TurnOnGreen, Inc 10-K for FY2023

TurnOnGreen, Inc. (TOGI)

10-K 2024-04-11 For: 2023-12-31

Added on April 08, 2026

About this 10-K

TurnOnGreen, Inc filed this 10-K on April 11, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.2M; down 23.9% from $5.52M a year earlier
Net loss: $4.83M; compared with a net loss of $4.22M a year earlier
Diluted EPS: -$0.04; compared with -$0.09 a year earlier

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Nevada	20-5648820
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1421 McCarthy Blvd, Milpitas, CA	95035	(510) 657-2635
(Address of principal executive offices)	(Zip Code)	(Registrant’s telephone number, including area code)

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer x	Smaller reporting company x
Emerging growth company ¨

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	18
Item 1B.	Unresolved Staff Comments	38
Item 1C.	Cybersecurity	38
Item 2.	Properties	38
Item 3.	Legal Proceedings	39
Item 4.	Mine Safety Disclosures	39
PART II
Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	40
Item 6.	Reserved	40
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 8.	Financial Statements and Supplementary Data	F-1 – F-21
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	46
Item 9A.	Controls and Procedures	46
Item 9B.	Other Information	48
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	48
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	49
Item 11.	Executive Compensation	50
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	51
Item 13.	Certain Relationships and Related Transactions, and Director Independence	52
Item 14.	Principal Accountant Fees and Services	53
PART IV
Item 15.	Exhibits and Financial Statement Schedules.	54
Item 16.	Form 10-K Summary	55
	Signatures	56

	2023			2022			Change ($)			Change (%)
Revenue	$	4,201,000		$	5,522,000		$	(1,321,000	)		(24	)%
Cost of revenue		3,306,000			3,504,000			(198,000	)		(6	)%
Gross profit		895,000			2,018,000			(1,123,000	)		(56	)%
Operating expenses:
Research and development		418,000			697,000			(279,000	)		(40	)%
Selling and marketing		1,446,000			1,522,000			(76,000	)		(5	)%
General and administrative		3,642,000			3,963,000			(320,000	)		(8	)%
Depreciation		63,000			51,000			12,000			(24	)%
Total operating expenses		5,569,000			6,233,000			(664,000	)		(11	)%
Operating loss		(4,674,000	)		(4,215,000	)		459,000			11	%
Other expense:
Interest		160,000			5,000			155,000			3,100	%
Total other expense		160,000			5,000			155,000			3,100	%
Net loss		(4,834,000	)		(4,220,000	)		614,000
Preferred dividends		(2,028,000	)		(639,000	)		1,389,000			34	%
Net loss available to common shareholders	$	(6,862,000	)	$	(4,859,000	)

	Page No .
Report of Independent Registered Public Accounting Firm - Marcum LLP (PCAOB ID Number 688)	F-2
Consolidated Balance Sheets as of December 31, 2023, and 2022	F-3
Consolidated Statements of Operations for the Years Ended December 31, 2023, and 2022	F-4
Consolidated Statement of Changes in Shareholders’ Deficit for the Years Ended December 31, 2023, and 2022	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022	F-6
Notes to the Consolidated Financial Statements	F-7


	December 31,
	2023			2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	21,000		$	95,000
Accounts receivable		966,000			1,022,000
Inventories		1,339,000			2,595,000
Prepaid expenses		630,000			684,000
TOTAL CURRENT ASSETS		2,956,000			4,396,000

Property and equipment, net		358,000			326,000
Right-of-use assets		1,133,000			1,661,000
Other noncurrent assets		270,000			270,000
TOTAL ASSETS	$	4,717,000		$	6,653,000

LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable, accrued expenses and other current liabilities	$	1,583,000		$	1,798,000
Dividends payable		2,667,000			639,000
Accrued legal contingencies		1,066,000			681,000
Operating lease liability, current		619,000			561,000
Related party notes and advances payable		2,472,000			52,000
TOTAL CURRENT LIABILITIES		8,407,000			3,731,000

LONG TERM LIABILITIES
Operating lease liability, non-current		631,000			1,251,000
Other long term liabilities		105,000			59,000
TOTAL LIABILITIES		9,143,000			5,041,000

COMMITMENTS AND CONTINGENCIES (NOTE 16)
REDEEMABLE CONVERTIBLE PREFERRED STOCK
Preferred stock series A subject to possible redemption, 50,000,000 shares authorized: 25,000 issued and outstanding at stated redemption value of $1,000 per share as of December 31, 2023, December 31, 2022, respectively		25,000,000			25,000,000

SHAREHOLDER’S DEFICIT:
Common Stock, par value $0.001 a share; 2,000,000,000 shares authorized as of December 31, 2023, and 750,000,000 as of December 31, 2022: 183,941,422 shares issued and outstanding on December 31, 2023, and 172,694,837 as of December 31, 2022, respectively		184,000			173,000
Additional paid-in capital		13,504,000			12,691,000
Accumulated deficit		(43,114,000	)		(36,252,000	)
TOTAL SHAREHOLDERS’ DEFICIT		(29,426,000	)		(23,388,000	)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ DEFICIT	$	4,717,000		$	6,653,000


	For the Year Ended December 31,
	2023			2022
Revenue	$	4,201,000		$	5,522,000
Cost of revenue		3,306,000			3,504,000
Gross profit		895,000			2,018,000

Operating expenses:
General and administration		3,705,000			4,014,000
Selling and marketing		1,446,000			1,522,000
Research and development		418,000			697,000
Total operating expenses		5,569,000			6,233,000
Operating loss		(4,674,000	)		(4,215,000	)
Other expense:
Interest expense, related party		160,000			3,000
Interest expense		-			2,000
Total other expense		160,000			5,000
Net loss		(4,834,000	)		(4,220,000	)

Preferred Dividends		(2,028,000	)		(639,000	)
Net loss available to common shareholders	$	(6,862,000	)	$	(4,859,000	)

Net loss per common share basic and diluted:	$	(0.04	)	$	(0.09	)

Weighted average common shares, basic and diluted		177,562,045			54,273,016


	Common Stock				Additional					Total
	Shares		Amount		Paid in Capital		Accumulated Deficit			Shareholders’ Deficit
Balance, January 1, 2023		172,694,837	$	173,000	$	12,691,000	$	(36,252,000	))	$	(23,388,000	)
Contribution from Parent		-		-		730,000		-			730,000
Fair value of warrants at issuance		-		-		39,000		-			39,000
Common stock issued upon conversion of convertible notes		11,241,370		11,000		44,000		-			55,000
Common stock issued upon exercise of warrants		5,215		-		-		-			-
Preferred dividends		-		-		-		(2,028,000	)		(2,028,000	)
Net loss		-		-		-		(4,834,000	)		(4,834,000	)
Balance, December 31, 2023		183,941,422	$	184,000	$	13,504,000	$	(43,114,000	)	$	(29,426,000	)


	For the Year Ended December 31,
Cash flows from operating activities:	2023			2022
Net loss	$	(6,862,000	)	$	(4,859,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		93,000			51,000
Amortization of right-of-use assets		528,000			488,000
Amortization of debt discount		89,000			-
Inventory adjustment		853,000			-
Allocation of parent company overhead		153,000			670,000
Changes in operating assets and liabilities
Accounts receivable		56,000			(395,000	)
Prepaid expenses and other assets		(29,000	)		1,136,000
Inventory		403,000			(1,349,000	)
Accounts payable		(89,000	)		508,000
Accrued expenses and other current liabilities		(48,000	)		1,382,000
Dividends payable		2,028,000
Operating lease liabilities		(516,000	)		(301,000	)
Net cash used in operating activities		(3,341,000	)		(2,669,000	)

Cash flows from investing activities:
Purchase of property and equipment		(42,000	)		(263,000	)
Cash used in investing activities		(42,000	)		(263,000	)

Cash flows from financing activities:
Proceeds from related party advances, net of payments		2,482,000			52,000
Proceeds from contribution from parent		577,000			2,863,000
Proceeds from note payable, fees		250,000			-
Net cash provided by financing activities		3,309,000			2,915,000

Net decrease in cash and cash equivalents		(74,000	)		(17,000	)
Cash at beginning of period		95,000			112,000
Cash at end of period	$	21,000		$	95,000
Non-cash investing and financing activities
Recognition of new operating lease right-of-use assets and lease liabilities	$	-		$	1,905,000
Acquisition of net assets	$	-		$	214,000
Conversion of principal and interest on convertible note	$	55,000		$	110,000

Schedule of disaggregated revenues
	For the Year Ended December 31,
	2023		2022
Primary Geographical Markets
North America	$	3,771,000	$	4,514,000
Europe		29,000		115,000
Other		401,000		893,000
Total Revenue	$	4,201,000	$	5,522,000

Major Goods
Power supply units	$	3,854,000	$	5,214,000
EV chargers		347,000		308,000
Total Revenue	$	4,201,000	$	5,522,000

Timing of Revenue Recognition
Revenue recognized over time	$	16,000	$	22,000
Goods transferred at a point in time		4,185,000		5,500,000
Total Revenue	$	4,201,000	$	5,522,000

Schedule of related party sales
	For the Year Ended December 31,
	2023		2022
Related Party
Subsidiaries of Ault	$	14,000	$	26,000
Entities Ault holds an investment interest in		-		1,000
Total Revenue	$	14,000	$	27,000

Schedule of concentration
	For the Year Ended					For the Year Ended
	December 31, 2023					December 31, 2022
	Total Revenue		Percentage of			Total Revenue		Percentage of
	by Major		Total Company			by Major		Total Company
	Customers		Revenue			Customer		Revenue
Customer A	$	769,000		18	%	$	935,000		17	%
Customer B	$	476,000		11	%	$

Schedule percentage of total trade receivables
	For the Year Ended					For the Year Ended
	December 31, 2023					December 31, 2022
	Trade Receivables		Percentage of			Total Receivables		Percentage of
	by Major		Total Trade			by Major		Total Trade
	Customer		Receivables			Customer		Receivables
Customer A	$	342,000		35	%	$	199,000		19	%
Customer B	$	-		-	%	$	111,000		11	%
Customer C	$	179,000		18	%	$	-		-
Customer D	$	-		-	%	$	169,000		17	%

Schedule of property and equipment
	December 31, 2023			December 31, 2022
Machinery and equipment	$	649,000		$	667,000
Leasehold improvements, furniture and equipment		217,000			207,000
EV chargers		141,000			115,000
		1,007,000			989,000
Less: accumulated depreciation and amortization		(649,000	)		(663,000	)
Property and equipment, net	$	358,000		$	326,000

Schedule of property and equipment net
		Useful Lives
Asset		(In Years)
Computer software and office and computer equipment		3 - 5
Machinery and equipment, automobiles, furniture, and fixtures		3 - 15
Leasehold improvements		Over the term of the lease or the life of the asset, whichever is shorter

Schedule of inventories
	December 31, 2023		December 31, 2022
Finished products	$	878,000	$	1,807,000
Raw materials, parts and supplies		461,000		788,000
Total inventories	$	1,339,000	$	2,595,000

Summary of leases by balance sheet category
	December 31, 2023		December 31, 2022
Operating right-of-use assets	$	1,133,000	$	1,661,000
Operating lease liability – current		619,000		561,000
Operating lease liability – non-current		631,000		1,251,000

Schedule of lease cost
	December 31,
	2023			2022
Operating lease costs	$	623,000		$	648,000
Less: Sublease income		(84,000	)		-
Total	$	539,000		$	648,000

Summary of other information related to leases
	December 31, 2023
Cash paid for amounts included in the measurement of lease liabilities:		-
Operating cash flows related to operating leases	$	682,000
Right-of-use assets obtained in exchange for new operating lease liabilities		-
Weighted-average remaining lease term – operating leases		2.0 years
Weighted-average discount rate – operating leases		8	%

Schedule of non cancellable operating leases
2024	$	693,000
2025		609,000
2026		51,000
Total lease payments		1,353,000
Less interest		(103,000	)
Present value of lease liabilities	$	1,250,000

Schedule of related party notes payable
	Interest rate	Due date	December 31, 2023		December 31, 2022
Ault advance payable	10%	-	$	2,407,000	$	-
Chief Executive Officer	14%	Default		51,000		25,000
Non-officer June and September 2023 advance payable	-	-		14,000		13,000
Officer December 2022 advance payable	-	-				14,000
Total related party notes and advances payable			$	2,472,000	$	52,000

Schedule of convertible notes payable
	Conversion price per share		Interest rate	Due date	December 31, 2023		December 31, 2022
Opportunity fund convertible notes payable	$	0.005	10%	January 14, 2024	$	-	$	45,000
Total convertible notes payable					$	-	$	45,000

Schedule of assumptions
Term		5 years
Exercise Price	$	0.044
Volatility		271	%
Risk-free interest rate		3	%
Expected dividend yield		-

Schedule of loss before provision for income tax
	2023			2022
Pre-tax loss
U.S. Federal	$	(4,834,000	)	$	(4,220,000	)
Foreign		-			-
Total	$	(4,834,000	)	$	(4,220,000	)

Schedule of federal and state income tax (provision) benefit
	2023		2022
Current
U.S. Federal	$	-	$	-
U.S. State		-		-
Foreign		-		-
Total current provision		-		-
Deferred
U.S. Federal		-		-
U.S. State				-
Foreign		-		-
Total deferred provision (benefit)		-		-
Total provision (benefit) for income taxes	$	-	$	-

Schedule of deferred tax assets and liabilities
	2023			2022
Deferred tax asset:
Net operating loss	$	6,558,000		$	6,037,000
Intangible asset basis		118,000			132,000
Deferred rent liability		349,000			507,000
Inventory adjustments		352,000			148,000
R&D capitalization		201,000			144,000
Asset retirement obligation		4,000			1,000
Settlement liability		267,000			161,000
Accrued warranty		14,000			12,000
Accrued salaries		65,000			-
Deferred revenue		12,000			-
Total deferred tax asset		7,940,000			7,142,000

Deferred tax liability:
ROU assets		(316,000	)		(465,000	)
Fixed asset basis		(97,000	)		(65,000	)
Total deferred income tax liabilities		(413,000	)		(530,000	)
Net deferred income tax assets		7,528,000			6,591,000
Valuation allowance		(7,528,000	)		(6,612,000	)
Deferred tax asset (liability), net	$	-		$	-

Schedule of net operating losses and tax credit carryforwards
	2023 Amount		Expiration Years
Net operating losses, federal (Post December 31, 2017)	$	12,724,000	Do Not Expire
Net operating losses, federal (Pre-January 1, 2018)		10,169,000	2022 to 2037
Net operating losses, state		25,095,000	2029 to 2041

	2022 Amount		Expiration Years
Net operating losses, federal (Post December 31, 2017)	$	10,378,000	Do Not Expire
Net operating losses, federal (Pre-January 1, 2018)		11,185,000	2022 to 2037
Net operating losses, state		21,597,000	2029 to 2041

Schedule of effective income tax rate reconciliation
	2023			2022
Statutory Rate		21.00	%		21.00	%
State Tax		6.74	%		6.98	%
Permanent Differences		(0.35	)%		(0.57	)%
Changes in VA		(18.94	)%		(28.06	)%
NOL Expiration		(3.93	)%		0.00	%
Prior Year True-ups		(4.52	)%		0.65	%
Total		0.00	%		0.00	%

Schedule of anti dilutive securities excluded from computation of earnings per share
	December 31,
	2023		2022
Warrants		116,010,720		-
Convertible notes		-		10,736,066
Convertible preferred stock		25,000,000		25,000,000
Total		141,010,720		35,736,066

Name	Age	Positions
Amos Kohn	64	Founder, Chief Executive Officer, Chief Financial Officer and Director
Marcus Charuvastra	45	President and Director
Douglas Gintz	57	Chief Technology Officer and Director

Name and principal position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		All Other Compensation ($)		Total ($)
Amos Kohn		2023		350,000		-		-		-		29,540		379,540
Chief Executive Officer		2022		350,000		-		-		-		30,540		380,540
Marcus Charuvastra		2023		128,125		5,834		-				1,160		135,119
President and Chief Revenue Officer		2022		125,000		40,000		5,271				1,127		171,398

Name and Address of Beneficial Owners of Common Stock ⁽¹⁾	Number of shares beneficially owned		% of Common Stock
Amos Kohn ⁽³⁾		24,800		*
Marcus Charuvastra		-		- - -
Douglas Gintz ⁽⁴⁾		18,080		*
All Directors and Officers as a group (Three persons)		21,440		*
Ault Alliance, Inc. ⁽²⁾		87,636,263		39.7	%

2.1		Securities Purchase Agreement dated March 20, 2022 by and among Imperalis Holding Corp., BitNile Holdings, Inc and TurnOnGreen, Inc. Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed March 21, 2022.
2.2		Form of Amendment to Securities Purchase Agreement, dated September 5, 2022. Incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed September 6, 2022.
3.1		Articles of Incorporation, dated April 5, 2005. Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed April 13, 2021.
3.2		Certificate of Amendment to the Articles of Incorporation, dated March 11, 2011. Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed April 13, 2021.
3.3		By-Laws of TurnOnGreen, Inc. Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 10 filed April 13, 2021.
3.4		Certificate of Designations of Rights and Preferences of Series A Convertible Redeemable Preferred Stock. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed September 6, 2022.
3.5		Amended and Restated Articles of Incorporation, dated August 29, 2023. Incorporated by reference to Exhibit 3.1 to the Current report on Form 8-K filed August 31, 2023.
3.6		Certificate of Amendment to the Articles of Incorporation, dated January 11, 2024. Incorporated by reference to Exhibit 3.1 to the Current report on Form 8-K filed January 18, 2024.
3.7		Amended and Restated Bylaws of the Company as of January 11, 2024. Incorporated by reference to Exhibit 3.2 to the Current report on Form 8-K filed January 18, 2024.
4.1		Convertible Promissory Note, dated December 15, 2021, made by Imperalis Holding Corp. in favor of Digital Power Lending, LLC. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed December 21, 2021.
4.2		Description of Capital Stock
4.3		Form of Warrant. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 12, 2023.
10.1		Convertible Promissory Note issued January 14, 2021. Incorporated by reference to Exhibit 10.4 to the Registration Statement on Form 10 filed April 13, 2021.
10.2		Exchange Agreement between Imperalis Holding Corp. and Digital Power Lending, LLC, dated as of December 15, 2021. Incorporated by reference to Exhibit 10.1 the Current Report on Form 8-K filed December 21, 2021.
10.3		Share Exchange Agreement with CannaCure Sciences, Inc. Incorporated by reference to Exhibit 10.1 to the Registration Statement on Form 10 filed April 13, 2021.
10.4		Form of Partnership Agreement, dated April 26, 2021, between TurnOnGreen, Inc. (formerly Coolisys Technologies Corp.) and ChargeLab, Inc. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed September 6, 2022.
10.5		Form of Distribution and Resale Agreement with Tesco Solutions LLC an Indiana based construction firm. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed September 6, 2022.
10.6		Form of Purchase Agreement with Unique Electric Solutions, a New York based entity. Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed September 6, 2022.
10.7		Form of Best Western International Marketing Agreement. Incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed September 6, 2022.
10.8		Form of EV-olution Charging Systems Distribution Agreement. Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed September 6, 2022.
10.9		Form of CED National Accounts Distribution Agreement. Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed September 6, 2022.
10.10		Form of Electric Vehicle Charger Site License Agreement dated May 23, 2002 by and between TurnOnGreen and Sunrise Hills Commercial Association. Incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed September 6, 2022.
10.11		Form of Purchase Agreement. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed April 12, 2023.
10.12		Form of Note. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed April 12, 2023.
10.13		Form of Loan and Security Agreement. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed August 21, 2023.
21.1		List of Subsidiaries. Incorporated by reference to Exhibit 21.1 to the Registration Statement on Form S-1/A filed February 9, 2023.
31.1*		Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2*		Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1**		Certifications of Chief Executive and Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
101		Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in Inline XBRL (Inline eXtensible Business Reporting Language).