Glimpse Group, Inc. Income Taxes Disclosure

NOTE 12. PROVISION FOR INCOME TAXES

 

The components of loss before provision for income taxes for the years ended June 30, 2025 and 2024 were as follows:

SCHEDULE OF LOSS BEFORE PROVISION FOR INCOME TAXES 

		2025				2024
		For the Years ended June 30,
		2025				2024
Loss subject to domestic income taxes		$	(2,197,907	)		$	(4,195,185	)
Loss subject to foreign income taxes			(354,744	)			(2,199,110	)
Total loss		$	(2,552,651	)		$	(6,394,295	)

 

The Company recorded provision for foreign income taxes for the years ended June 30, 2025 and 2024 consists of the following:

 

SCHEDULE OF PROVISION FOR FOREIGN INCOME TAXES

		2025				2024
		For the Years ended June 30,
		2025				2024
Current		$	-			$	38,588
Deferred			-				(38,588	)
Total provision for income taxes		$	-			$	-

 

There was no current or deferred income tax provision for the years ended June 30, 2025 and 2024.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

The reconciliation of taxes at the U.S. federal statutory rate to our provision for income taxes for the years ended June 30, 2025 and 2024 were as follows:

 SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION STATUTORY RATE

		For the Years Ended June 30,
		2025				2024
Statutory Federal Income Tax Rate			-21.00	%			-21.00	%
State and Local Taxes, Net of Federal Tax Benefit			-2.34	%			-10.15	%
Stock Based Compensation Expense (ISO)			5.52	%			3.46	%
Foreign tax rate differential			-4.00	%			-4.00	%
GAAP to Statutory rate			3.47	%			13.76	%
Change in Valuation Allowance			18.35	%			17.93	%
Income Taxes Provision			0.00	%			0.00	%

 

The Company had deferred tax assets as of June 30, 2025 and 2024 as follows:

 

SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS

		As of June 30,				As of June 30,
		2025				2024
Net operating loss carryforward		$	8,189,759			$	9,347,624
Goodwill and intangible asset			3,467,304				2,949,790
Stock-based compensation			369,595				306,274
Other			583,433				1,610,589
Total Deferred Tax Assets			12,610,091				14,214,277
Valuation allowance			(12,610,091	)			(14,175,689	)
Deferred Tax Asset, Net		$	-			$	38,588

 

The Company has established a valuation allowance against the net U.S. deferred tax assets due to uncertainty regarding the ability to utilize these deferred tax assets in the future. As of June 30, 2025, the Company had Federal net operating loss carryforwards (“NOLs”) for the years ending June 30, 2018 and prior of approximately $2.88 million that begin to expire in 2037 and NOLs for the years ending June 30, 2019 through 2025 of approximately $34.99 million that have no expiration date. New York State / New York City NOLs as of June 30, 2025 of approximately $13.39 million and $13.37 million, respectively, have no expiration date. California and Virginia State NOLs as of June 30, 2025 of $12.0 million and $1.72 million, respectively, have no expiration date.

 

Section 382 of the U.S. Internal Revenue Code imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership. The Company has not completed a Section 382 analysis of stock ownership and its effect upon federal and state NOL carryforwards. Consequently, the Company’s NOL carryforwards may be subject to annual limitations under Section 382.

 

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and taxing strategies in making this assessment. As a result of the uncertainty in the realization of the Company’s deferred tax assets, the Company has provided a valuation allowance for the full amount of the deferred tax assets as of June 30, 2025 and 2024.

 

Upon completion of its 2024 (for fiscal year ending June 30, 2025) U.S. income tax return, the Company may identify additional remeasurement adjustments. The Company will continue to assess its provision for income taxes as future guidance is issued, but does not currently anticipate significant revisions will be necessary.

 

 

THE GLIMPSE GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Uncertain Tax Positions

 

The following table summarizes the activity related to unrecognized tax benefits for the years ended June 30, 2025 and 2024:

 

SCHEDULE OF UNRECOGNIZED TAX BENEFITS

		2025				2024
		For the Years ended June 30,
		2025				2024
Unrecognized tax benefit - beginning of year		$	38,588			$	-
Gross increases - prior year tax positions			-				-
Gross decreases - prior year tax positions			(38,588	)			-
Gross increases - current year tax positions			-				38,588
Gross decreases - current year tax positions			-				-
Statute lapse			-				-
Total provision for income taxes		$	-			$	38,588

 

The beginning balance of unrecognized tax benefits of $38,588 was reversed in the current year as the Company divested Glimpse Turkey.

 

No interest and penalties were incurred or accrued for the years ended June 30, 2025 and 2024.

 

The Company files U.S., state and foreign tax returns with varying statutes of limitations. No examinations by U.S., state or foreign authorities are currently under way.