The Glimpse Group, Inc.

AI into our immersive products, the filing of seven new patents primarily focused on the integration of AI with immersive technologies, all while maintaining high gross margins and a clean balance sheet. Our software products and services are at the forefront of several key emerging technology segments, immersive, spatial computing, AI, cloud. We have established a track record of working with major customers across industries, as well as relationships with some of the leading companies in the tech world and have a significant pipeline and growth potential. However, these have not translated into significant shareholder value creation, which has led us to strategically review and with the board's approval of the plan that will unlock and create far more value for all of us as shareholders. I will go into more details later in my prepared remarks. Driving our growth going forward, our main engine is our subsidiary Brightline Interactive. As a quick reminder, VLI, through its product Spatial Core, provides advanced spatial computing, AI-driven operational simulation middleware software and solutions to the Department of War and big data-driven enterprises. Spatial Core sits at the intersection of spatial computing, immersive technologies, AI, cloud, and geospatial data. We view it as an operating system for computing, processing, and visualizing information in three-dimensional space on the cloud. DLI specializes in creating AI-supported workflows on top of dynamic synthetic environments that integrate multi-model and real-time data to accelerate decision-making enhance mission readiness, and expand human and non-human training capabilities that can be used in a variety of arenas, including digital twins, robotics, drone, and autonomous vehicles. While spatial core is at the cutting edge of technology, it is not science fiction. It is based on BLI's established 15 years of technological development, deep knowledge base, and rooted in proven, paid-for contracts with major entities with high operational and executional requirements. In fiscal year 2025 alone, Rightline achieved several critical milestones, including successfully executing and delivering the development of a unified synthetic training ecosystem for a major DOW entity, a four plus million dollars initial contract. The system enables soldiers to train, plan, and execute missions in a fully virtualized environment, providing interfaces for collaboration and digital twin integration and functionality. Entered in a two plus million dollar spatial core contract with another DOW entity as the direct prime to be delivered over the next 12 months. While we can't go into any additional details just yet, it has similar AI and deep tech characteristics as other spatial core contracts. Successfully delivered first full-motion immersive simulator to the U.S. Navy, providing the U.S. Navy with advanced simulation capabilities that bridge the gap between the real and virtual worlds. This state-of-the-art system incorporates spatial computing elements to enable high-level cost-effective simulations, ensuring that military personnel can train in realistic and immersive environments. delivered an advanced immersive simulation to a large government service integrator. PLI was able to create a sophisticated spatial simulation in record time, setting what we believe has the potential to become a new industry standard. This initial simulation project was developed with the goal of allowing the GSI to gather simulation needs from others to then add to this build for further deployments in a cost-effective and scalable manner. entered into a cooperative research and development agreement, CRADA, with the U.S. Army Combat Capabilities Development Command, Command Control, Communication, Computer, Cyber, Intelligence, Surveillance, and Reconnaissance Center. Brightline to develop, assess, and improve workflows to create and augment synthetic imagery for use in training and assessing artificial intelligence and machine learning algorithms. These, in addition to prior recent years' achievements, represent initial contracting validation of VLI's technology and delivery capabilities. All of these have the potential to expand into multi-million, multi-year follow-on contracts, leading to, eventually, possible inclusion in programs of record, which are exceptionally large, long-term, DOW contracts. In addition, BLI has a robust pipeline of new potential customers, both in the DOW space and in the enterprise big data segment, oil and gas, aviation, tech, and many others. We believe that BLI's growth potential is immense, even if it does not immediately materialize to its fullest extent and takes time to fully develop. DOW contracting, for example, is notoriously slow and quite complex. In parallel to Brightline, our other entities also achieved major milestones during the fiscal year, including an NIH grant in partnership with Yale Medical, Drexel University, and New Jersey Institute of Technology to advance VR education for adolescents and young adult cancer patients. Partnership with Montefiore Einstein for VR study for teen mental health. Reedy Immersive Enterprise Service Agreement with the leading global energy tech company. Mortel Reality, our subsidiary, entered into several contracts for its AI-driven immersive training product, while Glimpse Learning entered into multiple software license contracts in the healthcare and educational segments. Despite all of this, we don't believe that our intrinsic value, and certainly not Brightline's, is reflected in Glimpse's current valuation, not even remotely in our view. Indeed, based on our internal analysis, we believe that BLI's public company comps alone in the defense tech AI segment trade at vast multiples of trailing annual revenue. Even if a significantly discounted revenue multiple was to be applied to BLI, its valuation would far exceed Glimpse's current valuation. We believe that Whiteline's true value and potential is hidden within the Glimpse umbrella and is potentially encumbered by it. This being the case, And in light of Glimpse's current position as a largely abundant illiquid microcap, we have reached a conclusion that the best way to maximize shareholder value for Glimpse shareholders and to increase VLI's chances of success is to spin out VLI. If successful, VLI will become an independent, publicly traded company, a pure play, well-funded, standalone spatial computing, AI-driven, cloud operational simulation middleware provider to the DOW and big data-driven enterprises. While the final methodology has not been determined yet and success is not guaranteed, our board of directors has approved the strategy and general process, which we expect to play out in the coming months. As part of the process, the plan is for Glimpse shareholders to be issued shares in the spun-out VLI public entity as a distribution. In parallel, current Glimpse shareholders will maintain their holdings in Glimpse which we believe could have considerable and attractive going forward alternatives to pursue as a clean, healthy NASDAQ technology company. With that, I will now turn it over to Meydan Rothblum, Clemson 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-K and press release that were filed earlier today and yesterday afternoon. Please note that I may refer to non-GAAP measures. For the calculation of non-GAAP measures, please refer to the MD&A section of our 10-K filing. Fiscal year 25 revenue of approximately $10.5 million, an increase of approximately 20% compared to fiscal year 24 revenue of approximately $8.8 million. The increase was primarily driven by an increase in spatial core revenues and despite the divestiture of non-core assets and entities. Q4 fiscal year 25, that's the April to June 25 quarter, revenue of approximately 3.5 million, an approximate 105% increase compared to Q4 fiscal year 24 revenue of approximately $1.7 million and an approximate 150% increase compared to Q3 fiscal year 25, that's the January to March 25 quarter, revenue of approximately $1.4 million. We expect fiscal year 26 revenue to exceed fiscal year 25 revenue. However, given the nature of Brightline's DOW-driven contracts, revenue recognition timing and potential US government budget delays, the per quarter revenue in fiscal year 25 is expected to be quite choppy with significant movement from quarter to quarter. We expect Q1 fiscal year 26 to be significantly lower than Q4 fiscal year 25 and revenues to grow sequentially in the following quarters. Gross margin for fiscal year 25 was approximately 67.5% on par with 67% for fiscal year 24. We expect our gross margins to remain in the 65% to 75% range due to a larger portion of revenue coming from spatial core and software license sales. We were essentially cash break even for the fiscal year, marking an extraordinary turnaround. Net operating cash loss in fiscal year 25 was approximately negative 0.27 million compared to a net operating cash loss of approximately negative 5.2 million for fiscal year 24 reflecting our significant reorganization efforts cost reductions revenue growth and the main maintenance of high gross margins the company's cash and equivalent position as of june 30 2025 was approximately 6.85 million with an additional $0.85 million in accounts receivable. We continue to maintain a clean capital structure, no debt, no convertible debt, and no preferred equity. I'd now like to pass it back to Yaron for some closing remarks, after which we will begin our Q&A session.

Yaron? Thank you, Maydan.

Fiscal year 2025 was a pivotal year for Glimpse. We executed on our plan and made great strides, and there are immense opportunities ahead of us. We are determined to try and unlock shareholder value and have several options to achieve this. We intend to aggressively pursue these in the coming months, all the while keeping a sharp focus on our existing businesses and continuing to drive their growth. During this period, we may need to minimize public communications. I thank you all for your interest in and support of the Goons Group. And now I'll turn the call back over to Holly to take some questions.

Thank you, Leron. 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 you would like to ask a question by phone, please press star one 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 star keys. One moment please while we poll for questions. Our first question is coming from Casey Ryan with West Park Capital.

Good morning, gentlemen. Thanks for the update. It's pretty significant. Can I ask sort of as we look at markets, do you feel like BLI's opportunities are primarily in defense and defense-related industries or Is there some overlap with other opportunities in education and healthcare? And I'm just trying to understand kind of what would be left with the core business and what would be going with BLI outside of defense contracts currently.

Yes. So, good morning, Casey. And I'll take kind of two separate kind of parts of the question. So in terms of Brightline's opportunity, obviously kind of we've made significant strides with the DOW, and we've got multiple paths that each lead to pretty significant opportunities. In addition to that, we've basically started exploring how to work with our spatial core product with enterprises. Kind of it's going to take probably longer to get kind of significant revenue from that, but we see this as kind of a pretty tremendous opportunity for Brightline. Education and healthcare are less the focus for Brightline, but that's the focus of some of the other entities within Glymse, where we see a significant opportunity integrating immersive technologies with AI and kind of offering a variety of solutions that will help educational organizations, both at the college level and at the K-12 level, as well as kind of healthcare enterprises to utilize kind of our technology to simulate, train, and practice certain scenarios.

Okay. Okay. That's helpful. And then I know it's early days, we haven't worked out all the details, but from the announcement today to sort of some end point where there's something with BLI that happens that's fully consummated, are we looking at a timeframe that's maybe 12 months or does that feel too long to you and you think it's something sooner than that?

that is a way too long kind of, uh, we expect to initiate the process kind of, uh, in the coming weeks and expect that process to take several months to, uh, to go through, but we expect, uh, something to happen if we're successful at the beginning of the, uh, calendar year.

Hmm. Okay. Terrific. Terrific. Um, and then in terms of sort of the, the education markets, I guess, um, and maybe other commercial markets outside of defense again, um, Where do you think, do your customers feel like they're still learning how to integrate the technologies, or do you think they're getting closer to sort of integrating them into their normal operations and expanding them broadly, say a college or K-12 institution?

That's a good question, Casey. I think that we are very close to that kind of transition point. of basically organizations trying things out to organizations fully ready to kind of jump into the water and start swimming. We're working with one of the leading universities in Florida as our kind of primary first kind of data partner for our kind of AIA solution. And we're planning in the fall semester, in the spring semester, starting in January, to fully launch that solution in partnership with them. And that, that would be a significant test and probably one of the more advanced kind of willingness of an organization to really jump into the immersive AI space.

Okay. That sounds very compelling. And then sort of just jumping back to BLI, do we sort of sense that like there will be a name change or do we think Brightline has, has a good brand name and that'll sort of be the name that we move forward with, because it feels like all the key players would sort of know that name already, but I just sort of wonder what you think about branding.

Yeah, I do not expect any name change. We expect Brandline has a significant brand in the space that it's here, primarily with customers, partners, technology, there's no reason to change a name. It's a good name.

Yeah, okay, perfect. Well, this is significant and potentially a great move. So thank you for the update. I'll sort of drop off the question line and let others ask questions as we go forward. Thank you.

Thank you, Casey.

Our next question is from Richard Molenski with Max Ventures.

Hey, Lauren. First of all, congratulations in turning the company's cash flow around. That was a big change. And this bright line seems very, very exciting. And I'm wondering, I did love the news release of what you're doing with teen mental health at Montefiore. And I know you said the government is really the number one market for you, but the health care industry. could be like number two. And I'm wondering whether your services and your AI, you could go to some major companies and offer the services for them to sell it to their customers and increase the sale that way besides you doing it on your end.

Good morning, Richard. This is exactly kind of the path we're planning on taking in 2026 with some of our AI solutions kind of AI product. We are looking at finding partners in certain industries that specialize in that industry. They've been offering basically 2D kind of solutions to their customers in a variety of fields. We want to kind of integrate their know-how in their industry with our AI solutions and then allowing them to offer the solution on our platform to their customers kind of integrating immersive and AI into their solution. So that's definitely a game game plan for us for 2026 for the AI product.

Right? And when realistically, do you think this spinoff could happen? You know, in your estimate? Is it six months down the road, three months, you know, give any idea when you when you'd want this to happen?

So our plan is to make it happen as quickly as possible. As I responded to Casey's question, I expect this to happen early in 2026 if everything goes according to plan.

All right. That's terrific. And with one of my last questions, you've been really good monitoring, managing the cash. Do you expect the cash, you won't have any cash needs at all at this point in time based on what you currently have in the bank and your projections?

Yes, we expect to be able to operate kind of with the cash we have.

All right. Look, I greatly appreciate it. Great job, and look forward to seeing the progress and further contracts.

Thank you, Rich. Thank you.

Our next question for today is from Hung Nguyen, a private investor.

Hi, hi. As far as enterprises, do you plan to get into the training of employees for private enterprises as far as system and processing? Thank you for the question.

Our subsidiaries are not focused directly on corporate training solutions, but our AIA solution allows employees to soft-skill train various scenarios in a very effective way, and that's definitely part of our go-to market.

Thank you.

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. Our first online question is, is the proposed spin-out of BLI given the overhead costs of being a small public company are high and profits are still low, are still small?

Thank you for the question. We've basically taken that into consideration and definitely that's a kind of reason against doing it and part of the reason we've not explored this now, but we believe even with the cost of maintaining two public entities, the value that will be created to Gleam shareholders and the potential for Brightline to access capital as part of the process make this a significantly valuable opportunity for Gleam shareholders.

Our next online question is, when can we expect this spinoff? Very exciting developments with Brightline. Do you see joint ventures with larger companies wanting to offer Brightline services to their customers?

Two parts to this question. The first, we expect if everything goes according to plan, to have this happen early in 2026. And we're definitely constantly looking at partnership for Brightline. We have significant relationships with some of the world-leading technology companies, and we expect to continue to work with them and strengthen the relationships.

I'd now like to turn the call back over to Laurent for closing remarks.

Thank you, Holly. 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 our ongoing progress and growth. If we were unable to answer any of your questions, please reach out to us directly. Thank you and have a great day.

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