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EQUITY
 3 Months Ended
Sep. 30, 2023
Equity [Abstract]  
EQUITY

NOTE 9. EQUITY

 

Securities Purchase Agreement (“SPA”)

 

On September 28, 2023, the Company entered into a SPA with certain institutional investors to sell 1,885,715 shares of common stock for approximately $3.30 million (at $1.75 per share). The Company received the subscription receivable on October 3, 2023 and the Company realized net proceeds (after placement agent fees, professional fees and listing expenses) of $2.98 million. See Note 12.

 

Common Stock Issued

 

Common stock issued for Business Acquisitions

 

During the three months ended September 30, 2022, the Company issued approximately 714,000 shares of common stock, valued at $2.85 million, as consideration for the acquisition of BLI (see Note 4).

 

Common stock issued to satisfy contingent acquisition obligations

 

During the three months ended September 30, 2023, the Company issued approximately 36,000 shares of common stock, with a fair value of approximately $0.13 million, to satisfy a contingent acquisition obligation for the achievement of a revenue performance milestone by XR Terra.

 

During the three months ended September 30, 2022, the Company issued approximately 107,000 shares of common stock, with a fair value of approximately $0.32 million, to satisfy a contingent acquisition obligation of approximately $0.57 million less the repayment of a secured promissory note of $0.25 million, related to the acquisition of AUGGD.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

SEPTEMBER 30, 2023 AND 2022

 

Common stock issued for Exercise of Stock Options

 

During the three months ended September 30, 2023 and 2022, the Company issued approximately 9,000 and 25,000 shares of common stock in cash and cashless transactions, respectively, upon exercise of the respective option grants and realized cash proceeds of approximately $0.0 million and $0.04 million, respectively.

 

Common stock issued to Vendors

 

During the three months ended September 30, 2023, the Company issued approximately 11,000 shares of common stock to various vendors for services performed and recorded share-based compensation of approximately $0.03 million.

 

Common stock issued to Employees as Compensation

 

During the three months ended September 30, 2023, the Company issued approximately 55,000 shares of common stock to various employees as compensation and recorded share-based compensation of approximately $0.20 million.

 

Employee Stock-Based Compensation

 

Stock Option issuance to Executives

 

In February 2023, pursuant to the Equity Incentive Plan, the Company granted certain executive officers 2.32 million stock options as a long-term incentive. The options have an exercise price of $7.00 per share. 0.22 million of these options vest ratably over four years (“Initial Options”). The remainder (“Target Options”) vest in fixed amounts based on achieving various revenue or common stock prices within seven years of grant date. Given the Company’s current stock price and revenue, the Company views the achievement of the milestones that would trigger vesting of the Target Options as remote.

 

Equity Incentive Plan

 

The Company’s 2016 Equity Incentive Plan (the “Plan”), as amended, has approximately 11.3 million common shares reserved for issuance. As of September 30, 2023, there were approximately 2.4 million shares available for issuance under the Plan. The shares available are after the granting of 2.1 million shares of executive Target Options.

 

The Company recognizes compensation expense relating to awards ratably over the requisite period, which is generally the vesting period.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

SEPTEMBER 30, 2023 AND 2022

 

Stock options have been recorded at their fair value. The Black-Scholes option-pricing model assumptions used to value the issuance of stock options under the Plan, are noted in the following table:

 

           
  

For the Three Months Ended

September 30,

 
   2023   2022 
Weighted average expected terms (in years)   6.5    6.5 
Weighted average expected volatility   97.8%   101.4%
Weighted average risk-free interest rate   4.6%   2.9%
Expected dividend yield   0.0%   0.0%

 

The weighted average expected term (in years) excludes the executive Target Options.

 

The grant date fair value for options granted during the three months ended September 30, 2023 and 2022 was approximately $0.40 million and $1.25 million, respectively.

 

The following is a summary of the Company’s stock option activity for the three months ended September 30, 2023 and 2022, excluding the executive Target Options:

 

       Weighted Average     
           Remaining     
       Exercise   Contractual   Intrinsic 
   Options   Price   Term (Yrs)   Value 
Outstanding at July 1, 2023   6,128,381   $4.84    7.0   $1,676,966 
Options Granted   259,747    2.57    10.0    102,407 
Options Exercised   (25,000)   2.00    3.1    22,741 
Options Forfeited / Cancelled   (609,977)   4.79    6.9    102,407 
Outstanding at September 30, 2023   5,753,151   $4.76    7.0   $- 
Exercisable at September 30, 2023   3,585,072   $4.16    5.6   $- 

 

The above table excludes executive Target Options: 2,100,000 granted, $7.00 exercise price, 9.7 remaining term in years, no intrinsic value. Vesting of these is considered remote.

 

       Weighted Average     
           Remaining     
       Exercise   Contractual   Intrinsic 
   Options   Price   Term (Yrs)   Value 
Outstanding at July 1, 2022   4,484,616   $4.68    7.0   $2,404,249 
Options Granted   321,787    7.00    9.9    - 
Options Exercised   (66,853)   4.13    7.1    93,945 
Options Forfeited / Cancelled   (72,099)   8.86    9.0    13,273 
Outstanding at September 30, 2022   4,667,451   $4.77    6.9   $6,429,851 
Exercisable at September 30, 2022   3,509,358   $3.59    6.0   $6,382,458 

 

The intrinsic value of stock options at September 30, 2023 and 2022 was computed using a fair market value of the common stock of $1.84/share and $5.29/share, respectively.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

SEPTEMBER 30, 2023 AND 2022

 

The Company’s stock option-based expense for the three months ended September 30, 2023 and 2022 consisted of the following:

 

           
   For the Three Months Ended
September 30,		 
   2023   2022 
Stock option-based expense:          
Research and development expenses  $271,129   $387,440 
General and administrative expenses   97,726    54,274 
Sales and marketing expenses   153,424    186,660 
Cost of goods sold   -    694 
Board option expense   74,101    146,784 
Total  $596,380   $775,852 

 

There is no expense included for the executive officers’ Target Options.

 

At September 30, 2023 total unrecognized compensation expense to employees, board members and vendors related to stock options was approximately $6.15 million (excluding executive Target Options of $8.53 million), and is expected to be recognized over a weighted average period of 2.71 years (which excludes the executive Target Options).