What changed in this filing

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Item 1. Business

2021-04-15 compared with 2020-06-08 · 156 added, 151 removed, 68 unchanged (82% of the section changed)

As used in this Annual Report, the terms

“we,”

As used in this Annual Report, the terms “we,”

“us,”

1 unchanged sentence

and the “Company”

refer to DarkPulse Inc, Inc., a Delaware corporation.

refer to DarkPulse, Inc., a Delaware corporation.

Corporate Overview

2 unchanged sentences

or the "Company") is a technology-security company incorporated in 1989 as Klever Marketing, Inc ("Klever").

Its principal wholly-owned subsidiary, DarkPulse Technologies Inc.

("DPTI"), originally started as a technology spinout

from the University of New Brunswick, Fredericton, Canada.

Its principal

wholly-owned subsidiary, DarkPulse Technologies Inc.

("DPTI"), originally started as a technology spinout from the University

of New Brunswick, Fredericton, Canada.

DPI is comprised of two security platforms:

Fiber and Ultra-High

Sensitivity Sensors ("UHSS").

On April 27, 2018, Klever entered into

an Agreement and Plan of Merger (the “Merger Agreement”

or the “Merger”) involving Klever as the surviving

parent corporation and acquiring DPTI as its wholly-owned subsidiary.

On July 18, 2018, the parties closed the Merger Agreement,

as amended on July 7, 2018, and the name of the Company was subsequently changed to DarkPulse, Inc.

With the change of control

of the Company, the Merger was accounted for as a recapitalization in a manner similar to a reverse acquisition.

Fiber and Ultra-High Sensitivity Sensors ("UHSS").

On April 27, 2018, Klever entered into an Agreement

and Plan of Merger (the “Merger Agreement”

or the “Merger”) involving Klever as the surviving parent corporation

and acquiring DPTI as its wholly-owned subsidiary.

On July 18, 2018, the parties closed the Merger Agreement, as amended on July 7, 2018,

and the name of the Company was subsequently changed to DarkPulse, Inc.

With the change of control of the Company, the Merger was accounted

for as a recapitalization in a manner similar to a reverse acquisition.

On July 20, 2018, the Company filed a Certificate

of Amendment to its Certificate of Incorporation with the State of Delaware, changing the name of the Company to DarkPulse, Inc.

The Company filed a corporate action notification with the Financial Industry Regulatory Authority (FINRA), and the Company's ticker

symbol was changed to DPLS.

The Company’s security and monitoring

systems will initially be delivered in applications for border security, pipelines, the oil and gas industry and mine safety.

uses of fiber optic distributed sensor technology have been limited to quasi-static, long-term structural health monitoring due

to the time required to obtain the data and its poor precision.

The Company’s patented BOTDA dark-pulse sensor technology

allows for the monitoring of highly dynamic environments due to its greater resolution and accuracy.

of Amendment to its Certificate of Incorporation with the State of Delaware, changing the name of the Company to “DarkPulse, Inc.”

The Company filed a corporate action notification with the Financial Industry Regulatory Authority (FINRA), and the Company's ticker symbol

was changed to “DPLS.”

The Company’s security and monitoring systems

will be delivered in applications for critical infrastructure/ key resources such as but not limited to border security, pipelines, the

oil and gas industry and mine safety.

Current uses of fiber optic distributed sensor technology have been limited to quasi-static, long-term

structural health monitoring due to the time required to obtain the data and its poor precision.

The Company’s patented BOTDA dark-pulse

sensor technology allows for the monitoring of highly dynamic environments due to its greater resolution and accuracy.

In December 2010 DPTI entered into an Assignment

Agreement with the University of New Brunswick, Canada (“the University”), pursuant to which the University sold, transferred,

and assigned to the Company certain patents related to the University’s BOTDA dark-pulse technology (the "Patents")

in exchange for the issuance of a debenture to the University in the amount of C$1,500,000 (Canadian dollars).

Agreement with the University of New Brunswick, Canada (the “University”), pursuant to which the University sold, transferred,

and assigned to the Company certain patents related to the University’s BOTDA dark-pulse technology (the "Patents") in

exchange for the issuance of a debenture to the University in the amount of C$1,500,000 (Canadian dollars).

In April 2017, DPTI

entered into an Intellectual Property agreement with the University in exchange for the issuance of a replacement debenture to

the University in the amount of US$1,491,923 (the “Debenture”).

The Patents and the Debenture were initially recorded

in the Company’s accounts at $1,491,923, based upon the exchange rate between the US dollar and the Canadian dollar on December

16, 2010, the date of the original debenture.

In addition to the repayment of principal and interest, the Debenture requires DPTI

to pay the University a two percent royalty on sales of any and all products or services which incorporate the Patents for a period

of five years commencing on April 24, 2018, as well as to reimburse the University for its patent-related costs.

issued a replacement debenture to the University in the amount of US$1,491,923 (the “Debenture”).

The Patents and the

Debenture were initially recorded in the Company’s accounts at $1,491,923, based upon the exchange rate between the US dollar and

the Canadian dollar on December 16, 2010, the date of the original debenture.

In addition to the repayment of principal and interest,

the Debenture requires DPTI to pay the University a two percent royalty on sales of any and all products or services which incorporate

the Patents for a period of five years commencing on April 24, 2018, as well as to reimburse the University for its patent-related costs.

The Company offers a full suite of engineering,

installation and security management solutions to industries and governments.

Coupled with our patented BOTDA dark-pulse technology

(the “DarkPulse Technology”), DarkPulse provides its customers a comprehensive data stream of critical metrics for

assessing the health and security of their infrastructure.

Our comprehensive system provides for rapid, precise analysis and responsive

activities predetermined by the end-user customer.

Historically, distributed sensor systems

have been too costly, slow and limited in their capabilities to attain widespread use.

In addition, Brillouin-based sensors have

been plagued with temperature and strain cross-sensitivity, i.e.

the inability to distinguish between temperature and strain change

along the same fiber.

The loss of spatial resolution with an increase in fiber length has also limited the use of distributed sensor

Due to these shortcomings, existing technologies are unable to succeed within today’s dynamic environments, and

needs for more advanced sensor technologies have remained unsatisfied.

By contrast to existing technologies, the

DarkPulse Technology is a distributed-fiber sensing system, based on dark-pulse Brillouin scattering, which reports in real-time

on conditions such as temperature, stress, strain and load, initially for pipeline and mining installations.

DarkPulse Technology’s differentiators

from and advantages over existing technologies:

Coupled with our patented BOTDA dark-pulse technology (the

“DarkPulse Technology”), DarkPulse provides its customers a comprehensive data stream of critical metrics for assessing the

health and security of their infrastructure.

Our comprehensive system provides for rapid, precise analysis and responsive activities predetermined

by the end-user customer.

Historically, distributed sensor systems have

been too costly, slow and limited in their capabilities to attain widespread use.

In addition, Brillouin-based sensors have been plagued

with temperature and strain cross-sensitivity, i.e.

the inability to distinguish between temperature and strain change along the same

The loss of spatial resolution with an increase in fiber length has also limited the use of distributed sensor systems.

these shortcomings, existing technologies are unable to succeed within today’s dynamic environments, and needs for more advanced

sensor technologies have remained unsatisfied.

By contrast to existing technologies, the DarkPulse

Technology is a distributed-fiber sensing system, based on dark-pulse Brillouin scattering, which reports in real-time on conditions

such as temperature, stress, strain corrosion and structural health monitoring of Critical Infrastructure/Key Resources including Bridges,

Buildings, Roadways pipelines and mining installations.

DarkPulse Technology’s differentiators from

and advantages over existing technologies:

Real-time Reporting:

8 unchanged sentences

Capable of integrating with existing systems

Central station monitoring

We believe that these key advantages should

allow the Company not only to enter existing markets, but more importantly, to open new market opportunities with new applications.

The Company intends to leverage new applications to target clients that have been unable to make use of distributed fiber optic

technology to date.

Central station monitoring/cloud based GUI

We believe that these key advantages should allow

the Company not only to enter existing markets, but more importantly, to open new market opportunities with new applications.

intends to leverage new applications to target clients that have been unable to make use of distributed fiber optic technology to date.

Revenue Generation

We intend to generate revenue from the

following sources:

We intend to generate revenue from the following

Hardware equipment sales, warranties, service contracts and licensing to large enterprises and governments.

5 unchanged sentences

Recurring subscription fees paid by enterprise/government users who subscribe to bundled service offerings.

Current uses of fiber optic distributed

sensor technology have been limited to quasi-static, long-term structural health monitoring due to the time required to obtain

the data and its poor precision.

Our DarkPulse Technology allows for the monitoring of highly dynamic environments due to its magnitude

of increased resolution and greater accuracy.

The resulting high speed, real-time monitoring capabilities of our DarkPulse Technology

should satisfy a broad range of existing and emerging requirements.

Use of the DarkPulse Technology by our customers should result

in lower production costs with increased sensing capabilities that can integrate with existing technology and be upgraded cost

Due to the characteristics of the fiber

used in fiber optic sensing, the uses of our DarkPulse Technology are wide ranging.

Optical fiber is hard-wearing, which allows

it to be used in environments where other technologies fail (for example, at temperatures ranging from -40°C to 300°C and

Additionally DarkPulse Technology’s sensors allow for live sensing due to the speed at which the analysis takes

The Company’s management team is

continually identifying markets in which our DarkPulse Technology may be readily applied.

Once these markets (as described below)

have been addressed, our DarkPulse Technology may be adapted and applied to new markets.

Current uses of fiber optic distributed sensor

technology have been limited to quasi-static, long-term structural health monitoring due to the time required to obtain the data and its

poor precision.

Our DarkPulse Technology allows for the monitoring of highly dynamic environments due to its magnitude of increased resolution

and greater accuracy.

The resulting high speed, real-time monitoring capabilities of our DarkPulse Technology should satisfy a broad range

of existing and emerging requirements.

Use of the DarkPulse Technology by our customers should result in lower production costs with increased

sensing capabilities that can integrate with existing technology and be upgraded cost effectively.

Due to the characteristics of the fiber used in

fiber optic sensing, the uses of our DarkPulse Technology are wide ranging.

Optical fiber is hard-wearing, which allows it to be used

in environments where other technologies fail (for example, at temperatures ranging from -40°C to 300°C and 1000psi).

DarkPulse Technology’s sensors allow for live sensing due to the speed at which the analysis takes place.

The Company’s management team is continually

identifying markets in which our DarkPulse Technology may be readily applied.

Once these markets (as described below) have been addressed,

our DarkPulse Technology may be adapted and applied to new markets.

Structural Monitoring

24 unchanged sentences

Sea defense monitoring

We utilize our DarkPulse Technology as

the foundation of our ongoing marketing initiatives.

Most notably, the greater magnitude of increased capabilities DarkPulse Technology

versus existing bright-pulsing technologies.

Existing bright-pulse Brillouin-based sensors have historically been plagued with

temperature and strain cross-sensitivity, i.e.

the inability to distinguish between temperature and strain change along the same

The loss of spatial resolution with an increase in fiber length is also a limiting factor for the use of distributed sensor

Because of these shortcomings, existing bright-pulse Brillouin-based technologies are unable to succeed within today’s

dynamic environments, which coincides with our DarkPulse Technology’s increased capabilities over bright-pulse systems.

marketing initiatives include daily, broad-based social media engagement;

We utilize our DarkPulse Technology as the foundation

of our ongoing marketing initiatives.

Most notably, the greater magnitude of increased capabilities DarkPulse Technology versus existing

bright-pulsing technologies.

Existing bright-pulse Brillouin-based sensors have historically been plagued with temperature and strain

cross-sensitivity, i.e.

the inability to distinguish between temperature and strain change along the same fiber.

The loss of spatial resolution

with an increase in fiber length is also a limiting factor for the use of distributed sensor systems.

Because of these shortcomings, existing

bright-pulse Brillouin-based technologies are unable to succeed within today’s dynamic environments, which coincides with our DarkPulse

Technology’s increased capabilities over bright-pulse systems.

Our marketing initiatives include daily, broad-based social media

management of our website;

email campaigns, and other

ongoing initiatives designed to increase awareness of our products and services and drive conversion and adoption rates.

email campaigns, and other ongoing initiatives designed to increase awareness of our products and

services and drive conversion and adoption rates.

The overall optical sensing market is projected

to reach USD $3.47 billion by 2023 from USD $1.13 billion in 2016, at a CAGR of 15.47% between 2017 and 2023.

Company is active in the optical sensing market, including Oil & Gas pipeline health monitoring, National Border Security applications,

The Company is active in the optical sensing market, including Oil & Gas pipeline health monitoring, National Border Security applications,

and the mining industry.

2 unchanged sentences

Hewlett-Packard, and Yokogawa, which collectively account for a significant portion of industry sales.

These companies, as well

as others, have numerous differences in feature sets and functionality, but all share certain basic attributes:

a bright-pulse

technology as the core of their systems architecture.

An architecture designed using bright-pulsing technology has limited sensing

capabilities and resolutions of one meter allowing for mostly long-term quasi-static deployments.

[1] Optical Sensing

Market by Industry (Aerospace & Defense, Utilities, Oil & Gas, Medical, Construction, and Consumer Electronics), Application,

Method, and Geography - Global Forecast to 202\3 (https://www.marketsandmarkets.com/Market-Reports/optical-sensing-market-197592599.html?gclid=EAIaIQobChMIzrfanf7P4QIVA0GGCh3jlw7rEAAYASAAEgI9bvD_BwE)

However, the Company utilizes its DarkPulse

Technology allowing for multiple applications into those markets unavailable to companies using bright-pulse technology.

many of the companies using bright-pulse technology have attempted to incorporate various sensing techniques into a legacy technology,

none have been able to offer the order of magnitude resolutions offered by our DarkPulse Technology.

This magnitude in resolution

coupled with the DarkPulse Technology’s increased data collection speeds allows our DarkPulse Technology to be installed

into areas of the market that our competitors cannot.

The Company’s future financial condition and operating results depend

on its ability to provide a high-quality solution as well as increased distribution of the solutions in each of the markets in

which it competes or intends to compete within.

markets for the Company’s products and services are highly competitive and the Company is confronted by aggressive competition.

These markets are characterized by frequent product introductions and rapid technological advances.

The Company’s financial

condition and operating results can be adversely affected by these and other industry-wide downward pressures on gross margins.

Principal competitive factors important to the Company include price, product features, relative price and performance, product

quality and reliability, marketing and distribution capability, service and support and corporate reputation.

These companies, as well as others,

have numerous differences in feature sets and functionality, but all share certain basic attributes:

a bright-pulse technology as the

core of their systems architecture.

An architecture designed using bright-pulsing technology has limited sensing capabilities and resolutions

of one meter allowing for mostly long-term quasi-static deployments.

However, the Company utilizes its DarkPulse Technology

allowing for multiple applications into those markets unavailable to companies using bright-pulse technology.

While many of the companies

using bright-pulse technology have attempted to incorporate various sensing techniques into a legacy technology, none have been able to

offer the order of magnitude resolutions offered by our DarkPulse Technology.

This magnitude in resolution coupled with the DarkPulse

Technology’s increased data collection speeds allows our DarkPulse Technology to be installed into areas of the market that our

competitors cannot.

The Company’s future financial condition and operating results depend on its ability to provide a high-quality

solution as well as increased distribution of the solutions in each of the markets in which it competes or intends to compete within.

for the Company’s products and services are highly competitive and the Company is confronted by aggressive competition.

These markets

are characterized by frequent product introductions and rapid technological advances.

The Company’s financial condition and operating

results can be adversely affected by these and other industry-wide downward pressures on gross margins.

Principal competitive factors

important to the Company include price, product features, relative price and performance, product quality and reliability, marketing and

distribution capability, service and support and corporate reputation.

Intellectual Property

Our policy is to protect our technology

by, among other things, patents, trade secret protection and copyrights.

We have taken security measures to protect our trade secrets

and proprietary know-how, to the greatest extent possible.

Our means of protecting our proprietary rights may not prove to be adequate

and our competitors may independently develop technology or products that are similar to ours or that compete with ours.

secret, patent and copyright laws afford only certain protections for our technology and products.

The laws of many countries do

not protect our proprietary rights to as great an extent as do the laws of the United States.

Despite our efforts to protect our

proprietary rights, unauthorized parties may attempt to obtain and use information that we regard as proprietary.

Third parties

may also design around our proprietary rights, which may render our protected technology and products less valuable, if the design

around is favorably received in the marketplace.

Our policy is to protect our technology by, among

other things, patents, trade secret protection and copyrights.

We have taken security measures to protect our trade secrets and proprietary

know-how, to the greatest extent possible.

Our means of protecting our proprietary rights may not prove to be adequate and our competitors

may independently develop technology or products that are similar to ours or that compete with ours.

Trade secret, patent and copyright

laws afford only certain protections for our technology and products.

The laws of many countries do not protect our proprietary rights

to as great an extent as do the laws of the United States.

Despite our efforts to protect our proprietary rights, unauthorized parties

may attempt to obtain and use information that we regard as proprietary.

Third parties may also design around our proprietary rights,

which may render our protected technology and products less valuable, if the design around is favorably received in the marketplace.

In addition, any of our products or technology

covered by patents or other intellectual property rights, could cause us to be subject to various legal actions.

Litigation may

be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of

the proprietary rights of others, or to defend against claims of infringement, invalidity, misappropriation, or other claims.

Research and Development

We incurred $0 and $91,301 of research

and development expenses during the fiscal years ended December 31, 2019 and 2018 respectively.

These funds were primarily used

for development of our Erebos BOTDA hardware.

We currently rely on a full-time, dedicated,

external team of experienced professionals for the coding and maintenance of our products.

We believe we have mitigated the associated

risks of managing an external team of software and engineering development professionals by incorporating internal management and

oversight, as well as appropriate systems, protocols, controls, and procedures and ensuring that we have access to additional qualified

professionals to provide like or complementary services.

Litigation may be necessary

to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights

of others, or to defend against claims of infringement, invalidity, misappropriation, or other claims.

Through DPTI’s April 2017 Intellectual Property

agreement with the University, DPTI was sold, transferred, and assigned U.S.

7,245,790, 8,643,829, and 9,534,965, each of

which are related to our BOTDA dark-pulse technology.

In addition, Canadian Patent No.

2,502,275 was also assigned.

_______________________

Sensing Market by Industry (Aerospace & Defense, Utilities, Oil & Gas, Medical, Construction, and Consumer Electronics), Application,

Method, and Geography - Global Forecast to 202\3 (https://www.marketsandmarkets.com/Market-Reports/optical-sensing-market-197592599.html?gclid=EAIaIQobChMIzrfanf7P4QIVA0GGCh3jlw7rEAAYASAAEgI9bvD_BwE)

We currently rely on a full-time, dedicated, external

team of experienced professionals for the coding and maintenance of our products.

We believe we have mitigated the associated risks

of managing an external team of software and engineering development professionals by incorporating internal management and oversight,

as well as appropriate systems, protocols, controls, and procedures and ensuring that we have access to additional qualified professionals

to provide like or complementary services.

Government Regulation

Government regulation is not of significant

concern for our business nor is government regulation expected to become an impediment to the business in the near- or mid-term

as management is currently unaware of any planned or anticipated government regulation that would have a material impact on our

Our management believes it currently possesses all requisite authority to conduct our business as described in this Annual

Government regulation is not of significant concern

for our business nor is government regulation expected to become an impediment to the business in the near- or mid-term as management

is currently unaware of any planned or anticipated government regulation that would have a material impact on our business.

Our management

believes it currently possesses all requisite authority to conduct our business as described in this Annual Report.

As of April 10, 2021, we had one full-time employee

and no part-time employees.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business