UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40556

THE GLIMPSE GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada		81-2958271
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

15 West 38th St., 12th Floor New York, NY		10018
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (917) 292-2685

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.001 per share		GGRP		The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ‘‘emerging growth company’’ in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 11 2026, the registrant had 21,076,506 shares of common stock, par value $0.001 per share, outstanding.

THE GLIMPSE GROUP, INC.

TABLE OF CONTENTS

		Page No.
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33
ITEM 4.	CONTROLS AND PROCEDURES	33
PART II	OTHER INFORMATION	34
ITEM 1.	LEGAL PROCEEDINGS	34
ITEM 1A.	RISK FACTORS	34
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	34
ITEM 6.	EXHIBITS	35
SIGNATURES		36

THE GLIMPSE GROUP, INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Page
Index to Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets	4
Condensed Consolidated Statements of Operations	5
Condensed Consolidated Statements of Stockholders’ Equity	6
Condensed Consolidated Statements of Cash Flows	8
Notes to Condensed Consolidated Financial Statements	9-23

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of March 31, 2026			As of June 30, 2025
	(Unaudited)			(Audited)
ASSETS
Cash and cash equivalents	$	2,151,320		$	6,832,725
Accounts receivable		662,201			840,551
Deferred costs		2,129			48,971
Notes receivable		50,832			160,600
Prepaid expenses and other current assets		674,497			289,810
Total current assets		3,540,979			8,172,657

Equipment and leasehold improvements, net		41,278			54,898
Right-of-use assets, net		161,160			122,094
Intangible assets, net		-			60,717
Goodwill		-			10,857,600
Other assets		11,100			11,100
Total assets	$	3,754,517		$	19,279,066

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	215,386		$	228,371
Accrued liabilities		364,136			446,896
Deferred revenue		306,418			52,576
Lease liabilities, current portion		149,959			127,046
Contingent consideration for acquisition		-			1,483,583
Total current liabilities		1,035,899			2,338,472

Long term liabilities
Lease liabilities, net of current portion		12,371			4,704
Total liabilities		1,048,270			2,343,176
Commitments and contingencies		-			-

Stockholders’ Equity
Preferred Stock, par value $0.001 per share, 20,000,000 shares authorized; 0 shares issued and outstanding		-			-
Common Stock, par value $0.001 per share, 300,000,000 shares authorized; 21,076,506 and 21,055,506 issued and outstanding, respectively		21,077			21,056
Additional paid-in capital		83,219,223			82,506,758
Accumulated deficit		(80,534,053	)		(65,591,924	)
Total stockholders’ equity		2,706,247			16,935,890
Total liabilities and stockholders’ equity	$	3,754,517		$	19,279,066

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	2026			2025			2026			2025
	For the Three Months Ended						For the Nine Months Ended
	March 31,						March 31,
	2026			2025			2026			2025
Revenue
Software services	$	443,189		$	1,283,287		$	2,866,391		$	6,641,652
Software license/software as a service		209,428			138,948			461,159			387,886
Royalty income		4,841			-			28,258			-
Total Revenue		657,458			1,422,235			3,355,808			7,029,538
Cost of goods sold		73,359			402,209			974,471			2,061,519
Gross profit		584,099			1,020,026			2,381,337			4,968,019
Operating expenses:
Research and development expenses		1,532,362			829,815			3,400,149			2,610,038
General and administrative expenses		626,139			1,165,187			2,449,194			2,947,847
Sales and marketing expenses		273,605			483,138			901,640			1,606,236
Amortization of acquisition intangible assets		-			100,537			60,717			326,614
Goodwill impairment		10,857,600			-			10,857,600			-
Change in fair value of acquisition contingent consideration		-			26,012			16,417			87,492
Total operating expenses		13,289,706			2,604,689			17,685,717			7,578,227
Loss from operations before other income		(12,705,607	)		(1,584,663	)		(15,304,380	)		(2,610,208	)

Other income:
Gain on sale of business		-			-			240,000			-
Interest income		22,376			82,461			122,251			119,686
Net loss	$	(12,683,231	)	$	(1,502,202	)	$	(14,942,129	)	$	(2,490,522	)

Basic and diluted net loss per share	$	(0.60	)	$	(0.07	)	$	(0.71	)	$	(0.13	)

Weighted-average common shares used to compute basic and diluted net loss per share		21,076,506			20,999,445			21,072,444			19,161,661

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Shares		Amount		Capital		Deficit			Total
	Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance as of January 1, 2026		21,076,506	$	21,077	$	83,080,512	$	(67,850,822	)	$	15,250,767
Common stock and stock option-based compensation expense		-		-		138,711		-			138,711
Net loss		-		-		-		(12,683,231	)		(12,683,231	)
Balance as of March 31, 2026		21,076,506	$	21,077	$	83,219,223	$	(80,534,053	)	$	2,706,247

	Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance as of July 1, 2025		21,055,506	$	21,056	$	82,506,758	$	(65,591,924	)	$	16,935,890
Common stock and stock option-based compensation expense		21,000		21		507,995		-			508,016
Stock option-based board of directors expense		-		-		204,470		-			204,470
Net loss		-		-		-		(14,942,129	)		(14,942,129	)
Balance as of March 31, 2026		21,076,506	$	21,077	$	83,219,223	$	(80,534,053	)	$	2,706,247

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance as of January 1, 2025		20,272,006	$	20,272	$	81,925,269	$	(64,027,593	)	$	17,917,948
Common stock and stock option-based compensation expense		10,500		11		206,068		-			206,079
Common stock issued to vendors		1,250		1		3,086					3,087
Stock option-based board of directors expense		-		-		102,235		-			102,235
Common stock issued for exercise of warrants		760,000		760		-		-			760
Net loss		-		-		-		(1,502,202	)		(1,502,202	)
Balance as of March 31, 2025		21,043,756	$	21,044	$	82,236,658	$	(65,529,795	)	$	16,727,907

	Common Stock				Additional Paid-In			Accumulated
	Shares		Amount		Capital			Deficit			Total
Balance as of July 1, 2024		18,158,217	$	18,158	$	74,559,600		$	(63,039,273	)	$	11,538,485
Balance		18,158,217	$	18,158	$	74,559,600		$	(63,039,273	)	$	11,538,485
Common stock and stock option-based compensation expense		26,500		27		588,364			-			588,391
Common stock issued to vendors		1,250		1		3,086						3,087
Stock option-based board of directors expense		-		-		127,154			-			127,154
Common stock issued for exercise of options		7,789		8		(8	)		-			-
Common stock issued in Securities Purchase Agreement, net		1,990,000		1,990		6,783,562			-			6,785,552
Common stock issued for exercise of warrants		860,000		860		174,900						175,760
Net loss		-		-		-			(2,490,522	)		(2,490,522	)
Net income (loss)		-		-		-			(2,490,522	)		(2,490,522	)
Balance as of March 31, 2025		21,043,756	$	21,044	$	82,236,658		$	(65,529,795	)	$	16,727,907
Balance		21,043,756	$	21,044	$	82,236,658		$	(65,529,795	)	$	16,727,907

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE GLIMPSE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	2026			2025
	For the Nine Months Ended March 31,
	2026			2025
Cash flows from operating activities:
Net loss	$	(14,942,129	)	$	(2,490,522	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation		91,586			390,467
Common stock and stock option based compensation for employees, board of directors and vendors		712,486			718,632
Net gain on divestiture of subsidiaries		-			(1,392,434	)
Reserve on note received in connection with divestiture of subsidiaries		-			1,500,000
Gain on office lease termination		-			(34,660	)
Acquisition contingent consideration fair value adjustment		16,417			87,492
Goodwill impairment		10,857,600			-
Gain on sale of business		(240,000	)		-
Adjustment to operating lease right-of-use assets and liabilities		(8,486	)		(43,605	)

Changes in operating assets and liabilities:
Accounts receivable		178,350			70,914
Deferred costs		46,842			(434,781	)
Prepaid expenses and other current assets		(384,687	)		198,917
Other assets		-			5,349
Accounts payable		(12,985	)		(128,862	)
Accrued liabilities		(42,760	)		442,496
Deferred revenue		253,842			994,063
Net cash used in operating activities		(3,473,924	)		(116,534	)
Cash flow from investing activities:
Purchase of leasehold improvements and equipment		(17,249	)		(41,453	)
Proceeds from sale of business		200,000			-
Payment of contingent consideration for acquisition		(1,500,000	)		(1,500,000	)
Net cash used in investing activities		(1,317,249	)		(1,541,453	)
Cash flows provided by financing activities:
Notes receivable repayments (issuance)		109,768			(93,600	)
Proceeds from securities purchase agreement, net		-			6,785,552
Proceeds from exercise of warrants		-			175,760
Net cash provided by financing activities		109,768			6,867,712

Net change in cash and cash equivalents		(4,681,405	)		5,209,725
Cash and cash equivalents, beginning of period		6,832,725			1,848,295
Cash and cash equivalents, end of period	$	2,151,320		$	7,058,020

The accompanying notes are an integral part of these condensed consolidated financial statements.

THE GLIMPSE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS

The Glimpse Group, Inc. (“Glimpse”, the “Company”) is an Immersive technology company, providing Spatial Computing, Virtual Reality (“VR”) and Augmented Reality (“AR”) software and services. Glimpse’s operating entities are located in the United States. The Company was incorporated in the State of Nevada in June 2016.

Glimpse’s unique business model aims to build scale and a robust ecosystem, while simultaneously providing investors an opportunity to invest directly into this emerging industry via a diversified platform.

The Company is listed on the Nasdaq Capital Market Exchange (“NASDAQ”) under the ticker GGRP (as of February 19, 2026, prior ticker was VRAR).

NOTE 2. GOING CONCERN

At each reporting period, the Company evaluates whether there are conditions or events that raise doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing expectations for the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern.

The Company has incurred recurring losses since its inception, including a net loss of approximately $14.9 million for the nine months ended March 31, 2026. In addition, as of March 31, 2026, the Company had an accumulated deficit of $80.5 million. Furthermore, see Notes 5, 6 and 8 for recent challenges to the Company. The Company’s cash and cash equivalents as of March 31, 2026 may not be sufficient to fund operations and other commitments for at least the next twelve months from the date of issuance of these consolidated financial statements. Accordingly, the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for a period of at least 12 months from the date of issuance of these consolidated financial statements.

In order to restore the going concern the Company may take actions which could include, but are not limited to: subsidiary spinoffs (via initial public offering or other manner), merger with another entity, and equity or debt financings. There is no assurance that these actions will be taken or be successful if pursued.

The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described.

NOTE 3. NASDAQ LISTING NOTIFICATION

On March 13, 2026, the Company received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for the prior 30 consecutive business days, the Company no longer meets the minimum bid price requirement for continued listing on the Nasdaq Capital Market. In accordance with Nasdaq Marketplace rules, the Company has a period of 180 calendar days from March 13, 2026 or until September 9, 2026, to regain compliance with the Minimum Bid Price Requirement. If at any time before September 9, 2026, the bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide written notification that the Company has achieved compliance with the Minimum Bid Price Requirement. The Company’s receipt of the notification letter has no immediate effect on the listing of the Company’s shares, which will continue to trade uninterrupted on Nasdaq under the ticker “GGRP”. In addition, it does not affect the Company’s business, operations or reporting requirements with the Securities and Exchange Commission. In order to regain compliance with the Minimum Bid Price Requirements, the Company and its Board of Directors are reviewing various potential measures.

NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2026, the results of operations and cash flows for the three and nine months ended March 31, 2026 and 2025. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and nine months ended March 31, 2026 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2026 or for any subsequent periods. The consolidated balance sheet as of June 30, 2025 has been derived from the audited consolidated financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the SEC’s rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended June 30, 2025.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the balances of Glimpse and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Customer Concentration and Credit Risk

Five customers accounted for approximately 79% (22%, 19%, 17%, 12% and 10%, respectively) of the Company’s total gross revenues during the three months ended March 31, 2026. Two of the same customers accounted for approximately 51% (30% and 21%, respectively) of the Company’s total gross revenues during the nine months ended March 31, 2026.

Three customers accounted for approximately 52% (32%, 10%, and 10%, respectively) of the Company’s total gross revenues during the three months ended March 31, 2025. One of the same customers and another customer accounted for approximately 58% (35% and 23%, respectively) of the Company’s total gross revenues during the nine months ended March 31, 2025.

Three customers accounted for approximately 82% (42%, 21% and 19%, respectively) of the Company’s accounts receivable as of March 31, 2026. One of the same customers accounted for approximately 46% of the Company’s accounts receivable as of June 30, 2025. No other customer accounted for greater than 10% of accounts receivable as of June 30, 2025.

The Company maintains cash in accounts that, at times, may be in excess of the Federal Deposit Insurance Corporation limit. The Company has not experienced any losses on such accounts.

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy, which is based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value, is as follows:

● Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;

● Level 2 — inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

● Level 3 — unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company classifies its cash equivalents within Level 1 of the fair value hierarchy on the basis of valuations based on quoted prices for the specific securities in an active market.

The Company’s contingent consideration is categorized as Level 3 within the fair value hierarchy. Contingent consideration is recorded within contingent consideration in the Company’s consolidated balance sheet as of June 30, 2025. Contingent consideration has been recorded at its fair values using unobservable inputs that include assumptions regarding financial forecasts and discount rates. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management.

The Company’s other financial instruments consist primarily of accounts receivable, accounts payable and other liabilities, and are reported at approximate fair value due to the short-term nature of these instruments.

Goodwill

Goodwill is tested for impairment annually at fiscal year end June. If there are significant business developments during the fiscal year that would warrant a review, goodwill is reviewed at such time for impairment.

Goodwill is tested at the reporting unit (“RU”) level under the acquisition method approach per Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) 350-20, which represents all direct revenue and expense of the RU business. Goodwill is analyzed both quantitatively and qualitatively.

Quantitative measures primarily include a discounted cash flow model (“DCF”) assuming certain revenue and profit levels. The enterprise value of the RU based on the DCF model is compared to the carrying value of the RU. Quantitative models also may include industry comparable revenue multiple analyses.

Qualitative analysis includes existing customer contracts and quality of customers, expected new and follow-on contracts, value of the underlying technology developments, etc.

During the three months ended March 31, 2026, it was determined that goodwill was fully impaired, see Note 5.

Revenue Recognition

Nature of Revenues

The Company reports its revenues in three categories:

	●	Software Services: Spatial Computing, VR and AR projects, solutions and consulting services.
	●	Software License and Software-as-a-Service (“SaaS”): Spatial Computing, VR and AR software that is sold either as a license or as a SaaS subscription.
	●	Royalty income: royalty income earned pursuant to specific agreements.

The Company applies the following steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

	●	identify the contract with a customer;
	●	identify the performance obligations in the contract;
	●	determine the transaction price;
	●	allocate the transaction price to performance obligations in the contract;
	●	recognize revenue as the performance obligation is satisfied;
	●	determine that collection is reasonably assured.

Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer or service is performed and collection is reasonably assured. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A portion of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct. Other contracts can include various services and products which are at times capable of being distinct, and therefore may be accounted for as separate performance obligations.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales taxes and other taxes are excluded from revenues.

For distinct performance obligations recognized at a point in time, any unrecognized portion of revenue and any corresponding unrecognized expenses are presented as deferred revenue and deferred costs, respectively, in the accompanying balance sheets. Deferred costs include cash payroll costs and may include payments to consultants and vendors.

For distinct performance obligations recognized over time, the Company records deferred costs (costs in excess of billings) when revenue is recognized prior to invoicing, or deferred revenue (billings in excess of costs) when revenue is recognized subsequent to invoicing.

The Company recognizes royalty income pursuant to agreements with divested entities representing a percentage of said entities collected revenue.

Significant Judgments

The Company’s contracts with customers may include promises to transfer multiple products/services. Determining whether products/services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Further, judgment may be required to determine the standalone selling price for each distinct performance obligation.

During the three months ended March 31, 2026, estimates were revised regarding ultimate assurance of revenue collection on a certain sale agreement. See Note 6.

Disaggregation of Revenue

The Company generated revenue for the three and nine months ended March 31, 2026 and 2025 by delivering: (i) Software Services, consisting primarily of Spatial Computing and VR/AR software projects, solutions and consulting services, (ii) Software Licenses & SaaS, consisting primarily of Spatial Computing and VR/AR software licenses or SaaS, and (iii) Royalty income. The Company currently generates its revenues primarily from customers in the United States.

Revenue for a significant portion of Software Services projects and solutions (projects whereby, the development of the project leads to an identifiable asset with an alternative use to the Company) is recognized at the point of time in which the customer obtains control of the project, customer accepts delivery and confirms completion of the project. The Company also generates Software Services revenues which are custom project solutions (projects whereby, the development of the custom project leads to an identifiable asset with no alternative use to the Company, and, in which, the Company also has an enforceable right to payment under the contract) and are therefore recognized based on the percentage of completion using an input model with a master budget. The budget is reviewed periodically and percentage of completion adjusted accordingly.

Revenue for Software Services consulting services and website maintenance is recognized when the Company performs the services, typically on a monthly retainer basis.

Revenue for Software Licenses is recognized at the point of time in which the Company delivers the software and customer accepts delivery. Software Licenses often include third party components that are a fully integrated part of the Software License stack and are therefore considered as one deliverable and performance obligation. If there are significant contractually stated ongoing service obligations to be performed during the term of the Software License or SaaS contract, then revenues are recognized ratably over the term of the contract.

Timing of Revenue

Timing of revenue recognition may differ from the timing of invoicing to customers. The Company generally records an unbilled receivable asset when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing.

For certain Software Services project contracts the Company invoices customers after the project has been delivered and accepted by the customer. Software Service project contracts typically consist of designing and programming software for the customer. In most cases, there is only one distinct performance obligation, and revenue is recognized upon completion, delivery and customer acceptance. Contracts may include multiple distinct projects that can each be implemented and operated independently of subsequent projects in the contract. In such cases, the Company accounts for these projects as separate distinct performance obligations and recognizes revenue upon the completion of each project or obligation, its delivery and customer acceptance.

For contracts recognized over time, deferred revenue include billings invoiced for software projects for which the contract’s performance obligations are not complete.

In certain Software Services project contract situations, the Company invoices customers for a substantial portion of the project upon entering into the contract due to their custom nature and revenue is recognized based upon percentage of completion. Revenue recognized subsequent to invoicing is recorded as deferred revenue (billings in excess of cost) and revenue recognized prior to invoicing is recorded as a deferred cost (cost in excess of billings).

For Software Services consulting or retainer contracts, the Company generally invoices customers monthly at the beginning of each month in advance for services to be performed in the following month. The sole performance obligation is satisfied when the services are performed. Software Services consulting or retainer contracts typically consist of ongoing support for a customer’s software or specified business practices.

For Software License contracts, the Company generally invoices customers when the software has been delivered to and accepted by the customer, which is also when the performance obligation is satisfied. For SaaS contracts, the Company generally invoices customers in advance at the beginning of the service term.

For multi-period Software License contracts, the Company generally invoices customers annually at the beginning of each annual coverage period. Software License contracts consist of providing clients with software designed by the Company. For Software License contracts, there are generally no ongoing support obligations unless specified in the contract (becoming a Software Service).

The timing of revenue recognition for the three and nine months ended March 31, 2026 and 2025 was as follows:

SCHEDULE OF TIMING REVENUE RECOGNITION


	For the Three Months Ended					For the Nine Months Ended
	March 31,					March 31,
	2026			2025		2026		2025
Products and services transferred at a point in time	$	1,016,348		$	1,308,678	$	2,711,076	$	6,573,324
Products and services transferred/recognized over time	$	(358,890	)	$	113,557		644,732		456,214
Total revenue	$	657,458		$	1,422,235	$	3,355,808	$	7,029,538

Remaining Performance Obligations

Unfulfilled performance obligations represent amounts expected to be earned by the Company on executed contracts. As of March 31, 2026, the Company had approximately $0.77 million in unfulfilled performance obligations, which it expects to primarily realize over the next six months.

Other Significant Accounting Policies

There have been no material changes to other significant accounting policies from those detailed in the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2025.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for the Company’s annual periods beginning July 1, 2025. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, to enhance specified information about certain costs and expenses at each interim and annual reporting period so that investors can better understand an entity’s overall performance. The guidance is effective for the Company’s annual periods beginning July 1, 2027. The Company is currently evaluating the ASU to determine its impact on its financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU provides a comprehensive list of interim disclosures that are required by GAAP and clarifies the applicability of Topic 270, as well as a requirement to disclose events since the end of the last annual reporting period that have a material impact on the entity. The new standard will become effective for the Company’s interim disclosures beginning in fiscal year 2029. Early adoption is permitted and the new guidance should be applied prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of this standard on its financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU includes amendments to the FASB Accounting Standards Codification for a broad range of topics arising from technical corrections, unintended application of the Codification, clarifications, and other minor improvements. These amendments are not expected to have a significant effect on current accounting practice for most entities. The new standard will become effective for the Company’s interim and annual reporting periods beginning in fiscal year 2028. Early adoption is permitted on an issue-by-issue basis and the new guidance should be applied prospectively or retrospectively on an issue-by-issue basis. The Company is currently evaluating the impact of this standard on its financial statements and disclosures.

NOTE 5. GOODWILL IMPAIRMENT

During the three months ended March 31, 2026 there occurred triggering events that gave rise to assess the carrying value of the Company’s two RUs that have goodwill balances.

The Brightline reporting unit (“BRU”) product customer is principally the U.S. Department of War (“DOW”). U.S. Government funding for new DOW projects that BRU was anticipating is on hold as a result of: 1) the U.S. Government shutdown in January 2026, 2) the Continuing Budget Resolution in February 2026 which produced no new funding, and 3) no formal passing of the U.S. Government fiscal year 2026 budget.

The budget delay above has resulted in BRU no longer being able to invoice its current primary DOW customer for work currently being done, material uncertainty regarding whether the current work will be funded in an ultimate U.S. Government budget passage and limited visibility regarding its ability to secure other future revenue contracts.

While revenues may be generated in the future, if the U.S. Government fiscal year 2026 budget or subsequent years budgets being approved or when the project is included in an approved budget in subsequent years, the current lack of sight into future revenue contracts and the Company’s inability to generate material revenues in the current fiscal year has removed the primary driver of the quantitative DCF modelling that is utilized in order to determine the enterprise value of BRU. This also makes the qualitative assessment of BRU’s technology challenging to assess. In accordance with our accounting policies (see Note 4), it has been determined that BRU enterprise value is negligible from a financial reporting perspective at the date of these condensed financial statements. This results in a total goodwill impairment to the BRU and the Company has recorded a goodwill impairment expense of approximately $10.56 million in the statement of operations for the three and nine months ended March 31, 2026.

In addition, the Glimpse Learning reporting unit (“LRU”) was reviewed for goodwill impairment in light of the Company’s going concern status (Note 2). LRU has historically been approximately cash flow neutral. Although Glimpse Learning remains a viable and continuing business, based on historical long cycle period to secure customers and limited visibility in renewing existing customer agreements, future cash flow sufficient to support enterprise value for LRU is uncertain. In accordance with our accounting policies (see Note 4), it has been determined that LRU enterprise value is negligible from a financial reporting perspective at the date of these condensed financial statements. This results in a total goodwill impairment attributable to LRU and the Company has recorded a goodwill impairment expense of $0.30 million in the statement of operations for the three and nine months ended March 31, 2026.

NOTE 6. CHANGE IN REVENUE ESTIMATE ASSUMPTIONS

Brightline Interactive, Inc. (“BLI”) revenue recorded in the three and nine months ended March 31, 2026 primarily relates to one agreement with a DOW prime contractor. This revenue was recognized under the percentage of completion method.

Revenue collection for this agreement was dependent on full funding by the DOW. Through the six months ended December 31, 2025 it was estimated that full agreement funding was forthcoming and percentage of completion revenue was recognized based on this. However, as detailed in Note 5, full funding for this agreement is uncertain.

Accordingly, based on a revised funding estimate, revenue from this agreement was adjusted to reflect only funds already actually received from the customer. This results in a reduction of revenue and cost of goods sold of approximately $0.51 million and $0.29 million (reclassified as research and development expense), respectively, in the condensed statement of operation for the three and nine months ended March 31, 2026.

NOTE 7. SEGMENT AND RELATED INFORMATION

The Company has one reportable segment managed on a consolidated basis: Immersive technology software development and commercialization. The Company derives revenue primarily in the United States and manages all business activities on a consolidated basis. The services are deployed to customers in a similar manner.

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer who reviews financial information presented on a consolidated basis to allocate resources, evaluate performance and make overall operating decisions. The measure of segment profit or loss that is most consistent with the condensed consolidated financial statements is net cash used in operating activities. The accounting policies of our single reportable segment are the same as those for the condensed consolidated financial statements. The level of disaggregation and amounts of significant revenue and cash expenses that are regularly provided to the CODM are the same as presented in the condensed consolidated statement of operations. Likewise, the measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

NOTE 8. QREAL AND GLIMPSE TURKEY DIVESTITURE / CUSTOMER TERMINATION

Divestiture

Effective October 1, 2024, the Company divested the business of its wholly owned subsidiary company QReal, LLC (“QReal”) and its related operating entity GLIMPSE GROUP YAZILIM VE ARGE TİCARET ANONİM ŞİRKET (“Glimpse Turkey”) in a management buyout by the then General Manager of QReal.

The Company retains the revenues from QReal’s largest customer in full, until such time that the Company has collected and retained $1.35 million net cash in the aggregate, after taking into account all related operating expenses and fees (the “Milestone”). As of March 31, 2026, the Company received $0.32 million of the Milestone. Revenue from the divested business that was not retained going forward was approximately $0.14 million for the nine months ended March 31, 2025.

The assets, as defined in the divestiture agreement, of QReal/Glimpse Turkey, were sold in return for a $1.56 million senior secured convertible note (the “Note”) from the purchasing (“New”) entity and a 10% equity stake in New entity. Principal payback of the note is tied directly to revenue collected by New entity (separate from the Milestone). The note converts to New entity equity upon certain equity capital raising of New entity, as defined. The Company accounts for the investment in New entity at cost ($100) because the Company does not control or have significant influence over the investment. The Company has also fully reserved against the Note as collectability is considered remote.

Pursuant to the original acquisition of QReal by the Company in 2016, upon sale of the entity the original sellers are due 8% (“economic interest”) of the Milestone proceeds. As the achievement of the Milestone is uncertain, liability for these payments will be recorded as actual Milestone proceeds occur. The Company recorded an expense of approximately $0 and $0.01 million, respectively, related to the economic interest in sales and marketing expense on the condensed consolidated statement of operations for the three months and nine months ended March 31, 2026, and $0.01 and $0.02 million, respectively, for the three and nine months ended March 31, 2026.

In connection with the QReal divestiture, the Company made personal loans to the majority owner of New entity to assist in startup funding of New entity. These loans are personally guaranteed by said majority owner. The loans bear interest at a nominal rate, have monthly repayment requirements and are due in full by May 31, 2026. The outstanding balance on the loans is recorded as of March 31, 2026 and June 30, 2025 in the condensed consolidated balance sheets as notes receivable.

Customer Termination

In March 2026, QReal’s largest customer terminated their revenue agreement with Glimpse/QReal. Glimpse will record no further revenue from this customer and we do not anticipate a material further increase in the Milestone receipt. Revenue recorded by Glimpse related to this customer was $0.23 million and $0.99 million, respectively, for the three and nine months ended March 31, 2026 and $0.46 million and $1.61 million, respectively, for the three and nine months ended March 31, 2025.

NOTE 9. SALE OF BUSINESS

In August 2025, the Company closed on an agreement to sell the assets, as defined in the agreement, of its Pose With the Pros business for an initial consideration of $0.25 million in cash and potential future revenue royalties. In connection therewith, the Company received a $0.05 million nonrefundable prepayment of the consideration in June 2025 which is recorded in accrued liabilities in the consolidated balance sheet as of June 30, 2025. The remaining $0.20 million consideration was received in October 2025.

In the nine months ended March 31, 2026 the Company recognized a gain on this transaction of $0.24 million which is recorded as gain on sale of business in the condensed consolidated statement of operations.

Revenue from the divested business was approximately $0.01 million for the nine months ended March 31, 2026 and $0.01 and $0.14 million, respectively, for the three and nine months ended March 31, 2025.

NOTE 10. FINANCIAL INSTRUMENTS

Cash and Cash Equivalents

The Company’s money market funds are categorized as Level 1 within the fair value hierarchy. As of March 31, 2026 and June 30, 2025, the Company’s cash and cash equivalents were as follows:

	As of March 31, 2026
	Cost		Unrealized Gain (Loss)		Fair Value		Cash and Cash Equivalents
Cash	$	214,484	$	-		-	$	214,484
Level 1:
Money market funds		1,936,836		-	$	1,936,836		1,936,836
Total cash and cash equivalents	$	2,151,320	$	-	$	1,936,836	$	2,151,320

	As of June 30, 2025
	Cost		Unrealized Gain (Loss)		Fair Value		Cash and Cash Equivalents
Cash	$	130,288	$	-		-	$	130,288
Level 1:
Money market funds		6,702,437		-	$	6,702,437		6,702,437
Total cash and cash equivalents	$	6,832,725	$	-	$	6,702,437	$	6,832,725

Contingent Consideration

Contingent consideration was valued at the time of acquisition using unobservable inputs and included using a Monte Carlo simulation model, which model incorporated revenue volatility, internal rate of return, and a risk-free rate. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance, at times, of a third-party valuation specialist.

There is no contingent consideration as of March 31, 2026.

In July 2025 the Company finalized the contingent consideration related to the acquisition of BLI which resulted in a final contingent consideration cash payout of $1.50 million in October 2025.

The change in fair value of contingent consideration for BLI for the nine months ended March 31, 2026 was a non-cash expense of approximately $0.02 million included as change in fair value of acquisition contingent consideration in the condensed consolidated statement of operations. This reflects the change in the time value of money related to the present value of anticipated payment.

As of June 30, 2025, the Company’s contingent consideration liability balance was as follows:

	Contingent Consideration at Purchase Date		Consideration Paid			Changes in Fair Value			Fair Value		Contingent Consideration
	As of June 30, 2025
	Contingent Consideration at Purchase Date		Consideration Paid			Changes in Fair Value			Fair Value		Contingent Consideration
Level 3:
Contingent consideration - BLI		7,324,900		(2,997,894	)		(2,843,423	)		1,483,583		1,483,583
Contingent consideration - XRT		-		(499,288	)		499,288			-		-
Total contingent consideration	$	7,324,900	$	(2,997,894	)	$	(2,843,423	)	$	1,483,583	$	1,483,583

Actual BLI revenue through June 30, 2025 resulted in additional gross consideration of $1.50 million over the remainder of the contingent consideration payout period ending on July 31, 2025, payable in cash. Actual BLI revenue through July 31, 2025 did not trigger additional consideration. Accordingly, contingent consideration remaining for the BLI acquisition as of June 30, 2025 is calculated at the present value of the remaining $1.50 million cash discounted at risk-free interest rates from the estimated payment date.

The change in fair value of contingent consideration for BLI for the three and nine months ended March 31, 2025 was a non-cash expense of approximately $0.03 and $0.12 million, respectively, included as change in fair value of acquisition contingent consideration in the condensed consolidated statement of operations. This reflects the change in the time value of money related to the present value of anticipated payments.

The change in fair value of contingent consideration for XR Terra, LLC (“XRT”) for the nine months ended March 31, 2025 was a non-cash gain of approximately $0.03 million included as change in fair value of acquisition contingent consideration in the condensed consolidated statement of operations. This reflects the reversal of the estimated final consideration payment related to the acquisition of XRT. The contingent consideration payout period ended September 2024.

NOTE 11. DEFERRED COSTS AND DEFERRED REVENUE

As of March 31, 2026 and June 30, 2025, deferred costs totaling $2,129 and $48,971, respectively, consists of costs deferred under contracts not completed and recognized at a point in time. As of March 31, 2026 and June 30, 2025, deferred revenue, totaling $306,418 and $52,576, respectively, consists of revenue deferred under contracts not completed and recognized at a point in time ($189,167 and $52,576, respectively), and billings in excess of costs under contracts not completed and recognized over time ($117,251 and $0, respectively).

The following table shows the net activity of deferred cost and deferred revenue for the nine months ended March 31, 2026 and the year ended June 30, 2025:

	As of and for the nine months ended March 31, 2026			As of and for the year ended June 30, 2025

Deferred costs - beginning of period	$	48,971		$	170,781
Deferred cost recognized as cost of goods sold/expense during period		(48,699	)		(170,781	)
Costs incurred and not yet recognized as cost of goods sold		1,857			48,971
Deferred cost - end of period	$	2,129		$	48,971

Deferred revenue - beginning of period	$	52,576		$	72,788
Deferred revenue recognized as revenue during period		(52,576	)		(72,788	)
Billing in excess of costs		117,251			-
Payments received and not yet recognized as revenue		189,167			52,576
Deferred revenue - end of period	$	306,418		$	52,576

NOTE 12. EQUITY

Common Stock Issued

Common stock issued to Employees as Compensation

During the nine months ended March 31, 2026, the Company issued 21,000 unrestricted shares of common stock to an employee as compensation and recorded share-based compensation expense of approximately $0.03 million in sales and marketing expenses in the condensed consolidated statement of operations.

During the nine months ended March 31, 2025, the Company issued 26,500 unrestricted shares of common stock to an employee as compensation and recorded share-based compensation expense of approximately $0.04 million in sales and marketing expenses in the condensed consolidated statement of operations.

Common stock issued to Vendors

During the nine months ended March 31, 2025, the Company issued 1,250 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 condensed consolidated statement of operations.

Common stock issued for Exercise of Stock Options

During the nine months ended March 31, 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.

Securities Purchase Agreements (“SPA”)

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 prefunded 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 prefunded warrants had an exercise price of $0.001 per share of common stock, and were exercised in full in January 2025 for a de minimis amount (760,000 shares at $0.001 per share).

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

Exercise of Warrants

In December 2024, an institutional investor exercised warrants (issued in connection with the 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).

Warrants

In connection with the July 2021 initial public offering (“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.

The remaining outstanding warrants as of March 31, 2026 are:

SCHEDULE OF WARRANTS OUTSTANDING

	Warrants Outstanding		Exercise Price		Expiration Date

July 2021 IPO		87,500	$	7.00	June 2026
November 2021 SPA		481,000	$	1.75	November 2026
November 2021 SPA		169,000	$	1.75	May 2027
Total		737,500

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.

Equity Incentive Plan

The Company’s 2016 Equity Incentive Plan (the “Plan”), as amended, has approximately 14.23 million common shares reserved for issuance. As of March 31, 2026, there were approximately 8.60 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:

	2026			2025			2026			2025
	For the Three Months Ended March 31,						For the Nine Months Ended March 31,
	2026			2025			2026			2025
Weighted average expected terms (in years)		6.5			5.6			6.2			5.6
Weighted average expected volatility		86.5	%		125.4	%		121.0	%		121.4	%
Weighted average risk-free interest rate		3.9	%		4.4	%		4.0	%		4.3	%
Expected dividend yield		0.0	%		0.0	%		0.0	%		0.0	%

The grant date fair value for options granted during the nine months ended March 31, 2026 and 2025 was approximately $0.37 million and $0.73 million, respectively.

The following is a summary of the Company’s stock option activity for the nine months ended March 31, 2026 and 2025, excluding the executive Target Options:

SUMMARY OF STOCK OPTION ACTIVITY

				Weighted Average
						Remaining
				Exercise		Contractual		Intrinsic
	Options			Price		Term (Yrs)		Value
Outstanding as of July 1, 2025		2,766,206		$	3.37		5.6	$	-
Options granted		240,000			2.15		9.5		-
Options exercised		-			-		0.0		-
Options forfeited / cancelled		(387,778	)		3.67		5.4		-
Outstanding as of March 31, 2026		2,618,428		$	3.22		5.2	$	-
Exercisable as of March 31, 2026		2,086,809		$	3.39		4.6	$	-

The above table excludes executive Target Options: 1,980,000 granted, $7.00 exercise price, 6.9 remaining term in years, no intrinsic value. Vesting of these is considered remote.

SEC Form 10-Q filed by The Glimpse Group Inc.