Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

Note 7 – Subsequent Events

In accordance with ASC 855, Subsequent Events, the Company has analyzed its operations subsequent to June 30, 2022 to the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.

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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Plan of Operations

The Company has no operations from a continuing business other than the expenditures related to running the Company and has no revenue from continuing operations as of the date of this Quarterly Report.

On March 20, 2022, BitNile Holdings, Inc. (NYSE American: NILE), a diversified holding company (“BitNile”) and its subsidiary TurnOnGreen, Inc., an electronic vehicle (“EV”) charging and power solutions company (“TurnOnGreen”), entered into a securities purchase agreement (the “SPA”) with Imperalis, whereby TurnOnGreen will, upon closing, become a subsidiary of Imperalis (the “Acquisition”). Upon completion of the Acquisition, which is contingent upon the completion of an audit of TurnOnGreen and each party’s satisfaction or waiver of certain customary closing conditions set forth in the SPA, Imperalis will change its name to TurnOnGreen and, through an upstream merger whereby the current TurnOnGreen shall cease to exist, have two operating subsidiaries, TOG Technologies Inc. and Digital Power Corporation. Promptly following the closing of the Acquisition, Imperalis will dissolve its three dormant subsidiaries. Subsequent to the Acquisition, should it close, BitNile will assist TurnOnGreen in pursuing an uplisting to the Nasdaq Capital Market, subject to Nasdaq’s seasoning rules and other criteria for listing. BitNile anticipates that stockholders of BitNile will in due course receive a dividend of securities of TurnOnGreen. BitNile expects to distribute to BitNile stockholders approximately 140 million of its common shares and an equal number of warrants to purchase such shares of TurnOnGreen at the time of the record date to be set therefor, subject to regulatory approval and compliance with US federal securities laws. Upon the closing of the Acquisition, TurnOnGreen will continue to be led by its Chief Executive Officer, Amos Kohn and its Chief Revenue Officer, Marcus Charuvastra.

Management intends, should the Acquisition not close, to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase, or similar transaction. Our Chief Executive Officer has a degree of experience in business consulting and reverse mergers, though no assurances can be given that he can identify and implement a viable business strategy or that any such strategy will result in revenues or profits. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies.

We do not currently engage in any business activities that provide revenue or cash flow. During the next 12-month period we anticipate incurring costs in connection with the Acquisition or, should the Acquisition not be consummated, in investigating, evaluating, negotiating and consummating the potential acquisition of a suitable target company, as well as filing all requisite Securities and Exchange Commission (“SEC") reports.

Given our limited capital resources, we may consider an acquisition of an entity that has recently commenced operations, is a developing company or is otherwise in need of additional funds for the development of new products or services or expansion into new markets, or is an established business experiencing financial or operating difficulties and is in need of additional capital. Alternatively, a transaction may involve the acquisition of, or merger with, an entity that desires access to the U.S. capital markets.

Any target business that is selected may be financially unstable or in the early stages of development. In such event, we expect to be subject to numerous risks inherent in the business and operations of a financially unstable or early-stage entity. In addition, we may effect an acquisition with an entity in an industry characterized by a high level of risk or in which our management has limited experience, and, though our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

Our management anticipates that we will likely only be able to effect one acquisition due to our limited capital. This lack of diversification will likely pose a substantial risk in investing in the Company for the indefinite future because it will not permit us to offset potential losses from one venture or operating territory against gains from another. The risks we face will likely be heightened to the extent we acquire a business operating in a single industry or geographical region.

Based upon our current operations, we do not have sufficient working capital to fund our operations over the next 12 months. If we are able to close a reverse merger, it is likely we will need capital as a condition of closing that acquisition. Because of the uncertainties, we cannot be certain as to how much capital we need to raise or the type of securities we will be required to issue. In connection with a reverse merger, we will be required to issue a controlling block of our securities to the target’s stockholders which will be very dilutive. Additional issuances of equity or convertible debt securities will result in dilution to our current stockholders. Further, such securities might have rights, preferences, or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

We anticipate that we will incur operating losses in the next 12 months, principally costs related to operating any target company that we may acquire and filing reports with the SEC. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model, recognition of revenue sources, and the management of growth. To address these risks, we must, among other things, develop, implement, and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain, and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition, and results of operations.

Results of Operations

For the Three Months Ended June 30, 2022 and 2021

	June 30, 2022			June 30, 2021			Movement ($)			Movement (%)
Revenues		-			-			-			-
Cost of sales		-			-			-			-
Gross profit		-			-			-			-
Operating expenses
Rent		-			1,428			(1,428	)		(100	%)
General and administration		7,677			13,994			(6,317	)		(45	%)
Depreciation		-			-			-			-
Owner’s compensation		-			-			-			-
Total operating expenses		7,677			15,422			(7,745	)		(50	%)
Net loss from operations		(7,677	)		(15,422	)		7,745			(50	%)
Interest income		-			-			-			-
Amortization of debt discount		-			(11,250	)		11,250			(100	%)
Interest expense - related party		(2,538	)		-			(2,538	)		-
Interest expense		(1,125	)		(1,180	)		755			(40	%)
Net loss before taxes		(11,340	)		(28,552	)		17,212			(60	%)
Provision for income taxes		-			-			-			-
Net loss		(11,340	)		(28,552	)		17,212			(60	%)

Revenue and Gross Profit

We had no revenue or gross profit during the three months ended June 30, 2022 and 2021.

Operating Expenses

During the three months ended June 30, 2022, we had $7,677 in operating expenses consisting of legal fees, filing fees and accounting fees of $2,980, $2,947 and $1,750, respectively. By comparison, during the three months ended June 30, 2021, we had $15,422 in operating expenses consisting of general and administrative of $13,444, rent in the amount of $1,428 and stock-based compensation of $550.

During the three months ended June 30, 2022, amortization of debt discount on convertible note payable decreased by $11,250, or 100%, because there was no amortization in the current period relative to a full three month amortization in the prior period.

Interest expense – related party consisted of interest expense on convertible note payable. Increase in interest expense by $2,538, or 100%, is mainly attributed to convertible note payable financing issued in December 2021.

Interest expense consisted of interest expense on note payable and convertible note payable. Decrease in interest expense by $755, or 40%, was mainly attributed to settlement of note payable and convertible notes payable that matured during 2021.

Net Loss

We realized a net loss of $11,340 for the three months ended June 30, 2022, compared to a net loss of $28,552 for the three months ended June 30, 2021, representing a decrease in net loss of $17,212, or 60%.

For the Six Months Ended June 30, 2022 and 2021

	June 30, 2022			June 30, 2021			Movement ($)			Movement (%)
Revenues	$	-		$	-		$	-		$	-
Cost of sales		-			-			-			-
Gross profit		-			-			-			-
Operating expenses
Rent		-			2,856			(2,856	)		(100	%)
General and administration		17,322			35,548			(18,227	)		(51	%)
Depreciation		-			575			(575	)		100	%
Owner’s compensation		-			25,000			(25,000	)		100	%
Total operating expenses		17,322			63,979			(46,658	)		(73	%)
Net loss from operations		(17,322	)		(63,979	)		46,658			(73	%)
Interest income		-			2			(2	)		(100	%)
Amortization of debt discount		(2,917	)		(20,625	)		17,708			(86	%)
Interest expense - related party		(5,076	)		-			(5,076	)		(100	%)
Interest expense		(2,754	)		(5,060	)		2,306			(46	%)
Net loss before taxes		(28,069	)		(89,662	)		61,593			(69	%)
Provision for income taxes		-			-			-			-
Net loss	$	(28,069	)	$	(89,662	)	$	61,593			(69	%)

Revenue and Gross Profit

We had no revenue or gross profit during the three and six months ended June 30, 2022 and 2021.

Operating Expenses

For the six months ended June 30, 2022, general and administration expenses consisted of accounting fees, legal fees and filing fees of $7,250, $5,860, and $4,212, respectively. These costs were mainly incurred in connection with debt financing and SEC related filings. For the six months ended June 30, 2021, general and administration expenses consisted mainly of accounting fees, legal fees and utilities of $7,250, $24,615 and $3,108, respectively. The legal fees were mainly incurred in connection with debt financing

Owner’s compensation incurred during the six months ended June 30, 2021 represented a one-time payment of $25,000 to our former chief executive officer for services rendered.

During the six months ended June 30, 2022, amortization of debt discount on convertible note payable decreased by $17,708, or 86%, because of partial amortization in the current period relative to a full six month amortization in the prior period.

Interest expense – related party consisted of interest expense on convertible note payable. Increase in interest expense by $5,076, or 100%, was mainly attributed to convertible note payable financing issued in December 2021.

Interest expense consisted of interest expense on note payable and convertible note payable. Decrease in interest expense by $2,306, or 46%, was mainly attributed to settlement of note payable and convertible notes payable that matured during 2021.

Net Loss

We realized a net loss of $28,069 for the six months ended June 30, 2022, compared to a net loss of $89,662 for the six months ended June 30, 2021, representing a decrease in net loss of $61,593, or 69%.

Liquidity and Capital Resources

As of June 30, 2022, we had $3,859 in our operating bank accounts. To date, our liquidity has been satisfied through proceeds received from issuance of note payables, convertible note payables and shareholder loans. Control of our company was sold on December 16, 2021 to an activist investor who has a strong track record of raising public and private debt. Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of an acquisition or one year from this filing. Over this time period, we will be using our cash for paying existing accounts payable, identifying and evaluating prospective target companies, performing due diligence on prospective target companies, paying for travel expenditures, selecting the target company to merge with or acquire, and structuring, negotiating and consummating the acquisition of the target company.

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 valuation allowances for deferred tax assets. The application of each of these critical accounting policies and estimates is discussed In Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, from which there have been no material changes.

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 material 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

We have established disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that 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 is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Our principal executive officer and principal financial officer, with the assistance of other members of the Company’s management, have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based upon our evaluation, each of our principal executive officer and principal financial officer has concluded that the Company’s internal control over financial reporting was not effective as of the end of the period covered by this Quarterly Report on Form 10-Q due to the material weaknesses as described herein.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (United States) Auditing Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following material weaknesses:

1. We do not have sufficient resources in our accounting function, which restricts our ability to perform sufficient reviews and approval of manual journal entries posted to the general ledger and to consistently execute review procedures over general ledger account reconciliations, financial statement preparation and accounting for non-routine transactions; and

2. Our primary user access controls (i.e., provisioning, de-provisioning, privileged access and user access reviews) 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. We did not design and/or implement sufficient controls for program change management to certain financially relevant systems affecting our processes.

Planned Remediation

We are implementing measures designed to improve our internal control over financial reporting to remediate material weaknesses, including the following:

· Formalizing our internal control documentation and strengthening supervisory reviews by our management; and

· When there are business operations and cash to justify the additional expenses, adding additional accounting personnel and segregating duties amongst accounting personnel.

Management continues to work to improve its controls related to our material weaknesses, specifically relating to user access and change management surrounding our information technology systems and applications. Management will continue to implement measures to remediate material weaknesses, such that these controls are designed, implemented, and operating effectively. The remediation actions include: (i) enhancing design and documentation related to both user access and change management processes and control activities; and (ii) developing and communicating additional policies and procedures to govern the area of information technology change management.  

We are currently working to improve and simplify our internal processes and implement enhanced controls, as discussed above, to address the material weaknesses in our internal control over financial reporting and to remedy the ineffectiveness of our disclosure controls and procedures. These material weaknesses will not be considered to be remediated until the applicable remediated controls are operating for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Despite the existence of these material weaknesses, we believe that the condensed consolidated financial statements included in the period covered by this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles. 

Changes in Internal Control over Financial Reporting

Except as detailed above, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may be subject to legal proceedings. We are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

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	Articles of Incorporation, dated April 5, 2005. Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed April 13, 2021.
3.2	Certificate of Amendment to the Articles of Incorporation, dated March 11, 2011. Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed April 13, 2021.
3.3	By-Laws. Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 10 filed April 13, 2021.
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 1, 2022

IMPERALIS HOLDING CORP.

By: /s/ Darren Magot

Darren Magot

Chief Executive Officer

(Principal Executive Officer)

By: /s/ David J. Katzoff

David J. Katzoff

Chief Financial Officer

(Principal Financial and Accounting Officer)

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