DarkPulse, Inc. 10-K

ITEM 3. LEGAL PROCEEDINGS On March 27, 2019, Thomas A. Cellucci, et al. v. DarkPulse, Inc. et al. (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 a 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. The Plaintiffs filed a motion for a temporary restraining order seeking appointment of a receiver to carry out the operations of the Company, restraining the Company’s sole officer and a director from conducting business on behalf of the Company, and other emergency relief. Following a hearing, the court denied the Plaintiffs’ motion. The Plaintiffs amended their complaint, and the Defendants moved to dismiss. On February 28, 2020, the Court granted the Defendants’ Motion to Dismiss the First Amended Complaint. The Court granted Plaintiffs leave to amend their complaint consistent with the opinion and provided an explanation of the deficiencies that would need to be cured in the amended complaint. After numerous extensions, the Plaintiffs eventually filed a Second Amended Complaint. The Defendants moved to dismiss the motion and, on January 25, 2021, the Court dismissed the motion. 14 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. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 15 PART II