The Glimpse Group, Inc.

Good afternoon. Thank you for holding for the Glimpse Group conference call. This conference call will begin in just a couple of minutes. Once again, thank you for holding. Please stay on the line. This conference call will begin in just a couple of minutes. Welcome to the Glimpse Group Q2 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 Bentevin, 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 second quarter fiscal year 2024 financial results investor call for a quarter ended December 31st, 2023. During this quarter, we made substantial progress on our strategic realignment of Glymphs towards providing immersive enterprise software and services that are driven by special computing, cloud, and AI, or special core, as we'll refer to it internally, led by our subsidiary company, Brightline Interactive. As a reminder, we strongly believe that in order for the immersive industry to reach true scale, the compute, must be processed in the cloud and not on the headsets or computing device. To reach its full potential, we believe that immersive technology must evolve from worlds and experiences created by humans for consumption by humans, to synthetic worlds whose creation is directed by humans, executed by AI in the cloud, and whose consumption is for both humans and non-humans, such as robots, drones, and AI avatars. This is one of the key philosophies behind Special Core and an important competitive advantage if we are to be at the center of this. We are not making this journey alone. We are working closely with some of the largest players in the tech industry, such as Nvidia and Microsoft, as well as with some of the leading hardware players in the space. We serve as middleware, connecting their cloud and AI technologies and services with the needs of enterprises and organizations creating a win-win-win. Our spatial core pipeline continues to grow rapidly, with several multi-million dollar contracts that are very close to the goal line. These contracts are with multiple Department of Defense entities, as well as large enterprises and organizations, and will be initially executed over the next 12 to 18 months, with a potential for significant recurring software components after that. While we cannot guarantee that these opportunities will materialize into signed contracts, we have good reason to believe that they will in the coming weeks and months. And when they do, the impact on Glimpse should be transformative. In parallel, the immersive industry continues to develop, as demonstrated by the recent launch of the Apple Vision Pro. The Apple Vision Pro pushes immersive experiences to the next level and engages with new audiences. The headset's launch has ignited new interest in immersive solutions, and we have started working with a variety of customers, ranging from federal agencies to large and small enterprises on a variety of enterprise applications and use cases. As we discussed in our last call, we expected our strategic transition to result in short-term reduction in revenues as we divested and shut down non-core operating assets and reduce our expenses targeting other non-essential opportunities. We expect this revenue decline to stabilize in Q1 of calendar year 2024 and growth to resume in calendar Q2 of 2024 as we ramp up spatial core revenues and as our other remaining subsidiary companies execute on their growth plans. Our other major subsidiary companies, Curiel, Sector 5 Digital, and the newly formed Glimpse Learning, our focus on enterprise use cases, including lifelike 3D modeling, robust augmented reality experiences, virtual reality corporate training and education, both for healthcare, K-12, higher learning. Recent customer contracts include Walmart, Colgate, and NYU Langone Hospital, to name a few. As made down a little detail in his prepared remarks, while we have increased our investment in Spatial Core, we have also taken major steps to reduce our operating expense base. We are now positioned to reach profitability when we return to prior revenue levels. We will continue to monitor our expense base and adjust it as needed in a prudent manner. With that, I will now turn it over to Meydan Rothblum, who is the CFO and COO, to review the financial results. Meydan?

Thanks, Liron. I will limit my portion to a summary review of our financial results. A full breakdown is available in our 10-Q and in a press release that were filed after market closed today. 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 MD&A section of our 10-Q filings, which you can find on our website under SEC Filings. Revenue for the three months ended December 31st, 2023 were approximately 2.08 million compared to approximately 2.95 million for the three months ended December 31st, 2022, a decrease of 29%. Revenue for the six months ended December 31st, 2023 were approximately 5.18 million compared to approximately 6.9 million for the six months ended December 31st, 2022, a decrease of 25%. This decline is in line with our previously announced expectations as we continue to, A, strategically transition our business from predominantly immersive marketing-driven projects to enterprise-scale spatial computing cloud AI-driven immersive recurring software solutions. and B, as we divest non-core operating assets. Gross margins for Q2 fiscal year 24 was approximately 68% compared to 70% for Q2 fiscal year 23. As we complete our strategic transition, we expect our gross margins to continue to remain in the 65% to 70% range and potentially increase afterward. While investing in the development of our spatial core solutions, we have continued to reduce non-core cash expenses. In the aggregate, we have reduced cash expenses by approximately 50% from their high. Our operational cash break-even point is now approximately $3 million revenue per quarter, or $12 million annually, excluding potential growth investments. For relative reference, our Q1 fiscal year 24 revenue was $3.1 million, and our fiscal year 23 annual revenue was approximately $13.5 million, figures that we believe are attainable once some of the large contracts we have in the pipeline materialize. Adjusted EBITDA loss was $1.33 million for the three months ended December 31st, 2023, compared to $2.6 million loss for the three months ended December 31st, 2022. Adjusted EBITDA loss of $2.6 million for the six months ended December 31, 2023, compared to a $3.64 million loss for the six months ended December 31, 2022. The reduced EBITDA loss for both periods was driven by the cash operating, by the reduction in cash operating expenses. As of December 31, 2023, the company had cash and cash equivalents of $5.2 million. 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 Q&A session.