Brightline Interactive

Welcome to the Glimpse Group Fiscal Year 2024 Financial Results Webinar. At this time, all participants are in a listen-only mode. A 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://ir.theglimpsegroup.com/. 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 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 also refer you to the company's website for more supporting industry information. I would now like to hand the call over to Liron Bentovum, President and CEO of the Glimpse Group. Liron, the floor is yours.

Thank you, everyone, for joining us. I am pleased to welcome you to the Glimpse Group's Fiscal Year 2024 Financial Results Investor Call. for year-ended June 30th, 2024. During this fiscal year, we made significant strides in our strategic transition to focus on providing enterprise-scale spatial computing, cloud, and AI-driven immersive recurring software solutions, or spatial core, as we will refer to it internally, led by our subsidiary company, Brightline Interactive. In August 2024, Brightline's general manager, Tyler Gates, gave a detailed webinar on Spatial Core. If you are interested in the topic, I strongly recommend that you listen to the webinar, the link for which can be found on our IR website. Some examples of Spatial Core traction include, signed a four plus million dollar 12 month contract with the Department of Defense entity for a spatial computing ecosystem, integrating AI workflows and accelerated compute for a variety of defense use cases. We entered into a cooperative research and development agreement, CRADA, with the U.S. Army Combat Capabilities Development Command, Control, Communications, Computers, Cyber, Intelligence, Surveillance, and Reconnaissance Center to develop, assess, and improve workflows to create and augment synthetic imagery for use in training and assessing AI and machine learning algorithms. Extended partnership with a Fortune 500 government systems integrator for VR training in digital twin environments to a key U.S. government agency with over 44,000 employees on a mid-six-figure contract. Brightline, Cesium, and NVIDIA teamed up at the Geospatial Intelligence Symposium 2024 to introduce Brightline Spatial Core, which uses AI workflows for complex computations. on top of real-life data sets, enabling powerful, real-time, massive data-driven digital twin and simulation applications. We successfully completed the cooperative research and development agreement, CREDA, with the U.S. Naval Surface Warfare Center, Dahlgren Division, for the adaptation of immersive technologies. We completed a contract to support a major immersive technology hardware provider, to accelerate their computing interfaces into GPU-enabled cloud with streaming and visualization capabilities. We are at an advanced process of securing several additional multimillion-dollar spatial core contracts with multiple government, DOD, and large enterprise customers. The short-term aggregate value for these contracts is in the $5 million to $10 million range. While there is no guarantee that some or all of these will come to fruition, we anticipate that, subject to government annual budgeting timing, a good portion of these will be signed before year-end 2024, with additional potential contract signings in calendar year 2025. Each of these potential contracts has significant growth elements built into them that could lead to significant annual recurring software revenue once the original contract has been successfully performed. While Spatial Core is our strategic focus and growth engine, our other GLEAMS entities, Curio, Stector 5 Visual, Fortel Reality, and GLEAMS Learning, continue to generate meaningful enterprise revenues and positive momentum. Some recent examples include GLEAMS Learning entered into a two-year, mid-six-figure contract with the College of Staten Island, CUNY, technology incubator for the design, deployment, and integration of a suite of immersive technologies in its new innovation hub. This is a cross-glimpse project with a significant software license component. Fortel Reality entered into a six-figure partnership with a large university to develop an AI-driven VR training system, enabling students and trainees to learn various professional skills through conversation-centric simulations with an AI-based avatar in different immersive settings. In recent months, Curio has seen an increase in its revenues with Snap for AR 3D models and lenses. Sector 5 Digital entered into a six-figure engagement with one of the world's largest architectural firms to visualize in AR the new business campus of multinational retail company. Looking forward, We expect overall revenues to be significantly higher in the coming months and quarters based on signed contracts in our advanced revenue pipeline. We also expect to be cash flow positive and increase our cash balance between now and year end 2024 and beyond without the need for capital raise. These developments, significant traction, and our positioning at the intersection of spatial computing, AI, and cloud are not currently reflected in our public company evaluation, which has come under significant and consistent pressure. As a result of that, on September 3rd, 2024, the company received a letter from NASDAQ notifying the company that it no longer met the minimum bid price requirement for continued listing of the dollar. We have until March 3rd, 2025 to cure this deficiency, and if not cured by then, the company can apply for an additional 180-day extension to cure to approximately September of 2025. In order to regain compliance with NASDAQ, the company may consider various potential measures to resolve the deficiency, such as leveraging its unutilized share buyback pool, insider buying, and press releases announcing significant business developments when if those materialize. Such measures if any are taken, may help cure the deficiency in due time. The company is not considering a reverse stock cliff at this time, a position that may change in the future. In light of special course AI and cloud-driven revenues with large DOD entities, our strength pipeline of revenues and our expectation is to generate positive cash flows going forward. We believe that there is a sharp disconnect between our intrinsic value and our current public company valuation. As such, the board of directors of the company is exploring strategic options to maximize shareholder value. With that, I will now turn it over to Meydan Rothblum, Glimpse's CFO and COO, to review the financial results. Meydan?

Thanks, Liron. I will limit my portion to a summary review of our financial results Full breakdown is available in our 10-K and press release that were filed after market close today. Please note that I'll refer to adjusted EBITDA and other non-GAAP measures. For the calculation of adjusted EBITDA and other non-cash measures, please refer to the MD&A section of our 10-K filing, which you can find on our website under SEC Filings. Fiscal year 24 revenue of approximately 8.8 million, a 35% decrease compared to fiscal year 23 revenue of approximately 13.5 million. Revenue for Q4 fiscal year 24, that's the quarter ending June 24, was approximately 1.7 million, a 41% decrease compared to Q4 fiscal 23 revenue of approximately 2.9 million. The decrease in revenue was primarily driven by, one, our strategic shift to Spatial Core, which led to a turnover in our legacy customer base, which was more immersive marketing oriented. Two, a consolidation and divestiture of some of our entities. And three, a general slowdown in corporate disposable spending in general and in the immersive industry in particular. Looking forward, we expect, one, revenue for Q1 fiscal year 25, that's the quarter ending September 24, to be significantly higher than Q4 fiscal year 24. And, two, revenue for Q2 fiscal year 25, that's the quarter ending December 24, and revenue for Q3 fiscal year 25, that's the quarter ending March 25, will each exceed $3 million per quarter. Gross margin for fiscal year 24 was approximately 67% compared to 68% for fiscal year 23. We expect our gross margins to continue to remain in the 60 to 70% range. Adjusted EBITDA loss for fiscal year 24 was approximately $4.6 million compared to an EBITDA loss of approximately $6.4 million in fiscal year 23. Our current cash operating expense base, pre-revenue, is approximately $1 million per month. Given our projected revenue for Q2 fiscal year 25 and Q3 fiscal year 25, We expect to generate positive cash flow in each of those two quarters based on existing contracts only and our current operating cash expense base. As of June 30th, 2024, the company had cash and cash equivalents of approximately 1.85 million and an additional 0.7 million in accounts receivable. We do not intend to raise capital in the foreseeable future especially since we expect our operations to generate positive cash and add to our cash balance between now and year end 24. The company has no outstanding corporate debt or preferred equity obligations. I'd now like to pass it back to Liron for some closing remarks, after which we will begin our question and answer session. Liron?