Full Year 2023 The Glimpse Group Inc Earnings Call

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Speaker 1: Please continue to hold, ladies and gentlemen. Your conference will begin momentarily. Please continue to hold. Your conference will begin momentarily. Please continue to hold. Please continue to hold. Please continue to hold.

Please continue to hold ladies and gentlemen, your conference will begin momentarily. Please continue to hold your conference will begin momentarily.

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Speaker 1: You

Speaker 2: Welcome to the Glimpse Group Fiscal Year 2023 Financial Results Webinar. At this time, all participants will be seated. Thank you.

Welcome to the glimpse group's fiscal year 2023 financial results webinar at this time all participants are in a listen only mode.

Speaker 2: Question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

Speaker 2: The earnings release that accompanies this call is available on the investors section of the company's website at https semi-colon forward slash, forward slash ir dot the glimpse group dot com.

The earnings release that accompanies this call is available on the investors section of the company's website at H T. T. P. S semi colon forward slash forward slash IR dot the glimpse group Dotcom Board slash.

Speaker 2: Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcasts, including those regarding future financial results and industry prospects, are forward-

Before we begin the formal presentation I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results and industry prospects are forward looking and maybe subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call.

Speaker 2: may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the...

Speaker 2: Please refer to the company's regulatory filings for a list of associated risks.

Please refer to the company's regulatory filings for a list of associated risks.

And we would ask also.

Speaker 2: and we would also refer you to the company's website for more supporting industry information. I would now like to hand the call over to the CEO of the company,

Excuse me and we would also refer you to the company's website for more supporting industry information I would now like to hand, the call over to Lee Iran.

Speaker 2: Ben Tovam, President and CEO of the Glynx Group, the floor is yours.

And told him President and CEO Obsequence group the floor is yours.

Thank you John and thank you everyone for joining us.

Speaker 3: I'm pleased to welcome you to the Glimpse Group's fiscal year of 2023 financial results investor call for year ended June 30, 2023.

I'm pleased to welcome you to the glimpse group's fiscal year 2023 financial results Investor call for year ended June 32023.

Speaker 3: Glimpse's fiscal year was highlighted by strong revenue growth year over year, combined with significant cost reductions and a strategic repositioning towards providing immersive enterprise software and services that are driven by spatial computing, cloud and AI.

Glimpse. This fiscal year was highlighted by strong revenue growth year over year combined with significant cost reductions in our strategic repositioning towards providing immersive enterprise software and services that are driven by spatial computing cloud and AI.

Speaker 3: Our 2023 revenue of approximately 13.5 million, an 85% increase compared to 2022 revenue of approximately 7.3 million, primarily driven by the acquisition of Brightline Interactive and Sector 5 Digital.

Our 2023 revenue of approximately $13 5 million and 85% increase compared to 2022 revenue of approximately $7 3 million, primarily driven by the acquisition of pipeline into Rocky and sector five digital.

Since the company's IPO in July 2021, our annual revenues increased by approximately Forex com, an ideal base of approximately $3 4 million.

Speaker 3: Since the company's IPO in July 2021, our annual revenues have increased by approximately 4x from an IPO base of approximately 3.4 million.

Speaker 3: While the immersive industry has evolved significantly over the past few years, it has yet to reach high adoption levels on either the enterprise or the consumer side.

While the emerging industry has evolved significantly over the past few years, because yet to reach high adoption levels on either the enterprise or the consumer sites.

Over the last few months, we haven't seen a change in the market.

Speaker 3: Over the last few months, we have seen a change in the market.

Speaker 3: Organizations are no longer just looking for one-time proof-of-concept projects to test out immersive technology.

Organizations are no longer just looking for one time proof of concept projects with desktop immersive technologies.

Speaker 3: They are looking to fully integrate immersive technologies strategically into many aspects of their business.

They are looking to fully integrate immersive technology strategically into many aspects of their business.

Speaker 3: The good news is that this change is a sign of the beginning of the maturation period for the industry and will eventually lead to a more stable recurring revenue model.

The good news is that this change is a sign of the beginning of the maturation period for the industry and will eventually lead to a more stable recurring revenue model.

Speaker 3: But in the short run, this has led to a significant increase in sales cycle and may impact short-term revenue.

But in the short run and this has led to a significant increase in sales cycle and may impact short term revenues.

In recent months, we've seen a few significant developments in the industry.

Speaker 3: In recent months, we've seen a few significant developments in the industry.

Speaker 3: Apple announced its first immersive headsets, the Vision Pro, and META announced yesterday's next generation headsets, the Oculus 3.

Apple announced its first immersive headset division pro and Menlo announced yesterday. Its next generation headset. The alcohol is three.

Speaker 3: both with enhanced spatial capabilities, blending the physical and virtual world.

Both we and health special capabilities blending the physical and virtual worlds.

Speaker 3: Other large players are introducing advanced headsets as well.

The other large players are introducing advanced headsets as well.

Speaker 3: These are expected to push the industry forward a step further.

These are expected to push the industry forward step further.

Speaker 3: However, in our view, for the immersive industry to be truly unleashed and reach its vast potential, it has to first be untethered from the computing limitation in current immersive technologies hardware, VR headsets, tablets, and phones.

However, in our view for the emerging industry to be truly unleashed and Richard's fast potential. It has to first be unfettered from the competing limitations inherent in current immersive technology hardware.

It's it tablets and phones.

Speaker 3: When the processing and compute of immersive experiences are done at the cloud level and then transmitted to a headset or device, the impact could be revolution.

When the processing and computer of immersive experiences all done at the cloud level, and then transmitted to our headset, Oregon voice the impact could be revolutionary.

Speaker 3: powerful immersive experiences with endless use cases throughout industries driven by cutting edge spatial AI capabilities delivered over true 5G networks to devices with a far smaller

Powerful immersive experiences and let's use cases, Ralph industries, driven by cutting edge, especially I capabilities delivered over two five G networks, two devices with a far smaller and lighter form factor.

Speaker 3: Recent development in spatial computing, cloud and NI, combined with our internal capabilities and relationships on these fronts, have driven us to the strategic decision to focus on developing immersive software products and services that are anchored in scalable cloud computing and AI software platforms.

Recent developments in spatial computing cloud and ni combined with our internal capabilities and relationships on these plants have driven us to the strategic decision to focus on developing the morrisey software products and services that are anchored in scalable cloud computing and AI software platforms.

By doing so glimpse can greatly expand the breadth of capabilities and solutions. It offers its enterprise customers provide dosing scale potentially leading to significant revenue growth driven by recurring software license and SaaS revenues.

Speaker 3: By doing so, Glimpse can greatly expand the immersive capabilities and solutions it offers its enterprise customers, provide those in scale, potentially leading to significant revenue growth driven by recurring software licenses and SaaS revenue.

Speaker 3: Our immersive cloud-based development is powered by and is being done in collaboration with industry leaders such as NVIDIA, Microsoft, AT&T and the US military.

Our immersive cloud based development is powered by <unk> and is being done in collaboration with industry leaders such as in video Microsoft AT&T in the U S military.

Speaker 3: In order to facilitate this process, we are streamlining our operations down to focus on three primary subsidiary companies, Brightline Interactive, Qreal and Sector 5 Digital.

In order to facilitate this process, we are streamlining our operations down to focus on three primary subsidiary companies bright interacting hulio in sector five digital.

Speaker 3: In parallel, we will explore various strategic alternatives for our subsidiary companies, including raising capital into them, spinning them out, selling them, or consolidating them into our main three subsidiaries.

In parallel we will explore various strategic alternatives for our subsidiary companies.

<unk> raising capital into them spinning them out selling them or consolidating them into our main three subsidiaries.

Speaker 3: This is not a straightforward transition, and it will require a glimpse to restructure internally, invest in developing these new technologies while continuing to cut legacy costs.

This is not a straightforward transition and it will require a glimpse to restructure internally investing in developing these new technologies, while continuing to cup legacy costs. This.

Speaker 3: The short term impact may include the decline in revenues as we transition from predominantly project based revenues and a consolidation of some of our subsidiary companies. However, we view this as an essential move if we are to become a dominant software player in this larger scale industry.

The short term impact may include the decline in revenues as we transitioned from predominantly.

Base, our revenues and a consolidation of some of our subsidiary companies.

Ever we view this as an essential if we are to become a dominant software player in this larger scale industry.

Well first of all development and investments will be required to bring our vision to fruition, we have already begun to see adoption in the market.

Speaker 3: While further development and investment will be required to bring our vision to fruition, we have already begun to see adoption in the market.

Examples include.

Speaker 3: Brightline, alongside prime contractor BCI Solutions and subcontractor Purdue University, was awarded a low seven-figure directive phase two contract with the U.S. Air Force.

Brightline alongside crime contracted Dci solutions and subcontractor of Purdue University was awarded a low seven figure of director place to contract with the U S Air Force.

Speaker 3: The overall solution utilizes Brightline's spatial computing platform combined with AI and machine learning elements to teach and operate robots using human tracking and immersive simulation environments in industrial settings.

Overall solution utilizes brightline spatial computing platform combined with AI and machine learning elements to teach and operate robots using human tracking and immersive stimulation environments in industrial settings.

Speaker 3: Brightline also entered into a cooperative research and development agreement to CRADA with the US Naval Surface Warfare Center Dahlgren Division to adopt new technologies in end-to-end immersive hyperscale environments and simulator systems.

Brightline also entered into a cooperative research and development agreement with the U S. Naval surface warfare Center, the Olive Garden division to adopt new technologies and end to end immersive hyperscale environments accumulator systems.

Speaker 3: Brightline was recently selected to support a major immersive technology hardware provider to accelerate their computing interface into GPU-enabled clouds with streaming and visualization capability.

Bright line was recently selected to support a major immersive technology hardware provider to accelerate their computer interface into cheaper you enabled clouds with streaming and visualization capabilities.

Speaker 3: Foco AR, a subsidiary of Curio, entered into a software license with Yves Rocher, a global skincare, cosmetics, and perfume company, to provide AI-powered skin analysis and real-time visual product recommendations.

Oh boy or a subsidiary of queue real entered into a social license with you won't see a global skincare cosmetics and perfume company to provide AI powered SKU analysis, and real time visual product recommendations.

Speaker 3: Curiel also completed a paid engagement to create an immersive experience to complement the launch of Sabrina Carpenter's real-world fragrance, Sweet Tooth, on Walmart.com via a virtual store and NFT experience in decentralized.

Sure ill also completed a patent engagement to create an immersive experience.

The launch of Sabrina Carpenters, real worst fragrance, Sweden on Walmart Dot com via a virtual store and NFC experienced in central labs.

Speaker 3: Spear XR, now part of S5D, entered into initial agreement for two web AR experiences with one of the world's largest consumer packaged goods companies, which is expected to be deployed in commercial environments and accessed by consumers on mobile phones and tablets without a need to download an app, potentially leading to additional web AR experiences and widespread implementation.

Spirits are now part of <unk> entered into an initial agreement for two when they are experiences with one of the world's largest consumer package goods companies, which is expected to be deployed in commercial environment and access by consumers on mobile phones and tablets without the need to download the lab.

Central leading to additional worthy our experiences and widespread implementation.

Speaker 3: As we done with detail later in his preferred remarks, we have taken significant steps to reduce our operating expenses and continue to maintain a clean capital structure.

As Mcdonald will detail later in his prepared remarks, we have taken significant steps to reduce our operating expense base and continue to maintain a clean capital structure.

Speaker 3: In parallel, we decided to raise capital today in a clean structure, and we are currently well capitalized to pursue this opportunity.

In parallel we decided to raise capital today in a clean structure and we are currently well capitalized to pursue this opportunity.

Speaker 3: With that, I will now turn it over to Meydan Rotbloom, Glimpse's CFO and COO, to review the financial results. Meydan?

With that I will now turn it over to Mcdonough rock little glimpses, CFO and COO, who will review the financial results.

Speaker 4: Thanks, Liron. I will limit my portion to a summary review of our financial results. A full breakdown is available in our 10-K in the press release that were filed after market close today.

Thanks for the wrong I will limit my portion into our summer review of our financial results would break down is available in our 10-K and the press release.

Filed after market close today.

Speaker 4: Please note that I'll refer to adjusted EBITDA and other non-GAAP measures. For the calculation of adjusted EBITDA and other non-GAAP measures, please refer to the NDNA section of our 10K filing, which you can find on our website under SEC PILOT.

Please note that I'll refer to adjusted EBITDA and other non-GAAP measures for the calculation of adjusted EBITA. Another noncash I'm sorry, non-GAAP measures. Please refer to the MD&A section in our 10-K filing which you can find on our website under SEC filings.

Speaker 4: Full revenue for the year ended June 30, 2023 was approximately $13.5 million compared to approximately $7.3 million for the year ended June 30, 2022, an increase of approximately 85%. The increase reflects the addition of subsidiary companies through acquisitions and new customers.

Total revenue for the year ended June 32023 was approximately 13.5 million compared to approximately $7 3 million a year ended June 32022, an increase of approximately 85%.

This reflects the addition of subsidiary companies.

Acquisitions and new customers.

Speaker 4: fiscal year Q4 fiscal year 23.

Fiscal year Q4 fiscal year 'twenty three.

Speaker 4: That's the April 23 to June 23 quarter revenue of approximately 2.9 million, a 16% increase compared to Q4 fiscal year 22 revenue of approximately 2.5.

That's the April 23, the June 23 quarter.

Revenue of approximately $2 9, million% to 16% increase compared to Q4 fiscal year 'twenty two revenue approximate two point bottleneck.

Speaker 4: Gross profit was approximately 68% for the year ended June 30, 2023, compared to approximately 83% for the year ended June 20, 2021.

Gross profit was approximately 68% for the year ended June 32023, compared to approximately 83% for the year ended June 28 2022.

Speaker 4: The decrease was driven by the addition of DLI and FID lower margin project reference.

This was driven by the addition of Gaea lie and that's why I E lower margin project revenue.

Speaker 4: Adjusted EBITDA loss for fiscal year 23 was approximately 6 point

Adjusted EBITDA loss for fiscal year 'twenty three was approximately six point.

Speaker 4: or 5 million compared to EBITDA loss of approximately 3.97 million for fiscal year 22.

<unk> 5 million compared to EBITDA loss of approximately $3 97 million for fiscal year 'twenty two.

Speaker 4: During the fiscal year and in recent months thereafter, we decreased the company's annual operating expense base by approximately $5 million in aggregate, or approximately 25%.

During the fiscal year and in recent months thereafter, we decrease the company annual operating expense base by approximately $5 million in aggregate approximately 25%.

Speaker 4: We expect to continue to significantly reduce our operating expense base as we realign our operations.

We expect to continue to significantly reduce our operating expense base as we realigned our operations.

Speaker 4: Our target is to reach cash flow profitability from our subsidiary company's operations potentially as soon as Q2 fiscal year.

Our target is to reach cash flow profitability from our subsidiary companies operations potentially as soon as Q2 fiscal year.

24.

Speaker 4: October to December 23 period, excluding any growth in past.

Oh brought up to December 23.

Period, excluding any growth investments.

Speaker 4: As Jeroen discussed, S5D is an active operating entity of the company and is expected to remain one of our three core subsidiary companies going forward.

I wanted to start S. Five active operating entity of the company and is expected to remain one of our three core subsidiary companies going forward.

Speaker 4: Due to a slowdown in S5D's business relative to the assumptions made during its acquisition, it was determined that it would be appropriate to write down its goodwill and intangible assets holding approximately $15 million.

Due to a slowdown and that's five games business relative to the assumptions made joined at the acquisition. It was determined that it would be appropriate to write down in goodwill and intangible assets totaling approximately $15 million.

Key noncash driver in our net loss.

We ended fiscal year 'twenty, three with approximately $5 6 million in cash and equivalents.

Speaker 4: We ended fiscal year 23 with approximately $5.6 million in cash and equivalent.

Speaker 4: Today, September 28, 2023.

Today September 28 2023.

Speaker 4: We entered into an agreement with two institutional investors to raise 3.3 million, approximately $3 million net of all fees and expenses via a registered direct offering at $1.75 per share, utilizing the company's S3 registration. That comes out to about 1.8 million common shares that will be issued. There are no warrants, there are no other derivatives in the transaction. It's straight nonstop.

We entered into an agreement with two institutional investors to raise $3 3 million approximately $3 million net of all fees and expenses.

Registered direct offering at $175 per share utilizing the company's S. Three registration that comes out to about 1.8 million common.

Common shares will be issued they're no warrants no other oh.

The residents and the transaction, it's straight common stock.

Speaker 4: The transaction is expected to close during the first week of October 2023. Post closing, the company will have approximately $7 million of cash on hand.

The transaction is expected to close during the first week of October 2023 post closing the company will have approximately $7 million of cash on hand.

We have no outstanding corporate debt, no convertible debt and preferred equity obligations.

Speaker 4: We have no outstanding corporate debt, no convertible debt, and no preferred equity obligation.

Speaker 4: I'd now like to pass it back to Lerone for some closing remarks, after which we will begin our question and answer session.

I'd now like to pass it back putting wrong for some closing remarks, after which we will begin our question and.

And answer session.

Thank you Mike.

Speaker 3: As we continue to reiterate, we are still in the early days of the immersive technologies like

As we continue to reiterate we are still in the early days of the Mercury technology cycle.

Speaker 3: I think the immersive industry has reached the next step in its evolution, and the Glims Group has a unique opportunity to capitalize.

I think the mercy of industry has reached the next step in its evolution and the glimpse group has a unique opportunity to capitalize on.

Speaker 3: With the knowledge, IP, and tier one customer and partner relationships we have accumulated over the past seven plus years, as one of the largest independent software and services companies in the segment, we have an opportunity to be a key part of this fundamental transformation of the immersive industry.

With the knowledge IP and tier one customer and partner relationships, we have accumulated over the past seven plus years I was one of the largest independent software and services company. In this segment, we have an opportunity to be a key part of this fundamental transformation of the mercy of industry.

Speaker 3: Thank you all for your interest and support of the Glimpse Group. And now I'll turn the call back over to the operator to take some questions. John ?

Thank you all for your interest and support of the claims group and now I'll turn the call back over to the operator to take some questions John .

Speaker 2: Thank you, Lee Ron. If you'd like to submit a question, you can either type it in the chat box below or raise your hand.

Thank you Lee Ron if.

If you'd like to submit a question you can either type it in the chat box below or raise your hand, we'll start with any audio questions and follow that with some write in questions. As time allows if he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two.

Speaker 2: Start with any audio questions and follow that with some writing questions as time allows.

Speaker 2: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start.

If you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Speaker 2: moment please while we poll for questions. Once again that's star one if you have a question or a comment.

One moment, please while we poll for questions. Once again Thats Star one if you have a question or a comment.

Speaker 2: Now our first question comes from Casey Ryan with West Park Capital.

Now our first question comes from Casey Ryan with West Park Capital. Please proceed.

Speaker 5: Good afternoon, everybody. Thanks for the call today.

Good afternoon, everybody. Thanks for the call today.

Speaker 5: There's a lot to process here, but but 1 of the important things going forward, I guess, is have you thought about.

There's lots of process here, but one of the important thing going forward I guess is have you thought about what's.

Speaker 5: What's the right with the new 3 divisions and then sort of the business focusing maybe more around projects.

What's the right way with the new three divisions and in sort of the business focusing maybe more around projects.

Speaker 5: broadly have you thought about what like target gross margin ranges might be like maybe if it was all software we would think 80s but if it's project

Broadly have you thought about what like the target gross margin ranges might be like maybe if it was all software we would think eighties, but if its projects.

Speaker 5: Would you feel comfortable thinking sort of in that 60 to 70% range would sort of be an expectation that might be reasonable or what are your thoughts around gross margins as you move forward post?

Would you feel comfortable thinking you know sort of in that 60 to 70 per cent range would sort of be an expectation that might be reasonable or what are your thoughts around gross margins as you move forward post <unk>.

Realignment.

Speaker 3: Good afternoon, Casey. So first of all, kind of the reverse. We're actually focusing more on software rather than project.

Good afternoon, Casey So first of all kind of the reverse were actually focusing more on software rather projects. So that's the exact reverse of the transition we're going through so if you look at kind of where we are kind of weird basically got a hybrid mix of probably 30% software licenses and seven people.

Speaker 3: So that's the exact reverse of the transition we're going through. So if you look at kind of where we are, kind of we are basically got a hybrid mix of probably 30% software licenses and 70% projects right now. So we're going to try and morph that on its head over the coming quarters and years. But I would look at margin of probably 60 to 70% over the next few quarters and then growing from there. Okay.

Sent projects right now so we're going to try and morph that on its head over the coming quarters and years, but I would look at margin of probably 60% to 70% over the next few quarters and then growing from there.

Okay.

Speaker 6: And then...

And then.

Speaker 5: This is a question for the future, but with these three distinct...

This is a question for the future, but but with these three distinct units that were laying out on the call today.

Speaker 5: units that were laying out in the call today.

Speaker 5: Do you believe that you might start providing percentage of revenue contributions from each? Just because I presume that, like, 1 of them or 2 of them may be bigger than them. Like the other, but.

Do you believe that you might start providing percentage of revenue contributions from age just because I presume that like one of them or two of them may be bigger that unlike the other but.

Speaker 5: would you guys consider doing that kind of reporting moving forward just to add some sort of

Would you guys consider doing that kind of reporting moving forward just to add some sort of debt.

Speaker 5: depth to sort of the revenue breakdown outlook, I guess.

The depth the sort of the revenue breakdown you know outlook I guess.

Speaker 3: So overall, we haven't disclosed and broken down revenues by subsidiaries for a variety of reasons. But the three big ones we're focusing on are pretty balanced in terms of between themselves, when you can have, obviously, those different fluctuations on a quarterly basis based on what is recognized in each period. But overall, they're like three legs of our stool. So they're all three pre-sizeable and balanced considering.

So overall kind of we haven't disclosed and broken down revenues by subsidiaries for a variety of reasons, but the three big ones. We're focusing on are pretty balanced in terms of scale out between themselves. When you get off obviously those different fluctuations on a quarterly basis based on kind of what is recognized in each period, but over.

Or all of their kind of their kind of like three legs of our stool. So there are all three pretty sizable unbalanced subsidiaries.

Speaker 5: Okay, okay, good. And then as you think about strategically evaluating the other pieces of the business, maybe pieces that don't fit cleanly into this new structure.

Okay. Okay. Good.

And then.

And then as you think about strategically evaluating the other pieces of the business maybe pieces that don't fit cleanly into this new structure.

Speaker 5: Do you have any expectation of what those structures might look like? Like, are you focused on making them cash transactions or is it possible to do equity, equity compensation or other royalty type of structures or.

Do you have any expectation of what those what those structures might look like like are you focused on making them cash transactions are or is it possible to do equity you know equity compensation or other royalty type type of structures or.

Speaker 5: Would you be focused on generating cash from selling off assets potentially?

Would you be focused on generating cash from selling off assets potentially.

Speaker 3: So we're looking at kind of basically how do we maximize value of.

So we're looking at kind of especially how do we maximize value.

Speaker 3: pieces that we are not seeing as strategic to our business. And we're open to a variety of structures, from spending them out and holding a piece to it, to selling them out for either cash or some future royalties, to integrating them into some of the bigger pieces we're keeping. So we're exploring all of the options, and there's quite a few active discussions that we're undertaking right now. But not more.

P seems that we are not seeing a strategic to our business and we're open to a variety of structures long spending them out in holding a piece of it to selling them out for either cash or some future royalties to integrating them into some of the bigger pieces. We're keeping so we're exploring all of the options and there's quite a few active.

The discussions that we're we're undertaking right now, but it's not something that's going to drive the business in a big way. So it's more about allowing us to really focus our efforts and resources on the areas, where we've seen significant traction now we think there's very big opportunities down the road.

Speaker 3: It's not something that's going to drive the business in a big way. So it's more about allowing us to really focus our efforts and resources on the areas where we've seen significant traction and we think there's very big opportunities down the road.

Speaker 5: Good, great. And then probably the last question for me is just...

Good Great and then probably the last question for me is just.

Speaker 5: Metas Connect kind of their AR, VR kind of conference was this week.

<unk> connect kind of their their E. R. V are kind of conference was this week aside.

Speaker 5: aside from us judging for ourselves what maybe the takeaways from that conference were.

Aside from us judging for ourselves, what what maybe the takeaways from that conference where.

Operator: Please continue to hold ladies and gentlemen. Your conference will begin momentarily. Please continue to hold.

Operator: Your conference will begin momentarily. Welcome to the Glimpse Group Fiscal Year 2023 Financial Results webinar. At this time, all participants are in a listen-only mode. Question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. The earnings release that accompanies this call is available on the Investors section of the company's website at https.com-fordslash-ir.glimpsegroup.com-fordslash.

Speaker 5: Were there things beyond the hardware that like were meaningful or thoughts that you might have around what what met is saying that sort of constructive for the overall and the market of AR and VR.

Were there things that beyond the hardware that like where meaningful or thoughts that you might have around what what Matt is saying that's sort of constructive for the overall end market of a R and D. R.

Speaker 3: So I think kind of obviously it showed one metas commitment, renewed commitment to the space and that this is still kind of a high priority for them. Obviously kind of, they've changed the name into it, but, uh, it's, it's showing kind of how they think about the industry. I think the headset is a step forward. It's taken a lot of the, uh,

So I I think kind of obviously it shows one met as commitments a renewed commitment to the space and this is still kind of a high priority for them, obviously kind of we have changed the name into it but.

It's it's it's showing kind of how they think about the industry I think the headset is a step forward. It speaking a lot of the Ah <unk>.

Speaker 3: good features, not all of them, but many of them from the pro, which was priced too high for the market in terms of mass adoption.

Good features not all of them, but many of them from the pro which was priced too high for the market in terms of kind of mass adoption and kind of reduce the price to a place that I think is very reasonable while adding a very important sort of element of mixed reality, allowing it to mix the physical world with the immersive.

Speaker 3: and kind of reduce the price to a price that I think is very reasonable, while adding a very important kind of element of mixed reality, allowing you to mix the physical world with the immersive experience and really kind of tying that similar to how Apple is looking at bigger elements. So I think you can see the trends from what Apple is doing and what they're talking about and what Meta is doing and seeing where the next phase of this industry is going.

Hearings and really kind of signed up similar to how Apple is usually you're looking at bigger element.

So I think you can see the trend from what Apple is doing and what they were talking about and what meta is doing and seeing where the next phase of this industry is going through.

Yeah, great. Thank you.

Speaker 5: Great, thank you. Those were the bulk of my questions, so I appreciate you taking the time to answer those. Thank you. Thank you, Casey.

Those are the bulk of my question. So I appreciate you taking the time to answer those thank you. Thank you Stacey.

Speaker 2: Once again, if there are any questions from the phone lines, please press star 1 on your touch tone.

Once again, if there are any questions from the phone lines. Please press star one on your Touchtone phone.

Speaker 2: Okay, the next question comes from Stephen K. with SWK Consulting. Please proceed.

Okay. The next question comes from Steven Kay with S. W. K consulting. Please proceed Steven.

Speaker 7: Hi, thank you very much for the call. Did I hear you say earlier that you were going to do a raise at $1.75 a share? And if I did hear that, is there any way for any of us to participate in that, or that's purely a single, one-off institutional commitment?

Hi, Thank you very much for the call did I hear you say earlier that you were going to do a raise.

And $1.75 a share and if I did hear that is there any way for any of us to participate in that or that's purely a single one off institutional commit there.

Speaker 3: That was a one-off deal that happened earlier today, just after the close. And it is not open to other participants, but hopefully if you're interested, you'll be able to find shares in the market. But this deal is a one-time opportunity that helped us put together in our balance sheet enough cash to allow us to invest in what we see as an amazing opportunity down the road. Okay, thank you very much.

That was a one off deal that happened earlier today, just after the close and it it is not open to other participants, but hopefully if you're interested are you will be able to find chairs in the markets.

But there still is a onetime opportunity that helped us put together a in our balance sheets enough cash to allow us to invest in what we see as an amazing opportunity down the road.

Okay. Thank you very much.

Okay. The next question comes from.

Jordan Cytori with B line Advisory Jordan. Please proceed.

Speaker 2: Jordan Satari with Beeline Advisory. Jordan, please proceed.

Speaker 8: Hello, gentlemen, congratulations on all the success thus far. I wanted to ask...

Hello, gentlemen.

Congratulations on all the success, thus far I wanted to ask.

Speaker 8: Do you guys foresee in the maybe coming 12 months, 24 months, with the current market conditions, there'll be opportunities for more acquisitions? Is that in...

Do you guys foresee and it may be coming 12 months 24 months with the current market condition there'll be opportunities for more acquisitions is that.

In.

Speaker 8: in the plans or would you say that you're pretty much done in terms of going harder on acquisitions and right now more focused on the streamlining.

Yeah in the plans or.

Would you say that you're pretty much done in terms of.

Going harder on acquisition and right now more focused on.

The streamlining operations.

Speaker 3: So I would love to do opportunistic acquisitions. We are actually getting a lot of very interesting opportunities in front of us.

So I would love to do opportunistic to do opportunistic acquisitions, we're actually getting a lot of very interesting opportunities in front of us. The unfortunate fact is right now there's a big disconnect between the public markets, where we're at and that's where our currency is in the private markets.

Operator: Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcasts, including those regarding future financial results and industry prospects are forward-looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the call. Please refer to the company's regulatory filings for a list of associated risks. And we would ask also, excuse me, and we would also refer you to the company's website for more supporting industry information.

Speaker 3: The unfortunate fact is right now there's a big disconnect between the public markets where we're at, and that's where our currency is, and the private markets in terms of valuation.

In terms of valuations and so for us to do any sizable acquisitions, we will need that to balance out or you can go in our favor.

Speaker 3: So for us to do any sizable acquisitions, we will need that to balance out or even go in our favor. So we will need to see public...

So we will need to see public valuations go up.

Speaker 3: valuations go up and private company valuations go down for us to kind of consider doing acquisitions.

And private company valuations go down for us to kind of consider doing acquisitions.

John: I would now like to hand the call over to Leran and Tovom, President and CEO of the Glimpse Group. The floor is yours.

I would agree.

Alright, that's it from my side.

Thank you dawn.

Lyron Bentovim: Thank you, John, and thank you, everyone, for joining us. I am pleased to welcome you to the Glimpse Group Fiscal Year 2023 Financial Results Investor call for a year-ended June 2030-2023. Glimpse's fiscal year was highlighted by strong revenue growth year-over-year combined with significant cross-reductions and a strategic repositioning towards providing immersive enterprise software and services that are driven by spatial computing, cloud and AI.

Speaker 2: If there are any final questions from the audio lines, please indicate so now by pressing star one.

Is there any final questions from the audio lines. Please indicate so now by pressing star one.

Speaker 2: Okay, we have no further questions from the phone lines. At this time, we'll turn to some write-in questions again. If you'd like to ask a question, please use the chat function.

Okay. We have no further questions from the phone lines at this time, we'll turn to some write in questions again if.

You'd like to ask a question please use the chat function.

Ron do you have any questions from your side.

Speaker 3: I did not see any. So I would like to thank each and every one of you for joining our earnings conference call. We look forward to continuing to update you on an ongoing process and growth. If you were unable to answer any of your questions, please reach out to us directly.

I do not see any so I would like to thank each and every one of you for joining our earnings conference call. We look forward to continuing to update you in an ongoing process and globe.

Lyron Bentovim: Our 2023 revenue of approximately 13.5 million, a 85% increase compared to 2022 revenue of approximately 7.3 million, primarily driven by the acquisition of right-line interactive and sector-five digital. Since the company's IPO in July 2021, our annual revenues have increased by approximately 4x from an IPO base of approximately 3.4 million. While the immersive industry has evolved significantly over the past few years, it has yet to reach high adoption levels on either the enterprise or the consumer sites.

We're unable to answer any of your questions. Please reach out to us directly.

This does conclude today's webinar. Thank you for your participation and have a wonderful day.

Speaker 2: This does conclude today's webinar. Thank you for your participation and have a wonderful day.

Lyron Bentovim: Over the last few months, we have seen a change in the market. Organizations are no longer just looking for one-time proof-of-concept projects to test out immersive technologies. They are looking to fully integrate immersive technologies strategically into many aspects of their business. The good news is that this change is a sign of the beginning of the maturation period for the industry and will eventually lead to a more stable recurring revenue model. But in the short run, this has led to a significant increase in self-cycle and may impact short-term revenues.

Lyron Bentovim: In recent months, we've seen a few significant development in the industry. Aple announced its first immersive headsets, the Vision Pro, and Maydan announced yesterday its next generation headsets, the Oculus 3. Both with enhanced spatial capabilities blending the physical and virtual worlds. Other large players are introducing advanced headsets as well. These are expected to push the industry forward a step further. However, in our view, for the immersive industry to be truly unleashed and reach its vast potential, it has to first be untethered from the computing limitation inherent in current immersive technologies hardware, VR headsets, tablets, and phones.

Lyron Bentovim: When the processing and computer immersive experiences are done at the cloud level and then transmitted to a headset or device, the impact could be revolutionary. Powerful immersive experiences with endless use cases throughout industries driven by cutting edge spatial AI capabilities delivered over true 5G networks to devices, with a far smaller and lighter full factor. Recent development in spatial computing, Cloud and NI, combined with our internal capabilities and relationships from these frauds, have driven us to the strategic decision to focus on developing immersive software products and services that are anchored in scalable cloud computing and AI software platforms.

Lyron Bentovim: By doing so, Glimpse can greatly expand the immersive capabilities and solutions it offers enterprise customers, provide those in scale, potentially leading to significant revenue growth, driven by recurring software license and staff revenues. Our immersive cloud-based development is powered by and is being done in collaboration with industry leaders such as Nvidia, Microsoft, AT&T, and the US military. In order to facilitate this process, we are streamlining our operations down to focus on three primary subsidiary companies, bridal interactive, curial, and sector 5 digital.

Lyron Bentovim: In parallel, we will explore various strategic alternatives for subsidiary companies, including raising capital into them, spinning them out, selling them, or consolidating them into our main three subsidiaries. This is not a straightforward transition and it will require Glimpse to restructure internally, invest in developing these new technologies while continuing to cut legacy costs. The shorter impact may include the decline in revenues as we transition from predominantly project-based revenues and a consolidation of some of our subsidiary companies.

Lyron Bentovim: However, we view this as an essential move if we are to become a dominant software player in this larger scale industry. While further development and investment will be required to bring our vision to fruition, we have already begun to see adoption in the market. Recent examples include, Brightline, alongside prime contractor BCI solutions and top contractor Purdue University, was awarded a low seven figure directive place to contract with the US Air Force.

Lyron Bentovim: The overall solution utilizes Brightline's spatial computing platform combined with AI and machine learning elements to teach and operate robots using human tracking and immersive simulation environments in industrial of the United States. Whiteline also entered into a cooperative research and development agreement with the U.S. Naval Surface Warfare Center, Dolgren Division, to adopt new technologies in end-to-end, immersive, hyper-scale environments and simulator systems. Whiteline was recently selected to support a major immersive technology hardware provider to accelerate their computing interface into GPU-enabled clouds with streaming and visualization capabilities.

Lyron Bentovim: Folpo AR, a subsidiary of Curial, entered into a software license with Ivor Shae, a global skincare cosmetics and perfume company, to provide AI-powered skin analysis and real-time visual product recommendations. Curial also completed a paid engagement to create an immersive experience to complement the launch of Sabrina Carpenters' real-world fragrance, sweet tooth, on walmart.com, via a virtual store and NFT experience in the Central App. Spirits are, now part of S5D, entered into an initial agreement for two WebAR experiences with one of the world's largest consumer-packaged group companies, which is expected to be deployed in commercial environments and access by consumers on mobile phones and tablets without a need to download an app, potentially leading to additional WebAR experiences and widespread implementation. As made down a little detail later in his preferred remarks, we have taken significant steps to reduce our operating expense base and continue to maintain a clean capital structure.

Lyron Bentovim: In parallel, we decided to raise capital today in a clean structure and we are currently well-capitalized to pursue this opportunity.

Maydan Rothblum: With that, I will now start it over to Meydan Rakhloom, Glimpses CFO and COO, to review the financial results. Meydan? Thanks, Meydan.

Maydan Rothblum: I will limit my portion to a summer review of our financial results. A full breakdown is available in our 10K in the press release that were filed after market closed today. Please note that I will refer to adjusted EBITDA and other non-GAP measures. For the calculation of adjusted EBITDA and other non-GAP measures, these refer to the NDNate section of our 10K filing, which you can find on our website under SEC Filing.

Maydan Rothblum: Full revenue for the year ended June 30, 2023, was approximately 13.5 million compared to approximately 7.3 million for the year complex, the addition of subsidiary companies through acquisitions and new customers. Fiscal year Q4, fiscal year 23, that's the April 23 to June 23 quarter. Revenue of approximately 2.9 million, a 16% increase compared to Q4, fiscal year 22 revenue of approximately 2.5 million. Gross profit was approximately 68% for the year ended June 30, 2023 compared to approximately 83% for the year ended June 20, 2022. The decrease was driven by the addition of DLI and F5D lower margin project revenue.

Maydan Rothblum: Thank you. Adjusted EBITDA laws for fiscal year 23 was approximately 6.45 million compared to EBITDA laws of the approximately 3.97 million for fiscal year 22. During the fiscal year and in recent months thereafter, we decreased the company's annual operating expense base more approximately $5 million in aggregate or approximately 25%. We expect to continue significantly reduce our operating expense base as we realline our operations. Our target is to reach cashflow profitability from our subsidiary company's operations, potentially as soon as Q2 fiscal year 24, October to December 23, period, excluding any growth investments.

Maydan Rothblum: As you're on discussed, S5D is an active operating entity of the company and the expected term made one of our three core subsidiary companies going forward. Due to a slow down in S5D's business, relative to the assumptions made during the fact-quisition, it was determined that it would be appropriate to write down its goodwill and intangible assets, pulling approximately $15 million. This was a key non-cash driver in our net loss. We ended this three-year 23 with approximately 5.6 million in cash and equipment.

Maydan Rothblum: Today, September 28, 2023, we entered into an agreement with two institutional investors to raise $3.3 million, approximately $3 million net of all fees and expenses. They are registered direct offering at $1.75 per share utilizing the company's S3 registration. That comes out to about 1.8 million common shares. It will be issued. There are no warrants, there are no other derivatives in the terms action. It's a straight common stock. The transactions expected to close during the first week of October 2003. Post-closing, the company will have approximately $7 million of cash on hand. We have no outstanding corporate debt, no convertible debt, and no preferred equity obligations.

Lyron Bentovim: I'd now like to pass it back to your own for some closing remarks after which we will begin our question and answer session. Thank you, Maidan. As we continue to reiterate, we are still in the early days of the immersive technology cycle.

Lyron Bentovim: I think the immersive industry has reached the next step in its evolution, and the glimps group has a unique opportunity to capitalize on. With the knowledge, IP, and tier one customer and partner relationships, we have accumulated over the past seven plus years. As one of the largest independent software and services company in this segment, we have an opportunity to be a key part of the fundamental transformation of the immersive industry.

John: Thank you all for your interest and support of the glimps group, and now I'll turn the call back over to the operator to take some questions. John?

John: Thank you, Lee Ron. If you'd like to submit a question, you can either type it in the chat box below or raise your hand. We'll start with any audio questions and follow that with some writing questions as time allows. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

John: For participants using speaker equipment it may be necessary to pick up your hands set before pressing the star keys. One moment please while we poll for questions. Once again, that's star one if you have a question or a comment.

Casey Ryan: Now our first question comes from Casey Ryan with West Park Capital. Please proceed. Good afternoon everybody, thanks for the call today.

Lyron Bentovim: There's a lot to process here but one of the important things going forward I guess is have you thought about what's the right with the new three divisions and sort of the business focusing maybe more around projects broadly have you thought about what like target gross margin ranges might be like maybe if it was all software we would think 80s but if it's projects would you feel comfortable thinking you know sort of in that 60 to 70 percent range would sort of be an expectation that might be reasonable or what are your thoughts around gross margins as you move forward post realignment. Good afternoon Casey so first of all kind of the reverse we're actually focusing more on software rather than projects so that's the exact reverse of the transition we're going through so if you look at kind of where we are kind of we are basically got a hybrid mix of probably 30 percent software licenses and 70 percent projects right now so we're going to try and morph that on its head over the coming quarters and years but I would look at margin of probably 60 to 70 percent over the next few quarters and then growing from there.

Lyron Bentovim: Okay and then this is a question for the future but with these three distinct units that we're laying out in the call today do you believe that you might start providing percentage of revenue contributions from each just because I presume that like one of them or two of them may be bigger than them like the other but would you guys consider doing that kind of reporting moving forward just to add some sort of depth to sort of the revenue breakdown you know I'll look I guess. So overall kind of we we haven't disclosed and broken down revenues but subsidiaries for a variety of reasons but the three big ones we're focusing on are pretty balanced in terms of kind of between themselves when you kind of obviously those different fluctuations on a quarterly basis based on kind of what is recognized kind of in each period but overall they're kind of they're kind of like three legs of our school so they're all three pre pleasable and balanced subsidiaries okay okay good and then and then as you think about strategically evaluating the other pieces of the business maybe pieces that don't fit cleanly into this new structure.

Lyron Bentovim: Do you have any expectation of what those structures might look like? Are you focused on making them cash transactions, or is it possible to do equity compensation or other royalty type of structures, or would you be focused on generating cash from selling off assets potentially? We're looking at how do we maximize value of pieces that we are not seeing as strategic to our business, and we're open to a variety of structures from spending them out and holding a piece to it, to selling them out for either cash or some future royalties, to integrating them into some of the bigger pieces we're keeping.

Lyron Bentovim: So we're exploring all of the options, and there's quite a few active discussions that we're on the paking right now, but it's not something that's going to drive the business in a big way, so it's more about allowing us to really focus our efforts and resources on the areas where we've seen significant traction, and we think there's very big opportunities down the road.

Lyron Bentovim: Good, great.

Lyron Bentovim: And then probably the last question for me is just met as connect kind of their ARBR kind of conference was this week, aside from us judging for ourselves what maybe the takeaways from that conference were, were there things beyond the hardware that like we're meaningful or thoughts that you might have around what Meta's saying, that sort of constructive for the overall end market of ARBR? So I think kind of obviously it showed one Meta's commitment, renewed commitment to this space, and that this is still kind of a high priority for them obviously kind of, they've changed the name into it, but it's showing kind of how they think about the industry.

Lyron Bentovim: I think the headset is a straightforward, it's taken a lot of the good features, not all of them, but many of them from the pro, which was priced too high for the market in terms of kind of mass adoption, and kind of reduced the price to a price that I think is very reasonable, while adding a very important kind of element of mixed reality, allowing you to mix the physical world with the immersive experience and really kind of timed out similar to how Apple is looking at bigger elements. So I think you can see the trends from what Apple is doing and what they're talking about and what Meta is doing and seeing where the next phase of this industry is going to.

Casey Ryan: Great, thank you, those were the bulk of my questions, so I appreciate you taking the time to answer those. Thank you. Thank you, Facy. Once again, if there are any questions from the phone lines, please press star one on your touch-tone phone.

Stephen K: Okay, the next question comes from Stephen K with SWK Consulting, please proceed, Stephen. Hi, thank you very much for the call. Did I hear you say earlier that you were going to do a raise at $1.75 a share and if I did hear that, is there any way for any of us to participate in that or that's purely a single one-off institutional commitment? There was a one-off deal that happened earlier today just after the close and it is not open to other participants but hopefully if you're interested you'll be able to find shares in the market but this deal is a one-time opportunity that helped us put together in our balance sheet enough cash to allow us to invest in what we see as an amazing opportunity down the road. Okay, thank you very much.

Jordan Sattari: Okay, the next question comes from Jordan Sattari with B-line Advisory. Jordan, please proceed.

Lyron Bentovim: Hello, German, congratulations on all the success thus far. I wanted to ask, do you guys foresee in that maybe coming 12 months, 24 months with the current market condition? There will be opportunities for more acquisitions. Is that in the plans or would you say that you're pretty much done in terms of going harder on acquisitions and right now more focused on streamlining operations? So I would love to do opportunistic acquisitions. We are actually getting a lot of very interesting opportunities in front of us.

Lyron Bentovim: The unfortunate factors right now there's a big disconnect between the public markets where we're at and that's where our currency is and the private markets in terms of valuations. So for us to do any sizable acquisitions, we will need that to balance out or even go in our favor. So we will need to see public valuations go up and private company valuations go down for us to kind of consider doing acquisitions.

Lyron Bentovim: I would agree.

Operator: All right, that's it from my friend. Thank you, Jordan. If there are any final questions from the audio lines, please indicate so now by pressing star 1. Okay, we have no further questions from the phone lines. At this time, we'll turn to some right-end questions again. If you'd like to ask a question, please use the chat function. Ronda, do you have any questions from your side? I did not see any.

Operator: So I would like to thank each and every one of you for joining our earnings conference call. We look forward to continuing to update you on an ongoing process and growth. If you weren't able to answer any of your questions, please reach out to us directly.

Operator: This does conclude today's webinar.

Operator: Thank you for your participation and have a wonderful day.