NEW YORK, NY / ACCESSWIRE / February 14, 2024 / The Glimpse Group, Inc. ("Glimpse") (NASDAQ:VRAR)(FSE:9DR), a diversified Immersive Technology platform company providing enterprise-focused Virtual Reality ("VR"), Augmented Reality ("AR") and Spatial Computing software and services, provided financial results for its second quarter fiscal year 2024 ("Q2 FY'24").
Business Summary by President & CEO Lyron Bentovim
Q2 FY '24 (October 1, 2023 - December 31, 2023) was highlighted by:
- Made significant strides toward securing several multi-million dollar annual Spatial Computing/Cloud/AI contracts with large Department of Defense and Commercial entities. While there is no guarantee that these contracts will come to fruition, we are optimistic that they may be signed in the short term.
- Q2 FY '24 quarterly revenue of approximately $2.1 million, a 29% decrease compared to revenue of approximately $2.95 million in Q2 FY '23. This decline is in line with our previously announced expectations, as we continue to: a) strategically transition our business from predominantly Immersive marketing driven projects to enterprise-scale Spatial Computing/Cloud/AI driven Immersive recurring software solutions, and b) divest non-core operating assets.
- While investing in the development of our Spatial Computing solutions, we have continued to reduce non-core cash expenses. In the aggregate, we have reduced cash expenses by approximately 50% from their high. Our operational cash breakeven point in now approximately $3 million revenue per quarter or $12 million annually (excluding potential growth investments). For relative reference, our Q1 FY '24 revenue was $3.1 million and our FY '23 (June 30) annual revenue was approximately $13.5 million, revenue figures that we believe are attainable once some of the large contracts we have in the pipeline materialize.
- Gross Margin for Q2 FY ‘24 was approximately 68% compared to 70% for Q2 FY ‘23. As we complete our strategic transition, we expect our Gross Margins to continue to remain in the 65-70% range and potentially increase afterward.
- Adjusted EBITDA loss for Q2 FY'24 was approximately $1.3 million, compared to an EBITDA loss of approximately $2.6 million for Q2 FY '23, reflecting the reductions in operational expenses.
Q2 FY '24 Financial Summary (for full detail of our financial results please refer to our 8K and 10Q filed on 2/14/24)
- Total revenue for the three months ended December 31, 2023 was approximately $2.08 million compared to approximately $2.95 million for the three months ended December 31, 2022, a decrease of 29%. Total revenue for the six months ended December 31, 2023 was approximately $5.18 million compared to approximately $6.9 million for the six months ended December 31, 2022, a decrease of 25%. The decrease reflects our strategic shift to Spatial Computing, Cloud and AI driven immersive software solutions.
- Gross profit was approximately 68% for the three months ended December 31, 2023, compared to approximately 70% for the three months ended December 31, 2022. Gross profit was approximately 64% for the six months ended December 31, 2023 compared to approximately 70% for the six months ended December 31, 2022. The decrease was driven by the lower margin on project revenue in the current fiscal year due to increased use of outside contractors.
- Operating expenses for the three months ended December 31, 2023 were approximately $2.23 million compared to $0.84 million for the three months ended December 31, 2022, an increase of approximately 165% (Q2 FY '22 Operating expenses were lower due to the non-cash gain on a change in fair value of acquisition contingent consideration). Operating expenses for the six months ended December 31, 2023 were approximately $4.33 million compared to $9.01 million for the six months ended December 31, 2022, an decrease of approximately 52%. These reflect a decrease in all expense categories, reduced investment in non-core areas and divesting non-core assets as a result of our strategic shift to Spatial Computing, Cloud and AI driven immersive software solutions.
- Net loss of $0.74 million for the three months ended December 31, 2023 as compared to net income of $1.31 million for the comparable 2022 period (Q2 FY '22 Net income was driven by the non-cash gain on a change in fair value of acquisition contingent consideration). Net loss of $0.86 million for the six months ended December 31, 2023 as compared to a net loss of $4.07 million for the comparable 2022 period. These reflect a reduction in Operating expenses.
- Adjusted EBITDA loss of $1.33 million for the three months ended December 31, 2023 compared to a $2.60 million loss for the three months ended December 31, 2022. Adjusted EBITDA loss of $2.60 million for the six months ended December 31, 2023 compared to a $3.64 million loss for the six months ended December 31, 2022. The reduced EBITDA loss for both periods was driven by cash operating expense reductions.
- As of December 31, 2023, the Company had cash and cash equivalents of $5.22 million.
- The Company has no outstanding corporate debt or preferred equity obligations.
Q2 Fiscal Year 2024 Conference Call and Webcast
Date: Wednesday, February 14, 2024
Time: 4:30 p.m. Eastern time
USA Dial In: 877-545-0523
International: 973-528-0016
Participant Access Code: 125049
Webcast: https://www.webcaster4.com/Webcast/Page/2934/49880
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
A playback of the webcast will be available through February 14, 2025. A replay of the teleconference will be available through February 28, 2024. To listen, please call USA: 1-877-481-4010 or International: 919-882-2331; Replay Passcode: 49880. A webcast will also be available on the IR section of The Glimpse Group website ( ir.theglimpsegroup.com ) or by clicking the webcast link above.
Note about Non-GAAP Financial Measures
A non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States of America, or GAAP. Non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Other companies may use different non-GAAP measures and presentation of results.
In addition to financial results presented in accordance with GAAP, this press release presents adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA is determined by taking net loss and adding interest, taxes, depreciation, amortization and stock-based compensation expenses. The company believes that this non-GAAP measure, viewed in addition to and not in lieu of net loss, provides useful information to investors by providing a more focused measure of operating results. This metric is an integral part of the Company's internal reporting to evaluate its operations and the performance of senior management. A reconciliation of adjusted EBITDA to net loss, the most comparable GAAP measure, is available in the accompanying financial tables below. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies.
About The Glimpse Group, Inc.
The Glimpse Group (NASDAQ:VRAR),(FSE:9DR) is a diversified Immersive technology platform company, providing enterprise-focused Virtual Reality, Augmented Reality and Spatial Computing software & services. Glimpse's unique business model builds scale and a robust ecosystem, while simultaneously providing investors an opportunity to invest directly into this emerging industry via a diversified platform. For more information on The Glimpse Group, please visit www.theglimpsegroup.com
Safe Harbor Statement
This press release does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. This press release contains certain forward-looking statements based on our current expectations,
forecasts and assumptions that involve risks and uncertainties. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," and "would" or similar words. All forecasts are provided by management in this release are based on information available at this time and management expects that internal projections and expectations may change over time. In addition, the forecasts are entirely on management's best estimate of our future financial performance given our current contracts, current backlog of opportunities and conversations with new and existing customers about our products and services. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
Company Contact:
Maydan Rothblum
CFO & COO
The Glimpse Group, Inc.
(917) 292-2685
[email protected]
THE GLIMPSE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| As of December 31, 2023 | As of June 30, 2023 | |||||||
| (Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 5,220,653 | $ | 5,619,083 | ||||
Accounts receivable | 1,245,718 | 1,453,770 | ||||||
Deferred costs/contract assets | 76,992 | 158,552 | ||||||
Prepaid expenses and other current assets | 661,394 | 562,163 | ||||||
Total current assets | 7,204,757 | 7,793,568 | ||||||
Equipment, net | 203,624 | 264,451 | ||||||
Right-of-use assets, net | 624,303 | 627,832 | ||||||
Intangible assets, net | 3,111,104 | 4,284,151 | ||||||
Goodwill | 10,857,600 | 11,236,638 | ||||||
Other assets | 73,273 | 71,767 | ||||||
Total assets | $ | 22,074,661 | $ | 24,278,407 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Accounts payable | $ | 275,700 | $ | 455,777 | ||||
Accrued liabilities | 292,141 | 635,616 | ||||||
Accrued non cash performance bonus | 363,216 | 1,041,596 | ||||||
Deferred revenue/contract liabilities | 136,862 | 466,393 | ||||||
Lease liabilities, current portion | 450,032 | 405,948 | ||||||
Contingent consideration for acquisitions, current portion | 4,550,000 | 5,120,791 | ||||||
Total current liabilities | 6,067,951 | 8,126,121 | ||||||
Long term liabilities | ||||||||
Contingent consideration for acquisitions, net of current portion | 923,100 | 4,505,000 | ||||||
Lease liabilities, net of current portion | 286,465 | 423,454 | ||||||
Total liabilities | 7,277,516 | 13,054,575 | ||||||
Commitments and contingencies | - | - | ||||||
Stockholders' Equity | ||||||||
Preferred Stock, par value $0.001 per share, 20 million shares authorized; 0 shares issued and outstanding | - | - | ||||||
Common Stock, par value $0.001 per share, 300 million shares authorized; 16,722,146 and 14,701,929 issued and outstanding | 16,723 | 14,702 | ||||||
Additional paid-in capital | 72,283,210 | 67,854,108 | ||||||
Accumulated deficit | (57,502,788 | ) | (56,644,978 | ) | ||||
Total stockholders' equity | 14,797,145 | 11,223,832 | ||||||
Total liabilities and stockholders' equity | $ | 22,074,661 | $ | 24,278,407 | ||||
THE GLIMPSE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenue | ||||||||||||||||
Software services | $ | 2,032,272 | $ | 2,886,458 | $ | 5,044,343 | $ | 6,748,972 | ||||||||
Software license/software as a service | 44,153 | 64,089 | 136,962 | 152,599 | ||||||||||||
Total Revenue | 2,076,425 | 2,950,547 | 5,181,305 | 6,901,571 | ||||||||||||
Cost of goods sold | 655,509 | 875,281 | 1,837,018 | 2,089,878 | ||||||||||||
Gross Profit | 1,420,916 | 2,075,266 | 3,344,287 | 4,811,693 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development expenses | 1,391,883 | 2,532,646 | 3,072,670 | 4,535,025 | ||||||||||||
General and administrative expenses | 1,045,194 | 1,260,675 | 2,141,236 | 2,636,000 | ||||||||||||
Sales and marketing expenses | 765,116 | 1,737,091 | 1,578,858 | 3,481,330 | ||||||||||||
Amortization of acquisition intangible assets | 291,036 | 541,714 | 659,156 | 985,681 | ||||||||||||
Intangible asset impairment (inclusive of $379,038 goodwill impairment) | 8,275 | - | 901,204 | - | ||||||||||||
Change in fair value of acquisition contingent consideration | (1,268,014 | ) | (5,228,500 | ) | (4,025,544 | ) | (2,625,102 | ) | ||||||||
Total operating expenses | 2,233,490 | 843,626 | 4,327,580 | 9,012,934 | ||||||||||||
Income (Loss) from operations before other income | (812,574 | ) | 1,231,640 | (983,293 | ) | (4,201,241 | ) | |||||||||
Other income | ||||||||||||||||
Interest income | 74,207 | 76,725 | 125,483 | 126,879 | ||||||||||||
Net Income (Loss) | $ | (738,367 | ) | $ | 1,308,365 | $ | (857,810 | ) | $ | (4,074,362 | ) | |||||
Basic net income (loss) per share | $ | (0.04 | ) | $ | 0.09 | $ | (0.05 | ) | $ | (0.30 | ) | |||||
Diluted net income (loss) per share | $ | (0.04 | ) | $ | 0.07 | $ | (0.05 | ) | $ | (0.30 | ) | |||||
Weighted-average shares used to compute basic net income (loss) per share | 16,668,740 | 13,779,958 | 15,699,563 | 13,548,573 | ||||||||||||
Weighted-average shares used to compute diluted net income (loss) per share | 16,668,740 | 19,264,307 | 15,699,563 | 13,548,573 | ||||||||||||
THE GLIMPSE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2023 | 2022 | |||||||
| For the Six Months Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (857,810 | ) | $ | (4,074,362 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Amortization and depreciation | 720,458 | 1,056,131 | ||||||
Common stock and stock option based compensation for employees and board of directors | 1,135,048 | 1,717,462 | ||||||
Accrued non cash performance bonus fair value adjustment | (551,234 | ) | - | |||||
Acquisition contingent consideration fair value adjustment | (4,025,544 | ) | (2,625,102 | ) | ||||
Impairment of intangible assets | 901,204 | - | ||||||
Issuance of common stock to vendors as compensation | 73,282 | - | ||||||
Adjustment to operating lease right-of-use assets and liabilities | (89,376 | ) | (6,383 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 208,052 | (373,055 | ) | |||||
Deferred costs/contract assets | 81,560 | 482,133 | ||||||
Prepaid expenses and other current assets | (99,231 | ) | (130,336 | ) | ||||
Other assets | (1,507 | ) | 30,100 | |||||
Accounts payable | (180,077 | ) | (439,737 | ) | ||||
Accrued liabilities | (343,474 | ) | (7,425 | ) | ||||
Deferred revenue/contract liabilities | (329,531 | ) | (2,123,680 | ) | ||||
Net cash used in operating activities | (3,358,180 | ) | (6,494,254 | ) | ||||
Cash flow from investing activities: | ||||||||
Purchases of equipment | (8,751 | ) | (119,588 | ) | ||||
Acquisitions, net of cash acquired | - | (2,478,756 | ) | |||||
Proceeds from maturity of investments | - | 2,738 | ||||||
Net cash used in investing activities | (8,751 | ) | (2,595,606 | ) | ||||
Cash flows provided by financing activities: | ||||||||
Proceeds from securities purchase agreement, net | 2,968,501 | - | ||||||
Proceeds from exercise of stock options | - | 44,916 | ||||||
Cash provided by financing activities | 2,968,501 | 44,916 | ||||||
Net change in cash, cash equivalents and restricted cash | (398,430 | ) | (9,044,944 | ) | ||||
Cash, cash equivalents and restricted cash, beginning of year | 5,619,083 | 18,249,666 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 5,220,653 | $ | 9,204,722 | ||||
Non-cash Investing and Financing activities: | ||||||||
Issuance of common stock for satisfaction of contingent liability | $ | 127,145 | $ | 734,036 | ||||
Issuance of common stock for non cash performance bonus | $ | 127,145 | $ | - | ||||
Lease liabilities arising from right-of-use assets | $ | 113,182 | $ | 1,155,769 | ||||
Note receivable for sale of subsidiary assets | $ | 1,000,000 | $ | - | ||||
Allowance against note receivable | $ | (1,000,000 | ) | $ | - | |||
Common stock issued for acquisition | $ | - | $ | 2,846,144 | ||||
Contingent acquisition consideration liability recorded at closing | $ | - | $ | 6,139,000 | ||||
Common stock issued for purchase of intangible asset - technology | $ | - | $ | 326,436 | ||||
Issuance of common stock for satisfaction of contingent liability, net of note extinguishment | $ | - | $ | 318,571 | ||||
Extinguishment of note receivable for satisfaction of contingent liability | $ | - | $ | 250,000 | ||||
The following table presents a reconciliation of net loss to Adjusted EBITDA for the three months ended December 31, 2023 and 2022 (in $ million):
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (in millions) | (in millions) | |||||||||||||||
Net income (loss) | $ | (0.74 | ) | $ | 1.31 | $ | (0.86 | ) | $ | (4.07 | ) | |||||
Depreciation and amortization | 0.32 | 0.58 | 0.72 | 1.06 | ||||||||||||
EBITDA income (loss) | (0.42 | ) | 1.89 | (0.14 | ) | (3.01 | ) | |||||||||
Stock based compensation expenses | 0.52 | 0.74 | 1.21 | 1.72 | ||||||||||||
Intangible asset impairment | - | - | 0.90 | - | ||||||||||||
Acquisition expenses | - | - | - | 0.28 | ||||||||||||
Non cash change in fair value of accrued performance bonus | (0.16 | ) | - | (0.55 | ) | - | ||||||||||
Non cash change in fair value of acquisition contingent consideration | (1.27 | ) | (5.23 | ) | (4.02 | ) | (2.63 | ) | ||||||||
Adjusted EBITDA loss | $ | (1.33 | ) | $ | (2.60 | ) | $ | (2.60 | ) | $ | (3.64 | ) | ||||
SOURCE: The Glimpse Group, Inc.