Company: TOGIW
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001214659-25-015980
Chunk: 10

Company: TurnOnGreen, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 10
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 The increase in gross profit during the nine-month period ended September
30, 2025, was negatively impacted by increased costs of components sourced from China and tariffs on those products.

Net Loss and Operating Expenses

During the
nine months ended September 30, 2025, our net loss decreased by $492,000 compared to the nine-month period ended September 30, 2024, primarily
due to the increase in gross profit as described above as well as by decreased selling and marketing expenses of $282,000, decreased professional
fees and outside services of $137,000, and decreased overhead allocation expense of $106,000 somewhat offset by an increase in interest
expenses of $201,000, salaries and benefits of $79,000, research and development of $27,000, software costs of $22,000, and $19,000 in
occupancy costs compared to the nine-month period ended September 30, 2024.

Net Loss available to common shareholders

The Company amended and restated its certificate
of designations of rights and preferences of the Series A Convertible Redeemable Preferred Stock. Pursuant to the Series A Amendment,
the holder of the preferred stock, which is a related party, waived all accrued and future dividends in exchange for an increase in the
liquidation preference to 125%.

The waived dividends resulted in a decrease in
accrued preferred dividends for the nine months ended September 30,2025 of $1,011,000 compared to the nine months ended September 30,
2024.

Liquidity and Capital Resources

The accompanying 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 the necessary 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 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. Our consolidated financial statements do not include any adjustments relating to the recoverability
and classification of recorded assets, or the amounts