Company: TOGIW
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001214659-25-011987
Chunk: 14

Company: TurnOnGreen, Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 4
Chunk 14
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, 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;                                                                                                           
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  The insufficient resources in our accounting function also resulted in a deficiency over design and implementation                      

  Management also concluded that there was a deficiency in internal controls over financial reporting relating                           

  Lastly, we did not design and maintain effective controls associated with related party transactions and                                

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.

  15  

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