IMHC Imperalis Holding Corporation (PK)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2023

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 000-52140

 

Imperalis Holding Corp.

(Exact name of registrant as specified in its charter)

 

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)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

o Large accelerated Filer		o Accelerated Filer
x Non-accelerated Filer		x Smaller reporting company
		o Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 183,936,207shares of common stock as of August 11, 2023. 

 

 

TABLE OF CONTENTS

 

			Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)		3
	Condensed Consolidated Balance Sheet as of June 30, 2023 and December 31, 2022		3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022		4
	Condensed Consolidated Statement of Changes in Shareholders’ Deficit for the three and six months ended June 30, 2023 and 2022		5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		16
Item 4.	Controls and Procedures		16
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		19
Item 1A.	Risk Factors		19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3.	Defaults Upon Senior Securities		19
Item 4.	Mine Safety Disclosures		19
Item 5.	Other Information		19
Item 6.	Exhibits		20

 

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

 

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

		June 30, 2023				December 31, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	65,000			$	95,000
Accounts receivable			507,000				1,022,000
Inventories			2,179,000				2,595,000
Prepaid expenses			624,000				684,000
TOTAL CURRENT ASSETS			3,375,000				4,396,000
Property and equipment, net			378,000				326,000
Right-of-use assets			1,402,000				1,661,000
Other noncurrent assets			271,000				270,000
TOTAL ASSETS		$	5,426,000			$	6,653,000
LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable		$	846,000			$	1,147,000
Dividends payable			1,645,000				639,000
Accrued expenses and other current liabilities			620,000				597,000
Accrued legal contingencies			1,066,000				681,000
Operating lease liability, current			594,000				561,000
Notes payable and convertible notes			350,000				54,000
Related party notes and advances payable			766,000				52,000
TOTAL CURRENT LIABILITIES			5,887,000				3,731,000
LONG TERM LIABILITIES
Operating lease liability, non-current			945,000				1,251,000
Other long term liabilities			72,000				59,000
TOTAL LIABILITIES			6,904,000				5,041,000
COMMITMENTS AND CONTINGENCIES
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 June 30, 2023 and December 31, 2022			25,000,000				25,000,000
SHAREHOLDERS’ DEFICIT:
Common Stock, par value $0.001 a share; 750,000,000 shares authorized as of June 30, 2023 and December 30, 2022: 172,694,837 shares issued and outstanding at June 30, 2023 and December 31, 2022			173,000				173,000
Additional paid-in capital			13,460,000				12,691,000
Accumulated deficit			(40,111,000	)			(36,252,000	)
TOTAL SHAREHOLDERS’ DEFICIT			(26,478,000	)			(23,388,000	)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ DEFICIT		$	5,426,000			$	6,653,000

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Revenue		$	724,000			$	1,062,000			$	1,600,000			$	2,191,000
Cost of revenue			775,000				672,000				1,292,000				1,338,000
Gross (loss) profit			(51,000	)			390,000				308,000				853,000
Operating expenses:
Research and development			88,000				304,000				207,000				510,000
Selling and marketing			420,000				319,000				812,000				660,000
General and administration			1,196,000				771,000				2,053,000				1,620,000
Total operating expenses			1,704,000				1,394,000				3,072,000				2,790,000
Operating loss			(1,755,000	)			(1,004,000	)			(2,764,000	)			(1,937,000	)
Other expense:
Interest			87,000				-				89,000				-
Total other expense			87,000				-				89,000				-
Net loss			(1,842,000	)			(1,004,000	)			(2,853,000	)			(1,937,000	)
Preferred Dividends			(506,000	)			-				(1,006,000	)			-
Net loss available to common shareholders		$	(2,348,000	)		$	(1,004,000	)		$	(3,859,000	)		$	(1,937,000	)
Net loss per common share basic and diluted:		$	(0.01	)		$	-			$	(0.02	)		$	-
Weighted average common shares, basic and diluted			172,694,837				-				172,694,837				-

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT FOR THE THREE AND

SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Unaudited)

		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
Preferred dividends			-				-				-				(500,000	)			(500,000	)
Net loss			-				-				-				(1,011,000	)			(1,011,000	)
Balance, March 31, 2023			172,694,837				173,000				13,421,000				(37,763,000	)			(24,169,000	)
Fair value of warrants issued			-				-				39,000				-				39,000
Preferred dividends			-				-				-				(506,000	)			(506,000	)
Net loss			-				-				-				(1,842,000	)			(1,842,000	)
Balance, June 30, 2023			172,694,837			$	173,000			$	13,460,000			$	(40,111,000	)		$	(26,478,000	)

 

 

		Common Stock								Additional								Total
		Shares				Amount				Paid in Capital				Accumulated Deficit				Shareholders’ Deficit
Balance, January 1, 2022			-			$	-			$	9,383,000			$	(31,393,000	)		$	(22,010,000	)
Contribution from parent			-				-				1,010,000				-				1,010,000
Net loss			-				-				-				(933,000	)			(933,000	)
Balance, March 31, 2022			-				-				10,393,000				(32,326,000	)			(21,933,000	)
Contribution from parent			-				-				1,250,000				-				1,250,000
Net loss			-				-				-				(1,004,000	)			(1,004,000	)
Balance, June 30, 2022			-			$	-			$	11,643,000			$	(33,330,000	)		$	(21,687,000	)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

		For the Six Months Ended June 30,
Cash flows from operating activities:		2023				2022
Net loss		$	(3,859,000	)		$	(1,937,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			45,000				30,000
Amortization of right-of-use assets			258,000				240,000
Amortization of debt and warrant discounts			85,000
Inventory allowance			317,000				-
Increase in contribution from parent for corporate overhead			153,000				160,000
Changes in operating assets and liabilities
Accounts receivable			515,000				(281,000	)
Prepaid expenses and other assets			(23,000	)			959,000
Inventory			99,000				(1,457,000	)
Accounts payable			85,000				327,000
Dividends payable			1,006,000				-
Lease and warranty liabilities			(261,000	)			(108,000	)
Other current liabilities			23,000				320,000
Net cash used in operating activities			(1,557,000	)			(1,747,000	)
Cash flows from investing activities:
Purchase of property and equipment			(14,000	)			(146,000	)
Cash used in investing activities			(14,000	)			(146,000	)
Cash flows from financing activities:
Proceeds from related party advances, net of payments			714,000				-
Proceeds from contribution from parent			577,000				2,101,000
Proceeds from issuance of warrants			39,000				-
Proceeds from note payable, net of discount			211,000				-
Net cash provided by financing activities			1,541,000				2,101,000
Net (decrease) increase in cash and cash equivalents			(30,000	)			208,000
Cash at beginning of period			95,000				112,000
Cash at end of period		$	65,000			$	320,000

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2023

 

1. DESCRIPTION OF BUSINESS

 

Overview

 

Imperalis Holding Corp. d/b/a TurnOnGreen, Inc. (“IMHC” or “Imperalis”), through its wholly owned subsidiaries Digital Power Corporation (“Digital Power” or “DPC”) and TOG Technologies Inc. (collectively, the “Company”), is an emerging electric vehicle (“EV”) electrification infrastructure solutions and premium custom power products company. The Company designs, develops, manufactures and sells highly engineered, feature-rich, high-grade power conversion systems and power system solutions for mission-critical applications and processes electronic products as well as EV charging solutions to diverse industries, markets and sectors including e-Mobility, medical, military, telecommunications, and industrial.

 

IMHC was incorporated in Nevada on April 5, 2005 and is a subsidiary of Ault Alliance, Inc., a Delaware corporation (the “Parent” or “Ault”) and currently operates as a reporting segment of Ault.

 

2. LIQUIDITY AND GOING CONCERN

 

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred recurring net losses and operations have not provided sufficient cash flows. Management believes that the Company will continue to incur operating and net losses each quarter until at least the time it begins significant deliveries of its products. The Company’s inability to continue as a going concern could have a negative impact on the Company, including its ability to obtain needed financing. In view of these matters, there is substantial doubt about the Company’s ability to continue as a going concern.

 

The Company intends to finance its future development activities and its working capital needs largely through the sale of equity securities with some additional funding from other sources, including term notes until such time as funds provided by operations are sufficient to fund working capital requirements. Although management believes that such capital sources will be available, there can be no assurances that financing will be available to the Company when needed in order to allow the Company to continue its operations, or if available, on terms acceptable to the Company. The condensed consolidated financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by GAAP. The Company has made estimates and judgments affecting the amounts reported in the Company’s condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited and reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for interim periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC on April 5, 2023.

 

Significant Accounting Policies

 

Other than as noted below, there have been no material changes to the Company’s significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on April 5, 2023.

 

New Accounting Guidance – Recently Adopted

 

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” (“ASU 2021-08”), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. We adopted ASU 2021-08 as of January 1, 2023, and the adoption had no impact on our condensed consolidated financial statements as we have not had any business combinations in 2023.

 

7

 

The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment approach in legacy U.S. GAAP with a methodology that reflects future credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we are required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which reflects losses that are probable. The guidance is effective for fiscal years beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the SEC, to fiscal years beginning after December 15, 2022. We adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) as of January 1, 2023, and the adoption had no impact on our condensed consolidated financial statements.

 

Recent Accounting Pronouncements not yet Adopted

 

The Company does not expect that any recently issued accounting guidance will have a significant effect on its condensed consolidated financial statements.

 

4. REVENUE DISAGGREGATION

 

The Company’s disaggregated revenues consisted of the following:

Schedule of disaggregated revenues
		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2023				2022				2023				2022
Primary Geographical Markets
North America		$	542,000			$	822,000			$	1,326,000			$	1,834,000
Europe			-				28,000				-				47,000
Other(1)			182,000				212,000				274,000				310,000
Total Revenue		$	724,000			$	1,062,000			$	1,600,000			$	2,191,000
Major Goods
Power supply units(1)		$	645,000			$	1,016,000			$	1,470,000			$	2,112,000
EV chargers			79,000				46,000				130,000				79,000
Total Revenue		$	724,000			$	1,062,000			$	1,600,000			$	2,191,000
Timing of Revenue Recognition
Revenue recognized over time		$	3,000			$	-			$	6,000			$	-
Goods transferred at a point in time(1)			721,000				1,062,000				1,594,000				2,191,000
Total Revenue		$	724,000			$	1,062,000			$	1,600,000			$	2,191,000

(1)

The Company had related party sales during each of the three and six months ended June 30, 2023 of $4,000, and $0 for each of the three and six months ended June 30, 2022.

 

The following table provides the percentage of total revenue attributable to a single customer from which 10% or more of total revenue was derived:

Schedule of concentration
		For the Three Months Ended June 30, 2023								For the Six Months Ended June 30, 2023
		Total Revenue				Percentage of				Total Revenue				Percentage of
		by Major				Total Company				by Major				Total Company
		Customers				Revenue				Customers				Revenue
Customer A		$	173,000				24	%		$	236,000				15	%
Customer B		$	115,000				16	%		$	190,000				15	%
Customer C		$	99,000				14	%		$	241,000				12	%

 

 

		For the Three Months Ended June 30, 2022								For the Six Months Ended June 30, 2022
		Total Revenue				Percentage of				Total Revenue				Percentage of
		by Major				Total Company				by Major				Total Company
		Customers				Revenue				Customers				Revenue
Customer A		$	259,000				24	%		$	263,000				12	%
Customer B		$	-				-	%		$	261,000				12	%

 

8

 

5. TRADE RECEIVABLES

 

As of June 30, 2023 and December 31, 2022, the Company had related party receivables of $2,000 and $25,000, respectively.

 

The following table provides the percentage of total trade receivables attributable to a single customer that accounted for 10% or more of the Company’s outstanding receivables:

Schedule percentage of total trade receivables
		As of				As of
		June 30, 2023				December 31, 2022
Customer A			26	%			-	%
Customer B			14	%			11	%
Customer C			5	%			20	%
Customer D			-	%			10	%
Customer E			-	%			17	%

 

6. PROPERTY AND EQUIPMENT, NET

 

As of June 30, 2023 and December 31, 2022, property and equipment consisted of the following:

Schedule of property and equipment
		June 30, 2023				December 31, 2022
Machinery and equipment		$	559,000			$	667,000
Computers and software			89,000				-
Leasehold improvements, furniture and equipment			208,000				207,000
EV chargers			122,000				115,000
Gross property and equipment			978,000				989,000
Less: accumulated depreciation and amortization			(600,000	)			(663,000	)
Property and equipment, net		$	378,000			$	326,000

 

Depreciation and amortization expense related to property and equipment was $23,000 and $24,000 for the three months ended June 30, 2023 and 2022, respectively. Depreciation and amortization expense related to property and equipment was $45,000 and $30,000 for the six months ended June 30, 2023 and 2022, respectively.

 

In 2023, the Company abandoned certain machinery and equipment when the Company moved to its new California offices.

 

Asset retirement obligations as of each June 30, 2023 and December 31, 2022, were $3,000.

 

7. INVENTORIES

 

As of June 30, 2023 and December 31, 2022, inventories consisted of: 

Schedule of inventories
		June 30, 2023				December 31, 2022
Raw materials, parts and supplies		$	772,000			$	788,000
Finished products			1,407,000				1,807,000
Total inventories		$	2,179,000			$	2,595,000

 

8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 

As of June 30, 2023 and December 31, 2022, accrued expenses and other current liabilities consisted of the following: 

Schedule of accrued expenses
		June 30, 2023				December 31, 2022
Customer prepayments		$	284,000			$	276,000
Warranty liability, current			16,000				16,000
Other accrued liabilities			78,000				50,000
Accrued payroll and payroll taxes			242,000				255,000
Total other current liabilities		$	620,000			$	597,000

 

9

 

9. LEASES

 

Office and Warehouse Leases and Sublease

 

During the six months ended June 30, 2023, the Company was a lessee/sublessor for a certain office space lease. No residual value guarantees have been provided by the sublessee and we recognized $36,000 of income related to the sublease. Fixed sublease payments received are recognized on a straight-line basis over the sublease term and netted against operating lease expenses.

 

The components of net operating lease expenses, recorded within operating expenses on the Company's condensed consolidated statements of operations for the three and six months ended June 30, 2023, were as follows:

Schedule of lease cost
		Three Months Ended June 30, 2023				Six Months Ended June 30, 2023
Operating lease cost		$	162,000			$	324,000
Short-term lease cost			-				-
Variable lease cost			-				-
Less: Sublease income			(25,000	)			(36,000	)
Total		$	137,000			$	288,000

 

10. RELATED PARTY TRANSACTIONS

 

Ault Lending, LLC (“Ault Lending” or “AL”) and the Company are both subsidiaries of Ault. David Katzoff, who serves as the Company’s Chief Financial Officer, is also the manager of Ault Lending. As a result, AL is deemed a related party.

 

Allocation of General Corporate Expenses

 

Ault provides human resources, accounting, and other services to the Company. The Company obtains its business insurance under Ault. The accompanying financial statements include allocations of these expenses. The allocation method calculates the appropriate share of overhead costs to the Company by using the Company’s revenue as a percentage of total revenue of Ault. The Company believes the allocation methodology used is reasonable and has been consistently applied, and results in an appropriate allocation of costs incurred. However, these allocations may not be indicative of the cost had the Company been a stand-alone entity or of future services. Ault allocated $223,000 of costs in the three month period ended June 30, 2023 that have been included in related party notes payable (see below). Ault allocated $153,000 of costs in the three month period ended March 31, 2023 that are recorded as additional paid-in capital. In the prior year period, Ault allocated $70,000 and $130,000 for the three and six months ended June 30, 2022, respectively. These costs in the prior year period were treated as additional paid-in capital.

 

Contributions From Parent

 

The Company previously received funding from Ault to cover any shortfalls on operating cash requirements. In addition to the allocation of general corporate expenses. The Company received $1.2 million and $2.1 million for the three and six months ended June 30, 2022, respectively and are reflected in additional paid-in capital.

 

Related Party Sales and Receivables

 

The Company recognized related party sales revenue during each of the three and six months ended June 30, 2023 of $4,000, and $0 for each of the three and six month periods ended June 30, 2022. As of June 30, 2023 and December 31, 2022, the Company had related party receivables of $2,000 and $25,000, respectively.

 

Related Party Notes and Advances Payable

 

Related party notes and advances payable were used for working capital purposes and at June 30, 2023 and December 31, 2022, were comprised of the following:

Schedule of related party notes payable
		Interest rate				Due date				June 30, 2023				December 31, 2022
Ault advance payable			-				-			$	701,000			$	-
Chief executive officer March 2023 note payable			14	%			April 10, 2023				26,000				-
Non-officer June 2023 advance payable			-				-				14,000				-
Chief executive officer December 2022 note payable			14	%			March 9, 2023				25,000				25,000
Officer December 2022 advance payable			-				-				-				14,000
Non-officer December 2022 advance payable			-				-				-				13,000
Total related party notes and advances payable										$	766,000			$	52,000

 

10

 

During the three months ended June 30, 2023, Ault and the Company’s management determined that all allocations and capital funding provided to us by Ault beginning April 1, 2023, would be repaid and treated as a related party note payable. During the three months ended June 30, 2023, Ault advanced us $478,000, net of repayments of $250,000, and allocated $223,000 of corporate overhead. As of June 30, 2023 the total balance of $701,000 was, interest-free, had no fixed terms of repayment and is recorded related party notes and advances payable.

 

During the quarter ended June 30, 2023, a non-officer employee of the Company advanced us $14,000. The advance is unsecured, interest-free and has no fixed terms of repayment.

 

During the three and six months ended June 30, 2023, the Company incurred an interest expense of $2,000 and $4,000, respectively, in relation chief executive officers’ notes issued.

 

11. COMMITMENTS AND CONTINGENCIES

 

Litigation Matters

 

The Company is involved in litigation arising from other matters in the ordinary course of business. The Company is regularly subject to claims, suits, regulatory and government investigations, and other proceedings involving labor and employment, commercial disputes, and other matters. Such claims, suits, regulatory and government investigations, and other proceedings could result in fines, civil penalties, or other adverse consequences.

 

Certain of these outstanding matters include speculative, substantial or indeterminate monetary amounts. The Company records an undiscounted liability for contingent losses, including future legal costs, settlements and judgments, when we consider it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the reasonably possible loss. The Company evaluates developments in its legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and makes adjustments as additional information becomes available. Significant judgment is required to determine both the likelihood of there being, and the estimated amount of a loss related to such matters.

 

Gordon v. Digital Power Corporation

 

On or about November 21, 2019, the plaintiff-William Gordon, filed a complaint against defendant, DPC, alleging wrongful termination and disability discrimination. The arbitration was conducted during October 2022. Aside from the opening and responding trial briefs, the arbitrator requested additional briefing on two subjects, undisclosed principal liability, and disclosed principal liability, both of which were submitted. In May 2023 the arbitrator entered a final award against us and in favor of Mr. Gordon in the amount of $1,065,621 inclusive of interest, legal fees, administrative fees and expenses. The award was based on Mr. Gordon’s employment agreement with DPC, and Mr. Gordon’s promissory note with Coolisys Technologies Corp. aka DPC. Mr. Gordon was deemed the prevailing party.

 

The Company has accrued $1.1 million in connection with legal contingencies as of June 30, 2023 and $681,000 as of December 31, 2022.

 

Non-cancelable Obligations

 

In the normal course of business, the Company enters into non-cancelable obligations with certain parties to purchase services, such as technology equipment and subscription-based cloud service arrangements. As of June 30, 2023 and December 31, 2022, the Company had outstanding non-cancelable purchase obligations with terms of one year or longer aggregating $54,000 and $0, respectively.

 

12. LOSS PER SHARE

 

In accordance with ASC 260, Earnings Per Share, the basic loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

 

11

 

The Company excluded the potential common stock equivalents outstanding from the calculation of diluted weighted average net loss per share for the six months ended June 30, 2023 and 2022, which would be anti-dilutive due to the net loss from continuing operations in those periods.

 

Anti-dilutive securities, which are convertible into or exercisable for the Company’s common stock, consisted of the following at June 30, 2023 and 2022:

Schedule of anti dilutive securities excluded from computation of earnings per share
		June 30,
		2023				2022
Warrants			1,000,000				-
Convertible notes			11,186,065				20,992,000
Convertible preferred stock			25,000,000				25,000,000
Total			37,186,065				45,992,000

  

13. SHAREHOLDERS’ DEFICIT

 

Authorized Capital

 

The Company is authorized to issue 750 million (750,000,000) shares of common stock, par value $0.001 per share and ten million (10,000,000) shares of preferred stock, par value $0.001 per share, of which twenty-five thousand shares (25,000) have been designed as Series A Convertible Redeemable Preferred Stock, par value $0.001 per share and the remaining authorized shares of preferred stock are “blank check” shares, which can be issued with various rights as determined by the Board. The number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding shares of common stock of the Corporation, voting together as a single class. As of each June 30, 2023 and December 31, 2022, there were 172,694,837 shares of common stock issued and outstanding and as of each June 30, 2023 and December 31, 2022, there were 25,000 shares of Series A Convertible Redeemable Preferred Stock issued and outstanding.

 

Common Stock

 

The holders of the Company’s common stock have equal ratable rights to dividends from funds legally available therefore, when, and if declared by the Company’s board of directors. Holders of common stock are also entitled to share ratably in all of the Company’s assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of the Company’s affairs.

 

Except as otherwise required by law or as may be provided by the resolutions of the Board of Directors authorizing the issuance of common stock, all rights to vote and all voting power shall be vested in the holders of common stock. Each share of common stock shall entitle the holder thereof to one vote.

 

Upon any liquidation, dissolution or winding-up of the corporation, whether voluntary or involuntary, the remaining net assets of the Company shall be distributed pro rata to the holders of the common stock.

 

14. STOCK BASED COMPENSATION

 

On June 27, 2023, the Company held a special meeting of shareholders and the shareholders voted and approved three proposals presented for a vote, including approving the Imperalis Holding Corp. 2023 Stock Incentive Plan which reserved 100,000,000 shares for issuance. As of June 30, 2023, no shares had been issued under the plan.

 

15. CONVERTIBLE NOTES PAYABLE

 

Convertible notes payable included in accrued expenses and other current liabilities at June 30, 2023 and December 31, 2022, were comprised of the following:

Schedule of convertible notes payable
		Conversion price per share				Interest rate				Due date				June 30, 2023				December 31, 2022
Opportunity fund convertible notes payable		$	0.005				10	%			January 14, 2024			$	45,000			$	45,000
Total convertible notes payable														$	45,000			$	45,000

 

The Company has convertible promissory notes payable to Opportunity Fund, LLC in the amount of $45,000 (the “Note”). The Note allows for advances up to maximum amount of $75,000. The principal, together with any accrued but unpaid interest on the amount of principal, is convertible upon request by the noteholder at a conversion price of $0.005 per share.

 

As of June 30, 2023 and December 31, 2022, the outstanding convertible notes payable had accrued interest of $11,000 and $9,000, respectively.

 

12

 

16. NOTES PAYABLE

 

Notes payable at June 30, 2023:

 

		Status		Default rate				June 30, 2023
Promissory note payable		In Default			3	%		$	300,000

 

The Company borrowed $250,000 and issued a promissory note to the FAR Holdings International, LLC (the “Investor”) in the principal face amount of $300,000. The Company also issued the Investor warrants (the “Warrants”) to purchase an aggregate of 1,000,000 shares of common stock, par value of $0.001 per share (the “Warrant Shares”).

 

The promissory note was issued with an original issuance discount of $50,000 and bears no interest. The Company is required to pay the Investor $100,000 on May 6, 2023, June 6, 2023, and on the maturity date of July 6, 2023. The promissory note contains a single event of default if the Company fails to make payments within five business days when due.

 

As of June 30, 2023 the Company had not made any payments and therefore the promissory note was in default. As of June 30, 2023 the Company had accrued default fees of $18,000 recorded within other accrued liabilities.

 

The Warrants entitle the holder to purchase shares of common stock for a period of five years from the date of issuance at an exercise price of $0.044 per share, subject to adjustment and vested immediately. The exercise price of each Warrant is subject to adjustment for customary stock splits, stock dividends, combinations or similar events. Because the Warrants vested immediately, the fair value was assessed on the date of inception.

 

The proceeds from the sale of the promissory note and warrants of $250,000, were allocated based on their relative stand-alone fair values. The fair value of the promissory note was $289,000 and was estimated using the discounted cash flow method under the income approach on the date of issuance. The $39,000 allocated to the warrants was accounted for as paid in capital and debt discount amortized using the effective rate of interest over the life of the promissory note. The fair value of the Warrants was determined on a stand-alone basis as $53,000 and was measured using the Black-Scholes option pricing model utilizing the following assumptions:

 

Schedule of assumptions		Capped Volume
Term			5 years
Exercise Price			$0.044
Volatility			270.6%
Risk-free interest rate			3.37%
Underlying stock price			$0.055
Expected dividend yield			-

 

17. SUBSEQUENT EVENTS

 

The Company’s convertible promissory notes payable to Opportunity Fund, LLC in the amount of $56,000 of convertible notes and accrued interest were converted into 11.2 million shares of common stock at the Opportunity Fund’s option at a conversion price of $0.005 per share.

 

On August 15^th the Company entered into a loan and security agreement (the “security agreement”) with AAI in relation to the June 30, 2023 outstanding related party advance of $701,000. The security agreement accrues interest at 10% per annum, had a principal balance of approximately $1,080,000, permits and aggregate loan amount of $2 million and is due within 5 business days after written demand for payment is made. AAI shall have the right to terminate its obligation to make credit extensions under this security agreement immediately and without notice upon the occurrence and during the continuance of an event of default. After December 31, 2023, AAI will not be obligated to make any further advances.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Forward-Looking Statements

 

Certain statements in this Quarterly Report on Form 10-Q, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events or our future financial performance. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “approximate,” “might,” “budget,” “forecast,” “shall,” “project,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements, or our ability to successfully remediate the material weakness in our internal control over financial reporting in an appropriate and timely manner or at all, and the other factors described under “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K filed with the SEC on April 5, 2023. Our expectations are as of the date this Quarterly Report is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report is filed to confirm these statements to actual results, unless required by law.

 

Plan of Operations

 

We are an emerging electric vehicle (“EV”) electrification infrastructure solutions and premium custom power products company, through our wholly owned subsidiaries Digital Power Corporation (“DPC”) and TOG Technologies Inc. (“TOGT”), design, develop, manufacture and sell highly engineered, feature-rich, high-grade-power conversion and power system solutions to diverse industries and markets including e-Mobility, medical, military, telecommunications, and industrial as well as design and provide a line of advanced EV charging solutions. Through DPC, we provide solutions which leverage a combination of low leakage power emissions, very high-power density with power efficiency, flexible design leveraging customized firmware and short time to market. Our designed and manufactured, highly engineered, precision power conversion and control solutions serve mission-critical applications and processes. Through TOGT, we market and sell a line of scalable EV residential, commercial and ultra-fast charging products and comprehensive charging management software and network services. The business represents a natural outgrowth from our proprietary core power technologies to optimizing the design and performance of EV charging solutions.

 

Our strategy is to be the supplier of choice across numerous markets that require high-quality power system solutions where custom design, superior product, high quality, time to market and competitive prices are critical to business success. We believe that we provide advanced custom product design services to deliver high-grade products that reach a high level of efficiency and density and can meet rigorous environmental requirements. Our customers benefit from a direct relationship with us that supports all their needs for designing and manufacturing power solutions and products. By implementing our proprietary core technology, including process implementation in integrated circuits, we can provide cost reductions to our customers by replacing their existing power sources with our custom design cost-effective products.

 

On March 20, 2022, IMHC entered into a Securities Purchase Agreement (the “Agreement”) with TurnOnGreen, Inc., a Nevada corporation (“TOGI”), a then wholly owned subsidiary of Ault Alliance, Inc., a Delaware corporation (the “Parent” or “AAI”). Pursuant to the Agreement, at the Closing, which occurred on September 6, 2022, the Parent delivered to us all of the outstanding shares of common stock of TOGI held by the Parent, and in consideration for the issuance by IMHC to the Parent (the “Acquisition”) of an aggregate of 25,000 newly designated shares of Series A Preferred Stock (the “Series A Preferred Stock”), with each such share having a stated value of $1,000. The Series A Preferred Stock has an aggregate liquidation preference of $25 million, is convertible into shares of our common stock at the Parent’s option, is redeemable by the Parent, and entitles the Parent to vote with the common stock on an as-converted basis. Immediately following the Acquisition, TOGI became our wholly owned subsidiary, and subsequent thereto, TOGI was merged with and into our company, pursuant to which TOGI ceased to exist. TurnOnGreen continues to be led by its Chief Executive Officer, Amos Kohn and its President, Marcus Charuvastra.

 

 

Results of Operations

 

For the Three Months Ended June 30, 2023 and 2022:

 

		2023				2022				Change ($)				Change (%)
Revenue		$	724,000			$	1,062,000			$	(338,000	)			-32	%
Cost of revenue			775,000				672,000				103,000				15	%
Gross (loss) profit			(51,000	)			390,000				(441,000	)			-113	%
Operating expenses:
Research and development			88,000				304,000				(216,000	)			-71	%
Selling and marketing			420,000				319,000				101,000				32	%
General and administrative			1,196,000				771,000				425,000				55	%
Total operating expenses			1,704,000				1,394,000				310,000				22	%
Operating loss			(1,755,000	)			(1,004,000	)			751,000				75	%
Other expense:
Interest			87,000				-				87,000				100	%
Total other expense			87,000				-				87,000				100	%
Net loss			(1,842,000	)			(1,004,000	)			(838,000	)			-83	%
Preferred dividends			(506,000	)			-
Net loss available to common shareholders		$	(2,348,000	)		$	(1,004,000	)

 

Revenue and Gross (Loss) Profit

 

During the three month period ended June 30, 2023, we had decreased revenues of $338,000 and decreased gross profits of $441,000 compared to the three month period ended June 30, 2022, primarily due to our decreased sales in the three month period ended June 30, 2023, related to a large project which was discontinued in 2022, that drove increased production and deliveries in 2022. Additionally, our cost of revenue increased for the three month period ended June 30, 2023, primarily due to a higher charge for excess and obsolete inventory.

 

Net Loss and Operating Expenses

 

During the three months ended June 30, 2023, our net loss increased by $838,000 compared to the three month period ended June 30, 2022, primarily due to decreased revenues coupled with legal fees, overhead allocations, inventory write downs and interest expense increasing by $384,000, $153,000, $97,000 and $87,000, respectively. The increases were partially offset primarily due to decreased safety fees and travel costs of $211,000 and $25,000, respectively.

 

Net Loss Available to Common Shareholders

 

During the third quarter of 2022, IMHC was combined with certain entities under the common control of our Parent. As part of this transaction, we issued preferred stock that accrues a dividend, which has resulted in an increase in the net loss available to common shareholders of $506,000 for the three month period ended June 30, 2023.

 

For the Six Months Ended June 30, 2023 and 2022:

 

		2023				2022				Change ($)				Change (%)
Revenue		$	1,600,000			$	2,191,000			$	(591,000	)			-27	%
Cost of revenue			1,292,000				1,338,000				(46,000	)			-3	%
Gross profit			308,000				853,000				(545,000	)			-64	%
Operating expenses:
Research and development			207,000				510,000				(303,000	)			-59	%
Selling and marketing			812,000				660,000				152,000				23	%
General and administrative			2,053,000				1,620,000				433,000				27	%
Total operating expenses			3,072,000				2,790,000				282,000				10	%
Operating loss			(2,764,000	)			(1,937,000	)			827,000				43	%
Other expense:
Interest			89,000				-				89,000				100	%
Total other expense			89,000				-				89,000				100	%
Net loss			(2,853,000	)			(1,937,000	)			(916,000	)			-47	%
Preferred dividends			(1,006,000	)			-
Net loss available to common shareholders		$	(3,859,000	)		$	(1,937,000	)

 

Revenue and Gross Profit

 

During the six month period ended June 30, 2023, we had decreased revenues of $591,000 and decreased gross profits of $545,000 compared to the six month period ended June 30, 2022, primarily due to our decreased sales in the six month period ended June 30, 2023, related to a large project which was discontinued in 2022, that drove increased production and deliveries in 2022.

 

 

Net Loss and Operating Expenses

 

During the six months ended June 30, 2023, our net loss increased by $916,000 compared to the six month period ended June 30, 2022, primarily due to decreased gross profit of $545,000 coupled with increased legal costs, overhead allocations and audit and consulting fees increasing by $384,000, $247,000, and $124,000, respectively. The increases were partially offset primarily by decreased safety fees and payroll costs of $308,000 and $119,000, respectively.

 

Net Loss Available to Common Shareholders

 

During the third quarter of 2022, IMHC was combined with certain entities under the common control of our Parent. As part of this transaction, we issued preferred stock that accrues a dividend, which has resulted in an increase in the net loss available to common shareholders of $1.0 million for the six month period ended June 30, 2023.

 

Liquidity and Capital Resources

 

The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern. We have incurred recurring net losses and operations have not provided sufficient cash flows. We believe that we will continue to incur operating and net losses each quarter until at least the time we begin significant deliveries of our products. Our inability to continue as a going concern could have a negative impact on our company, including our ability to obtain needed financing. In view of these matters, there is substantial doubt about our ability to continue as a going concern. We intend to finance our future development activities and working capital needs largely through the sale of equity securities with some additional funding from other sources, including term notes until such time as funds provided by operations are sufficient to fund working capital requirements. Our condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should we be unable to continue as a going concern.

 

Critical Accounting Estimates 

 

Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The accounting principles we use require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and amounts of income and expenses during the reporting periods presented. We believe in the quality and reasonableness of our critical accounting policies; however, materially different amounts may be reported under different conditions or using assumptions different from those that we have applied. The accounting policies that have been identified as critical to our business operations and to understanding the results of our operations pertain to valuation of inventories, accruals of certain liabilities including product warranties, and useful lives of assets.

 

Recently Issued Accounting Pronouncements

 

Our management has considered all recent accounting pronouncements issued since the last audit of our financial statements. Our management believes that these recent pronouncements will not have a significant effect on our financial statements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Because we are a smaller reporting company, this section is not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures

 

As of June 30, 2023, our management, with the participation and supervision of our principal executive officer and our principal financial officer, evaluated our disclosure controls and procedures (as defined in Rules 13a-15I and 15d-15(e) under the Exchange Act). The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based upon their evaluation, our principal executive officer and our principal financial officer concluded that, solely as a result of the material weaknesses identified by management and described below, our disclosure controls and procedures were not effective to ensure that material information relating to the Company required to be disclosed by the Company in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

 

Material Weaknesses

 

A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Audit Standard No. 5, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses, which have caused management to conclude that as of June 30, 2023, our internal control over financial reporting (“ICFR”) was not effective at the reasonable assurance level:

 

·

We do not have sufficient resources in our accounting function, which restricts our ability to gather, analyze and properly review information related to financial reporting, including fair value estimates, in a timely manner. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. The company’s primary user access controls to ensure appropriate authorization and segregation of duties that would adequately restrict user and privileged access to the financially relevant systems and data to appropriate personnel were not designed and/or implemented effectively;

 

·

The insufficient resources in our accounting function also resulted in a deficiency over design and implementation of effective revenue recognition policies, procedures and controls with respect to the identification, timing and treatment of various new contracts with customers;

 

·

Management also concluded that there was a deficiency in internal controls over financial reporting relating to the accounting treatment for complex financial instruments which resulted in the failure to properly account for such instruments, specifically with respect to the classification and proper accounting treatment of preferred shares; and

 

·

Lastly, we did not design and maintain effective controls associated with related party transactions and disclosures. The controls in place were not designed at a sufficient level of precision or rigor to effectively prepare and review the complete customer listing in such manner as to identify and properly disclose the nature and financial data of all our related party relationships.

 

Management evaluated the impact of our failure to have segregation of duties and proper reviews, inadequacy in design of revenue recognition policies and procedures, failure to properly account for and provide adequate disclosures of complex financial instruments, fair value estimate procedures and reviews, and deficiency in identification and a disclosure of related party transactions and concluded that the multiple control deficiencies that resulted represented material weaknesses. 

 

We have begun to implement the actions below (including appropriate staffing to execute such actions) in the following areas to strengthen our internal control over financial reporting in an effort to remediate the material weaknesses.

 

Remediation

 

Inventory. We have enhanced the design of existing controls and implemented new controls over the accounting, processing and recording of inventory. Specifically, we have strengthened the design of the management review control over inventory-in-transit. We have implemented processes to ensure timely identification and evaluation of inventory cut-off, and we are requiring additional accountability from counterparties on the accuracy of incoming and outgoing shipment documentation. We have deployed information system enhancements and have made better use of current system capabilities in order to improve the accuracy of inventory cut-off, reporting and reconciliation. In addition, we have been creating an assembly bill of materials (“BOM”) in our business software to facilitate efficient and accurate manufacturing and provide proper recording of raw materials inventory. The BOM structure ultimately minimizes inventory inaccuracies and production delays, and we have been increasing cycle counting of inventory used in production to improve accuracy. Lastly, we have recently hired a material specialist whose responsibility is to maintain inventory records.

 

Revenue Recognition. We intend on enhancing the design of existing controls and implementing new controls over the review of the application and recording of revenue for customer contracts under the guidance outlined in ASC 606. We also intend on implementing more thorough reviews of contracts by evaluating contractual terms and determining whether certain contracts should be consolidated, involve related parties and the proper timing of revenue recognition. These reviews will include more comprehensive contractual analysis from our legal team while ensuring qualified resources are involved and adequate oversight is performed during the internal technical accounting review process.

 

Accounts Receivable. We intend on enhancing the design of existing controls and implementing new controls over the processing and review of accounts receivable billings. We plan to supplement our accounting staff with more experienced personnel. We will also evaluate information system capabilities in order to reduce the manual calculations within this business process.

 

 

Complex Financial Instruments. We will design and implement controls to properly identify and implement the proper accounting treatment and classifications of our complex financial instruments to ensure our equity accounting and treatment is in accordance with U.S. generally accepted accounting principles. We intend to accomplish this by implementing more thorough reviews of certain details regarding all rights, penalties, record holders and negative covenants of the financial instruments in order to apply the correct accounting guidance (liabilities vs. equity vs. temporary equity).

 

Fair Value Estimates. We will design and implement additional control activities to ensure controls related to fair value estimates (including controls that validate the reasonableness, completeness and accuracy of information, data and assumptions), are properly designed, implemented and documented.

 

While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement of our internal control over financial reporting. We will continue to diligently review our internal control over financial reporting.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2023, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II—OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

The company is involved in litigation arising from matters in the ordinary course of business. We are regularly subject to claims, suits, regulatory and government investigations, and other proceedings involving labor and employment, commercial disputes, and other matters. Such claims, suits, regulatory and government investigations, and other proceedings could result in fines, civil penalties, or other adverse consequences. 

 

Certain of these outstanding matters include speculative or indeterminate monetary amounts. We record an undiscounted liability for contingent losses, including future legal costs, settlements and judgments, when we consider it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being a loss and the estimated amount of loss related to such matters. 

 

With respect to our outstanding matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties.

 

ITEM 1A. RISK FACTORS.

 

Because we are a smaller reporting company, this section is not applicable.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES OR USE OF PROCEEDS.

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION.

 

None.

 

 

ITEM 6. EXHIBITS.

 

Exhibit No.		Exhibit Description
3.1		Amended and Restated Articles of Incorporation.  Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed November 29, 2022.
3.2		By-Laws. Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 10 filed April 13, 2021.
3.3		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.
4.1		Form of Warrant. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed April 12, 2023.
10.1		Form of Purchase Agreement. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 12, 2023.
10.2		Form of Promissory Note. Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed April 12, 2023.
10.3		2023 Stock Incentive Plan. Incorporated by reference to Annex A to the Definitive Proxy Statement on Schedule 14A filed June 16, 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**		Certification 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.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

*Filed herewith.

** This certification will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing.

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: August 17, 2023

 

	IMPERALIS HOLDING CORP.
	By: /s/ Amos Kohn
	Amos Kohn
	Chief Executive Officer
	(Principal Executive Officer)
	By: /s/ David J. Katzoff
	David J. Katzoff
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

 

 

21

 

 

 

 

Exhibit 31.1

 

CERTIFICATIONS

 

I, Amos Kohn, certify that;

 

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of Imperalis Holding Corp. (the “registrant”);

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: August 17, 2023

 

/s/ Amos Kohn

By: Amos Kohn

Title: Chief Executive Officer

(Principal Executive Officer)

 

 

 

 

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, David J. Katzoff, certify that;

 

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of Imperalis Holding Corp. (the “registrant”);

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 17, 2023

 

/s/ David J. Katzoff

 By: David J. Katzoff

 Title: Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

 

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Imperalis Holding Corp. (the “Company”) on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.

The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and the consolidated result of operations of the Company.

 

 

By:	/s/ Amos Kohn
Name:	Amos Kohn
Title:	Chief Executive Officer (Principal Executive Officer)
Date:	August 17, 2023

 

 

By:	/s/ David J. Katzoff
Name:	David J. Katzoff
Title:	Chief Financial Officer (Principal Financial and Accounting Officer)
Date:	August 17, 2023

 

 

 

 

 

v3.23.2

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 11, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-52140
Entity Registrant Name	Imperalis Holding Corp.
Entity Central Index Key	0001349706
Entity Tax Identification Number	20-5648820
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	1421 McCarthy Blvd
Entity Address, City or Town	Milpitas
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95035
City Area Code	(510)
Local Phone Number	657-2635
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		183,936,207

v3.23.2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 65,000	$ 95,000
Accounts receivable	507,000	1,022,000
Inventories	2,179,000	2,595,000
Prepaid expenses	624,000	684,000
TOTAL CURRENT ASSETS	3,375,000	4,396,000
Property and equipment, net	378,000	326,000
Right-of-use assets	1,402,000	1,661,000
Other noncurrent assets	271,000	270,000
TOTAL ASSETS	5,426,000	6,653,000
CURRENT LIABILITIES
Accounts payable	846,000	1,147,000
Dividends payable	1,645,000	639,000
Accrued expenses and other current liabilities	620,000	597,000
Accrued legal contingencies	1,066,000	681,000
Operating lease liability, current	594,000	561,000
Notes payable and convertible notes	350,000	54,000
Related party notes and advances payable	766,000	52,000
TOTAL CURRENT LIABILITIES	5,887,000	3,731,000
LONG TERM LIABILITIES
Operating lease liability, non-current	945,000	1,251,000
Other long term liabilities	72,000	59,000
TOTAL LIABILITIES	6,904,000	5,041,000
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 June 30, 2023 and December 31, 2022	25,000,000	25,000,000
SHAREHOLDERS’ DEFICIT:
Common Stock, par value $0.001 a share; 750,000,000 shares authorized as of June 30, 2023 and December 30, 2022: 172,694,837 shares issued and outstanding at June 30, 2023 and December 31, 2022	173,000	173,000
Additional paid-in capital	13,460,000	12,691,000
Accumulated deficit	(40,111,000)	(36,252,000)
TOTAL SHAREHOLDERS’ DEFICIT	(26,478,000)	(23,388,000)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ DEFICIT	$ 5,426,000	$ 6,653,000

v3.23.2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	25,000	25,000
Preferred stock, shares outstanding	25,000	25,000
Preferred stock, redemption	$ 1,000	$ 1,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	750,000,000	750,000,000
Common stock, shares issued	172,694,837	172,694,837
Common stock, shares outstanding	172,694,837	172,694,837

v3.23.2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenue	$ 724,000	$ 1,062,000	$ 1,600,000	$ 2,191,000
Cost of revenue	775,000	672,000	1,292,000	1,338,000
Gross (loss) profit	(51,000)	390,000	308,000	853,000
Operating expenses:
Research and development	88,000	304,000	207,000	510,000
Selling and marketing	420,000	319,000	812,000	660,000
General and administration	1,196,000	771,000	2,053,000	1,620,000
Total operating expenses	1,704,000	1,394,000	3,072,000	2,790,000
Operating loss	(1,755,000)	(1,004,000)	(2,764,000)	(1,937,000)
Other expense:
Interest	87,000		89,000
Total other expense	87,000		89,000
Net loss	(1,842,000)	(1,004,000)	(2,853,000)	(1,937,000)
Preferred Dividends	(506,000)		(1,006,000)
Net loss available to common shareholders	$ (2,348,000)	$ (1,004,000)	$ (3,859,000)	$ (1,937,000)
Net loss per common share basic	$ (0.01)		$ (0.02)
Net loss per common share diluted	$ (0.01)		$ (0.02)
Weighted average common shares, basic	172,694,837		172,694,837
Weighted average common shares, diluted	172,694,837		172,694,837

v3.23.2

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021		$ 9,383,000	$ (31,393,000)	$ (22,010,000)
Beginning balance, shares at Dec. 31, 2021
Contribution from parent		1,010,000		1,010,000
Net loss			(933,000)	(933,000)
Ending balance, value at Mar. 31, 2022		10,393,000	(32,326,000)	(21,933,000)
Beginning balance, shares at Mar. 31, 2022
Contribution from parent		1,250,000		1,250,000
Net loss			(1,004,000)	(1,004,000)
Ending balance, value at Jun. 30, 2022		11,643,000	(33,330,000)	(21,687,000)
Beginning balance, shares at Jun. 30, 2022
Beginning balance, value at Dec. 31, 2022	$ 173,000	12,691,000	(36,252,000)	(23,388,000)
Beginning balance, shares at Dec. 31, 2022	172,694,837
Contribution from parent		730,000		730,000
Preferred dividends			(500,000)	(500,000)
Net loss			(1,011,000)	(1,011,000)
Ending balance, value at Mar. 31, 2023	$ 173,000	13,421,000	(37,763,000)	(24,169,000)
Beginning balance, shares at Mar. 31, 2023	172,694,837
Fair value of warrants issued		39,000		39,000
Preferred dividends			(506,000)	(506,000)
Net loss			(1,842,000)	(1,842,000)
Ending balance, value at Jun. 30, 2023	$ 173,000	$ 13,460,000	$ (40,111,000)	$ (26,478,000)
Beginning balance, shares at Jun. 30, 2023	172,694,837

v3.23.2

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (3,859,000)	$ (1,937,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	45,000	30,000
Amortization of right-of-use assets	258,000	240,000
Amortization of debt and warrant discounts	85,000
Inventory allowance	317,000
Increase in contribution from parent for corporate overhead	153,000	160,000
Changes in operating assets and liabilities
Accounts receivable	515,000	(281,000)
Prepaid expenses and other assets	(23,000)	959,000
Inventory	99,000	(1,457,000)
Accounts payable	85,000	327,000
Dividends payable	1,006,000
Lease and warranty liabilities	(261,000)	(108,000)
Other current liabilities	23,000	320,000
Net cash used in operating activities	(1,557,000)	(1,747,000)
Cash flows from investing activities:
Purchase of property and equipment	(14,000)	(146,000)
Cash used in investing activities	(14,000)	(146,000)
Cash flows from financing activities:
Proceeds from related party advances, net of payments	714,000
Proceeds from contribution from parent	577,000	2,101,000
Proceeds from issuance of warrants	39,000
Proceeds from note payable, net of discount	211,000
Net cash provided by financing activities	1,541,000	2,101,000
Net (decrease) increase in cash and cash equivalents	(30,000)	208,000
Cash at beginning of period	95,000	112,000
Cash at end of period	$ 65,000	$ 320,000

v3.23.2

DESCRIPTION OF BUSINESS	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS	1. DESCRIPTION OF BUSINESS   Overview   Imperalis Holding Corp. d/b/a TurnOnGreen, Inc. (“IMHC” or “Imperalis”), through its wholly owned subsidiaries Digital Power Corporation (“Digital Power” or “DPC”) and TOG Technologies Inc. (collectively, the “Company”), is an emerging electric vehicle (“EV”) electrification infrastructure solutions and premium custom power products company. The Company designs, develops, manufactures and sells highly engineered, feature-rich, high-grade power conversion systems and power system solutions for mission-critical applications and processes electronic products as well as EV charging solutions to diverse industries, markets and sectors including e-Mobility, medical, military, telecommunications, and industrial.   IMHC was incorporated in Nevada on April 5, 2005 and is a subsidiary of Ault Alliance, Inc., a Delaware corporation (the “Parent” or “Ault”) and currently operates as a reporting segment of Ault.

v3.23.2

LIQUIDITY AND GOING CONCERN	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LIQUIDITY AND GOING CONCERN	2. LIQUIDITY AND GOING CONCERN   The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred recurring net losses and operations have not provided sufficient cash flows. Management believes that the Company will continue to incur operating and net losses each quarter until at least the time it begins significant deliveries of its products. The Company’s inability to continue as a going concern could have a negative impact on the Company, including its ability to obtain needed financing. In view of these matters, there is substantial doubt about the Company’s ability to continue as a going concern.   The Company intends to finance its future development activities and its working capital needs largely through the sale of equity securities with some additional funding from other sources, including term notes until such time as funds provided by operations are sufficient to fund working capital requirements. Although management believes that such capital sources will be available, there can be no assurances that financing will be available to the Company when needed in order to allow the Company to continue its operations, or if available, on terms acceptable to the Company. The condensed consolidated financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

v3.23.2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES   Basis of Presentation   The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by GAAP. The Company has made estimates and judgments affecting the amounts reported in the Company’s condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited and reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for interim periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC on April 5, 2023.   Significant Accounting Policies   Other than as noted below, there have been no material changes to the Company’s significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on April 5, 2023.   New Accounting Guidance – Recently Adopted   In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” (“ASU 2021-08”), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. We adopted ASU 2021-08 as of January 1, 2023, and the adoption had no impact on our condensed consolidated financial statements as we have not had any business combinations in 2023.   The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment approach in legacy U.S. GAAP with a methodology that reflects future credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we are required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which reflects losses that are probable. The guidance is effective for fiscal years beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the SEC, to fiscal years beginning after December 15, 2022. We adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) as of January 1, 2023, and the adoption had no impact on our condensed consolidated financial statements.   Recent Accounting Pronouncements not yet Adopted   The Company does not expect that any recently issued accounting guidance will have a significant effect on its condensed consolidated financial statements.

v3.23.2

REVENUE DISAGGREGATION	6 Months Ended
	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
REVENUE DISAGGREGATION	4. REVENUE DISAGGREGATION   The Company’s disaggregated revenues consisted of the following: Schedule of disaggregated revenues                                     For the Three Months Ended June 30,     For the Six Months Ended June 30,       2023     2022     2023     2022   Primary Geographical Markets                         North America   $ 542,000     $ 822,000     $ 1,326,000     $ 1,834,000   Europe     -       28,000       -       47,000   Other(1)     182,000       212,000       274,000       310,000   Total Revenue   $ 724,000     $ 1,062,000     $ 1,600,000     $ 2,191,000                                     Major Goods                                 Power supply units(1)   $ 645,000     $ 1,016,000     $ 1,470,000     $ 2,112,000   EV chargers     79,000       46,000       130,000       79,000   Total Revenue   $ 724,000     $ 1,062,000     $ 1,600,000     $ 2,191,000                                     Timing of Revenue Recognition                                 Revenue recognized over time   $ 3,000     $ -     $ 6,000     $ -   Goods transferred at a point in time(1)     721,000       1,062,000       1,594,000       2,191,000   Total Revenue   $ 724,000     $ 1,062,000     $ 1,600,000     $ 2,191,000   (1) The Company had related party sales during each of the three and six months ended June 30, 2023 of $4,000, and $0 for each of the three and six months ended June 30, 2022.   The following table provides the percentage of total revenue attributable to a single customer from which 10% or more of total revenue was derived: Schedule of concentration                                     For the Three Months Ended June 30, 2023     For the Six Months Ended June 30, 2023       Total Revenue     Percentage of     Total Revenue     Percentage of       by Major     Total Company     by Major     Total Company       Customers     Revenue     Customers     Revenue   Customer A   $ 173,000       24 %   $ 236,000       15 % Customer B   $ 115,000       16 %   $ 190,000       15 % Customer C   $ 99,000       14 %   $ 241,000       12 %         For the Three Months Ended June 30, 2022     For the Six Months Ended June 30, 2022       Total Revenue     Percentage of     Total Revenue     Percentage of       by Major     Total Company     by Major     Total Company       Customers     Revenue     Customers     Revenue   Customer A   $ 259,000       24 %   $ 263,000       12 % Customer B   $ -       - %   $ 261,000       12 %

v3.23.2

TRADE RECEIVABLES	6 Months Ended
	Jun. 30, 2023
Credit Loss [Abstract]
TRADE RECEIVABLES	5. TRADE RECEIVABLES   As of June 30, 2023 and December 31, 2022, the Company had related party receivables of $2,000 and $25,000, respectively.   The following table provides the percentage of total trade receivables attributable to a single customer that accounted for 10% or more of the Company’s outstanding receivables: Schedule percentage of total trade receivables                     As of     As of       June 30, 2023     December 31, 2022   Customer A     26 %     - % Customer B     14 %     11 % Customer C     5 %     20 % Customer D     - %     10 % Customer E     - %     17 %

v3.23.2

PROPERTY AND EQUIPMENT, NET	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT, NET	6. PROPERTY AND EQUIPMENT, NET   As of June 30, 2023 and December 31, 2022, property and equipment consisted of the following: Schedule of property and equipment                     June 30, 2023     December 31, 2022   Machinery and equipment   $ 559,000     $ 667,000   Computers and software     89,000       -   Leasehold improvements, furniture and equipment     208,000       207,000   EV chargers     122,000       115,000   Gross property and equipment     978,000       989,000   Less: accumulated depreciation and amortization     (600,000 )     (663,000 ) Property and equipment, net   $ 378,000     $ 326,000     Depreciation and amortization expense related to property and equipment was $23,000 and $24,000 for the three months ended June 30, 2023 and 2022, respectively. Depreciation and amortization expense related to property and equipment was $45,000 and $30,000 for the six months ended June 30, 2023 and 2022, respectively.   In 2023, the Company abandoned certain machinery and equipment when the Company moved to its new California offices.   Asset retirement obligations as of each June 30, 2023 and December 31, 2022, were $3,000.

v3.23.2

INVENTORIES	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
INVENTORIES	7. INVENTORIES   As of June 30, 2023 and December 31, 2022, inventories consisted of:  Schedule of inventories                     June 30, 2023     December 31, 2022   Raw materials, parts and supplies   $ 772,000     $ 788,000   Finished products     1,407,000       1,807,000   Total inventories   $ 2,179,000     $ 2,595,000

v3.23.2

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	6 Months Ended
	Jun. 30, 2023
Payables and Accruals [Abstract]
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES	8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES   As of June 30, 2023 and December 31, 2022, accrued expenses and other current liabilities consisted of the following:  Schedule of accrued expenses                     June 30, 2023     December 31, 2022   Customer prepayments   $ 284,000     $ 276,000   Warranty liability, current     16,000       16,000   Other accrued liabilities     78,000       50,000   Accrued payroll and payroll taxes     242,000       255,000   Total other current liabilities   $ 620,000     $ 597,000

v3.23.2

LEASES	6 Months Ended
	Jun. 30, 2023
Leases
LEASES	9. LEASES   Office and Warehouse Leases and Sublease   During the six months ended June 30, 2023, the Company was a lessee/sublessor for a certain office space lease. No residual value guarantees have been provided by the sublessee and we recognized $36,000 of income related to the sublease. Fixed sublease payments received are recognized on a straight-line basis over the sublease term and netted against operating lease expenses.   The components of net operating lease expenses, recorded within operating expenses on the Company's condensed consolidated statements of operations for the three and six months ended June 30, 2023, were as follows: Schedule of lease cost                     Three Months Ended June 30, 2023     Six Months Ended June 30, 2023   Operating lease cost   $ 162,000     $ 324,000   Short-term lease cost     -       -   Variable lease cost     -       -   Less: Sublease income     (25,000 )     (36,000 ) Total   $ 137,000     $ 288,000

v3.23.2

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2023
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	10. RELATED PARTY TRANSACTIONS   Ault Lending, LLC (“Ault Lending” or “AL”) and the Company are both subsidiaries of Ault. David Katzoff, who serves as the Company’s Chief Financial Officer, is also the manager of Ault Lending. As a result, AL is deemed a related party.   Allocation of General Corporate Expenses   Ault provides human resources, accounting, and other services to the Company. The Company obtains its business insurance under Ault. The accompanying financial statements include allocations of these expenses. The allocation method calculates the appropriate share of overhead costs to the Company by using the Company’s revenue as a percentage of total revenue of Ault. The Company believes the allocation methodology used is reasonable and has been consistently applied, and results in an appropriate allocation of costs incurred. However, these allocations may not be indicative of the cost had the Company been a stand-alone entity or of future services. Ault allocated $223,000 of costs in the three month period ended June 30, 2023 that have been included in related party notes payable (see below). Ault allocated $153,000 of costs in the three month period ended March 31, 2023 that are recorded as additional paid-in capital. In the prior year period, Ault allocated $70,000 and $130,000 for the three and six months ended June 30, 2022, respectively. These costs in the prior year period were treated as additional paid-in capital.   Contributions From Parent   The Company previously received funding from Ault to cover any shortfalls on operating cash requirements. In addition to the allocation of general corporate expenses. The Company received $1.2 million and $2.1 million for the three and six months ended June 30, 2022, respectively and are reflected in additional paid-in capital. Related Party Sales and Receivables   The Company recognized related party sales revenue during each of the three and six months ended June 30, 2023 of $4,000, and $0 for each of the three and six month periods ended June 30, 2022. As of June 30, 2023 and December 31, 2022, the Company had related party receivables of $2,000 and $25,000, respectively.   Related Party Notes and Advances Payable   Related party notes and advances payable were used for working capital purposes and at June 30, 2023 and December 31, 2022, were comprised of the following: Schedule of related party notes payable                                     Interest rate     Due date     June 30, 2023     December 31, 2022   Ault advance payable     -       -     $ 701,000     $ -   Chief executive officer March 2023 note payable     14 %     April 10, 2023       26,000       -   Non-officer June 2023 advance payable     -       -       14,000       -   Chief executive officer December 2022 note payable     14 %     March 9, 2023       25,000       25,000   Officer December 2022 advance payable     -       -       -       14,000   Non-officer December 2022 advance payable     -       -       -       13,000   Total related party notes and advances payable                   $ 766,000     $ 52,000       During the three months ended June 30, 2023, Ault and the Company’s management determined that all allocations and capital funding provided to us by Ault beginning April 1, 2023, would be repaid and treated as a related party note payable. During the three months ended June 30, 2023, Ault advanced us $478,000, net of repayments of $250,000, and allocated $223,000 of corporate overhead. As of June 30, 2023 the total balance of $701,000 was, interest-free, had no fixed terms of repayment and is recorded related party notes and advances payable.   During the quarter ended June 30, 2023, a non-officer employee of the Company advanced us $14,000. The advance is unsecured, interest-free and has no fixed terms of repayment.   During the three and six months ended June 30, 2023, the Company incurred an interest expense of $2,000 and $4,000, respectively, in relation chief executive officers’ notes issued.

v3.23.2

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	11. COMMITMENTS AND CONTINGENCIES   Litigation Matters   The Company is involved in litigation arising from other matters in the ordinary course of business. The Company is regularly subject to claims, suits, regulatory and government investigations, and other proceedings involving labor and employment, commercial disputes, and other matters. Such claims, suits, regulatory and government investigations, and other proceedings could result in fines, civil penalties, or other adverse consequences. Certain of these outstanding matters include speculative, substantial or indeterminate monetary amounts. The Company records an undiscounted liability for contingent losses, including future legal costs, settlements and judgments, when we consider it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the reasonably possible loss. The Company evaluates developments in its legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and makes adjustments as additional information becomes available. Significant judgment is required to determine both the likelihood of there being, and the estimated amount of a loss related to such matters.   Gordon v. Digital Power Corporation   On or about November 21, 2019, the plaintiff-William Gordon, filed a complaint against defendant, DPC, alleging wrongful termination and disability discrimination. The arbitration was conducted during October 2022. Aside from the opening and responding trial briefs, the arbitrator requested additional briefing on two subjects, undisclosed principal liability, and disclosed principal liability, both of which were submitted. In May 2023 the arbitrator entered a final award against us and in favor of Mr. Gordon in the amount of $1,065,621 inclusive of interest, legal fees, administrative fees and expenses. The award was based on Mr. Gordon’s employment agreement with DPC, and Mr. Gordon’s promissory note with Coolisys Technologies Corp. aka DPC. Mr. Gordon was deemed the prevailing party.   The Company has accrued $1.1 million in connection with legal contingencies as of June 30, 2023 and $681,000 as of December 31, 2022. Non-cancelable Obligations   In the normal course of business, the Company enters into non-cancelable obligations with certain parties to purchase services, such as technology equipment and subscription-based cloud service arrangements. As of June 30, 2023 and December 31, 2022, the Company had outstanding non-cancelable purchase obligations with terms of one year or longer aggregating $54,000 and $0, respectively.

v3.23.2

LOSS PER SHARE	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
LOSS PER SHARE	12. LOSS PER SHARE   In accordance with ASC 260, Earnings Per Share, the basic loss per common share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.     The Company excluded the potential common stock equivalents outstanding from the calculation of diluted weighted average net loss per share for the six months ended June 30, 2023 and 2022, which would be anti-dilutive due to the net loss from continuing operations in those periods.   Anti-dilutive securities, which are convertible into or exercisable for the Company’s common stock, consisted of the following at June 30, 2023 and 2022: Schedule of anti dilutive securities excluded from computation of earnings per share                     June 30,       2023     2022   Warrants     1,000,000       -   Convertible notes     11,186,065       20,992,000   Convertible preferred stock     25,000,000       25,000,000   Total     37,186,065       45,992,000

v3.23.2

SHAREHOLDERS’ DEFICIT	6 Months Ended
	Jun. 30, 2023
Equity [Abstract]
SHAREHOLDERS’ DEFICIT	13. SHAREHOLDERS’ DEFICIT   Authorized Capital   The Company is authorized to issue 750 million (750,000,000) shares of common stock, par value $0.001 per share and ten million (10,000,000) shares of preferred stock, par value $0.001 per share, of which twenty-five thousand shares (25,000) have been designed as Series A Convertible Redeemable Preferred Stock, par value $0.001 per share and the remaining authorized shares of preferred stock are “blank check” shares, which can be issued with various rights as determined by the Board. The number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding shares of common stock of the Corporation, voting together as a single class. As of each June 30, 2023 and December 31, 2022, there were 172,694,837 shares of common stock issued and outstanding and as of each June 30, 2023 and December 31, 2022, there were 25,000 shares of Series A Convertible Redeemable Preferred Stock issued and outstanding.   Common Stock   The holders of the Company’s common stock have equal ratable rights to dividends from funds legally available therefore, when, and if declared by the Company’s board of directors. Holders of common stock are also entitled to share ratably in all of the Company’s assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of the Company’s affairs.   Except as otherwise required by law or as may be provided by the resolutions of the Board of Directors authorizing the issuance of common stock, all rights to vote and all voting power shall be vested in the holders of common stock. Each share of common stock shall entitle the holder thereof to one vote.   Upon any liquidation, dissolution or winding-up of the corporation, whether voluntary or involuntary, the remaining net assets of the Company shall be distributed pro rata to the holders of the common stock.

v3.23.2

STOCK BASED COMPENSATION	6 Months Ended
	Jun. 30, 2023
Compensation Related Costs [Abstract]
STOCK BASED COMPENSATION	14. STOCK BASED COMPENSATION   On June 27, 2023, the Company held a special meeting of shareholders and the shareholders voted and approved three proposals presented for a vote, including approving the Imperalis Holding Corp. 2023 Stock Incentive Plan which reserved 100,000,000 shares for issuance. As of June 30, 2023, no shares had been issued under the plan.

v3.23.2

CONVERTIBLE NOTES PAYABLE	6 Months Ended
	Jun. 30, 2023
Convertible Notes Payable
CONVERTIBLE NOTES PAYABLE	15. CONVERTIBLE NOTES PAYABLE   Convertible notes payable included in accrued expenses and other current liabilities at June 30, 2023 and December 31, 2022, were comprised of the following: Schedule of convertible notes payable                                             Conversion price per share     Interest rate     Due date     June 30, 2023     December 31, 2022   Opportunity fund convertible notes payable   $ 0.005       10 %     January 14, 2024     $ 45,000     $ 45,000   Total convertible notes payable                           $ 45,000     $ 45,000     The Company has convertible promissory notes payable to Opportunity Fund, LLC in the amount of $45,000 (the “Note”). The Note allows for advances up to maximum amount of $75,000. The principal, together with any accrued but unpaid interest on the amount of principal, is convertible upon request by the noteholder at a conversion price of $0.005 per share.   As of June 30, 2023 and December 31, 2022, the outstanding convertible notes payable had accrued interest of $11,000 and $9,000, respectively.

v3.23.2

NOTES PAYABLE	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
NOTES PAYABLE	16. NOTES PAYABLE   Notes payable at June 30, 2023:   Status   Default rate     June 30, 2023     Promissory note payable   In Default     3 %   $ 300,000       The Company borrowed $250,000 and issued a promissory note to the FAR Holdings International, LLC (the “Investor”) in the principal face amount of $300,000. The Company also issued the Investor warrants (the “Warrants”) to purchase an aggregate of 1,000,000 shares of common stock, par value of $0.001 per share (the “Warrant Shares”).   The promissory note was issued with an original issuance discount of $50,000 and bears no interest. The Company is required to pay the Investor $100,000 on May 6, 2023, June 6, 2023, and on the maturity date of July 6, 2023. The promissory note contains a single event of default if the Company fails to make payments within five business days when due.   As of June 30, 2023 the Company had not made any payments and therefore the promissory note was in default. As of June 30, 2023 the Company had accrued default fees of $18,000 recorded within other accrued liabilities.   The Warrants entitle the holder to purchase shares of common stock for a period of five years from the date of issuance at an exercise price of $0.044 per share, subject to adjustment and vested immediately. The exercise price of each Warrant is subject to adjustment for customary stock splits, stock dividends, combinations or similar events. Because the Warrants vested immediately, the fair value was assessed on the date of inception.   The proceeds from the sale of the promissory note and warrants of $250,000, were allocated based on their relative stand-alone fair values. The fair value of the promissory note was $289,000 and was estimated using the discounted cash flow method under the income approach on the date of issuance. The $39,000 allocated to the warrants was accounted for as paid in capital and debt discount amortized using the effective rate of interest over the life of the promissory note. The fair value of the Warrants was determined on a stand-alone basis as $53,000 and was measured using the Black-Scholes option pricing model utilizing the following assumptions:   Schedule of assumptions   Capped Volume     Term     5 years     Exercise Price     $0.044     Volatility     270.6%     Risk-free interest rate     3.37%     Underlying stock price     $0.055     Expected dividend yield     -

v3.23.2

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	17. SUBSEQUENT EVENTS   The Company’s convertible promissory notes payable to Opportunity Fund, LLC in the amount of $56,000 of convertible notes and accrued interest were converted into 11.2 million shares of common stock at the Opportunity Fund’s option at a conversion price of $0.005 per share.   On August 15th the Company entered into a loan and security agreement (the “security agreement”) with AAI in relation to the June 30, 2023 outstanding related party advance of $701,000. The security agreement accrues interest at 10% per annum, had a principal balance of approximately $1,080,000, permits and aggregate loan amount of $2 million and is due within 5 business days after written demand for payment is made. AAI shall have the right to terminate its obligation to make credit extensions under this security agreement immediately and without notice upon the occurrence and during the continuance of an event of default. After December 31, 2023, AAI will not be obligated to make any further advances.

v3.23.2

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation   The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by GAAP. The Company has made estimates and judgments affecting the amounts reported in the Company’s condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited and reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for interim periods presented. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC on April 5, 2023.
Significant Accounting Policies	Significant Accounting Policies   Other than as noted below, there have been no material changes to the Company’s significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on April 5, 2023.
New Accounting Guidance – Recently Adopted	New Accounting Guidance – Recently Adopted   In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” (“ASU 2021-08”), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. We adopted ASU 2021-08 as of January 1, 2023, and the adoption had no impact on our condensed consolidated financial statements as we have not had any business combinations in 2023.   The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment approach in legacy U.S. GAAP with a methodology that reflects future credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we are required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which reflects losses that are probable. The guidance is effective for fiscal years beginning after December 15, 2019. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which pushes back the effective date for public business entities that are smaller reporting companies, as defined by the SEC, to fiscal years beginning after December 15, 2022. We adopted ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) as of January 1, 2023, and the adoption had no impact on our condensed consolidated financial statements.
Recent Accounting Pronouncements not yet Adopted	Recent Accounting Pronouncements not yet Adopted   The Company does not expect that any recently issued accounting guidance will have a significant effect on its condensed consolidated financial statements.

v3.23.2

REVENUE DISAGGREGATION (Tables)	6 Months Ended
	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Schedule of disaggregated revenues	Schedule of disaggregated revenues                                     For the Three Months Ended June 30,     For the Six Months Ended June 30,       2023     2022     2023     2022   Primary Geographical Markets                         North America   $ 542,000     $ 822,000     $ 1,326,000     $ 1,834,000   Europe     -       28,000       -       47,000   Other(1)     182,000       212,000       274,000       310,000   Total Revenue   $ 724,000     $ 1,062,000     $ 1,600,000     $ 2,191,000                                     Major Goods                                 Power supply units(1)   $ 645,000     $ 1,016,000     $ 1,470,000     $ 2,112,000   EV chargers     79,000       46,000       130,000       79,000   Total Revenue   $ 724,000     $ 1,062,000     $ 1,600,000     $ 2,191,000                                     Timing of Revenue Recognition                                 Revenue recognized over time   $ 3,000     $ -     $ 6,000     $ -   Goods transferred at a point in time(1)     721,000       1,062,000       1,594,000       2,191,000   Total Revenue   $ 724,000     $ 1,062,000     $ 1,600,000     $ 2,191,000   (1) The Company had related party sales during each of the three and six months ended June 30, 2023 of $4,000, and $0 for each of the three and six months ended June 30, 2022.
Schedule of concentration	Schedule of concentration                                     For the Three Months Ended June 30, 2023     For the Six Months Ended June 30, 2023       Total Revenue     Percentage of     Total Revenue     Percentage of       by Major     Total Company     by Major     Total Company       Customers     Revenue     Customers     Revenue   Customer A   $ 173,000       24 %   $ 236,000       15 % Customer B   $ 115,000       16 %   $ 190,000       15 % Customer C   $ 99,000       14 %   $ 241,000       12 %         For the Three Months Ended June 30, 2022     For the Six Months Ended June 30, 2022       Total Revenue     Percentage of     Total Revenue     Percentage of       by Major     Total Company     by Major     Total Company       Customers     Revenue     Customers     Revenue   Customer A   $ 259,000       24 %   $ 263,000       12 % Customer B   $ -       - %   $ 261,000       12 %

v3.23.2

TRADE RECEIVABLES (Tables)	6 Months Ended
	Jun. 30, 2023
Credit Loss [Abstract]
Schedule percentage of total trade receivables	Schedule percentage of total trade receivables                     As of     As of       June 30, 2023     December 31, 2022   Customer A     26 %     - % Customer B     14 %     11 % Customer C     5 %     20 % Customer D     - %     10 % Customer E     - %     17 %

v3.23.2

PROPERTY AND EQUIPMENT, NET (Tables)	6 Months Ended
	Jun. 30, 2023
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	Schedule of property and equipment                     June 30, 2023     December 31, 2022   Machinery and equipment   $ 559,000     $ 667,000   Computers and software     89,000       -   Leasehold improvements, furniture and equipment     208,000       207,000   EV chargers     122,000       115,000   Gross property and equipment     978,000       989,000   Less: accumulated depreciation and amortization     (600,000 )     (663,000 ) Property and equipment, net   $ 378,000     $ 326,000

v3.23.2

INVENTORIES (Tables)	6 Months Ended
	Jun. 30, 2023
Inventory Disclosure [Abstract]
Schedule of inventories	Schedule of inventories                     June 30, 2023     December 31, 2022   Raw materials, parts and supplies   $ 772,000     $ 788,000   Finished products     1,407,000       1,807,000   Total inventories   $ 2,179,000     $ 2,595,000

v3.23.2

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)	6 Months Ended
	Jun. 30, 2023
Payables and Accruals [Abstract]
Schedule of accrued expenses	Schedule of accrued expenses                     June 30, 2023     December 31, 2022   Customer prepayments   $ 284,000     $ 276,000   Warranty liability, current     16,000       16,000   Other accrued liabilities     78,000       50,000   Accrued payroll and payroll taxes     242,000       255,000   Total other current liabilities   $ 620,000     $ 597,000

v3.23.2

LEASES (Tables)	6 Months Ended
	Jun. 30, 2023
Leases
Schedule of lease cost	Schedule of lease cost                     Three Months Ended June 30, 2023     Six Months Ended June 30, 2023   Operating lease cost   $ 162,000     $ 324,000   Short-term lease cost     -       -   Variable lease cost     -       -   Less: Sublease income     (25,000 )     (36,000 ) Total   $ 137,000     $ 288,000

v3.23.2

RELATED PARTY TRANSACTIONS (Tables)	6 Months Ended
	Jun. 30, 2023
Related Party Transactions [Abstract]
Schedule of related party notes payable	Schedule of related party notes payable                                     Interest rate     Due date     June 30, 2023     December 31, 2022   Ault advance payable     -       -     $ 701,000     $ -   Chief executive officer March 2023 note payable     14 %     April 10, 2023       26,000       -   Non-officer June 2023 advance payable     -       -       14,000       -   Chief executive officer December 2022 note payable     14 %     March 9, 2023       25,000       25,000   Officer December 2022 advance payable     -       -       -       14,000   Non-officer December 2022 advance payable     -       -       -       13,000   Total related party notes and advances payable                   $ 766,000     $ 52,000

v3.23.2

LOSS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
Schedule of anti dilutive securities excluded from computation of earnings per share	Schedule of anti dilutive securities excluded from computation of earnings per share                     June 30,       2023     2022   Warrants     1,000,000       -   Convertible notes     11,186,065       20,992,000   Convertible preferred stock     25,000,000       25,000,000   Total     37,186,065       45,992,000

v3.23.2

CONVERTIBLE NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2023
Convertible Notes Payable
Schedule of convertible notes payable	Schedule of convertible notes payable                                             Conversion price per share     Interest rate     Due date     June 30, 2023     December 31, 2022   Opportunity fund convertible notes payable   $ 0.005       10 %     January 14, 2024     $ 45,000     $ 45,000   Total convertible notes payable                           $ 45,000     $ 45,000

v3.23.2

NOTES PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
[custom:ScheduleOfNotesPayableTextBlock]	Status   Default rate     June 30, 2023     Promissory note payable   In Default     3 %   $ 300,000
Schedule of assumptions	Schedule of assumptions   Capped Volume     Term     5 years     Exercise Price     $0.044     Volatility     270.6%     Risk-free interest rate     3.37%     Underlying stock price     $0.055     Expected dividend yield     -

v3.23.2

DESCRIPTION OF BUSINESS (Details Narrative)	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Entity incorporation, date of incorporation	Apr. 05, 2005

v3.23.2

REVENUE DISAGGREGATION (Details) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Total Revenue		$ 724,000	$ 1,062,000	$ 1,600,000	$ 2,191,000
Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Total Revenue		3,000		6,000
Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	[1]	721,000	1,062,000	1,594,000	2,191,000
Power Supply Units [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	[1]	645,000	1,016,000	1,470,000	2,112,000
EV Chargers [Member]
Disaggregation of Revenue [Line Items]
Total Revenue		79,000	46,000	130,000	79,000
North America [Member]
Disaggregation of Revenue [Line Items]
Total Revenue		542,000	822,000	1,326,000	1,834,000
Europe [Member]
Disaggregation of Revenue [Line Items]
Total Revenue			28,000		47,000
Other [Member]
Disaggregation of Revenue [Line Items]
Total Revenue		$ 182,000	$ 212,000	$ 274,000	$ 310,000
[1] The Company had related party sales during each of the three and six months ended June 30, 2023 of $4,000, and $0 for each of the three and six months ended June 30, 2022.

v3.23.2

REVENUE DISAGGREGATION (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 724,000	$ 1,062,000	$ 1,600,000	$ 2,191,000
Customer A [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 173,000	$ 259,000	$ 236,000	$ 263,000
Customer A [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	24.00%	24.00%	15.00%	12.00%
Customer B [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 115,000		$ 190,000	$ 261,000
Customer B [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	16.00%	(0.00%)	15.00%	12.00%
Customer C [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 99,000		$ 241,000
Customer C [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	14.00%		12.00%

v3.23.2

TRADE RECEIVABLES (Details)	Jun. 30, 2023	Dec. 31, 2022
Customer A [Member]
Total trade receivables percent	26.00%
Customer B [Member]
Total trade receivables percent	14.00%	11.00%
Customer C [Member]
Total trade receivables percent	5.00%	20.00%
Customer D [Member]
Total trade receivables percent		10.00%
Customer E [Member]
Total trade receivables percent		17.00%

v3.23.2

TRADE RECEIVABLES (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Credit Loss [Abstract]
Related party receivables	$ 2,000	$ 25,000

v3.23.2

PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 978,000	$ 989,000
Less: accumulated depreciation and amortization	(600,000)	(663,000)
Property and equipment, net	378,000	326,000
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	559,000	667,000
Computer Software, Intangible Asset [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	89,000
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	208,000	207,000
EV Chargers [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 122,000	$ 115,000

v3.23.2

PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 23,000	$ 24,000	$ 45,000	$ 30,000
Asset retirement obligations	$ 3,000		$ 3,000		$ 3,000

v3.23.2

INVENTORIES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials, parts and supplies	$ 772,000	$ 788,000
Finished products	1,407,000	1,807,000
Total inventories	$ 2,179,000	$ 2,595,000

v3.23.2

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Customer prepayments	$ 284,000	$ 276,000
Warranty liability, current	16,000	16,000
Other accrued liabilities	78,000	50,000
Accrued payroll and payroll taxes	242,000	255,000
Total other current liabilities	$ 620,000	$ 597,000

v3.23.2

LEASES (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Leases
Operating lease cost	$ 162,000	$ 324,000
Short-term lease cost
Variable lease cost
Less: Sublease income	(25,000)	(36,000)
Total	$ 137,000	$ 288,000

v3.23.2

LEASES (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Leases
Sublease income	$ 25,000	$ 36,000

v3.23.2

RELATED PARTY TRANSACTIONS (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Total related party notes and advances payable	$ 766,000	$ 52,000
Ault Advance Payable [Member]
Related Party Transaction [Line Items]
Total related party notes and advances payable	$ 701,000
Chief Executive Officer March 2023 Note Payable [Member]
Related Party Transaction [Line Items]
Total related party notes and advances payable
Interest rate	14.00%
Due date	Apr. 10, 2023
Non Officer March 2023 Advance Payable [Member]
Related Party Transaction [Line Items]
Total related party notes and advances payable	$ 26,000
Non Officer June 2023 Advance Payable [Member]
Related Party Transaction [Line Items]
Total related party notes and advances payable	14,000
Chief Executive Officer December 2022 Note Payable [Member]
Related Party Transaction [Line Items]
Total related party notes and advances payable	$ 25,000	25,000
Interest rate	14.00%
Due date	Mar. 09, 2023
Officer December 2022 Advance Payable [Member]
Related Party Transaction [Line Items]
Total related party notes and advances payable		14,000
Non Officer December 2022 Advance Payable [Member]
Related Party Transaction [Line Items]
Total related party notes and advances payable		$ 13,000

v3.23.2

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Allocation of general corporate expenses	$ 1,196,000		$ 771,000	$ 2,053,000	$ 1,620,000
Contributions From Parent				577,000	2,101,000
Revenue from related party	4,000		0	4,000	0
Related party receivables	2,000			2,000		$ 25,000
Proceeds from note payable, net of discount				211,000
Interest Expense	2,000			4,000
Non Officer Employee [Member]
Related Party Transaction [Line Items]
Related Party Advances	14,000
Parent Company [Member]
Related Party Transaction [Line Items]
Contributions From Parent			1,200,000		$ 2,100,000
Ault [Member]
Related Party Transaction [Line Items]
Allocation of general corporate expenses	223,000
Allocation of general corporate expenses		$ 153,000	$ 70,000	130,000
Proceeds from Parent note, net of payments	478,000
Proceeds from note payable, net of discount	250,000
Corporate overhead				223,000
Related party note payable	$ 701,000			$ 701,000

v3.23.2

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Accrued legal fees	$ 1,100,000	$ 681,000
Non-cancelable purchase obligations	$ 54,000	$ 0

v3.23.2

LOSS PER SHARE (Details) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	37,186,065	45,992,000
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	1,000,000
Convertible Notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	11,186,065	20,992,000
Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	25,000,000	25,000,000

v3.23.2

SHAREHOLDERS’ DEFICIT (Details Narrative) - shares	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Authorized capital, description	The Company is authorized to issue 750 million (750,000,000) shares of common stock, par value $0.001 per share and ten million (10,000,000) shares of preferred stock, par value $0.001 per share, of which twenty-five thousand shares (25,000) have been designed as Series A Convertible Redeemable Preferred Stock, par value $0.001 per share
Common stock, shares issued	172,694,837	172,694,837
Common stock, shares outstanding	172,694,837	172,694,837
Preferred stock, shares issued	25,000	25,000
Preferred stock, shares outstanding	25,000	25,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares issued	25,000
Preferred stock, shares outstanding	25,000

v3.23.2

STOCK BASED COMPENSATION (Details Narrative)	Jun. 27, 2023 shares
Compensation Related Costs [Abstract]
Shares for issuance	100,000,000

v3.23.2

CONVERTIBLE NOTES PAYABLE (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Conversion price (in dollars per share)	$ 0.005
Total convertible notes payable	$ 45,000	$ 45,000
Opportunity Fund Convertible Debt [Member]
Debt Instrument [Line Items]
Conversion price (in dollars per share)	$ 0.005
Weighted average interest rate	10.00%
Due date	Jan. 14, 2024
Total convertible notes payable	$ 45,000	$ 45,000

v3.23.2

CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Convertible promissory notes payable	$ 45,000
Advance limit	$ 75,000
Conversion price	$ 0.005
Convertible Promissory Note [Member]
Short-Term Debt [Line Items]
Accrued interest	$ 11,000	$ 9,000

v3.23.2

NOTES PAYABLE (Details) - Promissory Note [Member]	6 Months Ended
	Jun. 30, 2023 USD ($)
Short-Term Debt [Line Items]
[custom:Status]	In Default
[custom:DefaultRate]	3.00%
Notes Payable	$ 300,000

v3.23.2

NOTES PAYABLE (Details 1) - Notes Payable [Member]	6 Months Ended
	Jun. 30, 2023 $ / shares
Short-Term Debt [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term	5 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price	$ 0.044
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate	270.60%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	3.37%
Share Price	$ 0.055
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate	(0.00%)

v3.23.2

NOTES PAYABLE (Details Narrative) - USD ($)			6 Months Ended
	Jun. 06, 2023	Apr. 06, 2023	Jun. 30, 2023
Offsetting Assets [Line Items]
Accrued default fees			$ 18,000
Proceeds from the sale of promissory note			250,000
fair value of promissory note			289,000
Additional paid in capital			39,000
Fair value of warrants			53,000
Purchase Agreement [Member] | FAR Holdings International [Member]
Offsetting Assets [Line Items]
Borrowed amount			250,000
Face amount			$ 300,000
Number of warrants issued			1,000,000
Share Price			$ 0.001
Original issuance discount		$ 50,000
Periodic payment	$ 100,000
Maturity date		Jul. 06, 2023
Exercise price		$ 0.044

v3.23.2

SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, shares in Thousands	Aug. 15, 2023	Jul. 12, 2023	Aug. 14, 2023	Jun. 30, 2023
Subsequent Event [Line Items]
Conversion price				$ 0.005
Related party advance				$ 701,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Conversion of stock, amount converted		$ 56,000
Conversion of stock, shares converted		11,200
Conversion price			$ 0.005
Subsequent Event [Member] | Security Agreement [Member]
Subsequent Event [Line Items]
Interest rate	10.00%
Principal balance	$ 1,080,000
Loan amount	$ 2,000,000

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