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EQUITY
 9 Months Ended
Mar. 31, 2024
Equity [Abstract]  
EQUITY

NOTE 8. 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 realized net proceeds (after underwriting, professional fees and listing expenses) of $2.97 million on October 3, 2023.

 

The SPA shares were issued on October 3, 2023. Simultaneously, the exercise price on warrants to purchase 750,000 shares of common stock originally issued pursuant to a SPA entered into in November 2021 were repriced from $14.63 per share to $1.75 per share.

 

Common Stock Issued

 

Common stock issued to satisfy Contingent Acquisition Obligations (see Note 6)

 

During the nine months ended March 31, 2024, the Company issued approximately 714,000 shares of common stock, with a fair value of approximately $0.81 million, to satisfy a contingent acquisition obligation for the achievement of a certain revenue performance milestone related to the acquisition of S5D. In addition, the Company issued approximately 71,000 shares of common stock, with a fair value of approximately $0.17 million, to satisfy a contingent acquisition obligation for the achievement of revenue performance milestones by XRT.

 

During the nine months ended March 31, 2023, the Company issued approximately 327,000 shares of common stock, valued at $1.36 million, for the achievement of a revenue performance milestone by S5D and approximately 36,000 shares of common stock, valued at $0.20 million, for the achievement of a revenue performance milestone by XRT. In addition, 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.

 

Common stock issued to Employees as Compensation

 

During the nine months ended March 31, 2024, the Company issued approximately 391,000 shares of common stock to various employees as compensation (including contractual bonus payments upon achievement of defined revenue milestones) and recorded share-based compensation of approximately $0.57 million.

 

During the nine months ended March 31, 2023, the Company issued approximately 80,000 shares of common stock to various employees as compensation and recorded share-based compensation of approximately $0.33 million.

 

Common stock issued to Board of Directors

 

During the nine months ended March 31, 2024, the Company issued approximately 258,000 shares of common stock to certain board members in return for canceling 443,000 fully vested stock options, and recorded share-based board compensation of approximately $0.37 million. In addition, the Company issued 75,000 shares of common stock to certain board members as calendar year 2024 compensation and recorded share-based board compensation of approximately $0.11 million.

 

Common stock issued for Exercise of Stock Options

 

During the nine months ended March 31, 2024 and 2023, the Company issued approximately 9,000 and 42,000 shares of common stock in cash and cashless transactions, respectively, upon exercise of the respective option grants and realized cash proceeds of approximately zero and $0.07 million, respectively.

 

Common stock issued to Vendors

 

During the nine months ended March 31, 2024 and 2023, the Company issued approximately 34,000 and 2,000 shares of common stock, respectively, to various vendors for services performed and recorded share-based compensation of approximately $0.09 million and $0.1 million, respectively.

 

Common stock issued for Business Acquisition and Asset Acquisition - Technology

 

During the nine months ended March 31, 2023, the Company issued approximately: 714,000 shares of common stock, valued at $2.85 million, as consideration for the acquisition of BLI; 71,000 shares of common stock valued at $0.33 million, per the assignment agreement with inciteVR; and 214,000 shares of common stock, valued at $0.73 million, as consideration for the acquisition of Pulpo (see Note 4).

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2024 AND 2023

 

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 12.2 million common shares reserved for issuance. As of March 31, 2024, there were approximately 5.2 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.

 

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 for the specific periods below are noted in the following table:

 

   2024   2023   2024   2023 
   For the Three Months Ended
March 31,		   For the Nine Months Ended
March 31,		 
   2024   2023   2024   2023 
Weighted average expected terms (in years)   4.9    6.0    4.9    6.0 
Weighted average expected volatility   103.8%   100.7%   103.5%   100.8%
Weighted average risk-free interest rate   4.2%   3.8%   4.2%   3.7%
Expected dividend yield   0.0%   0.0%   0.0%   0.0%

 

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

 

In February 2024, the Company offered current domestic employees the ability to cancel vested and non-vested stock options in return for a lesser amount of newly granted stock options at lower exercise prices and a new three-year vesting schedule. Pursuant to this offer, the Company cancelled approximately 828,000 employee options in February 2024 and granted approximately 578,000 new options to employees in March 2024. In addition, this offer was completed for a board member and approximately 31,000 vested options were cancelled and approximately 21,000 new options were granted. Also, in February 2024, 250,000 primarily non-vested options granted to an executive were cancelled and 250,000 new options were granted in March 2024 at a lower exercise price and a new vesting schedule of approximately four years.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2024 AND 2023

 

The grant date fair value for options granted during the nine months ended March 31, 2024 (including the new grants detailed above) and 2023 (excluding executive Target Options), was approximately $1.33 million and $7.12 million, respectively. Fair value of the executive Target Options was approximately $8.53 million.

 

The following is a summary of the Company’s stock option activity for the nine months ended March 31, 2024 and 2023, 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   1,153,662    2.32    9.8    128,315 
Options Exercised   (25,000)   2.00    2.6    191 
Options Forfeited / Cancelled   (3,418,851)   4.91    6.8    88 
Outstanding at March 31, 204   3,838,192   $4.05    6.9   $- 
Exercisable at March 31, 2024   2,234,420   $4.04    5.1   $- 

 

The above table excludes executive Target Options: 2,100,000 granted, $7.00 exercise price, 8.9 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   2,096,933    5.63    9.8    4,862 
Options Exercised   (94,932)   3.88    6.2    107,426 
Options Forfeited / Cancelled   (291,605)   7.87    8.7    16,208 
Outstanding at March 31, 2023   6,195,012   $5.38    7.9   $2,005,800 
Exercisable at March 31, 2023   3,677,049   $3.91    5.7   $2,005,800 

 

The above table excludes executive Target Options: 2,100,000 granted, $7.00 exercise price, 9.9 remaining term in years, no intrinsic value. Vesting of these is considered remote.

 

The intrinsic value of stock options at March 31, 2024 and 2023 was computed using a fair market value of the common stock of $1.12 per share and $3.76 per share, respectively.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2024 AND 2023

 

The Company’s stock option-based expense for the three and nine months ended March 31, 2024 and 2023 consisted of the following:

  

    2024     2023     2024     2023  
    For the Three Months Ended     For the Nine Months Ended   
    March 31,     March 31,   
    2024     2023     2024     2023  
Stock option-based expense:                        
Research and development expenses   $ 71,840     $ 433,877     $ 520,697     $ 1,204,934  
General and administrative expenses     65,362       86,729       238,905       175,777  
Sales and marketing expenses     (32,704 )     238,180       254,943       558,461  
Cost of goods sold     -       -       -       755  
Board option expense     26,271       85,752       169,546       379,319  
Total   $ 130,769     $ 844,538     $ 1,184,091     $ 2,319,246  

 

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

 

At March 31, 2024 total unrecognized compensation expense to employees, board members and vendors related to stock options was approximately $3.19 million (excluding executive Target Options of $8.53 million) and is expected to be recognized over a weighted average period of 2.02 years (which excludes the executive Target Options).