What changed in this filing

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Item 9A. Controls and Procedures

2021-04-15 compared with 2020-06-08 · 895 added, 1135 removed, 369 unchanged (85% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and

The Company's Chief Executive Officer and

Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for the Company, and

have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)

were not effective as of the end of the period covered by this report, based on their evaluation of these controls and procedures

required by paragraph (b) of Rules 13a-15(f) and 15d-15(f), due to certain material weaknesses in our internal control over financial

reporting as discussed below.

Evaluation of Disclosure Controls and Procedures

The Company's Chief Executive Officer and Chief

Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for the Company, and have concluded

that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as

of the end of the period covered by this report, based on their evaluation of these controls and procedures required by paragraph (b)

of Rules 13a-15(f) and 15d-15(f), due to certain material weaknesses in our internal control over financial reporting as discussed below.

Internal Control Over Financial Reporting

1 unchanged sentence

for establishing and maintaining adequate internal controls over financial reporting for the Company.

Due to limited resources,

Management conducted an evaluation of internal controls based on criteria established in 2013 Internal Control - Integrated Framework

issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

The results of this evaluation

determined that our internal control over financial reporting was ineffective as of December 31, 2019, due to material weaknesses.

A material weakness in internal control over financial reporting is defined as a deficiency, or a combination of deficiencies,

in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's

annual or interim financial statements will not be prevented or detected on a timely basis.

A significant deficiency is a

deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material

weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

Management’s assessment identified

the following material weaknesses in internal control over financial reporting:

Due to limited resources, Management

conducted an evaluation of internal controls based on criteria established in 2013 Internal Control - Integrated Framework issued by the

Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

The results of this evaluation determined that

our internal control over financial reporting was ineffective as of December 31, 2020, due to material weaknesses.

A material weakness

in internal control over financial reporting is defined as a deficiency, or a combination of deficiencies, in internal control over financial

reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements

will not be prevented or detected on a timely basis.

A significant deficiency is a deficiency, or a combination of deficiencies,

in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by

those responsible for oversight of our financial reporting.

Management’s assessment identified the following

material weaknesses in internal control over financial reporting:

The small size of our Company limits our ability to achieve the desired level of separation of duties to achieve effective internal controls over financial reporting.

6 unchanged sentences

Because of our limited capital resources, we sometimes formalize our agreements with certain contractors after the work is performed when additional resources become available to pay for the services.

As a result of the material weaknesses

in internal control over financial reporting described above, the Company’s management has concluded that, as of December

31, 2019, the Company's internal control over financial reporting was not effective based on the criteria in Internal Control -

Integrated Framework issued by the COSO.

As a result of the material weaknesses in internal

control over financial reporting described above, the Company’s management has concluded that, as of December 31, 2020, the Company's

internal control over financial reporting was not effective based on the criteria in Internal Control - Integrated Framework issued by

The Company’s lack of current financial

resources makes it impossible for the Company to hire the appropriate personnel needed to overcome these weaknesses and ensure

that appropriate controls and separation of responsibilities of a larger organization exist.

We also will continue to follow the

standards for the Public Company Accounting Oversight Board (United States) for internal control over financial reporting to include

procedures that:

resources makes it impossible for the Company to hire the appropriate personnel needed to overcome these weaknesses and ensure that appropriate

controls and separation of responsibilities of a larger organization exist.

We also will continue to follow the standards for the Public

Company Accounting Oversight Board (United States) for internal control over financial reporting to include procedures that:

Pertain to the maintenance of records in reasonable detail accurately that fairly reflect the transactions and dispositions of the Company's assets;

1 unchanged sentence

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Despite the material weaknesses in financial

reporting noted above, we believe that our financial statements included in this report fairly present our financial position,

results of operations and cash flows as of and for the years presented in all material respects.

Despite the material weaknesses in financial reporting

noted above, we believe that our financial statements included in this report fairly present our financial position, results of operations

and cash flows as of and for the years presented in all material respects.

Changes in Internal Controls

2 unchanged sentences

likely to materially affect, our internal control over financial reporting.

The Company has taken limited steps to

meet its Sarbanes-Oxley (SOX) Section 404 compliance requirements and implement procedures to assure financial reports are

prepared in accordance with generally accepted accounting principles (GAAP) and therefore fairly represent the results and condition

of the Company.

We are not materially compliant with the Section 404 requirements due to economic constraints.

The Company has taken limited steps to meet its

Sarbanes-Oxley (SOX) Section 404 compliance requirements and implement procedures to assure financial reports are prepared in accordance

with generally accepted accounting principles (GAAP) and therefore fairly represent the results and condition of the Company.

materially compliant with the Section 404 requirements due to economic constraints.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

The following table sets forth the name, age, and position of

each executive officer and director of the Company:

The following table sets forth the name, age, and position of each

executive officer and director of the Company:

Director's Name

2 unchanged sentences

Anthony Brown

O’Leary, Chairman, CEO,

President, CFO .

O’Leary is the Company’s Chief Executive Officer, President, Chief Financial Officer and Chairman

of the Board.

O’Leary, Chairman, CEO, President,

O’Leary is the Company’s Chief Executive Officer, President, Chief Financial Officer and Chairman of the Board.

O’Leary founded DarkPulse Technologies Inc., a wholly-owned subsidiary of the Company, in 2010.

O’Leary

is a serial entrepreneur with significant international experience having founded Sulu Electric Power and Light Corp (Philippines),

a firm with expertise in utility scale power generation and solar energy.

He is the co-founder and Chairman of DarkPulse Technologies

Inc., a firm developing specialized devices that monitor activities along national borders and provide structural health and safety

monitoring of oil and gas pipelines.

O’Leary is a serial

entrepreneur with significant international experience having founded Sulu Electric Power and Light Corp (Philippines), a firm with expertise

in utility scale power generation and solar energy.

He is the co-founder and Chairman of DarkPulse Technologies Inc., a firm developing

specialized devices that monitor activities along national borders and provide structural health and safety monitoring of oil and gas

He holds extensive start-up experience including multiple exit strategies.

O’Leary

is an Ambassador for the Province of New Brunswick, Canada, and a Research Member of the NATO Science and Technology Organization.

He served as a member of the Board at Arizona State University’s School of Engineering, Global Resolve as Chair of the Impact

His previous employment includes the NYPD where he worked as a member of the Manhattan North Tactical Narcotics Team,

which prosecuted establishments involved in the illegal distribution of narcotics.

He was a member of a joint taskforce working

with the DEA and USINS in the execution of warrants related to narcotics trafficking.

While at the NYPD, he was assigned to the

Department of Justice as a member of the FBI’s investigative team with internal designation C14.

He is a licensed private

pilot with turbine experience.

O’Leary is not, and has not been during the past 5 years, the director of any other public

O’Leary is an Ambassador for the Province

of New Brunswick, Canada, and a Research Member of the NATO Science and Technology Organization.

He served as a member of the Board at

Arizona State University’s School of Engineering, Global Resolve as Chair of the Impact Committee.

His previous employment includes

the NYPD where he worked as a member of the Manhattan North Tactical Narcotics Team, which prosecuted establishments involved in the illegal

distribution of narcotics.

He was a member of a joint taskforce working with the DEA and USINS in the execution of warrants related to

narcotics trafficking.

While at the NYPD, he was assigned to the Department of Justice as a member of the FBI’s investigative team

with internal designation C14.

He is a licensed private pilot with turbine experience.

O’Leary is not, and has not been during

the past 5 years, the director of any other public companies.

Anthony Brown, Director .

Brown is a physicist and scientist with extensive experience in the development of Brillouin scattering-based distributed fiber

optic sensing.

is a physicist and scientist with extensive experience in the development of Brillouin scattering-based distributed fiber optic sensing.

Brown co-founded DarkPulse Technologies, Inc., a wholly-owned subsidiary of the Company.

has more than 25 years of research and lecturing experience gained at the University of New Brunswick (“UNB”), focusing

primarily on the development of Brillouin scattering-based distributed fiber optic sensor technology.

Brown has more than 25 years

of research and lecturing experience gained at the University of New Brunswick (“UNB”), focusing primarily on the development

of Brillouin scattering-based distributed fiber optic sensor technology.

From 2001 to 2012, Dr.

served as an assistant professor and research associate at UNB.

Brown’s tenure at UNB, he was instrumental in

developing numerous patents in the field of fiber optic sensing.

Brown served as an assistant professor

and research associate at UNB.

Brown’s tenure at UNB, he was instrumental in developing numerous patents in the field

of fiber optic sensing.

From 2012 to 2015, Dr.

Brown served as an Adjunct Professor at

Brown served as an Adjunct Professor at UNB.

From 2013 through the present, Dr.

Brown has served as a data scientist for Xplornet Communications, Inc.

From 2018 through

the present, Dr.

Brown has served as a consultant for the Company.

Brown received a Bachelor of Science degree in Physics from

UNB in 1995, and a PhD in Physics from UNB in 2001.

We believe that Dr.

Brown should serve as a member of our Board of Directors

due to his extensive experience in the development of Brillouin scattering-based distributed fiber optic sensing.

served as a data scientist for Xplornet Communications, Inc.

From 2018 through the present, Dr.

Brown has served as a consultant for the

Brown received a Bachelor of Science degree in Physics from UNB in 1995, and a PhD in Physics from UNB in 2001.

Brown should serve as a member of our Board of Directors due to his extensive experience in the development of Brillouin scattering-based

distributed fiber optic sensing.

Carl Eckel, Director .

Eckel is a U.S.

military veteran with over 35 years of defense communications system development and support experience.

Eckel’s

career began in the field of telecommunications operations and continued to evolve with the rapid advancements in telecommunications

technologies.

Eckel’s career began

in the field of telecommunications operations and continued to evolve with the rapid advancements in telecommunications technologies.

While serving in the United States Air Force from 1977 to 1985, Mr.

Eckel was responsible for managing leased communications

accounting, planning, user requirement changes, and system upgrades and replacements for critical Air Force Satellite Control

Network (“AFSCN”) Programs at Onizuka AFS, until his honorable discharge in 1985.

As a private civilian, from 1985

Eckel served as a Database Systems Administrator and Site Integrator for Ford Aerospace / Loral where he was responsible

for into customer communications requirements analysis and development of training for operations and maintenance of the classified

and unclassified systems supporting all Space Shuttle and satellite activities.

In 1993 recognizing the government’s need

for quality affordable training for operations and maintenance of complex software and hardware communications systems, Mr.

started a successful training development and delivery business that provided training to Washington D.C.

area clients such as

the Pentagon 7th CG, the White House Communications Agency.

and PACAF based in Hawaii.

Eckel worked for Allied Signal/Honeywell

in 1995-96 as a Group Field Engineer maintaining critical Control Center and Remote Tracking Communications Equipment around the

world, and then rejoining communications systems support with Lockheed from 1997 to 1998.

Eckel was responsible for managing leased communications accounting,

planning, user requirement changes, and system upgrades and replacements for critical Air Force Satellite Control Network (“AFSCN”)

Programs at Onizuka AFS, until his honorable discharge in 1985.

As a private civilian, from 1985 to 1992, Mr.

Eckel served as a Database

Systems Administrator and Site Integrator for Ford Aerospace / Loral where he was responsible for into customer communications requirements

analysis and development of training for operations and maintenance of the classified and unclassified systems supporting all Space Shuttle

and satellite activities.

In 1993 recognizing the government’s need for quality affordable training for operations and maintenance

of complex software and hardware communications systems, Mr.

Eckel started a successful training development and delivery business that

provided training to Washington D.C.

area clients such as the Pentagon 7th CG, the White House Communications Agency.

and PACAF based

Eckel worked for Allied Signal/Honeywell in 1995-96 as a Group Field Engineer maintaining critical Control Center and Remote

Tracking Communications Equipment around the world, and then rejoining communications systems support with Lockheed from 1997 to 1998.

From 1999 to 2000, Mr.

Eckel resumed

support on the government side of the AFSCN serving initially in Network Security and Systems Integration.

From 2000 to 2001,

Eckel served as a Deputy Maintenance Manager for ITT where he was responsible for maintenance of AFSCN mission control communications

Eckel resumed support on the government side of the AFSCN serving initially in Network Security and Systems Integration.

From 2000 to 2001, Mr.

Eckel served as a Site Manager, Program Manager, and Program Director for IITC / Nortel / PEC

/ Avaya Government Solutions where he held a team leadership role transitioning back into program management.

With this transition

Eckel served as a Deputy Maintenance Manager for ITT where he was responsible for maintenance of AFSCN mission

control communications systems.

From 2001 to 2013, Mr.

Eckel served as a Site Manager, Program Manager, and Program Director for IITC

/ Nortel / PEC / Avaya Government Solutions where he held a team leadership role transitioning back into program management.

transition Mr.

Eckel was a part of establishing and delivering contract performance that netted 99-100% contract satisfaction award fees.

Eckel advanced to program director level managing contract team activities, including subcontractors, at multiple locations

supporting programs for the Air Force, Army, and NOAA/NWS.

Eckel advanced to program director level managing contract team activities, including subcontractors, at multiple locations supporting

programs for the Air Force, Army, and NOAA/NWS.

In early 2014, Mr.

Eckel transitioned into the Oil and Gas Industry

as a safety professional in support of pipeline integrity work, station work, and mainline projects for clients including Enbridge,

Hess, Tesoro, MarkWest, TransCanada, Kinder Morgan, and Shell.

Eckel transitioned into the Oil and Gas Industry as a safety professional

in support of pipeline integrity work, station work, and mainline projects for clients including Enbridge, Hess, Tesoro, MarkWest, TransCanada,

Kinder Morgan, and Shell.

From 2014 through the present, Mr.

Eckel has served as a Safety

Manager for Minnesota Limited, LLC where he is responsible for safety compliance, including field safety inspections, incident

and accident investigation, and reporting.

Eckel received a diploma in Communications Systems from the USAF Technical School

in Shepherd AFB, TX.

Eckel holds numerous certifications, including OSHA 500 –

Authorized OSHA 10 and 30 hour trainer,

OSHA 510 HAZWOPER, CPR/AED/First aid, DOT –

CSA & HAZMAT Driver Training.

Eckel has served as a Safety Manager for Minnesota Limited, LLC where he

is responsible for safety compliance, including field safety inspections, incident and accident investigation, and reporting.

received a diploma in Communications Systems from the USAF Technical School in Shepherd AFB, TX.

Eckel holds numerous certifications,

including OSHA 500 –

Authorized OSHA 10 and 30 hour trainer, OSHA 510 HAZWOPER, CPR/AED/First aid, DOT –

Driver Training.

We believe that Mr.

Eckel should serve as

a member of our Board of Directors due to his extensive management experience within the government and the private sectors in

such areas and industries where the Company’s technology systems may be advantageously utilized.

Changes to Executive Officers and Directors

On February 7, 2019, the stockholder holding

a majority of the voting rights (the “Majority Stockholder”) of the Company executed a stockholder consent in accordance

with Delaware General Corporation Law and the Company’s Bylaws to remove Thomas A.

Cellucci as a director of the Company.

As a result of the foregoing action by the Majority Stockholder, Thomas A.

Cellucci was removed as a director of the Company on

February 7, 2019.

On March 1, 2019, the Board of Directors

of the Company terminated Thomas A.

Cellucci as an Executive Officer of the Company, and appointed Dennis M.

O’Leary as Chief

Executive Officer and Secretary of the Company.

On March 8, 2019, the Company terminated

Stephen Goodman as Chief Financial Officer of the Company, and appointed Dennis M.

O’Leary as Chief Financial Officer of

The decisions to dismiss Stephen Goodman as Chief Financial Officer of the Company and appoint Dennis O’Leary

as Chief Financial Officer of the Company were approved and ratified by the Company’s Board of Directors.

On March 18, 2019, the Company terminated

Banash as Chief Technology Officer of the Company.

The decision to dismiss Mark Banash as Chief Technology Officer of the

Company was approved and ratified by the Company’s Board of Directors.

On March 19, 2019, the Company terminated

David Singer as Chief Marketing Officer of the Company.

The decision to dismiss David Singer as Chief Marketing Officer of the

Company was approved and ratified by the Company’s Board of Directors.

On April 17, 2019, the Board of Directors

of the Company appointed Dr.

Anthony Brown as a director of the Company to fill a vacancy in accordance with the Delaware General

Corporation Law (the “DGCL”) and the Company’s Bylaws.

In addition, on April 19, 2019, the Board of Directors

of the Company appointed Carl Eckel as a director of the Company to fill a vacancy in accordance with the DGCL and the Company’s

Eckel should serve as a member of our Board of Directors due to his extensive management experience

within the government and the private sectors in such areas and industries where the Company’s technology systems may be advantageously

Legal Proceedings

During the past ten years there have been no events

under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability

and integrity of any of our directors or executive officers, and none of these persons has been involved in any judicial or administrative

proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity, any judicial or administrative

proceedings based on violations of federal or state securities, commodities, banking or insurance laws or regulations, or any disciplinary

sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.

Family Relationships

There are no family relationships between any

of our directors and executive officers.

Compliance with Section 16(a) of the Securities Exchange Act of

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, 2020 for which either Forms 4 or Forms 5 were required to be filed.

Code of Ethics

We have not adopted a formal, written code of

ethics due to a small number of members of management, lack of previous business operations, and lack of resources.

We plan to adopt a

Code of Ethics during the fiscal year ending December 31, 2021.

Audit Committee

As of December 31, 2019, the Company did

not have a functioning Audit and Compliance Committee.

The Company’s management is currently reviewing the Company’s

SEC filings and relying on outside experts to assist with this process.

Audit Committee Financial Expert

The Company's board of directors needs

to have an “audit committee financial expert,”

within the meaning of such phrase under applicable regulations of the

Securities and Exchange Commission, serving on its audit committee.

The individual needs to be capable of (i) understanding generally

accepted accounting principles ("GAAP") and financial statements, (ii) assessing the general application of GAAP principles

in connection with our accounting for estimates, accruals and reserves, (iii) analyzing and evaluating our financial statements,

(iv) understanding our internal controls and procedures for financial reporting;

and (v) understanding audit committee functions,

all of which are attributes of an audit committee financial expert and meet the experience requirements specified in the SEC's

definition of “audit committee financial expert.”

Further, like many small companies, it is difficult for the Company

to attract and retain board members who qualify as “audit committee financial experts,”

and competition for these individuals

is significant.

As of December 31, 2020, the Company did not

have a functioning Audit Committee.

The Company’s management is currently reviewing the Company’s SEC filings and relying

on outside experts to assist with this process.

EXECUTIVE COMPENSATION

Summary Compensation

The following table shows the executive

compensation paid to our executive officers and directors for the years ended December 31, 2019 and 2018.

Principal Position

Option Awards (2)

The following table shows the executive compensation

paid to our named executive officers and directors for the years ended December 31, 2020 and 2019.

Name and Principal Position

Year Ended Dec 31,

Dennis O’Leary

2 unchanged sentences

___________________________

(1) The Company accrued $18,000

and $63,000 for compensation for Mr.

O’Leary during the years ended December 31, 2019 and 2018, respectively, of which $0

has been paid, respectively.

(2) The amounts in column (e) reflect the aggregate

grant date fair value with respect to stock options granted during the respective years in accordance with ASC Topic 718.

options were awarded or vested in 2019 and 2018.

Aggregate Option/SAR Exercises in the

Last Fiscal Year and Year End Option/SAR Values

During the year ended December 31, 2019, the Company did not

grant any stock options or SARs to the chief executive officer, chief financial officer and directors of the Company.

During the year ended December 31, 2019, no stock options were

exercised by the chief executive officer, chief financial officer and directors of the Company.

The following table sets forth information with respect to outstanding

stock options granted to our chief executive officer, chief financial officer and directors of the Company at December 31, 2019.

Equity Awards at Fiscal Year-End

Number of Securities Underlying Unexercised Options Exercisable

Number of Securities Underlying Unexercised Options Unexercisable

Equity Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options

Option Exercise Price

Option Expiration Date

Dennis O’Leary

Anthony Brown

Executive Compensation and Benefits

The Company provides no health insurance

to any full or part-time employees.

The Company has adopted a stock incentive

plan for its employees, executive officers, directors, and consultants.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

(1) The Company accrued $0 and $18,000

for compensation for Mr.

O’Leary during the years ended December 31, 2020 and 2019, respectively, of which $0 has been paid, respectively.

Equity Awards

As of December 31, 2020, there were no outstanding

equity awards.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Principal Shareholders

The table below sets forth information

as to our Directors and Executive Officers and each person owning of record or was known by the Company to own beneficially shares

of stock greater than 5% of the 1,392,131,347 (1,392,042,112 common plus 88,235 preferred) votes as of December 31, 2019.

The table includes preferred stock that is convertible into common stock and information as to the ownership of the Company's

Stock by each of its directors and executive officers and by the directors and executive officers as a group.

There were no stock

options outstanding as of December 31, 2019.

Except as otherwise indicated, all shares are owned directly, and the persons named

in the table have sole voting and investment power with respect to shares shown as beneficially owned by them.

The table below sets forth information as to our

Directors and Executive Officers and each person owning of record or was known by the Company to own beneficially shares of stock greater

than 5% of the 4,088,850,391 (4,088,762,156 common plus 88,235 preferred) votes as of December 31, 2020.

The table includes

preferred stock that is convertible into common stock and information as to the ownership of the Company's Stock by each of its directors

and executive officers and by the directors and executive officers as a group.

There were no stock options outstanding as of December

Except as otherwise indicated, all shares are owned directly, and the persons named in the table have sole voting and investment

power with respect to shares shown as beneficially owned by them.

Name and Address

2 unchanged sentences

Dennis O’Leary (through Fantastic Northamerica, LLC)

350 5 th Avenue

1345 Avenue of the Americas

21,853,351,983

2 unchanged sentences

Anthony Brown

350 5 th Avenue

1345 Avenue of the Americas

5,633,455,712

New York, NY 10105

350 5 th Avenue

1345 Avenue of the Americas

New York, NY 10105

27,486,807,695

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE

Related Party Notes Payable

During the year ended December 31, 2018,

two of the Company’s previous officers and directors of the Company advanced personal funds in the amount of $10,689 for

Company expenses, and $10,689 was repaid to them prior to December 31, 2018.

In May 2018, the JV Entity received $42,000

for an order from Bravetek and the JV Entity then placed a corresponding order with the Company.

The Company’s former executive

officer is also the CEO of Bravatek.

The proceeds were to be used for marketing efforts to generate sales of our intrusion detection

The order has been recorded as a prepaid sale and is a current liability as of December 31, 2018.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE

Accrued Compensation

O’Leary, the Company’s

CEO, accrued $18,000 and $63,000 for compensation for the CEO during the years ended December 31, 2019 and 2018, of which $0 and

$0 were paid, respectively.

O’Leary, the Company’s CEO,

accrued $0 and $18,000 for compensation for the CEO during the years ended December 31, 2020 and 2019, of which $0 and $0 were paid, respectively.

Director Independence

A Director is considered independent if

the Board affirmatively determines that the director (or an immediate family member) does not have any direct or indirect material

relationship with us or our affiliates or any member of our senior management or his or her affiliates.

A Director is considered independent if the Board

affirmatively determines that the director (or an immediate family member) does not have any direct or indirect material relationship

with us or our affiliates or any member of our senior management or his or her affiliates.

The term “affiliate”

means any corporation or other entity that controls, is controlled by, or under common control with us, evidenced by the power

to elect a majority of the Board of Directors or comparable governing body of such entity.

corporation or other entity that controls, is controlled by, or under common control with us, evidenced by the power to elect a majority

of the Board of Directors or comparable governing body of such entity.

The term “immediate family member”

means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in law, brothers- and sisters-in-laws

and anyone (other than domestic employees) sharing the director’s home.

In accordance with these guidelines, the

Board has determined that current Board member Jerry P.

Wright is an independent director.

means spouse, parents,

children, siblings, mothers- and fathers-in-law, sons- and daughters-in law, brothers- and sisters-in-laws and anyone (other than domestic

employees) sharing the director’s home.

In accordance with these guidelines, the Board

has determined that current Board members Eckel and Brown are independent directors.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Consists of fees billed

for professional services rendered for the audits of our financial statements, reviews of our interim financial statements included

in quarterly reports, services performed in connection with filings with the Securities & Exchange Commission, and related

other services that were provided by Boyle CPA (“Boyle”) in connection with statutory and regulatory filings or engagements.

The following is a summary of the fees

incurred by the Company to Boyle for professional services rendered for the years ended December 31, 2019 and 2018, respectively.

Consists of fees billed for

professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly

reports, services performed in connection with filings with the Securities & Exchange Commission, and related other services that

were provided by Boyle CPA (“Boyle”) in connection with statutory and regulatory filings or engagements.

The following is a summary of the fees incurred

by the Company to Boyle for professional services rendered for the years ended December 31, 2020 and 2019, respectively.

Audit-Related Fees

Consists of fees billed

for professional services for tax compliance, tax advice and tax planning.

These services include assistance regarding federal,

state and local tax compliance and consultation in connection with various transactions.

There were no tax fees incurred by the

Company for the years ended December 31, 2019 and 2018.

Board of Directors Pre-Approval of Audit and Permissible

Non-Audit Services of Independent Auditors

The Board of Directors may pre-approve

all audit and non-audit services provided by the independent auditors.

These services may include audit services, audit-related

services, tax services and other services as allowed by law or regulation.

Pre-approval is generally provided for up to one year

and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specifically

approved amount.

The independent auditors and management are required to periodically evaluate the extent of services provided

by the independent auditors in accordance with this pre-approval and the fees incurred to date.

The Board of Directors may also

pre-approve particular services on a case-by-case basis.

The Board of Directors pre-approved 100%

of the Company’s 2018 and 2017 audit fees, audit-related fees and all other fees.

Consists of fees billed for professional

services for tax compliance, tax advice and tax planning.

These services include assistance regarding federal, state and local tax compliance

and consultation in connection with various transactions.

There were no tax fees incurred by the Company for the years ended December

31, 2020 and 2019.

Board of Directors Pre-Approval of Audit and Permissible Non-Audit

Services of Independent Auditors

The Board of Directors may pre-approve all audit

and non-audit services provided by the independent auditors.

These services may include audit services, audit-related services, tax services

and other services as allowed by law or regulation.

Pre-approval is generally provided for up to one year and any pre-approval is detailed

as to the particular service or category of services and is generally subject to a specifically approved amount.

The independent auditors

and management are required to periodically evaluate the extent of services provided by the independent auditors in accordance with this

pre-approval and the fees incurred to date.

The Board of Directors may also pre-approve particular services on a case-by-case basis.

The Board of Directors pre-approved 100% of the

Company’s 2020 and 2019 audit fees, audit-related fees and all other fees.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following exhibits are included as part

of this report:

The following exhibits are included as part of this report:

Title of Document

of Agreement and Plan of Merger by and between Klever Marketing, Inc., DarkPulse Technologies Inc.

and DPTH Acquisition Corporation

dated April 27, 2018 (incorporated by reference to Exhibit 2.1 to Form 8K filed May 1, 2018)

of Amendment No.

Form of Agreement and Plan of Merger by and between Klever Marketing, Inc., DarkPulse Technologies Inc.

and DPTH Acquisition Corporation dated April 27, 2018 (incorporated by reference to Exhibit 2.1 to Form 8-K filed May 1, 2018)

Form of Amendment No.

1 to Agreement and Plan of Merger by and between Klever Marketing, Inc., DarkPulse Technologies Inc.

Acquisition Corporation dated June 29, 2018 (incorporated by reference to Exhibit 2.1 to Form 8K/A filed July 13, 2018)

of Amendment No.

and DPTH Acquisition Corporation dated June 29, 2018 (incorporated by reference to Exhibit 2.1 to Form 8-K/A filed July 13, 2018)

Form of Amendment No.

2 to Agreement and Plan of Merger by and between Klever Marketing, Inc., DarkPulse Technologies Inc.

Acquisition Corporation dated August 17, 2018, effective as of July 18, 2018 (incorporated by reference to Exhibit 2.1 to Form

8K filed August 21, 2018)

Restated Certificate of Incorporation of Klever Marketing,

and DPTH Acquisition Corporation dated August 17, 2018, effective as of July 18, 2018 (incorporated by reference to Exhibit 2.1 to Form 8-K filed August 21, 2018)

Restated Certificate of Incorporation of Klever Marketing, Inc.

a Delaware corporation (incorporated by reference to Annual Report on Form 10-KSB filed June 20, 1997)

Certificate of Designation of Rights, Privileges and

Rights of A Class Voting Preferred Stock, Series 1, of Klever Marketing, Inc., dated February 7, 2000

(incorporated by reference to Annual Report on Form 10-KSB filed June 20, 1997)

Amended Bylaws (incorporated by reference to Annual Report on Form 10-KSB filed March 29, 2001)

of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8K filed July 24, 2018)

of Designation of Series D Preferred Stock (incorporated by reference to Exhibit 3.2 to Form 8K filed July 24, 2018)

Amended Certificate of Designation of Rights, Privileges and Preferences:

Rights of A Class of Voting Preferred Stock, Series 1, of Klever Marketing, Inc., Dated February 7, 2000 (incorporated by reference to Quarterly Report on Form 10-QSB filed May 15, 2001)

Certificate of Designation of Rights, Privileges and Preferences of Class B Voting Preferred Stock, of Klever Marketing, Inc., dated September 24, 2000 (incorporated by reference to Quarterly Report on Form 10-QSB filed May 15, 2001)

Certificate of Designation of Rights, Privileges and Preferences of Class C Voting Preferred Stock, of Klever Marketing, Inc., dated January 2, 2001 (incorporated by reference to Quarterly Report on Form 10-QSB filed May 15, 2001)

Certificate of Designation of Rights, Privileges and Preferences of Class D Voting Preferred Stock, of Klever Marketing, Inc., dated June 14, 2002 (incorporated by reference to Quarterly Report on Form 10-QSB filed August 19, 2002)

to the Certificates of Designation of Rights, Privileges and Preferences of Class A, B, and C Voting Preferred Stock, of Klever

Marketing, Inc., dated June 12, 2002 (incorporated by reference to Quarterly Report on Form 10-QSB filed August 19, 2002)

Promissory Note dated July 14, 2018 (incorporated by reference to Exhibit 99.1 to Form 10Q filed August 15, 2018)

Promissory Note dated July 14, 2018 (incorporated by reference to Exhibit 99.2 to Form 10Q filed August 15, 2018)

Promissory Note dated July 14, 2018 (incorporated by reference to Exhibit 99.3 to Form 10Q filed August 15, 2018)

Promissory Note dated July 14, 2018 (incorporated by reference to Exhibit 99.4 to Form 10Q filed August 15, 2018)

Promissory Note dated July 17, 2018, effective July 18, 2018 (incorporated by reference to Exhibit 99.5 to Form 10Q filed August

Promissory Note dated July 24, 2018, and effective July 27, 2018 (incorporated by reference to Exhibit 99.6 to Form 10Q filed

August 15, 2018)

Promissory Note dated August 20, 2018, effective August 24, 2018 (incorporated by reference to Exhibit 10.1 to Form 8K filed

August 27, 2018)

Promissory Note issued to EMA dated September 25, 2018, effective September 28, 2018 (incorporated by reference to Exhibit

10.1 to Form 8K filed October 5, 2018)

Promissory Note issued to Auctus dated September 25, 2018, effective September 27, 2018 (incorporated by reference to Exhibit

10.2 to Form 8K filed October 5, 2018)

Promissory Note issued to FirstFire dated September 24, 2018, and effective October 9, 2018 (incorporated by reference to Exhibit

10.1 to Form 8K filed October 15, 2018)

Convertible Redeemable Note issued to GS Capital Partners, LLC dated January 10, 2019 (incorporated by reference to Exhibit

4.1 to Form 8K filed January 15, 2019)

of Convertible Promissory Note issued to Crown Bridge Partners, LLC dated February 5, 2019 (incorporated by reference to Exhibit

4.1 to Form 8K filed February 14, 2019)

Stock Incentive Plan, effective June 1, 1998 (incorporated by reference to Annual Report on Form 10-KSB filed June 20, 1997)

Asset purchase agreement dated August 27, 2004 (incorporated by reference to Quarterly Report on Form 10-QSB filed November 19, 2004)

Software Development Works Agreement between Klever Marketing, Inc.

and Qualzoom Inc.

dated August 15, 2010 (incorporated by reference to Quarterly Report on Form 8K filed November 19, 2010)

Development Agreement between Klever Marketing, Inc.

and Briabe Media Inc.

September 22, 2010 (incorporated by reference to

Quarterly Report on Form 8K filed November 19, 2010)

Agreement by and between Battelle Memorial Institute and Darkpulse Technology Holdings Inc.

dated December 28, 2018 (incorporated

by reference to Exhibit 10.1 to Form 8K filed January 3, 2019)

Purchase Agreement by and between DarkPulse, Inc.

and GS Capital Partners, LLC dated January 10, 2019 (incorporated by reference

to Exhibit 10.1 to Form 8K filed January 15, 2019)

of Securities Purchase Agreement between DarkPulse, Inc.

and Crown Bridge Partners, LLC dated February 5, 2019 (incorporated

by reference to Exhibit 10.1 to Form 8K filed February 14, 2019)

from Haynie & Company (incorporated by reference to Exhibit 16.1 to Form 8K filed March 11, 2019)

Brooks and Associates (incorporated by reference to Exhibit 10.2 to Form 8K/A filed November 19, 2018)

consolidated financial statements of DarkPulse Technologies Inc.

as of and for the years ended December 31, 2017 and 2016, including

the Independent Auditor’s Report thereon, and the notes related thereto (incorporated by reference to Exhibit 10.2 to

Form 8K/A filed November 19, 2018)

interim condensed consolidated financial statements of DarkPulse Technologies Inc.

as of June 30, 2018, and for the six months

ended June 30, 2018 and 2017 and the notes related thereto (incorporated by reference to Exhibit 10.2 to Form 8K/A filed November

Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed July 24, 2018)

Certificate of Designation of Series D Preferred Stock (incorporated by reference to Exhibit 3.2 to Form 8-K filed July 24, 2018)

Certificate of Amendment to Certificate of Incorporation filed February 5, 2019

Certificate of Amendment to Certificate of Incorporation filed February 20, 2020

Convertible Promissory Note dated July 14, 2018 (incorporated by reference to Exhibit 99.1 to Form 10-Q filed August 15, 2018)

Convertible Promissory Note dated July 14, 2018 (incorporated by reference to Exhibit 99.2 to Form 10-Q filed August 15, 2018)

Convertible Promissory Note dated July 14, 2018 (incorporated by reference to Exhibit 99.3 to Form 10-Q filed August 15, 2018)

Convertible Promissory Note dated July 14, 2018 (incorporated by reference to Exhibit 99.4 to Form 10-Q filed August 15, 2018)

Convertible Promissory Note dated July 17, 2018, effective July 18, 2018 (incorporated by reference to Exhibit 99.5 to Form 10-Q filed August 15, 2018)

Convertible Promissory Note dated July 24, 2018, and effective July 27, 2018 (incorporated by reference to Exhibit 99.6 to Form 10-Q filed August 15, 2018)

Convertible Promissory Note dated August 20, 2018, effective August 24, 2018 (incorporated by reference to Exhibit 10.1 to Form 8-K filed August 27, 2018)

Convertible Promissory Note issued to EMA dated September 25, 2018, effective September 28, 2018 (incorporated by reference to Exhibit 10.1 to Form 8-K filed October 5, 2018)

Convertible Promissory Note issued to Auctus dated September 25, 2018, effective September 27, 2018 (incorporated by reference to Exhibit 10.2 to Form 8-K filed October 5, 2018)

Convertible Promissory Note issued to FirstFire dated September 24, 2018, and effective October 9, 2018 (incorporated by reference to Exhibit 10.1 to Form 8-K filed October 15, 2018)

8% Convertible Redeemable Note issued to GS Capital Partners, LLC dated January 10, 2019 (incorporated by reference to Exhibit 4.1 to Form 8-K filed January 15, 2019)

Form of Convertible Promissory Note issued to Crown Bridge Partners, LLC dated February 5, 2019 (incorporated by reference to Exhibit 4.1 to Form 8-K filed February 14, 2019)

Convertible Promissory Note issued to Geneva Roth Remark Holdings,

dated September 2, 2020

Securities Purchase Agreement by and between DarkPulse, Inc.

and GS Capital Partners, LLC dated January 10, 2019 (incorporated by reference to Exhibit 10.1 to Form 8-K filed January 15, 2019)

Form of Securities Purchase Agreement between DarkPulse, Inc.

and Crown Bridge Partners, LLC dated February 5, 2019 (incorporated by reference to Exhibit 10.1 to Form 8-K filed February 14, 2019)

Securities Purchase Agreement with Geneva Roth Remark Holdings,

dated September 2, 2020

Consulting Agreement effective December 23, 2020 with Faisal Farooqui

Assignment Agreement with the University of New Brunswick, Canada

Convertible Debenture (Secured) Issued April 24, 2017

Letter from Haynie & Company (incorporated by reference to Exhibit 16.1 to Form 8-K filed March 11, 2019)

List of Subsidiaries

Certification of President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board of Directors Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Exchange Act.

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XBRL Presentation Linkbase Document

Pursuant to the requirements of section

13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its

behalf by the undersigned, thereunto duly authorized.

FORM 10-K SUMMARY

Pursuant to the requirements of section 13 or

15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the

undersigned, thereunto duly authorized.

DARKPULSE, INC.

April 15, 2021

/s/ Dennis M.

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Pursuant to the requirements of the Securities

Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in

the capacities indicated on this 8th day of June 2020.

Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities

indicated on this 15th day of April 2021.

/s/ Dennis M.

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Chairman, Chief Executive Officer and President Chief Financial Officer, Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer

Anthony Brown

/s/ Carl Eckel

DARKPULSE, INC.

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As of December 31, 2020 and 2019

and for the Years Ended December 31,

2019 and 2018

and for the Years Ended December 31, 2020 and

Report of Independent Registered Public Accounting Firm

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Certified Public Accountants & Consultants

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Shareholders and

Board of Directors of DarkPulse, Inc.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

DarkPulse, Inc.

Opinion on the Financial Statements

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balance sheets of DarkPulse, Inc.

(the “Company”) as of December 31, 2019 and 2018, the related consolidated statements

of operations, comprehensive loss, stockholders’

deficit, and cash flows for each of the two years in the period ended December

31, 2019, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and

2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in

conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of

operations, stockholders’

deficit, and cash flows for each of the two years in the period ended December 31, 2020, and the related

notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its

cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted

in the United States of America.

Substantial Doubt About the

Company’s Ability to Continue as a Going Concern

in Note 3 to the consolidated financial statements, the Company’s net losses, lack of revenues, and working capital deficiency raise

substantial doubt about its ability to continue as a going concern for one year from the issuance of these financial statements.

Management’s

plans are also described in Note 3.

The financial statements do not include adjustments that might result from the outcome of this uncertainty.

Basis of Opinion

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of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based

on our audits.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with standards of the Public Company Accounting Oversight Board (United States).

Those standards require that we plan and perform

the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due

to fraud or error.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over

financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting

but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

federal securities laws and the applicable rules

and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with standards

of the Public Company Accounting Oversight Board (United States).

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to fraud or error.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made

by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a

reasonable basis for our opinion.

Substantial Doubt About

the Company’s Ability to Continue as a Going Concern

As discussed in Note 3 to the consolidated

financial statements, the Company’s net losses, lack of revenues, and working capital deficiency raise substantial doubt

about its ability to continue as a going concern for one year from the issuance of these financial statements.

Management’s

plans are also described in Note 3.

The financial statements do not include adjustments that might result from the outcome of this

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Accounting for Embedded

Derivative Liabilities Related to Convertible Debentures

As described in Note

4 to the financial statements, the Company had convertible debentures that required accounting considerations and significant estimates.

The Company determined

that variable conversion features issued in connection with certain convertible debentures required derivative liability classification.

These variable conversion features were initially measured at fair value and subsequently have been remeasured to fair value at each reporting

The Company determined the fair value of the embedded derivatives using the Black-Scholes-Merton option pricing model.

of the embedded derivative liabilities related to the convertible debentures was $1,220,877 at December 31, 2020.

We identified the

accounting considerations and related valuations, including the related fair value determinations of the embedded derivative liabilities

of such as a critical audit matter.

The principal considerations for our determination were:

(1) the accounting consideration in determining

the nature of the various features (2) the evaluation of the potential derivatives and potential bifurcation in the instruments, and (3)

considerations related to the determination of the fair value of the various debt and equity instruments and the conversion features that

include valuation models and assumptions utilized by management.

Auditing these elements is especially challenging and requires auditor

judgement due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or

knowledge needed.

Our audit procedures related to management’s

conclusion on the evaluation and related valuation of embedded derivatives, included the following, among others:

(1) evaluating the relevant

terms and conditions of the various financings, (2) assessing the appropriateness of conclusions reached by the Company with respect to

the accounting for the convertible debt, and the assessment and accounting for potential derivatives and (3) independently recomputing

the valuations determined by Management.

/s/ Boyle CPA, LLC

We have served as the Company’s auditor since 2019

April 15, 2021

361 Hopedale Drive SE

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Payroll and compensation

Research and development

Debt transaction expenses

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Gain (Loss) on change in fair market value of derivative liabilities

Loss on merger

Gain (Loss) on forgiveness of debt

TOTAL OTHER EXPENSE

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$ (1,825,469 )

$ (3,318,059 )

LOSS PER SHARE

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Basic and Diluted

2,323,180,245

See accompanying notes to consolidated financial

DARKPULSE, INC.

Consolidated Statements of Comprehensive

Consolidated Statements of Comprehensive Loss

For the Year Ended

$ (1,825,469 )

OTHER COMPREHENSIVE LOSS

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$ (1,878,374 )

$ (3,227,287 )

See accompanying notes to consolidated financial

DARKPULSE, INC.

Consolidated Statement of Stockholders'

For the Years Ended December 31, 2019

Consolidated Statement of Stockholders' Deficit

For the Years Ended December 31, 2020 and 2019

Preferred Stock

Accumulated Other

Comprehensive

Controlling Interest in

Accumulated Other Comprehensive

Total Stockholders’

Balance, December 31, 2018

Recapitalization of the Company

Conversion of convertible notes

1,302,361,545

Foreign currency adjustment

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2,696,720,039

(12,737,345 )

Change to Par Value

Foreign currency adjustment

1 unchanged sentence

4,088,762,151

$ (11,877,864 )

$ (3,807,552 )

See accompanying notes to consolidated financial

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$ (1,825,469 )

$ (3,318,059 )

Adjustments to reconcile net loss to net cash used by operating activities:

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Stock based compensation

Gain on reduction of loan default penalty

Gain on extinguishment of debt

Debt discount

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Accounts payable

Contract liability

Cash held by officer of VIE

Prepaid expenses

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Capitalized patents

Non-controlling interest

Net cash used by investing activities

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Proceeds from related party notes payable

Repayments of notes payable

Net cash provided by financing activities

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Notes to the Consolidated Financial Statements

For the Years ended December 31, 2019

For the Years ended December 31, 2020 and 2019

NOTE 1 –

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wholly-owned subsidiary, DarkPulse Technologies Inc.

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

from the University of New Brunswick, Fredericton, Canada.

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.

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.

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 a privately held New Brunswick corporation known as DarkPulse Technologies Inc.

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 is being be accounted for as

a recapitalization in a manner similar to a reverse acquisition.

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

University of New Brunswick, Fredericton, Canada.

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.

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.

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 a privately held New Brunswick corporation known as DarkPulse Technologies Inc.

as its wholly owned subsidiary.

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 is being be 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.

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

NOTE 2 –

SIGNIFICANT ACCOUNTING

A summary of the significant accounting

policies consistently applied in the preparation of the accompanying financial statements are as follows:

Basis of Presentation and Principles

of Consolidation

The Company’s consolidated financial

statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

The consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries.

All material intercompany

balances and transactions have been eliminated in consolidation.

Our consolidated financial statements as

of December 31, 2019 and 2018 include the accounts of DarkPulse Inc.

SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies

consistently applied in the preparation of the accompanying financial statements are as follows:

Basis of Presentation and Principles of

Consolidation

The Company’s consolidated financial statements

are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

The consolidated

financial statements of the Company include the Company and its wholly-owned subsidiaries.

All material intercompany balances and transactions

have been eliminated in consolidation.

Our consolidated financial statements as of December

31, 2020 and 2019 include the accounts of DarkPulse Inc.

and its subsidiaries:

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a New Brunswick, Canada corporation, a wholly owned subsidiary, incorporated December 16, 2010.

DPTI owns 100% of DarkPulse Technology

Holdings Inc., a New York corporation, incorporated July 6, 2017.

DPTI indirectly owns 37.572% of DarkPulse

Technologies International Inc., ("DPTINY") a New York corporation, incorporated on September 7, 2017.

On or about September

18, 2017, DPTI entered into a shareholder agreement with 3 investors, whereby DPTI would own 50.2% of DPTINY and the investors would

On or about October 3, 2017, another investor entered into an agreement with DPTINY to fund it $37,500 for a 0.5% equity

interest in DPTINY.

On December 26, 2017, DPTI’s CEO incorporated another corporation named DarkPulse Technologies International

Inc., ("DPTIDel") in the State of Delaware.

On or about April 16, 2018, seven investors and DPTI entered into a new agreement

whereby it was agreed that the investors would own 62.428% of DPTIDel, and the September 18, 2017 agreement with respect to DPTINY

was considered null and void.

Accordingly, the funding of $37,500 to DPTINY in October 2017 has been converted to an equity interest

in DPTIDel as of April 2018.

As of April 16, 2018, DPTI owns approximately 37.572% of the shares of common stock of DPTIDel and

100% of the issued shares of Series A Preferred Stock of DPTIDel, pursuant to which the Company controls both DPTIDel and DPTINY.

The Company does not own any interest in

DarkPulse East LLC, ("DPE") an entity organized on December 8, 2017 in Russia, by two of the shareholders of DPTIDel,

to act as a sales organization to promote the Company's products within Russia.

Each of the two shareholders own 50% interest in

During November and December 2017 DPTINY funded DarkPulse East LLC a total of $20,650 to establish and launch the Company's

business in Russia.

The Company is considered to be the primary beneficiary of DPE based on implicit obligations to fund it, and

accordingly, the operations of DPE are consolidated into these financial statements.

As of December 31, 2018, DPE had no assets

or liabilities.

The Company is not liable for obligations of DPE, and creditors of DPE do not have recourse to the general credit

of the Company.

On February 8, 2018, DPTI formed DarkPulse

BVTK, LLC, a Virginia Limited Liability Company (“JV Entity”).

The Company, through its wholly-owned subsidiary DPTI,

holds a 60% equity interest in the JV Entity, and Bravatek Solutions, Inc ("Bravatek") has a 40% interest.

business purpose of the JV Entity was to develop, market, and sell products and services based on the Company's patented BOTDA

dark-pulse technology.

Both the CEO of the Company and the CEO of Bravatek were to manage the day to day operations of the JV Entity.

The operations of JV Entity are not consolidated into these financial statements.

On March 26, 2019, DPTI informed the JV

Entity and Bravatek that, effective immediately, DPTI was revoking from the JV Entity the revocable Licensed Technology exclusively

owned by DPTI and the Company.

DPTI owns 100% of DarkPulse Technology Holdings

Inc., a New York corporation, incorporated July 6, 2017.

DPTI indirectly owns 37.572% of DarkPulse Technologies

International Inc., ("DPTINY") a New York corporation, incorporated on September 7, 2017.

On or about September 18, 2017, DPTI

entered into a shareholder agreement with three investors, whereby DPTI would own 50.2% of DPTINY and the investors would own 49.8%.

or about October 3, 2017, another investor entered into an agreement with DPTINY to fund it $37,500 for a 0.5% equity interest in DPTINY.

On December 26, 2017, DPTI’s CEO incorporated another corporation named DarkPulse Technologies International Inc., ("DPTIDel")

in the State of Delaware.

On or about April 16, 2018, seven investors and DPTI entered into a new agreement whereby it was agreed that

the investors would own 62.428% of DPTIDel, and the September 18, 2017 agreement with respect to DPTINY was considered null and void.

Accordingly, the funding of $37,500 to DPTINY in October 2017 has been converted to an equity interest in DPTIDel as of April 2018.

of April 16, 2018, DPTI owns approximately 37.572% of the shares of common stock of DPTIDel and 100% of the issued shares of Series A

Preferred Stock of DPTIDel, pursuant to which the Company controls both DPTIDel and DPTINY.

The Company does not own any interest in DarkPulse

East LLC, ("DPE") an entity organized on December 8, 2017 in Russia, by two of the shareholders of DPTIDel, to act as a sales

organization to promote the Company's products within Russia.

Each of the two shareholders own 50% interest in DPE.

During November and

December 2017 DPTINY funded DarkPulse East LLC a total of $20,650 to establish and launch the Company's business in Russia.

is considered to be the primary beneficiary of DPE based on implicit obligations to fund it, and accordingly, the operations of DPE are

consolidated into these financial statements.

As of December 31, 2018, DPE had no assets or liabilities.

The Company is not liable for

obligations of DPE, and creditors of DPE do not have recourse to the general credit of the Company.

On February 8, 2018, DPTI formed DarkPulse BVTK,

LLC, a Virginia Limited Liability Company (“JV Entity”).

The Company, through its wholly-owned subsidiary DPTI, holds a 60%

equity interest in the JV Entity, and Bravatek Solutions, Inc ("Bravatek") has a 40% interest.

The primary business purpose

of the JV Entity was to develop, market, and sell products and services based on the Company's patented BOTDA dark-pulse technology.

the CEO of the Company and the CEO of Bravatek were to manage the day to day operations of the JV Entity.

The operations of JV Entity

are not consolidated into these financial statements.

On March 26, 2019, DPTI informed the JV Entity

and Bravatek that, effective immediately, DPTI was revoking from the JV Entity the revocable Licensed Technology exclusively owned by

DPTI and the Company.

Use of Estimates

In preparing the consolidated financial

statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities

as of the date of the statements of financial condition, and revenues and expenses for the years then ended.

Actual results may

differ significantly from those estimates.

Significant estimates made by management include, but are not limited to, the assumptions

used to calculate stock-based compensation, derivative liabilities, preferred deemed dividend and common stock issued for services.

In preparing the consolidated financial statements,

management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of

the statements of financial condition, and revenues and expenses for the years then ended.

Actual results may differ significantly from

those estimates.

Significant estimates made by management include, but are not limited to, the assumptions used to calculate stock-based

compensation, derivative liabilities, preferred deemed dividend and common stock issued for services.

Cash and Cash Equivalents

The Company considers all highly liquid

investments with a maturity of three months or less when acquired to be cash equivalents.

The Company places its cash with high

credit quality financial institutions.

The Company’s account at this institution is insured by the Federal Deposit Insurance

Corporation (“FDIC”) up to $250,000.

To reduce its risk associated with the failure of such financial institution,

the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

The Company considers all highly liquid investments

with a maturity of three months or less when acquired to be cash equivalents.

The Company places its cash with high credit quality financial

institutions.

The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”)

up to $250,000.

To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually

the rating of the financial institution in which it holds deposits.

Foreign Currency Translation

The Company’s reporting currency

is US Dollars.

The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, Canadian

Dollar (“CAD”) as the functional currency.

The Company’s reporting currency is US Dollars.

The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, Canadian Dollar (“CAD”)

as the functional currency.

All assets and liabilities are translated into U.S.

Dollars at balance sheet

date, shareholders' equity is translated at historical rates and revenue and expense accounts are translated at the average exchange

rate for the year or the reporting period.

Dollars at balance sheet date, shareholders' equity is

translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting

The translation adjustments are reported as a separate component of stockholders’

equity, captioned as accumulated other comprehensive (loss) gain.

Transaction gains and losses arising from exchange rate fluctuations

on transactions denominated in a currency other than the functional currency are included in the statements of operations.

equity, captioned as accumulated other

comprehensive (loss) gain.

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency

other than the functional currency are included in the statements of operations.

The relevant translation rates are as follows:

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Intangible assets

Intangible assets consist of capitalized

software development costs and patents and trademarks.

The Company reviews intangibles held and

used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not

be recoverable.

In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the

anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period.

The Company recognizes

an impairment loss if the carrying value of the asset exceeds the expected future cash flows.

Intangible Assets - Intrusion Detection

Intellectual Property

Intangible assets consist of capitalized software

development costs and patents and trademarks.

The Company reviews intangibles held and used

for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted

future net cash flow of the individual assets over the remaining amortization period.

The Company recognizes an impairment loss if the

carrying value of the asset exceeds the expected future cash flows.

Intangible Assets - Intrusion Detection Intellectual

The Company relies on patent laws and restrictions

on disclosure to protect its intellectual property rights.

As of December 31, 2019, the Company held 3 U.S.

and foreign patents

on its intrusion detection technology, which expire in calendar years 2025 through 2034 (depending on the payment of maintenance

The DPTI issued patents cover a System

and Method for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber

Optic Deformation System Sensor and Method.

Maintenance of intellectual property rights and the protection thereof is important

to our business.

Any patents that may be issued may not sufficiently protect the Company's intellectual property and third parties

may challenge any issued patents.

Other parties may independently develop similar or competing technology or design around any

patents that may be issued to the Company.

The Company cannot be certain that the steps it has taken will prevent the misappropriation

of its intellectual property, particularly in foreign countries where the laws may not protect proprietary rights as fully as in

the United States.

Further, the Company may be required to enforce its intellectual property or other proprietary rights through

litigation, which, regardless of success, could result in substantial costs and diversion of management's attention.

Additionally,

there may be existing patents of which the Company is unaware that could be pertinent to its business, and it is not possible to

know whether there are patent applications pending that the Company's products might infringe upon, since these applications are

often not publicly available until a patent is issued or published.

For the year ended December 31, 2019, the

Company had patent amortization costs on its intrusion detection technology totaling $51,028.

Patents costs are being amortized

over the remaining life of each patent, which is from 7 to 16 years.

The DPTI issued patents cover a System

and Method for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber

Optic Deformation System Sensor and Method.

Maintenance of intellectual property rights and the protection thereof is important

to our business.

Any patents that may be issued may not sufficiently protect the Company's intellectual property and third parties

may challenge any issued patents.

Other parties may independently develop similar or competing technology or design around any

patents that may be issued to the Company.

The Company cannot be certain that the steps it has taken will prevent the misappropriation

of its intellectual property, particularly in foreign countries where the laws may not protect proprietary rights as fully as in

the United States.

Further, the Company may be required to enforce its intellectual property or other proprietary rights through

litigation, which, regardless of success, could result in substantial costs and diversion of management's attention.

Additionally,

there may be existing patents of which the Company is unaware that could be pertinent to its business, and it is not possible to

know whether there are patent applications pending that the Company's products might infringe upon, since these applications are

often not publicly available until a patent is issued or published.

The following

is a summary of activity related to the DPTI patents for the year ended December 31, 2019:

As of December 31, 2020, the Company held three U.S.

and foreign patents on

its intrusion detection technology, which expire in calendar years 2025 through 2034 (depending on the payment of maintenance fees).

The DPTI issued patents cover a System and Method

for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber Optic Deformation

System Sensor and Method.

Maintenance of intellectual property rights and the protection thereof is important to our business.

that may be issued may not sufficiently protect the Company's intellectual property and third parties may challenge any issued patents.

Other parties may independently develop similar or competing technology or design around any patents that may be issued to the Company.

The Company cannot be certain that the steps it has taken will prevent the misappropriation of its intellectual property, particularly

in foreign countries where the laws may not protect proprietary rights as fully as in the United States.

Further, the Company may be required

to enforce its intellectual property or other proprietary rights through litigation, which, regardless of success, could result in substantial

costs and diversion of management's attention.

Additionally, there may be existing patents of which the Company is unaware that could

be pertinent to its business, and it is not possible to know whether there are patent applications pending that the Company's products

might infringe upon, since these applications are often not publicly available until a patent is issued or published.

For the year ended December 31, 2020, the Company

had patent amortization costs on its intrusion detection technology totaling $51,028.

Patents costs are being amortized over the remaining

life of each patent, which is from 7 to 16 years.

The DPTI issued patents cover a System and Method

for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber Optic Deformation

System Sensor and Method.

Maintenance of intellectual property rights and the protection thereof is important to our business.

that may be issued may not sufficiently protect the Company's intellectual property and third parties may challenge any issued patents.

Other parties may independently develop similar or competing technology or design around any patents that may be issued to the Company.

The Company cannot be certain that the steps it has taken will prevent the misappropriation of its intellectual property, particularly

in foreign countries where the laws may not protect proprietary rights as fully as in the United States.

Further, the Company may be required

to enforce its intellectual property or other proprietary rights through litigation, which, regardless of success, could result in substantial

costs and diversion of management's attention.

Additionally, there may be existing patents of which the Company is unaware that could

be pertinent to its business, and it is not possible to know whether there are patent applications pending that the Company's products

might infringe upon, since these applications are often not publicly available until a patent is issued or published.

The following is a summary

of activity related to the DPTI patents for the year ended December 31, 2020:

Balance at January 1, 2020

Balance at December 31, 2020

following is a summary of the DPTI patents as of December 31, 2019:

The following is a summary of the DPTI patents

as of December 31, 2020:

Historical cost

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Carrying Value

expected amortization of intangible assets is as follows:

Future expected amortization of intangible

assets is as follows:

Year Ending December 31,

Intangible Assets - Capitalized software, trademarks, and

other patents

The Company capitalizes software development

costs incurred from the time technological feasibility has been obtained until the product is generally released to customers.

Amortization of capitalized software development costs begins when the products are available to customers and is computed using

the straight-line method over the remaining estimated economic life of the product.

The Company achieved technological feasibility

with regard to its mobile phone technology during the fourth quarter of 2010.

No software development costs were incurred and capitalized

during the years ended December 31, 2019 and 2018, and no amortization expense for software development costs was recorded for

the years ended December 31, 2019 and 2018.

The costs of patents and trademarks related

to the Company's software are amortized on a straight-line basis over 5 years from the date the patent or trademark is issued.

Amortization expense for patents and trademarks related to the Company's software was $0 and $9,811 for the years ended December

31, 2019 and 2018, respectively.

Intangible assets are tested for impairment

on an annual basis or when the facts and circumstances suggest that the carrying amount of the assets may not be recovered.

When the Company determines that the carrying

value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the

carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge.

The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management

to be commensurate with the risk inherent in the current business model.

Significant management judgment is required in determining

whether an indicator of impairment exists and in projecting cash flows.

In December 2018, the Company determined that

the products associated with the capitalized software and corresponding trademarks and patents were not in the Company’s

immediate future due to the fact that future cash raised would be used for the further development of its intrusion detection technology.

As such the Company determined it was appropriate to impair these assets and recorded an impairment charge of $294,238 for the

year ended December 31, 2018.

Property and Equipment

Property and equipment are capitalized

and depreciated over their estimated economic useful lives.

Upon sale or other disposition of property and equipment, the cost

and related accumulated depreciation or amortization are removed from the accounts and any gain or loss is included in the determination

of income or loss.

The Company had no assets as of December 31, 2019 and 2018.

Property and equipment are capitalized and depreciated

over their estimated economic useful lives.

Upon sale or other disposition of property and equipment, the cost and related accumulated

depreciation or amortization are removed from the accounts and any gain or loss is included in the determination of income or loss.

Company had no assets as of December 31, 2020 and 2019.

Revenue Recognition

The Company currently has no revenues from

its operations.

We anticipate that revenues from product sales, net of estimated returns and allowances, will be recognized when

evidence of an arrangement is in place, related prices are fixed and determinable, contractual obligations have been satisfied,

title and risk of loss have been transferred to the customer and collection of the resulting receivable is reasonably assured.

The Company currently has no revenues from its

We anticipate that revenues from product sales, net of estimated returns and allowances, will be recognized when evidence

of an arrangement is in place, related prices are fixed and determinable, contractual obligations have been satisfied, title and risk

of loss have been transferred to the customer and collection of the resulting receivable is reasonably assured.

Concentration of Credit Risk

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Related Parties

The Company accounts for related party

transactions in accordance with ASC 850 (“Related Party Disclosures”).

A party is considered to be related to the Company

if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control

with the Company.

Related parties also include principal owners of the Company, its management, members of the immediate families

of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or

can significantly influence the management or operating policies of the other to an extent that one of the transacting parties

might be prevented from fully pursuing its own separate interests.

A party which can significantly influence the management or

operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly

influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate

interests is also a related party.

The Company accounts for related party transactions

in accordance with ASC 850 (“Related Party Disclosures”).

A party is considered to be related to the Company if the party

directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company.

Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of

the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence

the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing

its own separate interests.

A party which can significantly influence the management or operating policies of the transacting parties

or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or

more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Derivative Financial Instruments

The Company evaluates the embedded conversion

feature within its convertible debt instruments under ASC 815-15 and ASC 815-40 to determine if the conversion feature meets the

definition of a liability and, if so, whether to bifurcate the conversion feature and account for it as a separate derivative liability.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at

its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

For stock-based derivative financial instruments, the Company uses a lattice model, in accordance with ASC 815-15 “Derivative

and Hedging”

to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative

instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each

reporting period.

Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether

net-cash settlement of the derivative instrument could be required within 12 months after the balance sheet date.

feature within its convertible debt instruments under ASC 815-15 and ASC 815-40 to determine if the conversion feature meets the definition

of a liability and, if so, whether to bifurcate the conversion feature and account for it as a separate derivative liability.

For derivative

financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is

then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

For stock-based derivative

financial instruments, the Company uses a lattice model, in accordance with ASC 815-15 “Derivative and Hedging”

derivative instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether

such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

Derivative instrument

liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument

could be required within 12 months after the balance sheet date.

Beneficial Conversion Features

The Company evaluates the conversion feature

for whether it was beneficial as described in ASC 470-30.

The intrinsic value of a beneficial conversion feature inherent to a

convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be

settled in cash upon conversion, is treated as a discount to the convertible note payable.

This discount is amortized over the

period from the date of issuance to the date the note is due using the effective interest method.

If the note payable is retired

prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense.

In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative

fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock

at the commitment date to be received upon conversion.

The Company evaluates the conversion feature for

whether it was beneficial as described in ASC 470-30.

The intrinsic value of a beneficial conversion feature inherent to a convertible

note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon

conversion, is treated as a discount to the convertible note payable.

This discount is amortized over the period from the date of issuance

to the date the note is due using the effective interest method.

If the note payable is retired prior to the end of its contractual term,

the unamortized discount is expensed in the period of retirement to interest expense.

In general, the beneficial conversion feature is

measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in

the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received upon conversion.

Fair Value of Financial Instruments

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its financial assets and liabilities in accordance with the requirements of FASB ASC 820, “Fair Value Measurements and Disclosures”.

As defined in FASB ASC 820, the fair value is the price that would be received to sell an asset or paid to transfer a liability

in an orderly transaction between market participants at the measurement date (exit price).

The Company utilized the market data

of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including

assumptions about risk and the risks inherent in the inputs to the valuation technique.

These inputs can be readily observable,

market corroborated, or generally unobservable.

The Company classifies fair value balances based on the observability of those

FASB ASC 820 established a fair value hierarchy that prioritizes the inputs used to measure fair value.

The hierarchy gives

the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and

the lowest priority to unobservable inputs (level 3 measurement) as follows:

As defined in FASB ASC 820, the fair value is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date (exit price).

The Company utilized the market data of similar

entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about

risk and the risks inherent in the inputs to the valuation technique.

These inputs can be readily observable, market corroborated, or

generally unobservable.

The Company classifies fair value balances based on the observability of those inputs.

FASB ASC 820 established

a fair value hierarchy that prioritizes the inputs used to measure fair value.

The hierarchy gives the highest priority to unadjusted

quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs

(level 3 measurement) as follows:

Level 1 –

Quoted prices are available

in active markets for identical assets or liabilities as of the reporting date.

Active markets are those in which transactions

for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Quoted prices are available in

active markets for identical assets or liabilities as of the reporting date.

Active markets are those in which transactions for the asset

or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 1 primarily consists of

financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 –

Pricing inputs are other

than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported

date and includes those financial instruments that are valued using models or other valuation methodologies.

These models are primarily

industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility

factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures.

Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived

from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Instruments in

this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Pricing inputs are other than

quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes

those financial instruments that are valued using models or other valuation methodologies.

These models are primarily industry-standard

models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current

market and contractual prices for the underlying instruments, as well as other relevant economic measures.

Substantially all of these

assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported

by observable levels at which transactions are executed in the marketplace.

Instruments in this category generally include non-exchange-traded

derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 –

Pricing inputs include

significant inputs that are generally less observable from objective sources.

These inputs may be used with internally developed

methodologies that result in management’s best estimate of fair value.

Pricing inputs include significant

inputs that are generally less observable from objective sources.

These inputs may be used with internally developed methodologies that

result in management’s best estimate of fair value.

The Company accounts for income taxes pursuant

to the provision of ASC 740-10, “Accounting for Income Taxes”

(“ASC 740-10”) which requires, among other

things, an asset and liability approach to calculating deferred income taxes.

The asset and liability approach requires the recognition

of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts

and the tax bases of assets and liabilities.

A valuation allowance is provided to offset any net deferred tax assets for which

management believes it is more likely than not that the net deferred asset will not be realized.

(“ASC 740-10”) which requires, among other things,

an asset and liability approach to calculating deferred income taxes.

The asset and liability approach requires the recognition of deferred

tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax

bases of assets and liabilities.

A valuation allowance is provided to offset any net deferred tax assets for which management believes

it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of ASC 740-10

related to Accounting for Uncertain Income Tax Positions.

When tax returns are filed, there may be uncertainty about the

merits of positions taken or the amount of the position that would be ultimately sustained.

In accordance with the guidance of

ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available

evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution

of appeals or litigation processes, if any.

When tax returns are filed, there may be uncertainty about the merits of positions

taken or the amount of the position that would be ultimately sustained.

In accordance with the guidance of ASC 740-10, the benefit of

a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes

it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes,

Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more likely

than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized

upon settlement with the applicable taxing authority.

The portion of the benefit associated with tax positions taken that exceed

the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance

sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

The Company believes its tax positions

are all more likely than not to be upheld upon examination.

As such, the Company has not recorded a liability for uncertain tax

The Company has adopted ASC 740-10-25,

“Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively

settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively

settled upon the completion and examination by a taxing authority without being legally extinguished.

For tax positions considered

effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more

likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open.

federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally

for three years after they are filed.

Tax positions that meet the more likely than not

recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement

with the applicable taxing authority.

The portion of the benefit associated with tax positions taken that exceed the amount measured as

described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated

interest and penalties that would be payable to the taxing authorities upon examination.

The Company believes its tax positions are all

more likely than not to be upheld upon examination.

As such, the Company has not recorded a liability for uncertain tax benefits.

The Company has adopted ASC 740-10-25, “Definition

of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the

purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion

and examination by a taxing authority without being legally extinguished.

For tax positions considered effectively settled, an entity

would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based

solely on the basis of its technical merits and the statute of limitations remains open.

The federal and state income tax returns

of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

The Company's U.S.

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The Company does not anticipate a tax liability for the years 2020 and 2019.

The Company has filed tax returns in Canada for the years ending December 31, 2018, 2017, 2016, 2015, 2014, and 2013, and they

are still subject to audit.

has filed tax returns in Canada for the year ending December 31, 2018, and they are still subject to audit.

Income (Loss) Per Common Share

The Company accounts for earnings per share

pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements of "basic"

The Company accounts for earnings per share pursuant

to ASC 260, Earnings per Share, which requires disclosure on the financial statements of "basic"

and "diluted"

earnings (loss) per share.

Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number

of common shares outstanding for the year.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted

average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for

In periods where the Company has a net loss, all dilutive securities are excluded.

(loss) per share.

Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common

shares outstanding for the year.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number

of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.

where the Company has a net loss, all dilutive securities are excluded.

December 31, 2020

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2016-02, Leases (Topic 842).

The new guidance establishes the principles to report transparent and economically

neutral information about the assets and liabilities that arise from leases.

The updated standard was effective for us in the first

quarter of 2019.

Adoption of this standard did not have a material impact on the Company’s financial statements as the Company

does not have any leases.

The new guidance establishes the principles to report transparent and economically neutral

information about the assets and liabilities that arise from leases.

The updated standard was effective for us in the first quarter of

Adoption of this standard did not have a material impact on the Company’s financial statements as the Company does not have

In August 2018, the FASB issued Accounting

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Goodwill and Other —

Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That

Is a Service Contract.

The standard is intended to clarify the accounting for implementation costs of a hosting arrangement

that is a service contract.

For the Company, the amendments in ASU 2018-15 are effective for annual periods beginning January 1,

The Company is evaluating the impact this new guidance may have on its Consolidated Financial Statements.

In December 2019, the FASB issued Accounting

Standards Update No.

Internal-Use Software

(Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.

The standard is intended to clarify the accounting for implementation costs of a hosting arrangement that is a service contract.

Company, the amendments in ASU 2018-15 are effective for annual periods beginning January 1, 2021.

The Company is evaluating the impact

this new guidance may have on its Consolidated Financial Statements.

In December 2019, the FASB issued Accounting Standards

2019-12 (“ASU 2019-12”), Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

The standard is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in

Topic 740, as well as improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending

existing guidance.

For the Company, the amendments in ASU 2019-12 are effective for annual periods beginning January 1, 2022.

Company is evaluating the impact this new accounting guidance may have on its Consolidated Financial Statements.

is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, as well

as improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

the Company, the amendments in ASU 2019-12 are effective for annual periods beginning January 1, 2022.

The Company is evaluating the impact

this new accounting guidance may have on its Consolidated Financial Statements.

Although there are several other new accounting

pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not

believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe

any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

NOTE 3 –

GOING CONCERN

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

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

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.

NOTE 4 –

REVERSE ACQUISITION

Effective April 27, 2018, the Company,

formerly known as Klever Marketing, Inc.

("Klever"), entered into a Merger Agreement with DarkPulse Technologies Inc.,

pursuant to which the DarkPulse Technologies Inc.

shareholders agreed to contribute 100% of the outstanding securities of DarkPulse

Technologies Inc.

in exchange for an aggregate of 88,235 shares of our Series D Preferred Stock.

Following the closing, DarkPulse

Technologies Inc.

became a wholly owned subsidiary and the DarkPulse Technologies Inc.

shareholders became our stockholders and

control our Company through the ownership of the outstanding preferred stock.

The transaction was accounted for as a

reverse acquisition using the acquisition method of accounting in accordance with FASB ASC Topic 805.

DarkPulse Technologies Inc.

is the acquirer solely for financial accounting purposes.

The following table summarizes the purchase accounting for the fair value

of the assets acquired and liabilities assumed at the date of the reverse acquisition.

Capitalized software

Patents and trademarks, net

Total assets acquired

Due to former management

Total liabilities assumed

Total assets less liabilities assumed

Net assets attributed to non-controlling interests (Klever shareholders)

Net assets acquired

Consideration [1]

value of the consideration effectively transferred, $131,409, was measured based on the net asset value of the Klever Marketing,

assets immediately before the transaction.

The merger agreement was modified on June

The Company secured financing for the closing of the Merger, and it closed on July 18, 2018.

On July 20, 2018, Klever's

name was changed to DarkPulse Inc., ("DPI") and on September 4, 2018, DarkPulse.

Inc.'s stock symbol was changed to DPLS.

On August 17, 2018, the Merger Agreement was amended effective July 18, 2018, to effect the merger by share exchange instead of

by subsidiary merger.

On July 18, 2018, the 882 outstanding common shares of DarkPulse Technologies Inc.

were exchanged for 88,235

shares of Klever Marketing Inc.

Series D Preferred Stock.

The Company is now a wholly owned subsidiary of DPI, a publicly traded

company incorporated in Delaware.

Terms of the Merger Agreement were that all outstanding liabilities of Klever would be settled

in full prior to the merger, with the single exception for two year notes to be issued to the prior management of Klever in the

total amount of $150,000 at zero percent interest.

Additionally, all outstanding shares of preferred stock would be retired and

cancelled, and approximately 28,358,000 shares of common stock would be issued to the former management, who were also the shareholders

of the preferred shares to be cancelled.

At the closing of the merger, the Klever common stockholders owned approximately 15% of

the ownership of the merged entity, and the DarkPulse Technologies Inc.

shareholders owned approximately 85% of the entity.

intellectual property assets of Klever remained in the merged entity.

Cash assets in the Klever bank account were used to settle

the prior outstanding liabilities, and were not for the benefit of the newly merged entity.

As shown in the accompanying financial statements,

the Company generated net losses of $275,841 and $1,825,469 during the years ended December 31, 2020 and 2019, respectively.

did not generate any revenue from product sales during the years ended December 31, 2020 and 2019.

As of December 31, 2020, the Company’s

current liabilities exceeded its current assets by $3,241,568.

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.

NOTE 4 –

CONVERTIBLE DEBT SECURITIES

The Company uses the Black-Scholes Model

to calculate the derivative value of its convertible debt.

The valuation result generated by this pricing model is necessarily

driven by the value of the underlying common stock incorporated into the model.

The values of the common stock used were based

on the price at the date of issue of the debt security as of December 31, 2019.

Management determined the expected volatility

between 402.91-545.47%, a risk free rate of interest between 1.58-1.59%, and contractual lives of the debt varying from zero months

to seven months.

Management made the determination to use an expected life rather than contractual life for the calculations for

the matured debt as of December 31, 2019.

The expected life is equal to the contractual life extended by one year which vary from

two to seven months.

The table below details the Company's outstanding convertible notes, with totals for the face amount, amortization

of discount, initial loss, change in the fair market value, and the derivative liability.

The Company uses the Black-Scholes Model to calculate

the derivative value of its convertible debt.

The valuation result generated by this pricing model is necessarily driven by the value

of the underlying common stock incorporated into the model.

The values of the common stock used were based on the price at the date of

issue of the debt security as of December 31, 2020.

Management determined the expected volatility between 475.55-624.25%, a risk free

rate of interest between 0.10-0.13%, and contractual lives of the debt varying from zero months to eight months.

Management made the

determination to use an expected life rather than contractual life for the calculations for the matured debt as of December 31, 2020.

The expected life is equal to the contractual life extended by one year which vary from two to seven months.

The table below details

the Company's outstanding convertible notes, with totals for the face amount, amortization of discount, initial loss, change in the fair

market value, and the derivative liability.

Transaction expense

On July 17, 2018, The Company entered into

a securities purchase agreement with Carebourn Capital L.P., (“Carebourn”) issuing to Carebourn a convertible promissory

note in the aggregate principal amount of $189,750 with a $24,750 original issue discount and $15,000 in transactional expenses

due to Carebourn.

The note bears interest at 12% per annum and may be converted into common shares of DPI's common stock at a conversion

price equal to 60% of the average of the three lowest trading prices of the DPI's common stock during the 20 prior trading days.

For the years ended December 31, 2019 and 2018, the Company made repayments totaling $32,090 and $42,200.

On January 10, 2019, the Company entered

into a Securities Purchase Agreement with GS Capital Partners, LLC, (“GS Capital”) 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.

For the years ended December 31, 2020 and 2019, GS Capital converted $0

and $11,136 in principal of its' convertible note into 0 and 79,605,027 shares of common stock.

On February 12, 2019, the Company entered into

a securities purchase agreement with Crown Bridge Partners, LLC, (“Crown”) 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

For the year ended December 31, 2020 and 2019, Crown converted $6,855 and $9,532 in principal of its' convertible note into 169,000,000

and 259,259,259 shares of common stock.

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.

of the date the consolidated financial statements were available for issuance, DPI received $36,000 net cash.

For the year ended December

31, 2019, Carebourn converted $53,932 in principal of its' convertible note into 7,688,347 shares of common stock.

On July 27, 2018, The Company entered into

a securities purchase agreement with Carebourn, issuing to Carebourn a convertible promissory note in the aggregate principal amount

of $276,000 with a $36,000 original issue discount and $15,000 in transactional expenses due to Carebourn.

The note bears interest

at 12% per annum and 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.

As of December 31, 2019,

the Company received $150,000 net cash, and $75,000 is not expected to be received.

For the years ended December 31, 2019 and 2018,

the Company made repayments totaling $10,150 and $0.

On August 20, 2018, the Company entered

into a securities purchase agreement with More Capital LLC, ("More") issuing to More a convertible promissory note in

the aggregate principal amount of $152,000 with a $20,000 original issue discount and $7,000 in transactional expenses due to More.

31, 2020 and 2019, GS Capital has no converted principal into common stock.

On May 3, 2019, 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

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 60% of the average of the three lowest trading prices of the Company's common stock during the 20 prior trading

As of December 31, 2019, the Company received $70,000 net cash, and $55,000 is not expected to be received.

For the years

ended December 31, 2019 and 2018, More converted $24,512 and $0 in principal of its' convertible note into 20,880,639 and 0 shares

of common stock.

On September 24, 2018, the Company entered

into a securities purchase agreement with Auctus Fund, LLC, (“Auctus”) issuing to Auctus a convertible promissory

note in the aggregate principal amount of $100,000 with $10,250 in transactional expenses due to Auctus and its counsel.

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.

As of November 30, 2018, the

Company has been in breach of the note and default interest as of that date at the rate of 24% due to the failure to maintain

the required amount of reserve shares.

The Company received $89,750 net cash on September 27, 2018.

For the years ended December

31, 2019 and 2018, Auctus converted $23,343 and $0 in principal of its' convertible note into 377,325,592, and 0 shares of common

On May 18, 2020, the Company received a default notice from Auctus demanding full payment of the note and damages of $155,729.

The Company has notified Auctus that a full review of their conversions is underway due to some inconsistencies in previous conversion

prices thus conversion amounts.

On September 25, 2018, the Company entered

into a securities purchase agreement with EMA Financial, LLC, (“EMA”) issuing to EMA a convertible promissory note

in the aggregate principal amount of $100,000 with a 6% original issue discount and $4,000 in transactional expenses due to EMA.

The note originally bore interest at 8% per annum and was 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%.

The Company received $90,000 net cash on September

For the years ended December 31, 2019 and 2018, EMA converted $37,628 and $0 in principal of its' convertible note into

188,100,000 and 0 shares of common stock.

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

(“FirstFire”) issuing to FirstFire a convertible promissory note in the aggregate principal amount of $247,500, with

a $22,500 original issue discount and $5,000 in transactional expenses due to FirstFire's 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 the lower of $0.25,

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

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

The Company received $55,200

net cash on October 9, 2018.

For the years ended December 31, 2019 and 2018, EMA converted $37,628 and $0 in principal of

its' convertible note into 188,100,000 and 0 shares of common stock.

On January 10, 2019, the Company

entered into a Securities Purchase Agreement with GS Capital Partners, LLC, (“GS

Capital”) issuing a convertible redeemable note in the principal amount of $65,000.

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.

For the year ended

December 31, 2019, GS Capital converted $11,136 in principal of its' convertible note into 79,605,027 shares of common

On February 12, 2019, the Company entered

into a securities purchase agreement with Crown Bridge Partners, LLC, (“Crown”)

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.

For the year ended December 31, 2019, Crown converted $9,532 in principal of its' convertible

note into 259,259,259 shares of common stock.

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.

For the year ended December 31, 2019, GS Capital has not converted principal into common stock.

On May 3, 2019, 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 days.

The Company received $55,200 net cash.

For the year ended December 31, 2019, Geneva has not converted principal

into common stock.

The Company was notified on October 15, 2019 that the note was in default and subject to a 200% penalty.

additional $64,000 was recorded as interest expense as of December 31, 2019.

The additional $64,000

was recorded as interest expense as of December 31, 2019.

For the year ended December 31, 2020, Geneva has converted the full amount of

$128,000 principal and $11,606 interest into 1,745,231,572 shares of common stock.

On October 7, 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 $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

For the year ended December 31, 2020, Geneva has not converted principal into common stock.

As of December 31, 2020 and 2019 respectively,

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NOTE 5 - DEBENTURE

DPTI issued a convertible Debenture to

the University (see Note 1) in exchange for the Patents assigned to the Company, in the amount of Canadian $1,500,000, or US $1,491,923

on December 16, 2010, the date of the Debenture.

On April 24, 2017 DPTI issued a replacement secured term Debenture in the same

C$1,500,000 amount as the original Debenture.

DPTI issued a convertible Debenture to the University

(see Note 1) in exchange for the Patents assigned to the Company, in the amount of Canadian $1,500,000, or US $1,491,923 on December 16,

2010, the date of the Debenture.

On April 24, 2017 DPTI issued a replacement secured term Debenture in the same C$1,500,000 amount as

the original Debenture.

The interest rate is the Bank of Canada Prime overnight rate plus 1% per annum.

Debenture had an initial required payment of Canadian $42,000 (US$33,385) due on April 24, 2018 for reimbursement to the University

of its research and development costs, and this has been paid.

Interest-only maintenance payments are due annually starting after

April 24, 2018.

Payment of the principal begins on the earlier of (a) three years following two consecutive quarters of positive

earnings before interest, taxes, depreciation and amortization, (b) six years from April 24, 2017, or (c) in the event DPTI fails

to raise defined capital amounts or secure defined contract amounts by April 24 in the years 2018, 2019, and 2020.

has raised funds in excess of the amount required by April 24, 2018.

The principal repayment amounts will be due quarterly over

a six year period in the amount of Canadian Dollars $62,500.

Based on the exchange rate between the Canadian Dollar and the U.S.

The Debenture had an initial required

payment of Canadian $42,000 (US$33,385) due on April 24, 2018 for reimbursement to the University of its research and development costs,

and this has been paid.

Interest-only maintenance payments are due annually starting after April 24, 2018.

Payment of the principal begins

on the earlier of (a) three years following two consecutive quarters of positive earnings before interest, taxes, depreciation and amortization,

(b) six years from April 24, 2017, or (c) in the event DPTI fails to raise defined capital amounts or secure defined contract amounts

by April 24 in the years 2018, 2019, and 2020.

The Company has raised funds in excess of the amount required for 2020, 2019 and 2018.

The principal repayment amounts will be due quarterly over a six year period in the amount of Canadian Dollars $62,500.

Based on the exchange

rate between the Canadian Dollar and the U.S.

Dollar on December 31, 2018, the quarterly principal repayment amounts will be US$48,447.

The Debenture is secured by the Patents

assigned by the University to DPTI by an Assignment Agreement on December 16, 2010.

DPTI has pledged the Patents, and granted a

lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University.

The Debenture was initially recorded at

the $1,491,923 equivalent US Dollar amount of Canadian $1,500,000 as of December 16, 2010, the date of the original Debenture.

The liability is being adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the end

of each quarter.

The adjustment is recorded as unrealized gain or loss in the change of the value of the two currencies during

The amounts recorded as an unrealized gain (loss) for the years ended December 31, 2019, and 2018, were $71,084 and

$90,772 respectively.

These amounts are included in Accumulated Other Comprehensive Loss in the Equity section of the consolidated

balance sheet, and as Unrealized Loss on Foreign Exchange on the consolidated statement of comprehensive loss.

The Debenture also

includes a provision requiring DPTI to pay the University a two percent (2%) royalty on sales of any and all products or services

which incorporate the Patents for a period of five (5) years from April 24, 2018.

For the years ended December 31, 2019, and 2018, the Company

recorded interest expense of $52,538 and $76,275, respectively.

The Debenture is secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010.

DPTI has pledged

the Patents, and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University.

The Debenture was initially recorded at the $1,491,923

equivalent US Dollar amount of Canadian $1,500,000 as of December 16, 2010, the date of the original Debenture.

The liability is being

adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the end of each quarter.

The adjustment

is recorded as unrealized gain or loss in the change of the value of the two currencies during the quarter.

The amounts recorded as an

unrealized gain (loss) for the years ended December 31, 2020, and 2019, were $20,941 and $52,905 respectively.

These amounts are included

in Accumulated Other Comprehensive Loss in the Equity section of the consolidated balance sheet, and as Unrealized Loss on Foreign Exchange

on the consolidated statement of comprehensive loss.

The Debenture also includes a provision requiring DPTI to pay the University a two

percent (2%) royalty on sales of any and all products or services which incorporate the Patents for a period of five (5) years from April

For the years ended December 31, 2020, and 2019, the Company recorded

interest expense of $49,414 and $52,538, respectively.

As of December 31, 2020, the debenture liability totaled $1,176,092,

all of which was long term.

Future minimum required payments over

the next 5 years and thereafter are as follows:

Future minimum required payments over the

next 5 years and thereafter are as follows:

Period ending December 31,

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NOTE 7 –

The provision (benefit) for income taxes

for the years ended December 31, 2019 and 2018 differs from the amount which would be expected as a result of applying the statutory

tax rates to the losses before income taxes due primarily to the valuation allowance to fully reserve net deferred tax assets.

The provision (benefit) for income taxes for the

years ended December 31, 2020 and 2019 differs from the amount which would be expected as a result of applying the statutory tax rates

to the losses before income taxes due primarily to the valuation allowance to fully reserve net deferred tax assets.

The following table summarizes the significant

2 unchanged sentences

Change in valuation allowance:

The Company’s

deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows:

The Company’s deferred tax assets and liabilities as of December

31, 2020 and 2019 are as follows:

Deferred Tax (Liabilities):

2 unchanged sentences

Valuation allowance

The Company has approximately $1,284,000

non-capital income tax losses as of December 31, 2019, which will begin to expire in the year 2038.

The Company has approximately $1,284,000 non-capital

income tax losses as of December 31, 2019, which will begin to expire in the year 2038.

The Company calculates its income tax expense

by estimating the annual effective tax rate and applying that rate to the year-to-date ordinary income (loss) at the end of the

The Company records a tax valuation allowance when it is more likely than not that it will not be able to recover the value

of its deferred tax assets.

For the years ended December 31, 2019 and 2018, the Company calculated its estimated annualized effective

tax rate at 0% and 0%, respectively, for both the United States and Canada.

The Company had no income tax expense on its losses

for the years ended December 31, 2019 and 2018, respectively.

by estimating the annual effective tax rate and applying that rate to the year-to-date ordinary income (loss) at the end of the period.

The Company records a tax valuation allowance when it is more likely than not that it will not be able to recover the value of its deferred

For the years ended December 31, 2020 and 2019, the Company calculated its estimated annualized effective tax rate at 0% and

0%, respectively, for both the United States and Canada.

The Company had no income tax expense on its losses for the years ended December

31, 2020 and 2019, respectively.

The Company recognizes the financial statement

benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position

following an audit.

For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements

is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax

The Company recognizes interest accrued on uncertain tax positions as well as interest received from favorable tax settlements

within interest expense.

The Company recognizes penalties accrued on unrecognized tax benefits within selling, general and administrative

As of December 31, 2019 and 2018, the Company had no uncertain tax positions.

benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following

For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest

benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

recognizes interest accrued on uncertain tax positions as well as interest received from favorable tax settlements within interest expense.

The Company recognizes penalties accrued on unrecognized tax benefits within selling, general and administrative expenses.

As of December

31, 2020 and 2019, the Company had no uncertain tax positions.

The Company does not anticipate any significant

changes to the total amounts of unrecognized tax benefits in the next twelve months.

The Company files income tax returns in New

Brunswick, Canada, and the U.S.

The Company files income tax returns in New Brunswick,

Canada, and the U.S.

federal, New York, and Delaware jurisdictions.

Tax years 2011 to current remain open to examination

by Canadian authorities;

Tax years 2011 to current remain open to examination by Canadian authorities;

the tax year 2018 remains open to examination by U.S.

1 unchanged sentence

PREFERRED STOCK

In accordance with the Company’s

bylaws, the Company has authorized a total of 2,000,000 shares of preferred stock, par value $0.01 per share, for all classes.

As of December 31, 2019 and 2018 respectively, there were 88,235 and 88,235 total preferred shares issued and outstanding for all

On July 12, 2018, the Company filed a Certificate

of Designation with the State of Delaware amending the designation of its previously designated “Class D Voting Preferred

Stock,”

designating 100,000 shares of the Company’s preferred stock as “Series D Preferred Stock.”

share of Series D Preferred Stock entitles the holder to 6,000 votes on all matters submitted to a vote of the Company’s

stockholders and is convertible at the election of the holder into a number of shares of common stock equal to the number of outstanding

shares of common stock of the Company multiplied by 5 ⅔, divided by the number of outstanding shares of Series D Preferred

All of these shares are owned by the Company's management, with control ownership held by the Company's CEO.

NOTE 10 –

On July 1, 2019, the majority stockholders holding a majority of the issued and outstanding voting shares

of the Company amended the Company’s Certificate of Incorporation to increase the number of authorized shares of Common Stock

from 3,000,000,000 to 20,000,000,000.

In accordance with the Company’s

bylaws, the Company has authorized a total of 20,000,000,000 shares of common stock, par value $0.01 per share.

In accordance with the Company’s bylaws,

the Company has authorized a total of 2,000,000 shares of preferred stock, par value $0.01 per share, for all classes.

As of December

31, 2019 and 2018, there were 1,392,042,112 and 89,680,567 common shares issued and outstanding.

During the year ended December 31, 2019,

the Company issued 1,302,361,545 shares of common stock as settlement of notes payable and

accrued interest in the total amount of $184,737 and $54,534 respectively.

During the year ended December 31, 2018,

the Company issued 28,358,000 shares of common stock as settlement of deferred compensation

and notes payable to former officers and directors of the Company in the total amount of $558,745.74, and in recognition of the

upcoming cancellation of the PSF, Inc.

preferred shares.

At December 31, 2019, the Company had 1,589,257,888

in common shares reserved for issuance for convertible debt securities.

31, 2020 and 2019 respectively, there were 88,235 and 88,235 total preferred shares issued and outstanding for all classes.

NOTE 9 –

On February 5, 2019, the majority stockholders

1 unchanged sentence

to increase the number of authorized shares of Common Stock from 250,000,000 to 3,000,000,000.

On July 1, 2019, the majority stockholders holding

a majority of the issued and outstanding voting shares of the Company amended the Company’s Certificate of Incorporation to increase

the number of authorized shares of Common Stock from 3,000,000,000 to 20,000,000,000.

On February 18, 2020, the majority stockholders

holding a majority of the issued and outstanding voting shares of the Company amended the Company’s Certificate of Incorporation

to amend the par value of the Company’s common stock from $0.01 to $0.0001.

In accordance with the Company’s bylaws,

the Company has authorized a total of 20,000,000,000 shares of common stock, par value $0.0001 per share.

As of December 31, 2020 and

2019, there were 4,088,762,156 and 1,392,042,112 common shares issued and outstanding.

During the year ended December 31, 2020, the Company

issued 2,696,720,044 shares of common stock as settlement of notes payable and accrued interest

in the total amount of $143,930 and $22,339 respectively.

During the year ended December 31, 2019, the Company

issued 1,302,361,545 shares of common stock as settlement of notes payable and accrued interest

in the total amount of $184,737 and $54,534 respectively.

At December 31, 2020, the Company had 1,589,257,888

in common shares reserved for issuance for convertible debt securities.

NOTE 10 –

STOCK OPTIONS

The shareholders approved, by a majority

vote, the adoption of the 1998 Stock Incentive Plan (the “Plan”).

As amended on August 11, 2003, the Plan reserves

20,000,000 shares of common stock for issuance upon the exercise of options which may be granted from time-to-time to officers,

directors, certain employees and consultants of the Company or its subsidiaries by the Board of Directors.

The Plan permits the

award of both qualified and non-qualified incentive stock options.

As of December 31, 2019 and 2018,

the Company had no outstanding stock options.

As of December 31, 2020 and 2019, the Company

had no outstanding stock options.

NOTE 11 –

COMMITMENTS AND CONTINGENCIES

Potential Royalty

The Company, in consideration of the terms

of the debenture to the University of New Brunswick, shall pay to the University a two percent royalty on sales of any and all

products or services, which incorporate the Company's patents for a period of five years from April 24, 2018.

Potential Commission

Potential Royalty Payments

The Company, in consideration of the terms of

the debenture to the University of New Brunswick, shall pay to the University a two percent royalty on sales of any and all products or

services, which incorporate the Company's patents for a period of five years from April 24, 2018.

Potential Commission Payments

The Company, in consideration of the Strategic

Alliance Agreement with Bravatek, for the purpose of promoting the Company’s products, will pay Bravatek sales commissions

for clients introduced to the Company by Bravatek.

Alliance Agreement with Bravatek, for the purpose of promoting the Company’s products, will pay Bravatek sales commissions for clients

introduced to the Company by Bravatek.

This agreement expired on September 5, 2019.

License agreement

with Battelle Memorial Institute

On December 27, 2018,

the Company signed a license agreement with Battelle Memorial Institute ("Battelle").

The license agreement allows the

Company to utilize patents of Battelle for payments totaling $30,000.

The Company also must pay a royalty of 6% of gross sales

and 25% of sublicensing revenue.

The minimal royalties under the agreement are as follows:

2022 and thereafter

Legal Matters

October 2, 2018, the Company received a demand for payment from Bravatek Solutions, Inc.

for payment in the amount of $35,750 for

software services.

The Company is not a party to any significant pending legal proceedings, and no other such proceedings

are known to be contemplated.

No director, officer or affiliate of the Company, and no owner of record or beneficial owner of more

than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse

to the Company or has a material interest adverse to the Company in reference to pending litigation.

2, 2018, the Company received a demand for payment from Bravatek Solutions, Inc.

for payment in the amount of $35,750 for software services.

Company is not a party to any significant pending legal proceedings, and no other such proceedings are known to be contemplated.

No director, officer or affiliate of the Company, and no owner of record or beneficial owner of more than 5.0% of the securities of the

Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest

adverse to the Company in reference to pending litigation.

On March 27, 2019, Thomas A.

Cellucci, et al.

DarkPulse, Inc.

(the “Complaint”) was filed in the United States District Court for the Southern District

of New York by certain of the Company’s former executive officers, one also being a former director, and a non-employee shareholder

(collectively, the “Plaintiffs”), against the Company, its sole officer and director, and others, claiming that the

Plaintiffs brought the action to protect their individual rights as minority shareholders, as improperly-ousted officers (other

than the non-employee shareholder), and as an improperly-ousted director, seeking equitable relief, damages, recovery of unpaid

salaries and other relief.

It is the Company's position that the Complaint represents a frivolous harassment lawsuit, and the Company

intends to file a motion to dismiss all claims made in the Complaint and intends to otherwise defend itself vigorously in

The Company is also exploring filing counterclaims against the Plaintiffs in the action.

From time to time, we may become involved

in litigation relating to claims arising out of our operations in the normal course of business.

We are not currently involved

in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any

proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material

adverse effect on our business, financial condition and operating results.

(the “Complaint”) was filed in the United States District Court for the Southern District of New

York by certain of the Company’s former executive officers, one also being a former director, and a non-employee shareholder (collectively,

the “Plaintiffs”), against the Company, its sole officer and director, and others, claiming that the Plaintiffs brought the

action to protect their individual rights as minority shareholders, as improperly-ousted officers (other than the non-employee shareholder),

and as an improperly-ousted director, seeking equitable relief, damages, recovery of unpaid salaries and other relief.

It is the Company's

position that the Complaint represents a frivolous harassment lawsuit, and the Company intends to file a motion to dismiss all claims

made in the Complaint and intends to otherwise defend itself vigorously in this matter.

The Company is also exploring filing counterclaims

against the Plaintiffs in the action.

From time to time, we may become involved in litigation

relating to claims arising out of our operations in the normal course of business.

We are not currently involved in any pending legal

proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are

a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on our business,

financial condition and operating results.

On March 11, 2020, the World Health Organization

announced that infections of the novel Coronavirus (COVID-19) had become pandemic, and on March 13, the U.S.

President announced

a National Emergency relating to the disease.

There is a possibility of continued widespread infection in the United States and

abroad, with the potential for catastrophic impact.

National, state and local authorities have required or recommended social distancing

and imposed or are considering quarantine and isolation measures on large portions of the population, including mandatory business

These measures, while intended to protect human life, are expected to have serious adverse impacts on domestic and foreign

economies of uncertain severity and duration.

President announced a National

Emergency relating to the disease.

There is a possibility of continued widespread infection in the United States and abroad, with the

potential for catastrophic impact.

National, state and local authorities have required or recommended social distancing and imposed or

are considering quarantine and isolation measures on large portions of the population, including mandatory business closures.

These measures,

while intended to protect human life, are expected to have serious adverse impacts on domestic and foreign economies of uncertain severity

and duration.

Some economists are predicting the United States will soon enter a recession.

sweeping nature of the coronavirus pandemic makes it extremely difficult to predict how the Company’s business and operations

will be affected in the longer run, but we expect that it may materially affect our business, financial condition and results of

The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain

and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions

to contain the coronavirus or treat its impact, among others.

Moreover, the coronavirus outbreak has begun to have indeterminable

adverse effects on general commercial activity and the world economy, and our business and results of operations could be adversely

affected to the extent that this coronavirus or any other epidemic harms the global economy generally and/or the markets in which

we operate specifically.

Any of the foregoing factors, or other cascading effects of the coronavirus pandemic that are not currently

foreseeable, could materially increase our costs, negatively impact our revenues and damage the Company’s results of operations

and its liquidity position, possibly to a significant degree.

The duration of any such impacts cannot be predicted.

The sweeping nature of the coronavirus pandemic

makes it extremely difficult to predict how the Company’s business and operations will be affected in the longer run, but we expect

that it may materially affect our business, financial condition and results of operations.

The extent to which the coronavirus impacts

our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may

emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others.

the coronavirus outbreak has begun to have indeterminable adverse effects on general commercial activity and the world economy, and our

business and results of operations could be adversely affected to the extent that this coronavirus or any other epidemic harms the global

economy generally and/or the markets in which we operate specifically.

Any of the foregoing factors, or other cascading effects of the

coronavirus pandemic that are not currently foreseeable, could materially increase our costs, negatively impact our revenues and damage

the Company’s results of operations and its liquidity position, possibly to a significant degree.

The duration of any such impacts

cannot be predicted.

NOTE 12–

RELATED PARTY TRANSACTIONS

The Company follows

subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related

party transactions.

Pursuant to Section 850-10-20 the related parties include a) affiliates of the Company;

b) Entities for

which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value

Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity;

c) trusts for the benefit

of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management;

owners of the Company;

The Company follows subtopic

850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

to Section 850-10-20 the related parties include a) affiliates of the Company;

b) Entities for which investments in their equity securities

would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted

for by the equity method by the investing entity;

c) trusts for the benefit of employees, such as pension and profit-sharing trusts that

are managed by or under the trusteeship of management;

d) principal owners of the Company;

e) management of the Company;

f) other parties with which the Company may deal if one party controls or

can significantly influence the management or operating policies of the other to an extent that one of the transacting parties

might be prevented from fully pursuing its own separate interests;

and g) Other parties that can significantly influence the management

or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly

influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate

The financial statements shall include disclosures of material related party transactions, other than compensation

arrangements, expense allowances, and other similar items in the ordinary course of business.

However, disclosure of transactions

that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements.

disclosures shall include:

f) other parties

with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other

to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests;

and g) Other parties

that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in

one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might

be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related

party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business.

However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required

in those statements.

The disclosures shall include:

a) the nature of the relationship(s) involved;

b) a description of the transactions, including transactions

to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such

other information deemed necessary to an understanding of the effects of the transactions on the financial statements;

c) the dollar

amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the

b) a description of the transactions,

including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented,

and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements;

dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the

method of establishing the terms from that used in the preceding period;

and d) amounts due from or to related parties as of the

date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

During the year ended December 31, 2018,

two of the Company’s previous officers and directors of the Company advanced personal funds in the amount of $10,689 for

Company expenses, and $10,689 was repaid to them prior to December 31, 2018.

In May 2018, the JV Entity received $42,000

for an order from Bravetek and the JV Entity then placed a corresponding order with the Company.

The Company’s former executive

office is also the CEO of Bravatek.

The proceeds were to be used for marketing efforts to generate sales of our intrusion detection

The order has been recorded as a prepaid sale and is a current liability as of December 31, 2019.

and d) amounts due from or to related parties as of the date

of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

During the years ended December 31, 2020 and 2019,

the Company’s Chief Executive Officer advanced personal funds in the amount of $68,254 and $30,134 for Company expenses.

NOTE 13 –

SUBSEQUENT EVENTS

On April 29, 2020, the Company issued an

aggregate of 68,571,429 shares of common stock upon the conversion of convertible debt, as issued on May 3, 2019, in the amount

On May 4, 2020, the Company issued an aggregate

of 72,857,143 shares of common stock upon the conversion of convertible debt, as issued on May 3, 2019, in the amount of $5,100.

On March 11, 2020, the World Health Organization

declared a pandemic related to the rapidly spreading coronavirus (COVID-19) outbreak, which has led to a global health emergency.

The extent of the public-health impact of the outbreak is currently unknown and rapidly evolving, and the related health crisis

could adversely affect the global economy, resulting in an economic downturn.

Any disruption of the Company’s facilities

or those of our suppliers could likely adversely impact the Company’s operations.

Currently, there is significant uncertainty

relating to the potential effect of the novel coronavirus on our business.

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 January 14, 2021, the Company issued an aggregate

of 100,000,000 shares of common stock upon the conversion of convertible debt, as issued on September 24, 2018, in the amount of $28,000.

On January 25, 2021, the Company issued an aggregate

of 150,000,000 shares of common stock upon the conversion of convertible debt, as issued on September 24, 2018, in the amount of $42,000.

On February 1, 2021, the Company issued an aggregate

of 30,999,995 shares of common stock upon the conversion of convertible debt, as issued on February 12, 2019, in the amount of $8,116.

On February 11, 2021, the Company issued an aggregate

of 100,000,000 shares of common stock upon the conversion of convertible debt, as issued on September 24, 2018, in the amount of $56,000.

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 issued an aggregate

of 220,000,000 shares of common stock upon the conversion of convertible debt, as issued on September 24, 2018, in the amount of $75,436

for principal and $39,638 for interest.

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.

received $60,000 net cash.

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 9A. Controls and Procedures