What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-04-15 compared with 2020-06-08 · 151 added, 212 removed, 42 unchanged (90% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY,

RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED

STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the OTC Markets

under the trading symbol DPLS.

The Company has 3 billion authorized common shares.

The following table sets forth the high

and low bid of the Company’s Common Stock for each quarter within the past two years.

The information below was provided

from http://www.nasdaq.com/ and reflects the highest and lowest closing prices during each quarter.

under the trading symbol “DPLS.”

The Company has 20,000,000,000 authorized common shares.

The following table sets forth the high and low

bid of the Company’s Common Stock for each quarter within the past two completed fiscal years and the current year.

The information

below was provided from the OTC Markets and reflects the highest and lowest closing prices during each quarter.

First Quarter

Second Quarter

5 unchanged sentences

Fourth Quarter

The number of shareholders of record of

the Company's common stock as of May 29, 2020 was approximately 936.

The Company has not paid any cash dividends

to date and does not anticipate paying cash dividends in the foreseeable future.

It is the present intention of management to utilize

any available funds for the development of the Company's business.

The number of shareholders of record of the Company's

common stock as of April 10, 2021 was approximately 923.

The Company has not paid any cash dividends to

date and does not anticipate paying cash dividends in the foreseeable future.

It is the present intention of management to utilize any

available funds for the development of the Company's business.

Recent Sales of Unregistered Securities.

On July 17, 2018, the Company entered into

a securities purchase agreement with Carebourn Capital L.P., issuing a convertible promissory note in the aggregate principal amount

The note may be converted into the Company's common stock at a conversion price equal to 60% of the average of the

three lowest trading prices of the Company's common stock during the 20 prior trading days.

On July 27, 2018, The Company entered into

a securities purchase agreement with Carebourn, issuing a convertible promissory note in the aggregate principal amount of $201,000.

The note may be converted into the Company's common stock at a conversion price equal to 60% of the average of the three lowest

trading prices of the Company's common stock during the 20 prior trading days.

On August 20, 2018, the Company entered

into a securities purchase agreement with More Capital LLC, issuing a convertible promissory note in the aggregate principal amount

The note may be converted into common shares of the Company's common stock at a conversion price equal to 60% of the

average of the three lowest trading prices of the Company's common stock during the 20 prior trading days.

On September 24, 2018, the Company entered

into a securities purchase agreement with Auctus Fund, LLC, issuing a convertible promissory note in the aggregate principal amount

The note may be converted into common shares of the Company's common stock at a conversion price equal to 70% of

the lowest trading price of the Company's common stock during the 20 prior trading days.

Due to an outstanding balance of the

convertible promissory note at maturity, the interest rate has increased to 24% from 8%.

On September 25, 2018, the Company entered

into a securities purchase agreement with EMA Financial, LLC, issuing a convertible promissory note in the aggregate principal

amount of $100,000.

The note may be converted into common shares of the Company's common stock at a conversion price equal to

the lower of current market price, $0.25, or 70% of the lowest trading price of the Company's common stock during the 20 prior

trading days.

Due to an outstanding balance of the convertible promissory note at maturity, the conversion price is now 55%, down

from 70%, and the interest rate has increased to 24% from 8%.

September 24, 2018, the Company entered into a securities purchase agreement with FirstFire Global Opportunities Fund LLC,

issuing a convertible promissory note in the aggregate principal amount of $247,500.

The note may be converted into common

shares of the Company's common stock at a conversion price equal to the lower of $0.25, or 70% of the lowest trading price of

the Company's common stock during the 20 prior trading days.

On January 10, 2019, the Company

entered into a Securities Purchase Agreement with GS Capital Partners, LLC, issuing a convertible redeemable note in the

principal amount of $65,000.

The note may be converted into common shares of the

Company's common stock at a conversion price equal to the lower of $0.25, or 70% of the lowest trading price of the Company's

common stock during the 20 prior trading days.

On February 12, 2019, the Company entered

into a securities purchase agreement with Crown Bridge Partners, LLC, issuing a convertible promissory note in the aggregate principal

amount of up to $35,000.

The note may be converted into common shares of the Company's common stock at a conversion price equal

70% of the lowest trading price of the Company's common stock during the 20 prior trading days.

On April 23, 2019, the Company entered

into a securities purchase agreement with GS Capital Partners, LLC, ("GS Capital") issuing to GS Capital a convertible

promissory note in the aggregate principal amount of $40,000 with a $2,000 original issue discount and $2,000 in transactional

expenses due to GS Capital and its counsel.

The note bears interest at 8% per annum and may be converted into common shares of

the Company's common stock at a conversion price equal to 70% of the average of the three lowest trading prices of the Company's

common stock during the 20 prior trading days.

As of the date the consolidated financial statements were available for issuance,

DPI received $36,000 net cash.

On May 3, 2019, the Company entered into

On September 2, 2020, the Company entered into

a securities purchase agreement with Geneva Roth Remark Holdings, Inc.

(“Geneva”) issuing to Geneva a convertible promissory

note in the aggregate principal amount of $64,000 with a $6,000 original issue discount and $2,800 in transactional expenses due

to Geneva and its counsel.

The note bears interest at 9% per annum and may be converted into common shares of the Company's common

stock at a conversion price equal to 70% of the lowest trading price of the Company's common stock during the 20 prior trading

The Company received $55,200 net cash.

Compliance with Section 16(a) of the Securities Exchange

Section 16(a) of the Exchange Act requires

the Company’s directors, executive officers, and persons who own more than 10% of a registered class of the Company’s

equity securities, to file with the Commission reports regarding initial ownership and changes in ownership.

Directors, executive

officers, and greater than 10% stockholders are required by the Commission to furnish the Company with copies of all Section 16(a)

forms they file.

The Company is not aware of any common

stock transactions during the year ended December 31, 2019 for which either Forms 4 or Forms 5 were required to be filed.

note in the aggregate principal amount of $47,850 with a $4,350 original issue discount and $3,500 in transactional expenses due to Geneva

and its counsel.

The note bears interest at 9% per annum and may be converted into common shares of the Company's common stock at a conversion

price equal to 70% of the lowest trading price of the Company's common stock during the 20 prior trading days.

The Company received $40,000

This note was issued without registration under the Securities Act of 1933, as amended, by reason of the exemption from registration

afforded by the provisions of Section 4(a)(2) thereof, and Rule 506(b) promulgated thereunder, as a transaction by an issuer not involving

any public offering.

No selling commissions were paid in connection with the issuance of the note.

Equity Compensation Plan Information

The following

table shows information with respect to each equity compensation plan under which our common stock is authorized for issuance through

December 31, 2019.

EQUITY COMPENSATION

PLAN INFORMATION

Plan category

Number of securities

to be issued upon

outstanding options,

warrants and rights

Weighted average

exercise price of

outstanding options,

warrants and rights

Number of securities

remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)

Equity compensation plans approved by security holders

As of December 31, 2020, there were no securities

authorized for issuance under equity compensation plans.

Issuer Purchases of Equity Securities

4 unchanged sentences

DarkPulse, Inc.

(the “Company”)

is a technology-security company created to develop, market and distribute a full suite of engineering, installation and security

management solutions to industries and governments and has not commenced its planned principal operations.

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.

The Company’s activities since inception

have consisted principally of developing various solutions which the Company is currently testing, obtaining patents and trademarks

related to its technology, and raising capital.

The Company’s activities are subject to significant risks and uncertainties

including failing to secure additional funding needed to finalize development of the Company’s technology and to commercialize

its product in a profitable manner.

Going Concern Uncertainty

As shown in the accompanying financial

statements, the Company generated net losses of $1,825,469 and $3,318,059 during the years ended December 31, 2019 and 2018, respectively.

The Company did not generate any revenue from product sales during the years ended December 31, 2019 and 2018.

As of December

31, 2019, the Company’s current liabilities exceeded its current assets by $3,213,915.

As of December 31, 2019, the

Company had $1,210 of cash.

The Company will require additional funding

during the next twelve months to finance the growth of its current operations and achieve its strategic objectives.

These factors,

as well as the uncertain conditions that the Company faces relative to capital raising activities, create substantial doubt as

to the Company’s ability to continue as a going concern.

The Company is seeking to raise additional capital principally through

private placement offerings and is targeting strategic partners in an effort to finalize the development of its products and begin

generating revenues.

The ability of the Company to continue as a going concern is dependent upon the success of future capital

offerings or alternative financing arrangements and expansion of its operations.

The accompanying financial statements do not include

any adjustments that might be necessary should the Company be unable to continue as a going concern.

Management is actively pursuing

additional sources of financing sufficient to generate enough cash flow to fund its operations through calendar year 2020.

management cannot make any assurances that such financing will be secured.

(the “Company”) is

a technology-security company created to develop, market and distribute a full suite of engineering, installation and security management

solutions to industries and governments and has not commenced its planned principal operations.

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.

The Company’s activities since inception have consisted principally of developing

various solutions which the Company is currently testing, obtaining patents and trademarks related to its technology, and raising capital.

The Company’s activities are subject to significant risks and uncertainties including failing to secure additional funding needed

to finalize development of the Company’s technology and to commercialize its product in a profitable manner.

Recent Events

On January 4, 2021, the Company entered into a

securities purchase agreement with Geneva Roth Remark Holdings, Inc.

(“Geneva”) issuing to Geneva a convertible promissory

note in the aggregate principal amount of $42,350 with a $3,850 original issue discount and $3,500 in transactional expenses due to Geneva

and its counsel.

The note bears interest at 8% per annum and may be converted into common shares of the Company's common stock at a conversion

price equal to 70% of the lowest trading price of the Company's common stock during the 20 prior trading days.

The Company received $35,000

On February 3, 2021, the Company entered into

a securities purchase agreement with Geneva Roth Remark Holdings, Inc.

(“Geneva”) issuing to Geneva a convertible promissory

note in the aggregate principal amount of $94,200 with a $15,700 original issue discount and $3,500 in transactional expenses due to Geneva

and its counsel.

The note bears interest at 4.5% per annum and may be converted into common shares of the Company's common stock at a

conversion price equal to 81% of the lowest 2 trading prices of the Company's common stock during the 10 prior trading days.

received $75,000 net cash.

On February 18, 2021, the Company entered into a securities purchase

agreement with Geneva Roth Remark Holdings, Inc.

(“Geneva”) issuing to Geneva a convertible promissory note in the aggregate

principal amount of $76,200 with a $12,700 original issue discount and $3,500 in transactional expenses due to Geneva and its counsel.

The note bears interest at 4.5% per annum and may be converted into common shares of the Company's common stock at a conversion price

equal to 81% of the lowest 2 trading prices of the Company's common stock during the 10 prior trading days.

The Company received $60,000

Going Concern

The Company generated net losses of $275,841 and

$1,825,469 during the years ended December 31, 2020 and 2019, respectively.

The Company did not generate any revenue from product sales

during the years ended December 31, 2020 and 2019, respectively.

As of December 31, 2020, the Company’s current liabilities exceeded

its current assets by $3,241,567.

As of December 31, 2020, the Company had $337 of cash.

The Company will require additional funding during

the next twelve months to finance the growth of its current operations and achieve its strategic objectives.

These factors, as well as

the uncertain conditions that the Company faces relative to capital raising activities, create substantial doubt as to the Company’s

ability to continue as a going concern.

The Company is seeking to raise additional capital principally through private placement offerings

and is targeting strategic partners in an effort to finalize the development of its products and begin generating revenues.

of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements

and expansion of its operations.

The accompanying financial statements do not include any adjustments that might be necessary should the

Company be unable to continue as a going concern.

Management is actively pursuing additional sources of financing sufficient to generate

enough cash flow to fund its operations through calendar year 2021.

However, management cannot make any assurances that such financing

will be secured.

Results of Operations

To date, the Company has not generated

any operating revenues.

To date, the Company has not generated any operating

Operating Expenses

1 unchanged sentence

31, 2020 decreased by $287,497 or 52.6% to $258,739 from $546,236 for the year ended December 31, 2019.

The primary reason for the overall

decrease in general and administrative expense in the current year is a decrease in payroll and compensation of $168,758.

General and administrative expenses for the year

ended December 31, 2020 decreased by $33,824 or 18.5% to $149,259 from $183,083 for the year ended December 31, 2019.

The primary reason

for the overall decrease in general and administrative expense in the current year is a decrease in payroll and compensation, including

stock based compensation.

General and administrative expenses for

the year ended December 31, 2019 decreased by $36,573 or 16.7% to $183,083 from $219,656 for the year ended December 31, 2018.

The primary reason for the overall decrease in general and administrative expense in the current year is a decrease in professional

Payroll and compensation expenses for

the year ended December 31, 2019 decreased to $168,945 from $2,056,144 or 91.8% for the year ended December 31, 2018.

reason for the overall decrease in payroll and compensation expense in the current year is a decrease in employees and a reduction

in stock based compensation.

Research and development expenses for the

year ended December 31, 2019 decreased by $91,301 to $0 for the year ended December 31, 2018.

for the overall decrease in general and administrative expense in the current year is a decrease in professional fees.

Payroll and compensation expenses for the year

ended December 31, 2020 decreased to $187 from $168,945 or 99.9% for the year ended December 31, 2019.

The primary reason for the overall

decrease in research and development in the current year is a decrease in development of a new application using our patented technology.

decrease in payroll and compensation expense in the current year is a decrease in employees and a reduction in stock based compensation.

Amortization expenses for the years ended December

31, 2020 and 2019 remained constant at $51,028.

Legal expenses for the year ended December 31,

31, 2019 increased $118,281 from $0 for the year ended December 31, 2018.

2020 decreased $50,415 from $118,281 for the year ended December 31, 2019.

The increase is related to ongoing litigation as described

in more detail in Note 12 of the attached financial statements.

Debt transaction expenses for the year

ended December 31, 2019 decreased $85,785 or 77.5% from $110,685 to $24,900.

The primary reason for the decrease is related to

the decrease in convertible notes entered into during 2019.

Debt transaction expenses for the year ended December

31, 2020 decreased $17,050 or 68.5% from $24,900 to $7,850.

The primary reason for the decrease is related to the decrease in convertible

notes entered into during 2020.

Other Income (Expense)

Total other expenses totaled $1,279,233 and $779,434 for the

years ended December 31, 2019 and 2018, respectively.

The $499,799 increase is primarily attributed to the increase recognized

due to changes in the fair value of derivative instruments, exchange rate variances and interest expense.

Management completed an impairment analysis

of the Company’s capitalized software development costs as of December 31, 2018 as required by generally accepted accounting

As a result, the Company recorded an impairment expense of $294,788 for the year ended December 31, 2018.

No impairment

expense was recorded for the year ended December 31, 2019.

As a result, net loss for the year ended December 31, 2019

decreased by $1,492,590 to $1,825,469 from $3,318,059 for the year ended December 31, 2018.

Total other expenses totaled $17,102 and $1,279,233 for the years ended

December 31, 2020 and 2019, respectively.

The $1,262,131 decrease is primarily attributed to the decrease recognized due to changes in

the fair value of derivative instruments of $422,787, loss on convertible notes of $401,497 and a decrease in interest expense of $370,619.

As a result, net loss for the year ended December 31, 2020 decreased

by $1,549,627 to $275,842 from $1,825,469 for the year ended December 31, 2019.

Comprehensive (Loss) Gain

The Company recorded a gain for foreign currency translation

adjustments for the year ended December 31, 2019 of $71,084 and a loss of $90,772 for the year ended December 31, 2018.

The fluctuations

of the increase/decrease is primarily attributed to the increase recognized due to exchange rate variances.

Comprehensive loss

was $1,754,385 as compared to $3,227,287 for the years ended December 31, 2019 and 2018, respectively.

The Company recorded a loss for foreign currency

translation adjustments for the year ended December 31, 2020 of $20,941 and a loss of $52,905 for the year ended December 31, 2019.

fluctuations of the increase/decrease is primarily attributed to the change in the value of the note recognized due to exchange rate variances.

Comprehensive loss was $296,785 as compared to $1,878,374 for the years ended December 31, 2020 and 2019, respectively.

Liquidity and Capital Resources

Liquidity is the ability of a company to

generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis.

At December 31, 2019, we had a cash balance of $1,210.

Liquidity is the ability of a company to generate

funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis.

At December 31,

2020, we had a cash balance of $337.

Our working capital deficit is approximately $3,241,567 at December 31, 2020.

1 unchanged sentence

compared to $1,210 as of December 31, 2019.

The Company currently does not have sufficient cash to fund its operations

for the next 12 months and will require working capital to complete development, testing and marketing of its products and to pay

for ongoing operating expenses.

The Company anticipates adding consultants for technology development and the corresponding operations

of the Company, but this will not occur prior to obtaining additional capital.

Management is currently in the process of looking

for additional investors.

Currently, loans from banks or other lending sources for lines of credit or similar short-term borrowings

are not available to the Company.

The Company has been able to raise working capital to fund operations through the issuances of

convertible notes or obtained through the issuance of the Company’s restricted common stock.

The Company currently does not have sufficient cash to fund its operations for the next 12

months and will require working capital to complete development, testing and marketing of its products and to pay for ongoing operating

The Company anticipates adding consultants for technology development and the corresponding operations of the Company, but this

will not occur prior to obtaining additional capital.

Management is currently in the process of looking for additional investors.

loans from banks or other lending sources for lines of credit or similar short-term borrowings are not available to the Company.

has been able to raise working capital to fund operations through the issuances of convertible notes or obtained through the issuance

of the Company’s restricted common stock.

As of December 31, 2020, our current liabilities

of $3,241,904 exceeded our current assets of $337 by $3,241,567.

Cash Flows From Operating Activities

During the year ended December 31, 2019,

net cash used by operating activities was $171,604, resulting from our net loss of $1,825,469 partially offset by non-cash expenses

totaling $259,824 and increases in accounts payable of $264,788 and a decrease in accrued liabilities of $145,234.

Operating Activities

During the year ended December 31, 2020, net cash

used by operating activities was $8,194, resulting from our net loss of $275,842 partially offset by non-cash expenses totaling $14,446

and increases in accounts payable of $195,951 and accrued liabilities of $72,892.

By comparison, during the year ended December

31, 2019, net cash used by operating activities was $171,604, resulting from our net loss of $1,825,469, partially offset by non-cash

expenses of $2,016,230 and increases in accounts payable of $49,160 and accrued liabilities of $309,925.

Cash Flows From Investing Activities

During the year ended December 31, 2019,

net cash used by investing activities was $54,930, comprised primarily of capitalized patents costs of $101,652.

During the year

ended December 31, 2018, net cash used by investing activities was $0.

Cash Flows From Financing Activities

During the year ended December 31, 2019,

net cash provided by financing activities was $155,450, comprised of proceeds from issuance of convertible notes payable of $180,100,

partially offset by repayments of convertible notes payable of $24,650.

During the year ended December 31, 2018, net cash provided

by financing activities was $1,056,762, comprised of proceeds from issuance of convertible notes payable of $1,088,250 and proceeds

from related party notes payable of $44,096, partially offset by repayments of convertible notes payable of $42,200 and notes payable

expenses totaling $259,824 and increases in accounts payable of $264,788 and a decrease in accrued liabilities of $145,234.

Investing Activities

During the year ended December 31, 2020, net cash

used by investing activities was $4,969, of capitalized patents costs of $4,969.

During the year ended December 31, 2019, net cash used

by investing activities was $54,930.

Financing Activities

During the year ended December 31, 2020, net cash

used by financing activities was $4,096, comprised of proceeds from issuance of convertible notes payable of $40,000, offset by repayments

of related party notes payable of $44,096.

During the year ended December 31, 2019, net cash provided by financing activities was $155,450,

comprised of proceeds from issuance of convertible notes payable of $180,100, partially offset by repayments of convertible notes payable

Factors That May Affect Future Results -

- Management’s Discussion and Analysis contains information based on management’s beliefs and forward-looking statements

that involve a number of risks, uncertainties, and assumptions.

There can be no assurance that actual results will not differ materially

from the forward-looking statements as a result of various factors, including but not limited to the following:

The Company may not obtain the equity funding or short-term borrowings necessary to market and launch its mobile applications.

Management’s Discussion and Analysis contains information based on management’s beliefs and forward-looking statements that

involve a number of risks, uncertainties, and assumptions.

There can be no assurance that actual results will not differ materially from

the forward-looking statements as a result of various factors, including but not limited to the following:

The Company may not obtain the equity funding or short-term borrowings necessary to market and launch its products.

The product development and launch may take longer to implement than planned or may not be successful.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Not applicable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements of the Company

are included beginning on page F-1 immediately following the signature page to this report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

The financial statements of the Company are included

beginning on page F-1 immediately following the signature page to this report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

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 5. Market for Registrant’s Common Equity