8-K
Glimpse Group, Inc. (GGRP)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 14, 2023
THE
GLIMPSE GROUP, INC.
(Exact name of registrant as specified in charter)
| Nevada | 001-40556 | 81-2958271 |
|---|---|---|
| (State<br> or other jurisdiction | (Commission | (IRS<br> Employer |
| of<br> incorporation) | File<br> Number) | Identification<br> No.) |
15West 38^th^ St.****, 12thFl
NewYork, NY 10018
(Address of principal executive offices) (Zip Code)
(917)-292-2685
(Registrant’s telephone number, including area code)
NotApplicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common<br> Stock | VRAR | The<br> Nasdaq Stock Market LLC<br><br> <br>(The<br> Nasdaq Capital Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mart if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02 | Results of Operations and Financial Condition |
|---|
On February 14, 2023, The Glimpse Group, Inc. (the “Company”) issued a press release (the “Release”) announcing financial results for its fiscal second quarter ended December 31, 2022. The full text of the press release is furnished herewith as Exhibit 99.1.
The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as expressly set forth in such filing.
| Item 7.01 | Regulation FD Disclosure. |
|---|
As disclosed in the Release, on February 14, 2023, at 4:30 p.m. EDT/1:30 p.m. PDT, the Company will host a conference call to discuss its financial results for its fiscal second quarter ended December 31, 2022. A playback of the webcast will be available through February 14, 2024. A replay of the teleconference will be available through Tuesday, February 28, 2023.
The information under this Item 7.01 is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The information set forth under this Item 7.01 shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K.
| Item 9.01 | Exhibits |
|---|---|
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press Release dated February 14, 2023 |
| 104 | Cover<br> Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags<br> are embedded within the Inline XBRL document |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 14, 2023
| THE GLIMPSE GROUP, INC. | |
|---|---|
| By: | /s/ Lyron Bentovim |
| Lyron Bentovim | |
| Chief<br> Executive Officer |
Exhibit99.1
TheGlimpse Group Reports Fiscal Second Quarter 2023 Financial Results
FiscalSecond Quarter FY 2023 Revenues Grew by 75% Year-over-Year to Approximately $3.0 million; Revenue for 1H FY 2023 Grew by 155% Year-over-Yearto a Record of Approximately $6.9 million; Progressing Toward Goal of Achieving Cash Flow Neutrality From Existing Operations in CY ‘23;Artificial Intelligence and Blockchain Technologies Increasingly Integrated Into Glimpse Software Solutions
NEWYORK, February 14, 2023 — The Glimpse Group, Inc. (NASDAQ: VRAR, FSE: 9DR) (“Glimpse” or the “Company”), a diversified Virtual Reality and Augmented Reality (“VR” and “AR”) platform company providing enterprise-focused VR and AR software & services immersive technology solutions, provided financial results for its fiscal second quarter ended December 31, 2022 (“Q2 FY’23”).
BusinessCommentary by President & CEO Lyron Bentovim
Q2FY ‘23 (October – December ‘22) and 1H FY ‘23 (July-December ‘22) were highlighted by:
| ● | Q2<br> FY’23 quarterly revenue of approximately $3.0 million, a 75% increase compared to Q2<br> FY’22 revenue of approximately $1.7 million, representing the second highest quarterly<br> revenue in the Company’s history. |
|---|---|
| ● | 1H<br> FY ‘23 record revenue of approximately $6.9 million, a 155% increase compared to 1H<br> FY ‘22 revenue of approximately $2.7 million. |
| --- | --- |
| ● | We<br> expect Q3 FY ‘23 (Jan-March ‘23) revenues to exceed Q2 FY ‘23 revenue and<br> to have a materially lower net cash burn. |
| --- | --- |
| ● | Launched<br> several key technology initiatives, including: embedding artificial intelligence (AI) capabilities<br> into our XR software products, augmented reality-based try-on for e-commerce, NFT/blockchain<br> integration for V-Commerce applications and potential Department of Defense (DoD) VR- based<br> simulations. |
| --- | --- |
| ● | Gross<br> Margin was approximately 70% for both Q2 and 1H FY’23; Adjusted EBITDA loss was approximately<br> $2.6 million and $3.6 million for Q2 FY ‘23 and 1H FY ‘23 respectively. |
| --- | --- |
| ● | In<br> recent months, we improved internal efficiencies, rationalized our investments and reduced<br> our operational cash expense base by approximately $2.5 million on an annualized basis, representing<br> approximately 15% of our annual operational cost base. These reductions included 20-25% cash<br> salary cuts for the Company’s executives. We expect to see the effects of these reductions<br> in the upcoming quarter. |
| --- | --- |
| ● | The<br> Company’s operating cost structure remains predominantly variable. Through continued<br> revenue growth, combined with expense controls, we are committed to reaching cash flow neutrality<br> from our existing operations in calendar year ‘23, and as mentioned above, we have<br> taken initial and significant steps to achieving this strategic goal. |
| --- | --- |
| ● | The<br> Company’s cash and equivalent position (including short term investments) as of December<br> 31, 2022 was approximately $9.4 million, including $2 million cash held in escrow for potential<br> future performance payments relating to the S5D acquisition. We do not expect to utilize<br> our current cash balance as part of the purchase price of any acquisition we may make in<br> the foreseeable future. |
| --- | --- |
| ● | We<br> continue to maintain a clean capital structure with no debt, no convertible debt and no preferred<br> equity. |
| --- | --- |
Other Business Highlights:
| ● | Entered<br> into additional contracts and partnership with leading global companies. Recent Examples<br> include: |
|---|---|
| ○ | Sector<br> 5 Digital (S5D) completed a 6-figure dollar multi-domain 3D experience for Airbus US Space<br> & Defense, which debuted at the annual Association of the United States Army (AUSA) 2022<br> exposition. |
| --- | --- |
| ○ | QReal<br> completed a paid engagement to create an immersive experience to complement the launch of<br> Sabrina Carpenter’s real world fragrance, “Sweet Tooth” on Walmart.com<br> via a virtual experience in Decentraland. |
| --- | --- |
| ○ | During<br> the quarter, PulpoAR successfully integrated Machine Learning (ML) algorithms to perform<br> skins diagnostics and a fingernail-based AR try-on for a global social media company. In<br> addition, PulpoAR recently released its first commercial version of a Real Time Face Landmark<br> Detection ML Model that leverages facial recognition to enable real time virtual experiences. |
| --- | --- |
| ○ | Brightline<br> Interactive (BLI), collaborated with AT&T for an integrated technological demonstration<br> at the I/ITSEC conference, the largest training and simulation tradeshow in the US. |
| --- | --- |
| ○ | Additionally<br> at the I/ITSEC conference, BLI, in collaboration with NVIDIA, demonstrated a realistic, multi-user,<br> hyperscalable simulation tailored to training use cases. BLI is currently pursuing potential<br> and active relationships with multiple major DoD agencies. The solutions being discussed<br> will allow agencies to investigate and implement hyperscale solutions addressing specific<br> warfighter use cases and requirements. |
| --- | --- |
| ○ | New<br> Glimpse subsidiary company Glimpse Israel, utilizing the VR software platform of Foretell<br> Reality, entered into a paid engagement to become a key partner for the Israel Ministry of<br> Education’s Metaverse Lab. |
| --- | --- |
| ○ | Immersive<br> Health Group (IHG) completed the assignment of the technology and IP of inciteVR,<br> consisting primarily of immersive learning experience solutions, delivered in VR and utilizing<br> AI, game-based learning and an extensive proprietary library of learning 3D assets, primarily<br> focused on the clinical and nursing healthcare segments. In parallel, inciteVR’s team<br> joined IHG, significantly strengthening its development and business development team. |
| --- | --- |
| ○ | The<br> Company’s Board of Directors and Compensation Committee authorized the Company to issue<br> stock options to the three executive founders of the Company, in a long term incentive plan,<br> the vesting of which shall occur over four years from issuance and is primarily based upon<br> the Company’s achievement of significant annual revenues ($30-100 million) and stock<br> price ($20-60 per share) growth targets with a fixed exercise price of $7.00/share. These<br> will be detailed in an 8K that is expected to be filed later this week. |
| --- | --- |
Summary
While the overall Macro and business environments in Q2 FY’23 continued to be challenging, we achieved several key goals during the quarter, including: the full integration of the Brightline Interactive acquisition, advancement of VR multi person operability, AI and Blockchain integrations into our software products that are critical to our future success, signed new contracts with existing and new global customers and entered into conversations with multiple DoD entities as a direct contractor.
By making painful reductions to our operational base (including 20-25% reduction in Executive cash compensation) and rationalizing our investments, we made significant progress in achieving our stated strategic goal of reaching cash flow neutrality from our existing operations in CY ‘23.
In parallel, our Board approved a long term incentive plan for the Company’s Executive Founders, which is predominantly triggered at stock prices and revenue levels that are several orders of magnitude above from where we are today. In addition to the Executive Founders not having sold a single share since the Company’s inception 7 years ago (pre or post IPO) and investing additional funds directly, we believe that this incentive plan further demonstrates our strong belief, confidence and commitment to the Company and its shareholders.
Q2FY ‘23 Financial Summary
| ● | Total<br> revenue for the three months ended December 31, 2022 was approximately $2.95 million compared<br> to approximately $1.69 million for the three months ended December 31, 2021, an increase<br> of 75%. Total revenue for the six months ended December 31, 2022 was approximately $6.90<br> million compared to approximately $2.71 million for the six months ended December 31, 2021,<br> an increase of 155%. The increase for both periods reflect the addition of several subsidiary<br> companies after December 31, 2021 and new customers. |
|---|---|
| ● | For<br> the three months ended December 31, 2022, Software Services revenue was approximately $2.89<br> million compared to approximately $1.61 million for the three months ended December 31, 2021,<br> an increase of approximately 80%. For the six months ended December 31, 2022, Software Services<br> revenue was approximately $6.75 million compared to approximately $2.42 million for the six<br> months ended December 31, 2021, an increase of approximately 179%. The increase for both<br> periods reflect the addition of several subsidiary companies after December 31, 2021 and<br> new customers. |
| --- | --- |
| ● | For<br> the three months ended December 31, 2022, Software License revenue was approximately $0.06<br> million compared to approximately $0.08 million for the three months ended December 31, 2021.<br> For the six months ended December 31, 2022, Software License revenue was approximately $0.15<br> million compared to approximately $0.29 million for the six months ended December 31, 2021,<br> reflecting a long term license agreement signed in the 2021 period. As the VR and AR industries<br> continue to mature, we expect our Software License revenue to continue to grow on an absolute<br> basis and as an overall percentage of total revenue. |
| --- | --- |
| ● | For<br> the three months ended December 31, 2022, non-project revenue (i.e., VR/AR Software and Services revenue only), was approximately<br> $0.93 million compared to approximately $0.85 million for the three months ended December 31, 2021, an increase of approximately 9%,<br> reflecting organic growth and the addition of new customers. For the three months ended December 31, 2022, non-project revenue<br> accounted for approximately 32% of total revenues compared to approximately 50% for the three months ended December 31, 2021. For<br> the six months ended December 31, 2022, non-project revenue (i.e., VR/AR Software and Services revenue only), was approximately<br> $2.21 million compared to approximately $1.70 million for the six months ended December 31, 2021, an increase of approximately 30%,<br> reflecting organic growth and the addition of new customers. For the six months ended December 31, 2022, non-project revenue accounted for approximately 32% of total revenues compared to approximately 63% for the six months ended December 31, 2021. The decrease in both periods reflects the additions of BLI and S5D, which primarily generate project revenue, representing an increased portion of total revenue. |
| --- | --- |
| ● | Gross<br> profit was approximately 70% for the three months ended December 31, 2022 compared to approximately<br> 88% for the three months ended December 31, 2021. Gross profit was approximately 70% for<br> the six months ended December 31, 2022 compared to approximately 87% for the six months ended<br> December 31, 2021. The decrease for both periods was driven by the addition of BLI and S5D<br> which carry a lower margin. |
| --- | --- |
| ● | Operating<br> expenses for the three months ended December 31, 2022 were approximately $0.84 million compared<br> to $3.05 million for the three months ended December 31, 2021, a decrease of approximately<br> 72%. The decrease is driven by a gain in the change in fair value of contingent consideration<br> for the S5D and BLI acquisitions; offset by expenses related to the addition of several new<br> subsidiaries (which includes headcount, amortization of intangibles and professional fees<br> related to the acquisitions) and employee headcount additions to support growth. Operating<br> expenses for the six months ended December 31, 2022 were approximately $9.01 million compared<br> to $5.32 million for the six months ended December 31, 2021, an increase of approximately<br> 69%. The increase is driven by expenses related to the addition of several new subsidiaries<br> (which includes headcount, amortization of intangibles and professional fees related to the<br> acquisitions) and employee headcount additions to support growth; offset by a gain in the<br> change in fair value of contingent consideration for the S5D and BLI acquisitions. |
| --- | --- |
| ● | Net<br> income for the three months ended December 31, 2022 was $1.31 million, as compared to a net<br> loss of $1.57 million for the comparable 2021 period, an absolute change of $2.88 million.<br> This change is driven by the non-cash gain on the change in fair value of acquisition contingent<br> consideration, partially offset by the increase in operating expenses from the acquisition<br> of several subsidiaries. We sustained a net loss of $4.07 million for the six months ended<br> December 31, 2022 as compared to a net loss of $3.23 million for the comparable 2021 period,<br> a loss increase of $0.84 million. This change is driven by the increase in operating expenses<br> from the acquisition of several subsidiaries, partially offset by the non-cash gain on change<br> in fair value of acquisition contingent consideration. |
| --- | --- |
| ● | Adjusted<br> EBITDA loss of $2.58 million for the three months ended December 31, 2022 increased by $1.77<br> million compared to a $0.81 million loss for the three months ended December 31, 2021. Adjusted<br> EBITDA loss of $3.63 million for the six months ended December 31, 2022 increased by $2.19<br> million compared to a $1.44 million loss for the six months ended December 31, 2021. The<br> increases in EBITDA loss were driven by an increase in operating expense outlays in all areas<br> of the Company to propel future growth, including the acquisition of several new subsidiaries.<br> This is offset primarily by non-cash expenses, both stock based and fair value driven. |
| --- | --- |
| ● | Net<br> cash used in operating activities was $6.49 million for the six months ended December 31,<br> 2022, compared to $2.36 million during the prior period, an increase of approximately $4.13<br> million. This is driven by an increase in net loss and a decrease in accounts payable and<br> deferred revenue primarily related to the BLI acquisition, offset by increased non-cash expenses<br> (acquisition contingent consideration fair value adjustment, stock based expenses and intangible<br> asset amortization). Net cash used in investing activities for the six months ended December<br> 31, 2022 was approximately $2.6 million compared to $0.59 million during the prior period,<br> an increase of approximately $2.01 million. This primarily represents the cash portion of<br> the BLI acquisition. Cash flow provided from financing activities during the six months ended<br> December 31, 2022 was negligible. |
| --- | --- |
| ● | As<br> of December 31, 2022, the Company had cash and cash equivalents balances of $9.2 million,<br> plus $0.2 million of liquid corporate bond investments, including $2.0 million cash escrow<br> for potential future contingent consideration of the S5D acquisition, payable upon achievement<br> of S5D and the Company’s performance targets (refundable to Glimpse if targets not<br> achieved). |
| --- | --- |
| ● | As<br> of December 31, 2022, the Company has no debt, no convertible debt and no preferred equity. |
FiscalSecond Quarter 2023 Conference Call and Webcast
Date: Tuesday, February 14, 2023
Time: 4:30 p.m. Eastern time
US Dial In**:** 1-877-545-0523
International Dial In**:** 1-973-528-0016
Conference ID: 276601
Webcast: https://www.webcaster4.com/Webcast/Page/2934/47595
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
A playback of the webcast will be available through February 14, 2024. A replay of the teleconference will be available through Tuesday, February 28, 2023. To listen, call 1-877-545-0523 within the United States or 1-973-528-0016 when calling internationally and enter replay access code 276601. A webcast will also be available on the IR section of The Glimpse Group website or by clicking the webcast link above.
Noteabout Non-GAAP Financial Measures
A non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.
In addition to financial results presented in accordance with GAAP, this press release presents adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA is determined by taking net loss and adding interest, taxes, depreciation, amortization and stock-based compensation expenses. The company believes that this non-GAAP measure, viewed in addition to and not in lieu of net loss, provides useful information to investors by providing a more focused measure of operating results. This metric is an integral part of the Company’s internal reporting to evaluate its operations and the performance of senior management. A reconciliation of adjusted EBITDA to net loss, the most comparable GAAP measure, is available in the accompanying financial tables below. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies.
AboutThe Glimpse Group, Inc.
The Glimpse Group (NASDAQ: VRAR, FSE: 9DR) is a diversified Virtual and Augmented Reality platform company, comprised of multiple VR and AR software & services companies, and designed with the specific purpose of cultivating companies in the emerging VR/AR industry. Glimpse’s unique business model simplifies challenges faced by VR/AR companies and creates a robust ecosystem, while simultaneously providing investors an opportunity to invest directly into the emerging VR/AR industry via a diversified platform. For more information on The Glimpse Group, please visit www.theglimpsegroup.com
SafeHarbor Statement
This press release does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” and “would” or similar words. All forecasts are provided by management in this release are based on information available at this time and management expects that internal projections and expectations may change over time. In addition, the forecasts are entirely on management’s best estimate of our future financial performance given our current contracts, current backlog of opportunities and conversations with new and existing customers about our products and services. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
CompanyContact:
Maydan Rothblum
CFO & COO
The Glimpse Group, Inc.
(917) 292-2685
maydan@theglimpsegroup.com
THEGLIMPSE GROUP, INC.
CONSOLIDATEDBALANCE SHEETS
| As of<br><br> <br>June 30, 2022<br><br> <br>(Audited) | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Cash and cash equivalents | 7,204,722 | $ | 16,249,666 | ||
| Investments | 236,576 | 239,314 | |||
| Accounts receivable | 1,876,070 | 1,332,922 | |||
| Deferred costs/contract assets | 109,739 | 39,484 | |||
| Prepaid expenses and other current assets | 681,283 | 479,483 | |||
| Total current assets | 10,108,390 | 18,340,869 | |||
| Equipment, net | 350,688 | 245,970 | |||
| Note receivable | - | 250,000 | |||
| Right-of-use assets | 965,717 | - | |||
| Intangible assets, net | 7,594,239 | 4,063,485 | |||
| Goodwill | 22,556,959 | 13,464,760 | |||
| Other assets | 101,766 | 32,000 | |||
| Restricted cash | 2,000,000 | 2,000,000 | |||
| Total assets | 43,677,759 | $ | 38,397,084 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Accounts payable | 435,756 | $ | 340,139 | ||
| Accrued liabilities | 207,043 | 188,417 | |||
| Accrued bonuses | 294,713 | 169,262 | |||
| Deferred revenue/contract liabilities | 754,779 | 841,389 | |||
| Asset purchase payable | 44,000 | 734,037 | |||
| Lease liabilities, current portion | 441,687 | - | |||
| Contingent consideration for acquisitions, current portion | 1,593,700 | 1,966,171 | |||
| Total current liabilities | 3,771,678 | 4,239,415 | |||
| Long term liabilities | |||||
| Contingent consideration for acquisitions, net of current portion | 8,461,100 | 5,340,800 | |||
| Lease liabilities, net of current portion | 517,647 | - | |||
| Total liabilities | 12,750,425 | 9,580,215 | |||
| Commitments and contingencies | |||||
| Stockholders’ Equity | |||||
| Preferred Stock, par value 0.001 per share, 20 million shares authorized; 0 shares issued and outstanding | - | - | |||
| Common Stock, par value 0.001 per share, 300 million shares authorized; 13,966,007 and 12,747,624 issued and outstanding | 13,968 | 12,749 | |||
| Additional paid-in capital | 63,069,423 | 56,885,815 | |||
| Accumulated deficit | (32,156,057 | ) | (28,081,695 | ) | |
| Total stockholders’ equity | 30,927,334 | 28,816,869 | |||
| Total liabilities and stockholders’ equity | 43,677,759 | $ | 38,397,084 |
All values are in US Dollars.
THEGLIMPSE GROUP, INC.
CONSOLIDATEDSTATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenue | ||||||||||||
| Software services | $ | 2,886,458 | $ | 1,613,195 | $ | 6,748,972 | $ | 2,417,913 | ||||
| Software license/software as a service | 64,089 | 76,807 | 152,599 | 294,622 | ||||||||
| Total Revenue | 2,950,547 | 1,690,002 | 6,901,571 | 2,712,535 | ||||||||
| Cost of goods sold | 875,281 | 212,254 | 2,089,878 | 357,641 | ||||||||
| Gross Profit | 2,075,266 | 1,477,748 | 4,811,693 | 2,354,894 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development expenses | 2,532,646 | 1,190,490 | 4,535,025 | 2,179,874 | ||||||||
| General and administrative expenses | 1,260,675 | 1,130,446 | 2,636,000 | 1,889,343 | ||||||||
| Sales and marketing expenses | 1,934,589 | 665,677 | 3,678,828 | 1,170,364 | ||||||||
| Amortization of acquisition intangible assets | 541,714 | 66,663 | 985,681 | 87,495 | ||||||||
| Change in fair value of acquisition contingent consideration | (5,425,998 | ) | - | (2,822,600 | ) | - | ||||||
| Total operating expenses | 843,626 | 3,053,276 | 9,012,934 | 5,327,076 | ||||||||
| Income (loss) from operations before other income (expense) | 1,231,640 | (1,575,528 | ) | (4,201,241 | ) | (2,972,182 | ) | |||||
| Other income (expense) | ||||||||||||
| Interest income | 76,725 | 134 | 126,879 | 19,757 | ||||||||
| Loss on conversion of convertible notes | - | - | - | (279,730 | ) | |||||||
| Total other income (expense), net | 76,725 | 134 | 126,879 | (259,973 | ) | |||||||
| Net Income (Loss) | $ | 1,308,365 | $ | (1,575,394 | ) | $ | (4,074,362 | ) | $ | (3,232,155 | ) | |
| Basic net income (loss) per share | $ | 0.09 | $ | (0.14 | ) | $ | (0.30 | ) | $ | (0.30 | ) | |
| Diluted net income (loss) per share | $ | 0.07 | $ | (0.14 | ) | $ | (0.30 | ) | $ | (0.30 | ) | |
| Weighted-average shares used to compute basic net income (loss) per share | 13,779,958 | 11,637,318 | 13,548,573 | 10,802,570 | ||||||||
| Weighted-average shares used to compute diluted net income (loss) per share | 19,264,307 | 11,637,318 | 13,548,573 | 10,802,570 |
THEGLIMPSE GROUP, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended<br><br> <br>December 31, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Cash flows from operating activities: | ||||||
| Net loss | $ | (4,074,362 | ) | $ | (3,232,155 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
| Amortization and depreciation | 1,056,131 | 102,851 | ||||
| Common stock and stock option based compensation for employees and board of directors | 1,717,462 | 1,289,381 | ||||
| Acquisition contingent consideration fair value adjustment | (2,822,600 | ) | - | |||
| Common stock issuance for additional asset acquisition consideration | 197,498 | |||||
| Issuance of common stock to vendors as compensation | - | 147,895 | ||||
| Amortization of right-to-use-assets | 190,052 | |||||
| Loss on conversion of convertible notes | - | 279,730 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (373,055 | ) | (661,491 | ) | ||
| Pre-offering costs | - | 470,136 | ||||
| Deferred costs/contract assets | 482,133 | 3,181 | ||||
| Prepaid expenses and other current assets | (130,336 | ) | (359,921 | ) | ||
| Other assets | 30,100 | (64,000 | ) | |||
| Accounts payable | (439,737 | ) | (238,736 | ) | ||
| Accrued liabilities | (132,876 | ) | (63,090 | ) | ||
| Accrued bonuses | 125,451 | (33,852 | ) | |||
| Deferred revenue/contract liabilities | (2,123,680 | ) | 311 | |||
| Lease liabilities | (196,435 | ) | - | |||
| Net cash used in operating activities | (6,494,254 | ) | (2,359,760 | ) | ||
| Cash flow from investing activities: | ||||||
| Purchases of equipment | (119,588 | ) | (50,080 | ) | ||
| Acquisitions, net of cash acquired | (2,478,756 | ) | (300,000 | ) | ||
| Sale (purchase) of investments | 2,738 | (247,430 | ) | |||
| Net cash used in investing activities | (2,595,606 | ) | (597,510 | ) | ||
| Cash flows from financing activities: | ||||||
| Proceeds from initial public offering, net | - | 11,821,364 | ||||
| Proceeds from securities purchase agreement, net | - | 13,578,400 | ||||
| Proceeds from exercise of stock options | 44,916 | 613,620 | ||||
| Net cash provided by financing activities | 44,916 | 26,013,384 | ||||
| Net change in cash, cash equivalents and restricted cash | (9,044,944 | ) | 23,056,114 | |||
| Cash, cash equivalents and restricted cash, beginning of period | 18,249,666 | 1,771,929 | ||||
| Cash, cash equivalents and restricted cash, end of period | $ | 9,204,722 | $ | 24,828,043 | ||
| Non-cash Investing and Financing activities: | ||||||
| Common stock issued for acquisitions | $ | 2,846,144 | $ | 1,050,000 | ||
| Common stock issued for satisfaction of prior year acquisition lability | $ | 734,036 | $ | - | ||
| Common stock issued for purchase of intangible asset - technology | $ | 326,436 | $ | - | ||
| Issuance of common stock for satisfaction of contingent liability, net of note extinguishment | $ | 318,571 | $ | - | ||
| Extinguishment of note receivable for satisfaction of contingent liability | $ | 250,000 | $ | - | ||
| Contingent acquisition consideration liability | $ | 6,139,000 | $ | - | ||
| Lease liabilities arising from right-of-use assets | $ | 1,155,769 | $ | - | ||
| Common stock issued and escrowed for acquisition | $ | - | $ | 4,000,000 | ||
| Issuance of common stock for satisfaction of legacy acquisition liability | $ | - | $ | 790,000 | ||
| Conversion of convertible promissory notes into common stock | $ | - | $ | 1,606,176 | ||
| Issuance of warrants in connection with initial public offering | $ | - | $ | 522,360 | ||
| Issuance of warrants in connection with securities purchase agreement | $ | - | $ | 8,797,546 |
Thefollowing table presents a reconciliation of net loss to Adjusted EBITDA for the three and six months ended December 31, 2021 and 2021(in $MM):
| For the Three Months Ended | For the Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (in millions) | (in millions) | |||||||||||
| Net income (loss) | $ | 1.31 | $ | (1.57 | ) | $ | (4.07 | ) | $ | (3.23 | ) | |
| Depreciation and amortization | 0.58 | 0.08 | 1.06 | 0.10 | ||||||||
| EBITDA (loss) | 1.89 | (1.49 | ) | (3.01 | ) | (3.13 | ) | |||||
| Stock based compensation expenses | 0.74 | 0.59 | 1.72 | 1.31 | ||||||||
| Stock based acquisition expense | 0.20 | - | 0.20 | - | ||||||||
| Stock based financing related expenses | - | - | - | 0.28 | ||||||||
| Acquisition related expenses | 0.01 | 0.09 | 0.28 | 0.10 | ||||||||
| Change in fair value of acquisition contingent consideration | (5.42 | ) | - | (2.82 | ) | - | ||||||
| Adjusted EBITDA (loss) | $ | (2.58 | ) | $ | (0.81 | ) | $ | (3.63 | ) | $ | (1.44 | ) |