NOTE 10. EQUITY

Securities Purchase Agreements (“SPA”)

SPA 2024

In December 2024, the Company completed a SPA with an institutional investor selling 1,990,000 shares of common stock at $2.65 per share and pre-funded warrants to purchase up to 760,000 shares of common stock at $2.649 per warrant (which is convertible to one share of common stock on a one for one basis). The pre-funded warrants were exercised in full in January 2025 at the exercise price of $0.001 per share of common stock.

The Company realized total net proceeds (after underwriting and professional fees) of $6.79 million from the SPA 2024.

SPA 2023

In October 2023, the Company completed a SPA with certain institutional investors selling 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.

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

Exercise of Warrants

In December 2024, an institutional investor exercised warrants (issued in connection with a November 2021 SPA) convertible into 100,000 shares of common stock. The Company realized proceeds of $0.18 million ($1.75 per share).

In January 2025, an institutional investor exercised warrants (issued in connection with a December 2024 SPA) convertible into 760,000 shares of common stock. The Company realized de minimis proceeds (760,000 shares at $0.001 per share).

Common stock issued to Employees as Compensation

During the year ended June 30, 2025, the Company issued 37,000 unrestricted shares of common stock to an employee as compensation and recorded share-based compensation of approximately $0.05 million in sales and marketing expenses in the statement of operations.

During the year ended June 30, 2024, the Company issued approximately 399,000 unrestricted 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 $0.58 million in general and administrative and sales and marketing expenses in the statement of operations.

Common stock issued to Vendors

During the year ended June 30, 2025, the Company issued 2,500 unrestricted shares of common stock to a vendor for services performed and recorded share-based expense of approximately $0.01 million in sales and marketing expenses in the statement of operations.

During the year ended June 30, 2024, the Company issued approximately 44,000 unrestricted shares of common stock to various vendors for services performed and recorded share-based expense of approximately $0.10 million, primarily in sales and marketing expenses in the statement of operations.

Common stock issued for Exercise of Stock Options

During the year ended June 30, 2025, the Company issued approximately 8,000 shares of common stock in cashless transactions upon exercise of the respective option grants and realized cash proceeds of zero.

During the year ended June 30, 2024, the Company issued approximately 9,000 shares of common stock in cashless transactions upon exercise of the respective option grants and realized cash proceeds of zero.

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common stock issued to satisfy Contingent Acquisition Obligations

During the year ended June 30, 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.

Common stock issued to Board of Directors

During the year ended June 30, 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. The expense for these issuances was recorded in general and administrative expenses in the statement of operations.

Warrants

In connection with the July 2021 IPO, the November 2021 SPA and the December 2024 SPA, the Company issued warrants, which are exercisable into Company common shares on a one-for-one basis, as detailed below. The warrants are not publicly traded.

Warrants exercised since issuance are 100,000 warrants from the November 2021 SPA exercised in December 2024 and 760,000 warrants from the December 2024 SPA exercised in January 2025.

The remaining outstanding warrants as of June 30, 2025 are:

 SCHEDULE OF WARRANTS OUTSTANDING 

Employee Stock-Based Compensation

Stock Option issuance to Executives

In February 2023, pursuant to the Equity Incentive Plan, the Company granted certain executive officers 2.20 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.

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity Incentive Plan

The Company’s 2016 Equity Incentive Plan (the “Plan”), as amended, has approximately 13.17 million common shares reserved for issuance. As of June 30, 2025, there were approximately 7.40 million shares available for issuance under the Plan. The shares available are after the granting of 1.98 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:

   SCHEDULE OF STOCK OPTION FAIR VALUE ASSUMPTION 

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 fully 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 grant date fair value for options granted during the years ended June 30, 2025 and 2024 was approximately $0.75 million and $1.53 million (including the new grants detailed above), respectively.

The following is a summary of the Company’s stock option activity for the years ended June 30, 2025 and 2024, excluding the executive Target Options:

  SUMMARY OF STOCK OPTION ACTIVITY 

The above table excludes executive Target Options: 1,980,000 granted, $7.00 exercise price, 7.6 remaining term in years, no intrinsic value. Vesting of these is considered remote.

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The above table excludes executive Target Options: 2,100,000 granted (includes 120,000 attributable to an executive who resigned in July 2024), $7.00 exercise price, 8.6 remaining term in years, no intrinsic value. Vesting of these is considered remote.

The intrinsic value of stock options activity for the years ended June 30, 2025 and 2024 was computed using a fair market value (fiscal year to date VWAP – volume weighted average price) of the common stock of $2.31 per share and $1.89 per share, respectively.

The Company’s stock option-based expense for the years ended June 30, 2025 and 2024 consisted of the following:

  SCHEDULE OF STOCK OPTION BASED EXPENSE 

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

As of June 30, 2025 total unrecognized compensation expense to employees, board members and vendors related to stock options was approximately $1.15 million (excluding executive Target Options vested value of $8.08 million, which vesting is considered remote) and is expected to be recognized over a weighted average period of 1.56 years (which excludes the executive Target Options).