Glimpse Group, Inc.

The Glimpse Group, Inc. operates in the early-stage, growing, and potentially transformative Immersive technology industry, focusing on Virtual Reality (VR), Augmented Reality (AR), and Spatial Computing software and services ¹. The company primarily targets business-to-business (B2B) and business-to-business-to-consumer (B2B2C) segments and is hardware agnostic ². The industry is characterized by rapid technological change, evolving standards, and increasingly sophisticated customer requirements, with leading technology companies like Meta, Apple, Microsoft, Google, ByteDance (Pico), Samsung, Sony, HTC, and HP driving hardware development and software infrastructure ³.

The company's core business model revolves around an ecosystem of several entities, each developing, commercializing, and marketing innovative and proprietary Immersive technology software products and solutions for different industry segments in a non-competitive, collaborative manner ⁴. This ecosystem shares operational, financial, and intellectual property (IP) infrastructure to facilitate shorter time-to-market, higher quality products, reduced development costs, fewer redundancies, and enhanced go-to-market synergies ⁵. Revenue is generated through Software Services, Software License and Software-as-a-Service (SaaS), and Royalty Income ⁶.

The Glimpse Ecosystem is comprised of several entities. Brightline Interactive, LLC (BLI) focuses on Spatial computing, Immersive technologies, AI, and Cloud (Spatial Core), primarily targeting the Department of Defense (DoD) and large enterprise segments ⁷. Sector 5 Digital, LLC (S5D) specializes in corporate Immersive technologies experiences and events ⁸. Glimpse Learning, LLC leverages immersive technologies and AI for education, healthcare, and training ⁹. Glimpse Lenses, LLC focuses on life-like 3D modeling and Augmented Reality lens creation ¹⁰.

For the fiscal year ended June 30, 2025, total revenue was $10.53 million ¹¹, an increase of 20% from $8.80 million in the prior year ¹². Software Services revenue increased by approximately 23% to $10.00 million ¹³ from $8.13 million in 2024 ¹⁴. Software License and SaaS revenue decreased by approximately 24% to $0.51 million ¹⁵ from $0.67 million in 2024 ¹⁶, primarily due to the divestiture of the QReal business ¹⁷. Royalty Income was $0.02 million in 2025 ¹⁸, up from zero in 2024 ¹⁹. Gross profit for the year was $7.12 million ²⁰, resulting in a gross profit margin of approximately 68% ²¹, an increase of 1% from 67% in 2024 ²². Operating expenses decreased by approximately 21% to $9.86 million ²³ from $12.47 million in 2024 ²⁴. The company reported a net loss of $2.55 million ²⁵ for the year ended June 30, 2025, an improvement of $3.84 million ²⁶ compared to a net loss of $6.39 million in 2024 ²⁷. Basic and diluted net loss per share was $(0.13) ²⁸ for 2025, compared to $(0.38) ²⁹ for 2024. Net cash used in operating activities significantly improved to $0.27 million ³⁰ from $5.21 million in 2024 ³¹. Cash and cash equivalents at year-end were $6.83 million ³², with no outstanding debt obligations ³³.

The increase in revenue primarily reflects the addition of new Spatial Core customers, offset by the runoff of certain heritage VR/AR customers due to the company's Strategic Shift ³⁴. The improvement in gross profit margin is attributed to increased margin on Spatial Core revenue, driven by less reliance on third-party vendors ³⁵. Operating expense reductions were a result of the Strategic Shift, divestiture of the QReal business, and reduction in non-core businesses ³⁶. Research and development expenses decreased by 36% to $3.49 million ³⁷ from $5.45 million in 2024 ³⁸. General and administrative expenses decreased by 15% to $3.64 million ³⁹ from $4.29 million in 2024 ⁴⁰. Sales and marketing expenses decreased by 22% to $2.20 million ⁴¹ from $2.82 million in 2024 ⁴². Amortization of acquisition intangible assets decreased by 65% to $0.43 million ⁴³ from $1.24 million in 2024 ⁴⁴, primarily due to the write-off of BLI intangible assets – legacy customer relationships in June 2024 ⁴⁵. Goodwill impairment was none in 2025, compared to $0.38 million in 2024 ⁴⁶, which represented the write-off of goodwill from the divestiture of PulpoAR ⁴⁷. Intangible asset impairment was none in 2025, compared to $2.56 million in 2024 ⁴⁸, primarily due to the write-off of BLI – legacy customer relationships unamortized balance at June 30, 2024 ⁴⁹. The change in fair value of acquisition contingent consideration was an expense of $0.10 million ⁵⁰ in 2025, compared to a gain of $4.27 million ⁵¹ in 2024.

During fiscal year 2025, the company divested its QReal, LLC business and its related operating entity, Glimpse Group Yazilim Ve Arge Ticaret Anonim Sirket, in a management buyout effective October 1, 2024 ⁵². The company retains the contract and revenues from QReal's largest customer until $1.35 million net cash is collected ⁵³, after which it will receive a monthly cash revenue share for 18 months ⁵⁴. In connection with the divestiture, a $1.56 million senior secured convertible note was issued in the new independent entity, along with a 10% equity stake ⁵⁵. On December 23, 2024, the company closed a registered direct offering, selling 1,990,000 shares of common stock and pre-funded warrants for 760,000 shares, realizing net proceeds of $6.79 million ⁵⁶. On July 11, 2025, the company entered into an At-The-Market (ATM) Facility to sell up to $3,081,340 of common stock ⁵⁷, with no shares sold to date ⁵⁸. On August 13, 2025, a $2+ million SpatialCore contract was secured, to be delivered over a 12-month period ⁵⁹.

The company believes it is sufficiently funded to meet its operational plan and future obligations beyond the 12-month period from the date the financial statements were issued ⁶⁰. This assessment is supported by cash and cash equivalents of $6.83 million and accounts receivable of $0.84 million as of June 30, 2025 ⁶¹, and a significant improvement in net cash used in operating activities, which was approximately $0.27 million for the year ended June 30, 2025 ⁶².

A major growth area for the company is its strategic shift to focus on immersive technology solutions software and services primarily driven by Spatial Computing, Cloud, and Artificial Intelligence (AI), including its product "Spatial Core," led by its entity Brightline Interactive, LLC (BLI) ⁶³. The company believes Spatial Core is a key differentiator, growth driver, and competitive advantage ⁶⁴. This strategic focus is evidenced by the $2+ million SpatialCore contract secured on August 13, 2025, which is to be delivered over a 12-month period ⁶⁵. The company also aims to expand its ecosystem through potential acquisitions of additional companies, technologies, or intellectual property, subject to capital availability, equity value, and attractive deal terms, to enhance its ecosystem, technology, scale, and competitive position ⁶⁶.

The company's operational outlook includes a focus on increased margin on Spatial Core revenue, driven by less reliance on third-party vendors ⁶⁷. The reduction in operating expenses in fiscal year 2025, reflecting the Strategic Shift, divestiture of the QReal business, and reduction in non-core businesses, is expected to contribute to improved profitability ⁶⁸. Research and development costs are expensed as incurred and are not capitalized, reflecting the emerging industry and uncertain market environment ⁶⁹.

Regarding capital allocation, the company has an Equity Incentive Plan with approximately 13.17 million common shares reserved for issuance ⁷⁰, and as of June 30, 2025, approximately 7.40 million shares were available for issuance under the Plan ⁷¹. The company does not intend to pay cash dividends for the foreseeable future, with any future determination at the discretion of the board of directors, depending on financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other relevant factors ⁷². However, the company is committed to paying certain distributions if it sells the business of any of its entities for a price exceeding $10,000,000, in which case it may distribute no less than 85% of the after-tax net proceeds ⁷³. Additionally, if annual audited financial statements report consolidated net income, the company may distribute 10% of the consolidated net income for that fiscal year within 90 days of audit completion ⁷⁴.

The company acknowledges that its plans for growth will place significant demands on managerial, financial, and human resources ⁷⁵. Its ability to manage future growth depends on building or leveraging business partners, sales teams, attracting and retaining qualified technical personnel, developing support capacity for end-users, and expanding internal management and financial controls ⁷⁶. The company also faces risks related to its acquisition strategy, including the ability to obtain additional financing, successfully identify and integrate acquisitions, and manage potential adverse effects on operating results, diversion of management's attention, and unanticipated expenses ⁷⁷.

The company faces several material risks, including being an early-stage technology company operating in an emerging industry, which has led to significant net losses since inception, with an accumulated deficit of approximately $65.6 million as of June 30, 2025 ⁷⁸. There is a risk of not being successful in raising additional capital necessary to meet expected funding needs, which could lead to an inability to continue business operations and advance growth initiatives ⁷⁹. The immersive technology market is competitive and dynamic, with new products and services constantly being introduced, potentially leading to reduced profit margins and loss of market share ⁸⁰. Customer concentration is a material risk, as two customers accounted for approximately 61% of total gross revenues for the year ended June 30, 2025 ⁸¹, and one customer accounted for approximately 46% of accounts receivable as of June 30, 2025 ⁸². The loss of existing customers or failure to attract new ones could adversely impact the business ⁸³. Ongoing research and development efforts are subject to risks of technical problems, delays, and insufficient funds, which could delay product improvements and lead to business failure ⁸⁴. The company's success depends on its ability to anticipate technological changes and develop new and enhanced products and services, and failure to do so could render existing products obsolete or unmarketable ⁸⁵. The practice of placing significant decision-making powers with underlying entities' management presents risks of inconsistent strategy implementation and varying operating results ⁸⁶. Furthermore, the company's centralized management has significant discretion over resource allocation, and ineffective allocation could harm the business ⁸⁷. The failure to attract, hire, retain, and motivate key personnel, particularly in the intense technology industry, could significantly impact operations ⁸⁸. The business depends on the performance and reliability of the Internet, mobile networks, and other infrastructure not under its control, and disruptions could damage its reputation and operations ⁸⁹. Interruptions, performance problems, or defects in its platforms, including new versions or technology advancements, could lead to loss of customers and adverse effects on business ⁹⁰. Failure to timely release updates and new features, or adapt to rapidly changing technology and regulations, could make its platforms less competitive ⁹¹. A failure in information technology systems could cause service interruptions, disrupt business, and damage reputation ⁹². Security breaches, improper access to or disclosure of data, or other hacking attacks could lead to loss of users, legal and financial liabilities, and reputational harm, with insurance coverage potentially insufficient to mitigate such risks ⁹³. The company's financial results may fluctuate substantially due to various factors, and past results should not be relied upon as indications of future performance ⁹⁴.

Management's message to shareholders emphasizes the company's position as an Immersive technology company providing enterprise-focused Virtual Reality (VR), Augmented Reality (AR), and Spatial Computing software and services, highlighting its diversified model and ecosystem as a means to mitigate downside risk in the growing and potentially transformative Immersive technology markets. The strategic priorities for the period ahead include a continued focus on providing immersive technology solutions software and services primarily driven by Spatial Computing, Cloud, and Artificial Intelligence (AI), with "Spatial Core" being a key differentiator, growth driver, and competitive advantage. This strategic shift is reflected in the divestiture of non-core assets like QReal and the securing of new Spatial Core contracts, such as the $2+ million SpatialCore contract to be delivered over a 12-month period ⁹⁵. Management also stresses the importance of its ecosystem in simplifying industry challenges, creating scale, building operational efficiencies, reducing time to market, and enhancing go-to-market synergies. The company believes it is sufficiently funded to meet its operational plan and future obligations beyond the next 12 months from the date of issuance of the financial statements ⁹⁶, supported by cash and cash equivalents of $6.83 million ⁹⁷ and a significant improvement in net cash used in operating activities to approximately $0.27 million ⁹⁸ for the year ended June 30, 2025.