DEF 14A: TurnOnGreen Seeks Shareholder Approval for Reverse Stock Split and Director Elections at Upcoming Annual Meeting

TurnOnGreen, Inc. is holding its annual shareholder meeting on July 19, 2024, to vote on key proposals including a reverse stock split, director elections, and executive compensation.

Summary

• TurnOnGreen, Inc. will hold its Annual Meeting of Shareholders virtually on July 19, 2024, at 12:00 P.M. Eastern Time.
• Shareholders will vote on several proposals, including the election of three directors, ratification of the appointment of Marcum LLP as the company's independent auditor, and an advisory vote on executive compensation.
• A key proposal is an amendment to the Articles of Incorporation to effect a reverse stock split of the common stock at a ratio between one-for-fifty and one-for-five hundred, to be determined by the Board of Directors prior to July 18, 2025.
• The Board is also seeking approval to adjourn the meeting if necessary to solicit additional proxy votes.
• The record date for determining shareholders eligible to vote is June 20, 2024, and proxy materials will be mailed around July 3, 2024.
• Shareholders can vote by mail, telephone, or online, and proxies must be received by 11:59 A.M. Eastern Time on July 19, 2024.

Sentiment

Score: 5

Explanation: The document presents a mix of positive and negative aspects. While there are growth opportunities and strategic initiatives, there are also financial challenges and risks associated with the company's operations and industry.

Positives

• The proposed reverse stock split aims to make the company's stock more attractive to a broader range of investors.
• The virtual meeting format is expected to provide greater access and flexibility for shareholders to attend.
• The Board is actively seeking shareholder input on executive compensation and its frequency.
• The company has adopted a Code of Ethics for Executive Officers, Directors and Associates to promote honest and ethical conduct.

Negatives

• The company's Board has determined that none of the directors meets the independence standards of the SEC or Nasdaq Marketplace Rules.
• The company previously failed to file one Form 4 for each of the three Named Executive Officers.
• The company has a history of related party transactions with Ault Alliance, Inc., which may raise concerns about potential conflicts of interest.

Risks

• The reverse stock split may not result in the intended increase in stock price, and the total market capitalization could decrease.
• The company's reliance on Ault Alliance, Inc. for certain services and capital contributions creates a dependency that could be detrimental if Ault's financial situation changes.
• The company faces intense competition in the EV charging market, and larger competitors may have greater financial resources.
• The company has identified material weaknesses in its internal control over financial reporting, which could affect the reliability of its financial statements.

Future Outlook

The company aims to broaden its product and technology base, build on industry relationships, and enhance its ability to penetrate new markets through strategic acquisitions and investments.

Industry Context

The document highlights TurnOnGreen's efforts to navigate the rapidly evolving EV charging market, emphasizing the need for infrastructure development to support the increasing adoption of electric vehicles.

Comparison to Industry Standards

• The document mentions competitors in the EV charging space such as Tesla, ChargePoint, Blink Charging, EVgo, Electrify America, and Sema Connect.
• It also references industry reports and government initiatives related to EV adoption and charging infrastructure needs, such as the Department of Energy's estimate of 28 million EV charging ports needed by 2030.
• The document does not provide a direct comparison of TurnOnGreen's performance against these industry benchmarks.

Legal Proceedings

• The company is involved in litigation arising from matters in the ordinary course of business.
• A final award was entered against the Company and in favor of Mr. Gordon in the amount of $1.1 million inclusive of interest, legal fees, administrative fees and expenses.

Related Party Transactions

• Ault provides human resources, accounting and other services to the Company, which are included as allocations of these expenses.
• Ault has made capital contributions to the Company of $576,000 and $2,539,000 for general corporate purposes.
• The Company recognized $14,000 and $27,000 in revenue in the years ended December 31, 2023 and 2022, respectively, from sales to another subsidiary of Ault or businesses that Ault holds an investment in.
• Related party notes and advances payable were used for working capital purposes and on December 31, 2023 and 2022, were comprised of the following: Interest rate Due date December 31, 2023 December 31, 2022 Ault advance payable 10% $2,407,000 $Chief Executive Officer 14% Default 51,000 25,000 Non-officer June and September 2023 advance payable 14,000 13,000 Officer December 2022 advance payable 14,000 Total related party notes and advances payable $2,472,000 $52,000

Stakeholder Impact

• Shareholders will be impacted by the outcome of the vote on the reverse stock split and other proposals.
• Employees may be affected by changes in executive compensation and the company's overall financial performance.
• Customers will be impacted by the company's ability to provide reliable and innovative EV charging solutions.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The Board of Directors will determine the exact ratio for the reverse stock split, if approved.
• The company will continue to monitor and adapt to technological changes in the industry.

Key Dates

Keywords

reverse stock split, annual meeting, proxy statement, director election, executive compensation, Marcum LLP, auditor ratification, virtual meeting, TurnOnGreen, shareholders