TOGI 10-K & 10-Q changes, risk factors and insider trading

Risks Related to the Company and Its Financial Condition

We have a history of annual net losses which may continuecontinue, and which may negatively impact our ability to achieve our business objectives.

As of December 31, 2024,2025, we had cash of $0.0$0.1 million and negative working capital of $6.5$8.2 million. We have incurred recurring losses, anticipateanticipated continuing losses, and reported losses available to common shareholders for the years ended December 31, 20242025, and December 31, 20232024, of $4.0$2.1 million and $6.9$4.0 million, respectively. In the past, we have financed our operations principally through investment by Hyperscale, our current parent company.company; however, there can be no assurance that Hyperscale will continue to support us. There can be no assurance that, even if our revenues increase, future operations will result in net income. Our failure to increase our revenues or improve our gross margins will harm our business. We may not be able to sustain or increase profitability on a quarterly or annual basis in the future. If our revenues grow more slowly than we anticipate, our gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer. The prices we charge for our products may decrease, which would reduce our revenues and gross margins and harm our business. If we are unable to sell our products at acceptable prices relative to our costs, or if we fail to develop and introduce introduce, on a timely basisbasis, new products from which we can derive additional revenues, our financial results will suffer. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for the 12 months following the issuance of thesethe financial statements.statements included within this Annual Report.

We will need, but may be unable to obtain, funding on satisfactory terms, or at all; any financing we do obtain couldwould dilute our shareholders and investors orand could also impose burdensome burdensome financial restrictions on our business.

WeWhile we have historically relied upon cash from financing activities and in the future,activities, we hope to relygenerate onsufficient revenues generated from operations to fund all of the cash requirements ofwe need to support our activities.business. However, it is extremely unlikely that we will be able to generate any significant cash from our operating activities in the foreseeable future. Future financings may not be available on a timely basis, in sufficient amounts or on terms acceptable to us, if at all. Any debt financing or other financing of securities senior to our common stock will likely include financial and other covenants that will restrict our flexibility. Any failure to comply with these covenants may cause an event of default and acceleration of the obligation to pay the debt,debt or dividend payments if the funds we raise arise from the sale of preferred equity, which would have a material adverse effect on our business, prospects, financial condition and results of operations and we could lose our existing sources of funding and impair our ability to secure new sources of funding. You should not assume that Hyperscale will support us financially in the future. There can be no assurance that we will be able to generate any further investor interest in our securities or other types of funding, in which case you would likely lose the entirety of the value of ouryour shares that will be distributed to you.shares.

There iscan be no assurance of successful expansion of operations.

Our significant increase in the scope and the scale of our operations, including the hiring of additional personnel, has resulted in significantlysubstantially higher operating expenses.expenses, Weand anticipate thatwe expect our operating expenses will to continue to increase. Expansion of our operations may also makeplace significant demands on our management, finances financial resources, and other resources.internal systems. Our ability to manage the anticipated future growth, should it occur,growth will depend uponon a significantthe expansion of ourits accounting and other internal management systems and the implementation and subsequent improvement of a variety of systems, procedures procedures, and controls. We cannot assure you that significant problems will not arise in these areas will not occur.areas. Failure to expand these areas and implement and improve suchthese systems, proceduresprocedures, and controls inefficiently an efficient mannerand at a pace consistent with our business growth could have a material adverse effect on our business, financial conditioncondition, and results of operations. WeAdditionally, we cannot assure you that attemptsour efforts to expand our marketing, sales, manufacturing manufacturing, and customer support efforts will succeed or generate additional sales or profitsprofitability in any future period. As a result of the expansion of our operations and the anticipated increase in our operating expenses, along with the difficulty in forecasting revenue levels, we expect to continue to experience significant fluctuations in its results of operations.periods.

If our major OEM customers reduce or cancel their orders scalingor scale back some of their activities,operations, our revenues wouldcould be significantly reduced. Further,In diversionsaddition, shifts in the capital spending priorities of certain of these customers totoward new network elements have resulted, and couldmay continue to leadresult, to theirin reduced demand for our products, which which could, in turn,could have a material adverse effect on our business and results of operations. If the financial condition of one or more of our our major customers should deteriorate,deteriorates, or if they haveexperience difficulty acquiringobtaining financing or investment capital due to any of these or other factors, a substantial decrease incapital, our revenues wouldcould likelydecline result.substantially. Because Wewe are dependent on the electronic equipment industryindustry, andour accordinglybusiness will beis affectedalso bysubject to the impact onof general economic conditions affecting that industry of current economic conditions.industry.

Substantially all of our existing customers areoperate in in the electronic equipment industry, andwhich theyis manufacturecharacterized products that are subject toby rapid technological change, product obsolescence, and large significant fluctuations in demand. This industry is furtheralso characterizedhighly by intense competitioncompetitive and subject to volatility. The OEMs serving this industry face ongoing pressure to improve product performance while reducing costs. These pressures are pressuredoften passed on to suppliers, including us, resulting in demands for increased enhanced product performance and lower product prices. OEMs, in turn, make similar demands on their suppliers, such as us, for increased product performance and lower prices.pricing. Such demands may adversely affect our ability to successfullycompete competeeffectively in certain markets orand ourmay negatively ability to sustainimpact our gross margins.

If we lose the services of Amos Kohn, our Chief Executive Officer and Chief Financial Officer, Marcus Charuvastra, our President, and Douglas Gintz, our Chief Technology Officer,President and/or certain key employees, we may not be able to find appropriate replacements on a timely basis, and our business could be adversely affected. Our existing operations and continued future development depend to a significant extent upon the performance and active participation of these individuals and certain key employees. We Althoughmay we have enteredenter into employment agreements new employment agreement with Mr. Kohn and we may enter into employment agreements withKohn, Mr. Charuvastra and additional key employees in the future, we cannot guarantee that we will be successful in retaining the services of these individuals. If we were to lose any of these individuals, we may not be able to find appropriate replacements on a timely basis and our financial condition and results of operations could be materially adversely affected.

We currentlyrely relya on foreign third-party manufacturers,manufacturers and partscomponent suppliers,suppliers including thoselocated in China, Taiwan, Israel, and other countries. The U.S. government and persons involved in the Trump administration have made statements andhas taken certain actions that may leadresult to potential in changes to U.S. and international trade policies. In April 2025, the U.S. government announced tariffs on imports from China that may reach a tariffcombined total rate of up to 145%at least 145%, including the 20% tariff implemented in February 2025. Tariffs of 10% were also imposed on imports from China. Tariffs of 10were imposed on imports from both Taiwan and Israel. If maintained andor if extendedexpanded to otheradditional countries, tariffs,tariffs and the potential escalation of trade disputes with China and or other countries could pose a significant risk toincrease our business and could result in higher costcosts of revenuesrevenue and operating expenses. The extent and duration of any tariffstariffs, and the resultingtheir impact on economic general economic conditions and on our businessbusiness, areremain uncertain and depend on various factors, such as negotiations between the United States and China and/or other countries, the response of such countries, exemptions or exclusions that may be granted, availability.uncertain.

We have operations, suppliers and customers located in the U.S., China and Israel. Operations at our manufacturing facilities and our assembly subcontractors and those of our suppliers, as well as our other operations and those of our customers, are subject to disruption for a variety of reasons, including work stoppages, acts of war such as the United States’ and Israeli military actions taken against Iran and its reverberations, Russia’s invasion of Ukraine, terrorism, public health crises ,crises, fire, earthquake, volcanic eruptions, drought, storms, sea-level rise, extreme temperatures, energy shortages, spikes in energy demand or power blackouts, disruptions in the availability of water necessary for our operations (including, but not limited to, in areas of relatively high water stress), flooding or other natural disasters; and certain of these events may become more frequent or intense as ama result of climate change. Such disruption could in the future cause inefficiencies in our workforce and delays in, among other things, shipments of products to our customers, our ability to perform services requested by our customers, the ability of our suppliers to supply us components for our products in a timely manner, or the timely installation and acceptance of our products at customer sites. Such disruptions could also induce illiquidity for our customers and suppliers, further straining our supply chain and causing continued uncertainty in customers’ abilities to pay for the products they purchase and their demand for our products and services. In case of any disruptions in our supply chain, we may need to commit to increased purchases and provide longer lead times to secure critical components, which could increase inventory obsolescence risk.

Changes toin government incentives, emissions and fuel economy standardsstandards, and other regulatory policies may negatively impact the EV market and thus the demand for our products and services.

We are in a highly competitive EV charging services industry and there can be no assurance that we will be able to compete with many of our competitorscompetitors, which are larger and have greater financial resources.

We face strong competition from competitors in theother EV charging providers, servicessome industry,of includingwhom competitorsmay whobe couldable to duplicate aspects of our business model. Many of these competitors may have substantially greater financial, marketing marketing, and development resources and other capabilities than us. In addition, there are very few barriers to entry into in certain segments of the EV charging services market forare relatively ourlow. services.As Therea canresult, becompetitors no assurance, therefore, that any of our current and future competitors, many of whom may have far greater resources, will not independently develop services that are substantially equivalent or superior to ourtheir services. Therefore, an investment in our company is very risky and speculative due to the competitive environment in which we may operate.environment.

Our competitors may be able toalso provide customers with with different or greater capabilities or benefits than we can provide in areas such as technical qualifications, past contract performance, geographic presencepresence, and driver price. Further, many of ourpricing. Furthermore, competitors may be able to utilize substantiallywith greater resources and economies of scale tomay develop competing products and technologies, divert sales away from us by winningsecure broader contractscontracts, or hire awayrecruit our employees by offering more lucrativeattractive compensation packages.

If suppliers or subcontractors cannot provide their products or services on time or to our specifications, we may not be able to meet the demand for our productsproducts, and our delivery times times may be negatively affected. In addition, we cannot directly control the quality of the products and services provided by third parties. In order to expand revenue, we likely will need to identify and qualify new suppliers and subcontractors to supplant or replace existing suppliers and subcontractors, which may be a time-consuming and expensive process. In addition, any qualification of new suppliers may require customers of our products utilizing products and services from new suppliers and service providers to undergo a re-qualification process. Such circumstances likely would lead to disruptions in our production, increased manufacturing costs, delays in shipping to our customers, and/or increases in prices paid to third parties for products and services.

We are dependent on information technology in our operations operations, and the failure of such technology may adversely affect our business. Potential security breaches of our information technology systems, including cyber-attacks, could lead to liability or could damage our reputation and financial results.

We are an emerging electricpower vehicleelectronics (“EV”)company that electrificationdesign infrastructureand manufacture premium power solutions and premiumEV customcharging powerinfrastructure. products company, throughThrough our wholly owned subsidiaries Digital Power Corporation Corporation (‘DPC”) and TOG Technologies Inc. (“TOGT”), we design, develop, manufacture and sell highly engineered, feature-rich, 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.

Ø To date, our operations were financed principally through investments by Hyperscale and took advantage of Hyperscale’s size and purchasing power in procuring goods, technology, and services, including insurance, employee benefit support and audit, and other professional services. Though Hyperscale is now a controlling shareholder after the completion of the Acquisition,However, we may not have access to Hyperscale’s financial and other resources in the future.

For the year ended December 31, 2024,2025, we had increased revenues of $711,000$2,316,000 and increased gross profits of $1,227,000$1,197,000 compared to the year ended December 31, 2023,2024, primarily due to a new defense customer that contributed $1,107,000 new sales and, increased sales of $777,000$729,000 tofrom one of our higher marginexisting defense industry customers and $277,000$729,000 toincreased sales from two of our commercial and telecom customers, somewhat offset by decreased sales of $343,000$229,000 tofrom ourone of medical customers during the year ended December 31, 2024. Additionally,2025. ourThe cost of revenue decreased primarily due to a decreaseincrease in chargesgross for excess obsolete inventory of $583,000 inprofit during the year ended December 31, 2024.2025, was negatively impacted by increased costs for components sourced from China and related tariffs.

During the year ended December 31, 2024,2025, our net loss before income tax provision decreased $866,000$1,857,000 from the year ended December 31, 2023.2024. During the year ended December 31, 2024,2025, our gross profit increased $1,227,000$1,197,000 as described above, our legalselling and marketing expenses decreased $439,000 $238,000 and overhead allocation decreased $261,000.$213,000 and the write off EV related assets in the prior year of $763,000. Somewhat offsetting these increases, we recognized increased interest expense of $208,000,$317,000 and increased salaries and benefits of $320,000 and write offexpenses of EV related assets of $763,000.$156,000.

The accompanying 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 havehas not provided generated sufficient cash flows.flows from operations. We believeexpect that we willto continue to incurincurring operating and net losses each quarter until at least the time we beginachieve significant product deliveriesdeliveries. Historically, the Company has been funded primarily by its parent and that is expected to continue. Recently, the Company has also begun to receive funding from external investors. Despite these sources of ourcapital, products. Our inability to continue as a going concern could have a negative impact on the Company, including our ability to obtain needed financing. In view of these matters, there is substantial doubt about the ourCompany’s ability to continue as a going concern. The Company intends to finance its future development activities and its working capital needs largelyprimarily through the sale of equity securitiessecurities, withsupplemented someby additional funding from otherfinancing sources, including term notesnotes, until such time as fundsoperating providedcash by operationsflows are sufficient to fundsupport its working capital requirements. The consolidated financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets,assets or the amounts and classifications of liabilities that mightmay be necessary shouldif the Company beis unable to continue as a going concern. As of December 31,February 2024,28, 2026, the Company had cash and cash equivalents of $0.0approximately $0.4 million and negative working capital of $6.5approximately $8.6 million.

SupplyGlobal supply chain disruptions, including component component shortages, manufacturing interruptions, higherincreased materials,material and products’product costs, longerextended lead time,times, customers’customer orders’ order delays, and somecustomer order customers'cancellations, orders cancelationshave had significantand could continue to have a material adverse contributioneffect toon businessour business, financial condition, and results of operations. For example, supply chain challenges related to the global semiconductor chip shortages have impacted our customers and, as a result, impacted us. We depend on the timely supply of materials, servicesservices, and related products to meet the demands of our customers, which depends in part on the timely delivery of materials and services from our suppliers and contract manufacturers. Similarly,Global oursupply customerschain are facing similarconditions challenges which adversely affect their business resulting in pushingfiscal out2025 continued to be affected by geopolitical tensions, trade restrictions, export controls, inflationary pressures, and logistics disruptions. Although the deliveryglobal schedulesemiconductor shortage has improved compared to prior periods, shortages and extended lead times persist for certain components, including power semiconductors, specialized integrated circuits, and other critical electronic components. Increased demand driven by electrification, artificial intelligence infrastructure, and telecommunications expansion has further constrained supply. These conditions have made it more difficult for someus ordersto obtain sufficient quantities of materials on commercially reasonable terms, or at canceling some orders they have placed with.all.

Ongoing supply chain challenges, component shortages shortages, and heightenedincreased logistics costs have adversely affected our gross margins in fiscal 20232025 and prior periods, and we expect that our gross margins willmay continue to be adversely affected by increased material costs and freight and logisticlogistics expenses for the foreseeable future. future. Further, any sustained downturnslowdown in demand for electronic technologysystems used in our customers’ electronicproducts, systemsincluding in industrial, telecommunications, and electric vehicle markets, could adversely affect our business, financial condition, and EVsresults would alsoof harm our business.operations.

SuchThese adverse impacts on our supply chain could limit our ability to manufacture and selldeliver our products onin a timely and costcost-effective effective basismanner and adversely affect our gross margins, which could materially adversely affect our businessbusiness, financial condition, and results of operations. The measures and proactive steps we have taken to address the challenges posed by recent supply chain disruptions and revenue fluctuations affecting us and our customers.

For the Three Months Ended MarchJune 31,30, 2026, and 2025:

During the three-month period ended MarchJune 31,30, 2026, we had increased revenues of $144,000$1,754,000 and increased gross profits of $83,000$821,000 comparedwhich is fairly comparable to the three-month period ended MarchJune 31, 2025, primarily due to increased sales of approximately $344,000 from our commercial customers and a decrease of approximately $194,000 in defense industry customer sales, compared to the three-month period ended March 31,30, 2025.

During the three months ended MarchJune 31,30, 2026, our net loss increaseddecreased by $232,000$303,000 compared to the three-month period ended MarchJune 31,30, 2025, primarily due to approximatelyincreases $200,000of $140,000 in costsgross forprofits, the relocationreductions of ourapproximately office$139,000 andin warehouseoccupancy space,costs, a $62,000$59,000 increasebenefit from fair value adjustments, $44,000 decrease in sellingsoftware and marketing expenses and $89,000a $35,000 reduction in increaseengineering interest expense, and an increase of $63,000 in professional fees and outside service expense,costs, somewhat offset by an increase in gross profitinterest expenses of $83,000 and a $68,000 change in fair value of embedded derivatives$106,000 compared to the three-month period ended MarchJune 31,30, 2025.

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 advances from Hyperscale, 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 and classifications of liabilities that might be necessary should we be unable to continue as a going concern. As of MarchJune 31,30, 2026, we had cash and cash equivalents of $.0.1 million and negative working capital of $9$9.3 million.

Pursuant to the Agreement, the second tranche closed on January 9, 2026, the third tranche closed on January 30,2026, and the fourth and fifth tranches on March 27, 2026, and the sixth on June 5, 2026. These closings consisted of the issuance of Convertible Notes to SJC in the total principal face amount of $880,000, $1,100,000, for a total purchase price of $800,000. $1,000,000. The convertible notes accrue interest at 12% per annum and will mature one year from issuance of the notes. The convertible notes are convertible into shares of the Company’s common stock at any time at a conversion price of $0.035 per share, which shall not be adjusted for stock dividends, stock splits, stock combinations and other similar transactions.