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COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 14. COMMITMENTS AND CONTINGENCIES

 

Lease Costs

 

The Company made cash payments for all operating leases for the years ended June 30, 2023 and 2022, of approximately $0.60 million and $0.37 million, respectively, which were included in cash flows from operating activities within the consolidated statements of cash flows. As of June 30, 2023, the Company’s operating leases have a weighted average remaining lease term of 1.5 years and weighted average discount rate of 7.9%.

 

The total rent expense for all operating leases for the years ended June 30, 2023 and 2022, was approximately $0.54 million and $0.41 million, respectively, with short-term leases making up an immaterial portion of such expenses.

 

Lease Commitments

 

The Company has various operating leases for its offices. These existing leases have remaining lease terms ranging from 1 to 3 years. Certain lease agreements contain options to renew, with renewal terms that generally extend the lease terms by 1 to 3 years for each option. The Company determined that none of its current leases are reasonably certain to renew.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2023 AND 2022

 

Future approximate undiscounted lease payments for the Company’s operating lease liabilities and a reconciliation of these payments to its operating lease liabilities at June 30, 2023 are as follows:

SCHEDULE OF UNDISCOUNTED LEASE PAYMENTS 

Years Ended June 30,    
2024  $534,000 
2025   324,000 
2026   120,000 
Total future minimum lease commitments, including short-term leases   978,000 
Less: future minimum lease payments of short -term leases   (80,000)
Less: imputed interest   (69,000)
Present value of future minimum lease payments, excluding short term leases  $829,000 
      
Current portion of operating lease liabilities  $406,000 
Non-current portion of operating lease liabilities   423,000 
Total operating lease liability  $829,000 

 

Contingent Consideration for Acquisitions

 

Contingent consideration for acquisitions, consists of the following as of June 30, 2023 and June 30, 2022 respectively (see Notes 4 and 7):

  

   As of June 30,   As of June 30, 
   2023   2022 
S5D, current portion  $1,908,800   $1,397,600 
BLI, current portion   2,957,700    -  
AUGGD   -    568,571 
XRT   254,291    - 
Subtotal current portion   5,120,791    1,966,171 
S5D, net of current portion   1,251,700    5,340,800 
BLI, net of current portion   3,253,300    -  
Total contingent consideration for acquisitions  $9,625,791   $7,306,971 

 

AUGGD

 

In June 2022, AUGGD achieved its initial revenue threshold as defined in the asset acquisition agreement, and was issued shares of Company stock in July 2022 reflecting the payment of additional asset acquisition consideration. The share issuance was done inclusive of netting the outstanding balance of a $0.25 million note receivable due the Company by ARI (see Note 13). This additional consideration of approximately $0.57 million was included in contingent consideration for acquisitions, current portion, in the consolidated balance sheet at June 30, 2022 and was satisfied during the year ended June 30, 2023 (see Note 10).

 

XRT

 

During the year ended June 30, 2023, XRT achieved certain revenue threshold as defined in the asset acquisition agreement and is expected to meet certain further thresholds in the future. Certain earned, and not yet paid, and expected to be earned additional consideration of approximately $0.25 million were included in contingent consideration for acquisitions, current portion, in the consolidated balance sheet at June 30, 2023 (see Note 7). No further contingent consideration is expected to be earned.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2023 AND 2022

 

Employee Bonus

 

It is anticipated that a certain employee will meet the revenue threshold to earn a bonus payout of approximately $0.91 million in the upcoming fiscal year. This and an earned, but not yet paid, bonus of approximately $0.13 million are included in accrued bonus in the consolidated balance sheet at June 30, 2023. These bonuses will be paid entirely in the form of Company common stock.

 

Potential Future Distributions Upon Divestiture or Sale

 

In some instances, upon a divestiture or sale of a subsidiary company, the Company is contractually obligated to distribute up to 10% of the net proceeds from such divestiture or sale to the senior management team of the divested subsidiary company. Currently, there were no active discussions pertaining to a potential divestiture or sale of any of the Company’s subsidiaries that would trigger such distribution.

 

COVID-19

 

The COVID-19 pandemic caused significant business and financial markets disruption worldwide and there was significant uncertainty around the duration of this disruption. We continue to monitor the situation and the effects on our business and operations. While some level of potential uncertainty remains, given the current state of the pandemic, we do not expect the impact of COVID-19 to be material to our business and operations.