10-Q

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: March 31, 2023

¨ 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 ¨

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 ¨

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.

¨ Large accelerated Filer	¨ Accelerated Filer
x Non-accelerated Filer	x Smaller reporting company
	¨ 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. ¨

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

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 172,694,837 shares of common stock as of May 13, 2023.

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheet as of March 31, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022	4
	Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the three months ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 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	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	19

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2023			December 31, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	21,000		$	95,000
Accounts receivable		716,000			1,022,000
Inventories		2,461,000			2,595,000
Prepaid expenses		693,000			684,000
TOTAL CURRENT ASSETS		3,891,000			4,396,000
Property and equipment, net		397,000			326,000
Right-of-use assets		1,533,000			1,661,000
Other noncurrent assets		270,000			270,000
TOTAL ASSETS	$	6,091,000		$	6,653,000
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	1,066,000		$	1,147,000
Accrued expenses and other current liabilities		2,366,000			1,971,000
Operating lease liability, current		578,000			561,000
Related party advances		76,000			52,000
TOTAL CURRENT LIABILITIES		4,086,000			3,731,000
LONG TERM LIABILITIES
Operating lease liability, non-current		1,102,000			1,251,000
Other long term liabilities		72,000			59,000
TOTAL LIABILITIES		5,260,000			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 March 31, 2023 and December 31, 2022		25,000,000			25,000,000
STOCKHOLDER’S DEFICIT:
Common Stock, par value $0.001 a share; 750,000,000 shares authorized: 172,694,837 shares issued and outstanding at March 31, 2023 and December 31, 2022		173,000			173,000
Additional paid-in capital		13,421,000			12,691,000
Accumulated deficit		(37,763,000	)		(36,252,000	)
TOTAL STOCKHOLDERS’ DEFICIT		(24,169,000	)		(23,388,000	)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT	$	6,091,000		$	6,653,000

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

3

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
	2023			2022
Revenue	$	876,000		$	1,129,000
Cost of revenue		517,000			666,000
Gross profit		359,000			463,000
Operating expenses:
Research and development		119,000			206,000
General and administration		857,000			849,000
Selling and marketing		392,000			341,000
Total operating expenses		1,368,000			1,396,000
Operating loss		(1,009,000	)		(933,000	)
Other expense:
Interest		2,000			-
Total other expense		2,000			-
Net loss		(1,011,000	)		(933,000	)
Preferred Dividends		(500,000	)		-
Net loss available to common stockholders		(1,511,000	)		(933,000	)
Net loss per common share basic and diluted:	$	(0.01	)	$	-
Weighted average common shares, basic and diluted		172,694,837			-

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

4

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

Three Months Ended March 31, 2023 and 2022

(Unaudited)

	Common Stock				Additional					Total
	Shares		Amount		Paid in Capital		Accumulated Deficit			Stockholders’ 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	)

	Common Stock				Additional					Total
	Shares		Amount		Paid in Capital		Accumulated Deficit			Stockholders’ 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	)

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

5

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
Cash flows from operating activities:	2023			2022
Net loss	$	(1,511,000	)	$	(933,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		22,000			6,000
Amortization of right-of-use assets		128,000			120,000
Increase in contribution from parent for corporate overhead		153,000			60,000
Changes in operating assets and liabilities
Accounts receivable		306,000			225,000
Prepaid expenses and other assets		(95,000	)		1,019,000
Inventory		134,000			(1,321,000	)
Accounts payable		(81,000	)		91,000
Lease and warranty liabilities		(119,000	)		16,000
Other current liabilities		395,000			23,000
Net cash used in operating activities		(668,000	)		(694,000	)
Cash flows from investing activities:
Purchase of property and equipment		(7,000	)		(75,000	)
Cash used in investing activities		(7,000	)		(75,000	)
Cash flows from financing activities:
Proceeds from contribution from parent		577,000			950,000
Related party advances, net of payments		24,000			-
Net cash provided by financing activities		601,000			950,000
Net (decrease) increase in cash and cash equivalents		(74,000	)		181,000
Cash at beginning of period		95,000			112,000
Cash at end of period	$	21,000		$	293,000

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

6

IMPERALIS HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 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”) and TOG Technologies (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. 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 2022 Annual Report.

Leases

 The Company acts as sublessor in a leasing arrangement related to a sublease of one of the Company's leased office spaces. Fixed sublease payments received are recognized on a straight-line basis over the sublease term.

7

Capitalized Software Development Costs - Cloud Computing Arrangements

The Company enters into cloud computing arrangements which comprise of hosting arrangements which are service contracts, whereby the Company gains access to use enterprise software hosted by the vendor on an as-needed basis for a period of time in exchange for a subscription fee. Implementation costs for cloud computing arrangements are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. These capitalized implementation costs are presented within property and equipment on the balance sheets and are amortized over the term of the associated hosting arrangement on a straight-line basis. The monthly access fee is recognized within general and administrative expenses.

New Accounting Guidance – Recently Adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards update 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” 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 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 ASC 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 consolidated financial statements.

4. REVENUE DISAGGREGATION

The Company’s disaggregated revenues consisted of the following:

	For the Three Months Ended March 31,
	2023		2022
Primary Geographical Markets
North America	$	784,000	$	1,012,000
Europe		-		19,000
Other		92,000		98,000
Total Revenue	$	876,000	$	1,129,000
Major Goods
Power supply units	$	825,000	$	1,096,000
EV chargers		51,000		33,000
Total Revenue	$	876,000	$	1,129,000
Timing of Revenue Recognition
Revenue recognized over time	$	3,000	$	-
Goods transferred at a point in time		873,000		1,129,000
Total Revenue	$	876,000	$	1,129,000

8

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

	For the Three Months Ended					For the Three Months Ended
	March 31, 2023					March 31, 2022
	Total Revenue		Percentage of			Total Revenue		Percentage of
	by Major		Total Company			by Major		Total Company
	Customers		Revenue			Customer		Revenue
Customer A	$	142,000		16	%	$	261,000		23	%
Customer B	$	97,000		11	%	$	165,000		12	%

5. TRADE RECEIVABLES

As of March 31, 2023 and December 31, 2022, the Company had related party receivables of $0 and $25,000, respectively.

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

	As of			As of
	March 31, 2023			December 31, 2022
Customer A		17.2	%		10.9	%
Customer B		12.9	%		9.9	%
Customer C		10.5	%		-	%
Customer D		10.1	%		3.8	%
Customer E		1.0	%		19.5	%
Customer F		2.2	%		16.6	%

6. PROPERTY AND EQUIPMENT

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

	March 31, 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		118,000			115,000
Gross property and equipment		974,000			989,000
Less: accumulated depreciation and amortization		(577,000	)		(663,000	)
Property and equipment, net	$	397,000		$	326,000

Depreciation and amortization expense related to property and equipment was $22,000 and $6,000 for the three months ended March 31, 2023 and 2022, respectively.

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

7. INVENTORIES

As of March 31, 2023 and December 31, 2022, inventories consisted of: 

	March 31, 2023		December 31, 2022
Raw materials, parts and supplies	$	773,000	$	788,000
Finished products		1,688,000		1,807,000
Total inventories	$	2,461,000	$	2,595,000

9

8. WARRANTY LIABILITY

As of March 31, 2023 and December 31, 2022, the Company’s total accrued warranty liability was as follows: 

	March 31, 2023		December 31, 2022
Beginning warranty liability	$	59,000	$	54,000
Warranty expenses incurred		-		-
Additional liability accrued		-		5,000
Total accrued warranty		59,000		59,000
Less: accrued warranty - current	$	16,000	$	16,000
Accrued warranty – non-current	$	43,000	$	43,000

9. ACCRUED EXPENSESAND OTHER CURRENT LIABILITIES

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

	March 31, 2023		December 31, 2022
Customer prepayments	$	202,000	$	276,000
Accrued legal contingencies		681,000		681,000
Dividends payable		1,139,000		639,000
Warranty liability, current		16,000		17,000
Other accrued liabilities		89,000		103,000
Accrued payroll and payroll taxes		239,000		255,000
Total other current liabilities	$	2,366,000	$	1,971,000

10. LEASES

Office and Warehouse Leases and Sublease

During the three months ended March 31, 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 $11,000 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 lease expenses, recorded within operating expenses on the Company's Condensed Consolidated Statements of Operations for the three-month period ended March 31, 2023 and 2022, was as follows:

	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Operating lease cost	$	162,000		$	162,000
Short-term lease cost		-			-
Variable lease cost		-			-
Less: Sublease income		(11,000	)		-
Total	$	151,000		$	162,000

11. 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 $153,000 and $60,000 of costs for the three months ended March 31, 2023 and 2022, respectively. These costs were treated as additional paid-in capital.

10

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 $577,000 and $950,000 for the three months ended March 31, 2023 and 2022, respectively. These amounts are reflected in additional paid-in capital.

Related Party Receivables

As of March 31, 2023 and December 31, 2022, the Company had related party receivables of $0 and $25,000, respectively.

Related Party Advances

During the quarter ended March 31, 2023, our Officer, Amos Kohn loaned to the Company $26,000. The note has no annual interest, matured on April 10, 2023, and was used for working capital purposes. Upon an event of default, the interest rate on this Note will be 14% per annum. As of the date of this report we have not made any payments and therefore the note is in default and is now accruing interest at 14% per annum.

During the quarter ended March 31, 2023, a non-officer employee of the Company advanced us $25,000. The advance is unsecured, interest-free and has no fixed terms of repayment. The loan was used for working capital purposes and recorded as related party advances.

On December 9, 2022, our Officer, Amos Kohn loaned the Company $25,000, which was recorded in related party advances and used for working capital purposes. The note carried no interest, unless it goes into default, and was due and payable on the maturity date of March 9, 2023. As of the date of this report we have not made any payments and therefor the note is in default and is now accruing interest at 14% per annum. During the quarter ended March 31, 2023, the Company incurred an interest expense of $1,000 in relation to this note.

During the quarter ended December 31, 2022, our Officer Marcus Charuvastra advanced the Company $14,000, and a non-officer employee of the Company advanced us $13,000. The advances were unsecured, interest-free and had no fixed terms of repayment. The loans were used for working capital purposes and recorded as related party advances.

During the quarter ended March 31, 2023, the $14,000 advance from Marcus Charuvastra, the Company’s President, and the $13,000 advance from the non-officer employee were repaid in full.

As of March 31, 2023 and December 31, 2022, there were balances due to the Company’s officers and non-officer employee of $76,000 and $52,000, respectively.

12. 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.

11

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 February 2023 the arbitrator entered an interim award against us and in favor of Mr. Gordon in the amount of $428,602 inclusive of interest. The award was based on Mr. Gordon’s employment agreement with DPC, and Mr. Gordon’s promissory note with Coolisys. Mr. Gordon was deemed the prevailing party and will be entitled to bring a motion for attorney’s fees in addition to the interim awarded amount.

The Company has accrued $681,000 in connection with legal contingencies as of each March 31, 2023 and December 31, 2022.

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

Non-cancelable Obligations

In the normal course of business, we enter into non-cancelable obligations with certain parties to purchase services, such as technology equipment and subscription-based cloud service arrangements. As of March 31, 2023, we had outstanding non-cancelable purchase obligations with terms of two years or longer aggregating $60,000.

13. 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 stockholders by the weighted average number of common stock 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 three months ended March 31, 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, consist of the following at March 31, 2023 and 2022:

	March 31,
	2023		2022
Convertible notes		10,961,000		20,367,000
Convertible preferred stock		25,000,000		25,000,000
Total		35,961,000		45,367,000

14. STOCKHOLDERS’ DEFICIT

Authorized Capital

The Company is authorized to issue seven hundred fifty 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 March 31, 2023 and December 31, 2022, there were 172,694,837 shares of Common Stock issued and outstanding and as of each March 31, 2023 and December 31, 2022, there were 25,000 shares of series A preferred stock issued and outstanding.

12

Common Stock

The holders of the Company’s Common Stock have equal ratable rights to dividends from funds legally available therefor, when, as 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.

15. CONVERTIBLE NOTES PAYABLE

Convertible notes payable at March 31, 2023 and December 31, 2022, were comprised of the following:

	Conversion price per share		Interest rate			Due date	March 31, 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 March 31, 2023 and December 31, 2022, the outstanding convertible notes payable had accrued interest of $10,000 and $9,000, respectively.

16. SUBSEQUENT EVENTS

Entry into a Material Definitive Agreement

On April 6, 2023 (the "Closing Date"), the Company entered into a Purchase Agreement (the "Agreement") with FAR Holdings International, LLC (the "Investor") pursuant to which the Company borrowed $250,000 and issued a promissory note to the Investor in the principal face amount of $300,000. The Company also issued to the Investor warrants (the "Warrants") to purchase an aggregate of 1,000,000 shares of common stock, par value $0.001 per share of the Company (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 the maturity date of July 6, 2023. The promissory note also allows prepayment without any penalty. The promissory note contains a single event of default if the Company fails to make payments within five business days when due, then the Company must pay the Investor a default fee of three percent (3%) of the amount due.

The Warrants entitle the holder to purchase shares of Common Stock for a period of five years at an exercise price of $0.044 per share, subject to adjustment. The exercise price of each Warrant is subject to adjustment for customary stock splits, stock dividends, combinations or similar events.

As of the date of this report we have not made any payments and therefore the promissory note is in default and a default fee of $3,000 is now due.

13

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. 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.

14

Results of Operations

For the Three Months Ended March 31, 2023 and 2022:

	2023			2022			Change ($)			Change (%)
Revenue	$	876,000		$	1,129,000		$	(253,000	)		(22	)%
Cost of revenue		517,000			666,000			(149,000	)		(22	)%
Gross profit		359,000			463,000			(104,000	)		(22	)%
Operating expenses:
Research and development		119,000			206,000			(87,000	)		(42	)%
General and administrative		857,000			849,000			8,000			1	%
Selling and marketing		392,000			341,000			51,000			15	%
Total operating expenses		1,368,000			1,396,000			(28,000	)		(2	)%
Operating loss		(1,009,000	)		(933,000	)		76,000			8	%
Other expense:
Interest		2,000			-			2,000			100	%
Total other expense		2,000			-			2,000			100	%
Net loss		(1,011,000	)		(933,000	)		(78,000	)		8
Preferred dividends		(500,000	)		-
Net loss available to common stockholders	$	(1,511,000	)	$	(933,000	)

Revenue and Gross Profit

During the three month period ended March 31, 2023, we had decreased revenues of $253,000 and decreased gross profits of $104,000 compared to the three month period ended March 31, 2022, primarily due to our increased sales in the three month period ended March 31, 2022, 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 three months ended March 31, 2023, our net loss increased by $78,000 compared to the three month period ended March 31, 2022, primarily due to audit fees and overhead allocations increasing by $150,000, and $124,000, respectively, partially offset primarily by decreased payroll costs and safety license fees of $113,000 and $95,000, respectively.

Net Loss Available to Common Stockholders

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 stockholders of $500,000 for the three month period ended March 31, 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.

15

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 March 31, 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 March 31, 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.

16

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 March 31, 2023, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

17

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.

18

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.
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.

19

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: May 15, 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)

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Amos Kohn, certify that;

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 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: May 15, 2023

/s/ Amos Kohn

By: Amos Kohn

Title: Chief Executive Officer

(Principal Executive Officer)

EX-31.2

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 March 31, 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: May 15, 2023

/s/ David J. Katzoff

 By: David J. Katzoff

 Title: Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

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 March 31, 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:	May 15, 2023

By:	/s/ David J. Katzoff
Name:	David J. Katzoff
Title:	Chief Financial Officer (Principal Financial and Accounting Officer)
Date:	May 15, 2023

XML

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	Mar. 31, 2023	May 13, 2023
Cover [Abstract]
Document Type	10-Q
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Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Period Focus	Q1
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
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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 21,000	$ 95,000
Accounts receivable	716,000	1,022,000
Inventories	2,461,000	2,595,000
Prepaid expenses	693,000	684,000
TOTAL CURRENT ASSETS	3,891,000	4,396,000
Property and equipment, net	397,000	326,000
Right-of-use assets	1,533,000	1,661,000
Other noncurrent assets	270,000	270,000
TOTAL ASSETS	6,091,000	6,653,000
CURRENT LIABILITIES
Accounts payable	1,066,000	1,147,000
Accrued expenses and other current liabilities	2,366,000	1,971,000
Operating lease liability, current	578,000	561,000
Related party advances	76,000	52,000
TOTAL CURRENT LIABILITIES	4,086,000	3,731,000
LONG TERM LIABILITIES
Operating lease liability, non-current	1,102,000	1,251,000
Other long term liabilities	72,000	59,000
TOTAL LIABILITIES	5,260,000	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 March 31, 2023 and December 31, 2022	25,000,000	25,000,000
STOCKHOLDER’S DEFICIT:
Common Stock, par value $0.001 a share; 750,000,000 shares authorized: 172,694,837 shares issued and outstanding at March 31, 2023 and December 31, 2022	173,000	173,000
Additional paid-in capital	13,421,000	12,691,000
Accumulated deficit	(37,763,000)	(36,252,000)
TOTAL STOCKHOLDERS’ DEFICIT	(24,169,000)	(23,388,000)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT	$ 6,091,000	$ 6,653,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 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

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ()Unaudited - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenue	$ 876,000	$ 1,129,000
Cost of revenue	517,000	666,000
Gross profit	359,000	463,000
Operating expenses:
Research and development	119,000	206,000
General and administration	857,000	849,000
Selling and marketing	392,000	341,000
Total operating expenses	1,368,000	1,396,000
Operating loss	(1,009,000)	(933,000)
Other expense:
Interest	2,000
Total other expense	2,000
Net loss	(1,011,000)	(933,000)
Preferred Dividends	(500,000)
Net loss available to common stockholders	$ (1,511,000)	$ (933,000)
Net loss per common share basic and diluted:	$ (0.01)
Weighted average common shares, basic and diluted	172,694,837

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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
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

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss	$ (1,511,000)	$ (933,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	22,000	6,000
Amortization of right-of-use assets	128,000	120,000
Increase in contribution from parent for corporate overhead	153,000	60,000
Changes in operating assets and liabilities
Accounts receivable	306,000	225,000
Prepaid expenses and other assets	(95,000)	1,019,000
Inventory	134,000	(1,321,000)
Accounts payable	(81,000)	91,000
Lease and warranty liabilities	(119,000)	16,000
Other current liabilities	395,000	23,000
Net cash used in operating activities	(668,000)	(694,000)
Cash flows from investing activities:
Purchase of property and equipment	(7,000)	(75,000)
Cash used in investing activities	(7,000)	(75,000)
Cash flows from financing activities:
Proceeds from contribution from parent	577,000	950,000
Related party advances, net of payments	24,000
Net cash provided by financing activities	601,000	950,000
Net (decrease) increase in cash and cash equivalents	(74,000)	181,000
Cash at beginning of period	95,000	112,000
Cash at end of period	$ 21,000	$ 293,000

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DESCRIPTION OF BUSINESS

3 Months Ended

Mar. 31, 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”) and TOG Technologies (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.

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LIQUIDITY AND GOING CONCERN

3 Months Ended

Mar. 31, 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. 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.

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 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 2022 Annual Report.

Leases

 The Company acts as sublessor in a leasing arrangement related to a sublease of one of the Company's leased office spaces. Fixed sublease payments received are recognized on a straight-line basis over the sublease term.

Capitalized Software Development Costs - Cloud Computing Arrangements

The Company enters into cloud computing arrangements which comprise of hosting arrangements which are service contracts, whereby the Company gains access to use enterprise software hosted by the vendor on an as-needed basis for a period of time in exchange for a subscription fee. Implementation costs for cloud computing arrangements are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. These capitalized implementation costs are presented within property and equipment on the balance sheets and are amortized over the term of the associated hosting arrangement on a straight-line basis. The monthly access fee is recognized within general and administrative expenses.

New Accounting Guidance – Recently Adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards update 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” 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 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 ASC 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 consolidated financial statements.

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REVENUE DISAGGREGATION

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE DISAGGREGATION

4. REVENUE DISAGGREGATION

The Company’s disaggregated revenues consisted of the following:

	For the Three Months Ended March 31,
	2023		2022
Primary Geographical Markets
North America	$	784,000	$	1,012,000
Europe		-		19,000
Other		92,000		98,000
Total Revenue	$	876,000	$	1,129,000
Major Goods
Power supply units	$	825,000	$	1,096,000
EV chargers		51,000		33,000
Total Revenue	$	876,000	$	1,129,000
Timing of Revenue Recognition
Revenue recognized over time	$	3,000	$	-
Goods transferred at a point in time		873,000		1,129,000
Total Revenue	$	876,000	$	1,129,000

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

	For the Three Months Ended					For the Three Months Ended
	March 31, 2023					March 31, 2022
	Total Revenue		Percentage of			Total Revenue		Percentage of
	by Major		Total Company			by Major		Total Company
	Customers		Revenue			Customer		Revenue
Customer A	$	142,000		16	%	$	261,000		23	%
Customer B	$	97,000		11	%	$	165,000		12	%

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TRADE RECEIVABLES

3 Months Ended

Mar. 31, 2023

Credit Loss [Abstract]

TRADE RECEIVABLES

5. TRADE RECEIVABLES

As of March 31, 2023 and December 31, 2022, the Company had related party receivables of $0 and $25,000, respectively.

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

	As of			As of
	March 31, 2023			December 31, 2022
Customer A		17.2	%		10.9	%
Customer B		12.9	%		9.9	%
Customer C		10.5	%		-	%
Customer D		10.1	%		3.8	%
Customer E		1.0	%		19.5	%
Customer F		2.2	%		16.6	%

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

6. PROPERTY AND EQUIPMENT

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

	March 31, 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		118,000			115,000
Gross property and equipment		974,000			989,000
Less: accumulated depreciation and amortization		(577,000	)		(663,000	)
Property and equipment, net	$	397,000		$	326,000

Depreciation and amortization expense related to property and equipment was $22,000 and $6,000 for the three months ended March 31, 2023 and 2022, respectively.

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

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INVENTORIES

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

INVENTORIES

7. INVENTORIES

As of March 31, 2023 and December 31, 2022, inventories consisted of: 

	March 31, 2023		December 31, 2022
Raw materials, parts and supplies	$	773,000	$	788,000
Finished products		1,688,000		1,807,000
Total inventories	$	2,461,000	$	2,595,000

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WARRANTY LIABILITY

3 Months Ended

Mar. 31, 2023

Guarantees and Product Warranties [Abstract]

WARRANTY LIABILITY

8. WARRANTY LIABILITY

As of March 31, 2023 and December 31, 2022, the Company’s total accrued warranty liability was as follows: 

	March 31, 2023		December 31, 2022
Beginning warranty liability	$	59,000	$	54,000
Warranty expenses incurred		-		-
Additional liability accrued		-		5,000
Total accrued warranty		59,000		59,000
Less: accrued warranty - current	$	16,000	$	16,000
Accrued warranty – non-current	$	43,000	$	43,000

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ACCRUED EXPENSESAND OTHER CURRENT LIABILITIES

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

ACCRUED EXPENSESAND OTHER CURRENT LIABILITIES

9. ACCRUED EXPENSESAND OTHER CURRENT LIABILITIES

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

	March 31, 2023		December 31, 2022
Customer prepayments	$	202,000	$	276,000
Accrued legal contingencies		681,000		681,000
Dividends payable		1,139,000		639,000
Warranty liability, current		16,000		17,000
Other accrued liabilities		89,000		103,000
Accrued payroll and payroll taxes		239,000		255,000
Total other current liabilities	$	2,366,000	$	1,971,000

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LEASES

3 Months Ended

Mar. 31, 2023

Leases

LEASES

10. LEASES

Office and Warehouse Leases and Sublease

During the three months ended March 31, 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 $11,000 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 lease expenses, recorded within operating expenses on the Company's Condensed Consolidated Statements of Operations for the three-month period ended March 31, 2023 and 2022, was as follows:

	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Operating lease cost	$	162,000		$	162,000
Short-term lease cost		-			-
Variable lease cost		-			-
Less: Sublease income		(11,000	)		-
Total	$	151,000		$	162,000

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

11. 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 $153,000 and $60,000 of costs for the three months ended March 31, 2023 and 2022, respectively. These costs 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 $577,000 and $950,000 for the three months ended March 31, 2023 and 2022, respectively. These amounts are reflected in additional paid-in capital.

Related Party Receivables

As of March 31, 2023 and December 31, 2022, the Company had related party receivables of $0 and $25,000, respectively.

Related Party Advances

During the quarter ended March 31, 2023, our Officer, Amos Kohn loaned to the Company $26,000. The note has no annual interest, matured on April 10, 2023, and was used for working capital purposes. Upon an event of default, the interest rate on this Note will be 14% per annum. As of the date of this report we have not made any payments and therefore the note is in default and is now accruing interest at 14% per annum.

During the quarter ended March 31, 2023, a non-officer employee of the Company advanced us $25,000. The advance is unsecured, interest-free and has no fixed terms of repayment. The loan was used for working capital purposes and recorded as related party advances.

On December 9, 2022, our Officer, Amos Kohn loaned the Company $25,000, which was recorded in related party advances and used for working capital purposes. The note carried no interest, unless it goes into default, and was due and payable on the maturity date of March 9, 2023. As of the date of this report we have not made any payments and therefor the note is in default and is now accruing interest at 14% per annum. During the quarter ended March 31, 2023, the Company incurred an interest expense of $1,000 in relation to this note.

During the quarter ended December 31, 2022, our Officer Marcus Charuvastra advanced the Company $14,000, and a non-officer employee of the Company advanced us $13,000. The advances were unsecured, interest-free and had no fixed terms of repayment. The loans were used for working capital purposes and recorded as related party advances.

During the quarter ended March 31, 2023, the $14,000 advance from Marcus Charuvastra, the Company’s President, and the $13,000 advance from the non-officer employee were repaid in full.

As of March 31, 2023 and December 31, 2022, there were balances due to the Company’s officers and non-officer employee of $76,000 and $52,000, respectively.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

12. 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 February 2023 the arbitrator entered an interim award against us and in favor of Mr. Gordon in the amount of $428,602 inclusive of interest. The award was based on Mr. Gordon’s employment agreement with DPC, and Mr. Gordon’s promissory note with Coolisys. Mr. Gordon was deemed the prevailing party and will be entitled to bring a motion for attorney’s fees in addition to the interim awarded amount.

The Company has accrued $681,000 in connection with legal contingencies as of each March 31, 2023 and December 31, 2022.

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

Non-cancelable Obligations

In the normal course of business, we enter into non-cancelable obligations with certain parties to purchase services, such as technology equipment and subscription-based cloud service arrangements. As of March 31, 2023, we had outstanding non-cancelable purchase obligations with terms of two years or longer aggregating $60,000.

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LOSS PER SHARE

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

LOSS PER SHARE

13. 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 stockholders by the weighted average number of common stock 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 three months ended March 31, 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, consist of the following at March 31, 2023 and 2022:

	March 31,
	2023		2022
Convertible notes		10,961,000		20,367,000
Convertible preferred stock		25,000,000		25,000,000
Total		35,961,000		45,367,000

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STOCKHOLDERS’ DEFICIT

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

STOCKHOLDERS’ DEFICIT

14. STOCKHOLDERS’ DEFICIT

Authorized Capital

The Company is authorized to issue seven hundred fifty 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 March 31, 2023 and December 31, 2022, there were 172,694,837 shares of Common Stock issued and outstanding and as of each March 31, 2023 and December 31, 2022, there were 25,000 shares of series A 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 therefor, when, as 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.

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CONVERTIBLE NOTES PAYABLE

3 Months Ended

Mar. 31, 2023

Convertible Notes Payable

CONVERTIBLE NOTES PAYABLE

15. CONVERTIBLE NOTES PAYABLE

Convertible notes payable at March 31, 2023 and December 31, 2022, were comprised of the following:

	Conversion price per share		Interest rate			Due date	March 31, 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 March 31, 2023 and December 31, 2022, the outstanding convertible notes payable had accrued interest of $10,000 and $9,000, respectively.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

16. SUBSEQUENT EVENTS

Entry into a Material Definitive Agreement

On April 6, 2023 (the "Closing Date"), the Company entered into a Purchase Agreement (the "Agreement") with FAR Holdings International, LLC (the "Investor") pursuant to which the Company borrowed $250,000 and issued a promissory note to the Investor in the principal face amount of $300,000. The Company also issued to the Investor warrants (the "Warrants") to purchase an aggregate of 1,000,000 shares of common stock, par value $0.001 per share of the Company (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 the maturity date of July 6, 2023. The promissory note also allows prepayment without any penalty. The promissory note contains a single event of default if the Company fails to make payments within five business days when due, then the Company must pay the Investor a default fee of three percent (3%) of the amount due.

The Warrants entitle the holder to purchase shares of Common Stock for a period of five years at an exercise price of $0.044 per share, subject to adjustment. The exercise price of each Warrant is subject to adjustment for customary stock splits, stock dividends, combinations or similar events.

As of the date of this report we have not made any payments and therefore the promissory note is in default and a default fee of $3,000 is now due.

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 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 2022 Annual Report.

Leases

Leases

 The Company acts as sublessor in a leasing arrangement related to a sublease of one of the Company's leased office spaces. Fixed sublease payments received are recognized on a straight-line basis over the sublease term.

Capitalized Software Development Costs - Cloud Computing Arrangements

The Company enters into cloud computing arrangements which comprise of hosting arrangements which are service contracts, whereby the Company gains access to use enterprise software hosted by the vendor on an as-needed basis for a period of time in exchange for a subscription fee. Implementation costs for cloud computing arrangements are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. These capitalized implementation costs are presented within property and equipment on the balance sheets and are amortized over the term of the associated hosting arrangement on a straight-line basis. The monthly access fee is recognized within general and administrative expenses.

New Accounting Guidance – Recently Adopted

New Accounting Guidance – Recently Adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards update 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” 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 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 ASC 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 consolidated financial statements.

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REVENUE DISAGGREGATION (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of disaggregated revenues

	For the Three Months Ended March 31,
	2023		2022
Primary Geographical Markets
North America	$	784,000	$	1,012,000
Europe		-		19,000
Other		92,000		98,000
Total Revenue	$	876,000	$	1,129,000
Major Goods
Power supply units	$	825,000	$	1,096,000
EV chargers		51,000		33,000
Total Revenue	$	876,000	$	1,129,000
Timing of Revenue Recognition
Revenue recognized over time	$	3,000	$	-
Goods transferred at a point in time		873,000		1,129,000
Total Revenue	$	876,000	$	1,129,000

Schedule of concentration

	For the Three Months Ended					For the Three Months Ended
	March 31, 2023					March 31, 2022
	Total Revenue		Percentage of			Total Revenue		Percentage of
	by Major		Total Company			by Major		Total Company
	Customers		Revenue			Customer		Revenue
Customer A	$	142,000		16	%	$	261,000		23	%
Customer B	$	97,000		11	%	$	165,000		12	%

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TRADE RECEIVABLES (Tables)

3 Months Ended

Mar. 31, 2023

Credit Loss [Abstract]

Schedule percentage of total trade receivables

	As of			As of
	March 31, 2023			December 31, 2022
Customer A		17.2	%		10.9	%
Customer B		12.9	%		9.9	%
Customer C		10.5	%		-	%
Customer D		10.1	%		3.8	%
Customer E		1.0	%		19.5	%
Customer F		2.2	%		16.6	%

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	March 31, 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		118,000			115,000
Gross property and equipment		974,000			989,000
Less: accumulated depreciation and amortization		(577,000	)		(663,000	)
Property and equipment, net	$	397,000		$	326,000

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Schedule of inventories

	March 31, 2023		December 31, 2022
Raw materials, parts and supplies	$	773,000	$	788,000
Finished products		1,688,000		1,807,000
Total inventories	$	2,461,000	$	2,595,000

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WARRANTY LIABILITY (Tables)

3 Months Ended

Mar. 31, 2023

Guarantees and Product Warranties [Abstract]

Schedule of warranty liability

	March 31, 2023		December 31, 2022
Beginning warranty liability	$	59,000	$	54,000
Warranty expenses incurred		-		-
Additional liability accrued		-		5,000
Total accrued warranty		59,000		59,000
Less: accrued warranty - current	$	16,000	$	16,000
Accrued warranty – non-current	$	43,000	$	43,000

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ACCRUED EXPENSESAND OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Schedule of accrued expenses

	March 31, 2023		December 31, 2022
Customer prepayments	$	202,000	$	276,000
Accrued legal contingencies		681,000		681,000
Dividends payable		1,139,000		639,000
Warranty liability, current		16,000		17,000
Other accrued liabilities		89,000		103,000
Accrued payroll and payroll taxes		239,000		255,000
Total other current liabilities	$	2,366,000	$	1,971,000

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LEASES (Tables)

3 Months Ended

Mar. 31, 2023

Leases

Schedule of lease cost

	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Operating lease cost	$	162,000		$	162,000
Short-term lease cost		-			-
Variable lease cost		-			-
Less: Sublease income		(11,000	)		-
Total	$	151,000		$	162,000

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LOSS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of anti dilutive securities excluded from computation of earnings per share

	March 31,
	2023		2022
Convertible notes		10,961,000		20,367,000
Convertible preferred stock		25,000,000		25,000,000
Total		35,961,000		45,367,000

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CONVERTIBLE NOTES PAYABLE (Tables)

3 Months Ended

Mar. 31, 2023

Convertible Notes Payable

Schedule of convertible notes payable

	Conversion price per share		Interest rate			Due date	March 31, 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

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DESCRIPTION OF BUSINESS (Details Narrative)	3 Months Ended
	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Entity incorporation, date of incorporation	Apr. 05, 2005

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REVENUE DISAGGREGATION (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Total Revenue	$ 876,000	$ 1,129,000
Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	3,000
Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	873,000	1,129,000
Power Supply Units [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	825,000	1,096,000
E V Chargers [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	51,000	33,000
North America [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	784,000	1,012,000
Europe [Member]
Disaggregation of Revenue [Line Items]
Total Revenue		19,000
Other [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	$ 92,000	$ 98,000

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REVENUE DISAGGREGATION (Details 1) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 876,000	$ 1,129,000
Customer A [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 142,000	$ 261,000
Customer A [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	16.00%	23.00%
Customer B [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 97,000	$ 165,000
Customer B [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	11.00%	12.00%

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TRADE RECEIVABLES (Details)	Mar. 31, 2023	Dec. 31, 2022
Customer A [Member]
Total trade receivables percent	17.20%	10.90%
Customer B [Member]
Total trade receivables percent	12.90%	9.90%
Customer C [Member]
Total trade receivables percent	10.50%
Customer D [Member]
Total trade receivables percent	10.10%	3.80%
Customer E [Member]
Total trade receivables percent	1.00%	19.50%
Customer F [Member]
Total trade receivables percent	2.20%	16.60%

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TRADE RECEIVABLES (Details Narrative) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Credit Loss [Abstract]
Related party receivables	$ 0	$ 25,000

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 974,000	$ 989,000
Less: accumulated depreciation and amortization	(577,000)	(663,000)
Property and equipment, net	397,000	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
E V Chargers [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 118,000	$ 115,000

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense	$ 22,000	$ 6,000
Asset retirement obligations	$ 3,000		$ 3,000

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INVENTORIES (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials, parts and supplies	$ 773,000	$ 788,000
Finished products	1,688,000	1,807,000
Total inventories	$ 2,461,000	$ 2,595,000

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WARRANTY LIABILITY (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Guarantees and Product Warranties [Abstract]
Beginning warranty liability	$ 59,000	$ 54,000
Warranty expenses incurred
Additional liability accrued		5,000
Total accrued warranty	59,000	59,000
Less: accrued warranty - current	16,000	16,000
Accrued warranty - non-current	$ 43,000	$ 43,000

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Customer prepayments	$ 202,000	$ 276,000
Accrued legal contingencies	681,000	681,000
Dividends payable	1,139,000	639,000
Warranty liability, current	16,000	17,000
Other accrued liabilities	89,000	103,000
Accrued payroll and payroll taxes	239,000	255,000
Total other current liabilities	$ 2,366,000	$ 1,971,000

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LEASES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases
Operating lease cost	$ 162,000	$ 162,000
Short-term lease cost
Variable lease cost
Less: Sublease income	(11,000)
Total	$ 151,000	$ 162,000

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LEASES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases
Sublease income	$ 11,000

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)		3 Months Ended		12 Months Ended
	Dec. 09, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Allocation of general corporate expenses		$ 857,000	$ 849,000
Related party receivables		0		$ 25,000
Interest expense		1,000
Officer [Member]
Related Party Transaction [Line Items]
Related Party Advances	$ 25,000	$ 26,000
Maturity date	Mar. 09, 2023	Apr. 10, 2023
Interest rate	14.00%	14.00%
Proceeds from related party debt				14,000
Due to officers and non-officer employee		$ 76,000		52,000
Non Officer Employee [Member]
Related Party Transaction [Line Items]
Related Party Advances		25,000
Proceeds from related party debt		13,000		$ 13,000
Marcus Charuvastra [Member]
Related Party Transaction [Line Items]
Proceeds from related party debt		14,000
Parent Company [Member]
Related Party Transaction [Line Items]
Contributions From Parent		577,000	950,000
Ault [Member]
Related Party Transaction [Line Items]
Allocation of general corporate expenses		$ 153,000	$ 60,000

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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Accrued legal fees	$ 681,000	$ 681,000
Non-cancelable purchase obligations	$ 60,000

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LOSS PER SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	35,961,000	45,367,000
Convertible Notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	10,961,000	20,367,000
Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	25,000,000	25,000,000

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STOCKHOLDERS’ DEFICIT (Details Narrative) - shares	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Authorized capital, description	The Company is authorized to issue seven hundred fifty 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
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Common stock shares, issued	25,000
Common stock shares, outstanding	25,000

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CONVERTIBLE NOTES PAYABLE (Details) - USD ($)	3 Months Ended
	Mar. 31, 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

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CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 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	$ 10,000	$ 9,000

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SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Purchase Agreement [Member] - F A R Holdings International [Member] - USD ($)	Jun. 06, 2023	May 06, 2023	Apr. 06, 2023
Subsequent Event [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	$ 100,000
Maturity date			Jul. 06, 2023
Exercise price			$ 0.044
Default fee			$ 3,000