What changed in this filing

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Item 9A. Controls and Procedures

2022-04-15 compared with 2021-04-15 · 1633 added, 741 removed, 523 unchanged (82% of the section changed)

CONTROLS AND PROCEDURES

AND PROCEDURES

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.

We have established disclosure controls and procedures

that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act

of 1934, as amended (the “ Exchange Act ”), is recorded, processed, summarized and reported within the time periods

specified in the rules and forms of the SEC and, as such, is accumulated and communicated to our Chief Executive Officer and Chief Financial

Officer, Dennis O’Leary, who serves as our principal executive officer and principal financial officer, as appropriate to allow

timely decisions regarding required disclosure.

O’Leary, evaluated the effectiveness of our disclosure controls and procedures,

as defined in Rule 13a-15(e) of the Exchange Act, as of December 31, 2021.

Based on his evaluation, Mr.

O’Leary concluded that,

due to a material weakness in our internal control over financial reporting as described below, our disclosure controls and procedures

were not effective as of December 31, 2021.

In light of the material weakness in internal control over financial reporting, we completed

substantive procedures, including validating the completeness and accuracy of the underlying data used for accounting prior to filing

this Form 10-K.

These additional procedures have allowed us to

conclude that, notwithstanding the material weakness in our internal control over financial reporting, the consolidated financial statements

included in this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for

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

Internal Control Over Financial Reporting

The Company’s management is responsible

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, 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:

Our management is responsible 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, 2021, 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 our 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.

We do not have a separate CEO and CFO, to review and oversee the financial policies and procedures of the Company, which does achieve a degree of separation.

However, until such time as the Company is able to hire a Controller, we do not believe we meet the full requirement for separation.

We do not have a functional audit committee.

We do not have a separate CEO and CFO, to review and oversee our financial policies and procedures, which does achieve a degree of separation.

However, until such time as we are able to hire a controller, we do not believe we meet the full requirement for separation.

We do not have an audit committee.

We have not achieved the desired level of documentation of our internal controls and procedures.

When the Company obtains sufficient funding, this documentation will be strengthened through utilizing a third party consulting firm to assist management with its internal control documentation and further help to limit the possibility of any lapse in controls occurring.

This documentation will be strengthened through utilizing a third-party consulting firm to assist management with its internal control documentation and further help to limit the possibility of any lapse in controls occurring.

We have not achieved the desired level of corporate governance to ensure that our accounting for all of our contractual and other agreements is in accordance with all of the relevant terms and conditions.

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, 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:

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

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors;

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.

control over financial reporting described above, our management has concluded that, as of December 31, 2021, our internal control over

financial reporting was not effective based on the criteria in Internal Control - Integrated Framework issued by the COSO.

We 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 our assets;

Provide reasonable assurance that transactions are recorded as necessary

to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts

and expenditures are being made only in accordance with authorizations of management and the Board of Directors;

Provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use, or disposition of our 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.

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.

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

We have taken limited steps to meet our 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.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

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Director's Name

Dennis O’Leary

Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Secretary & Treasurer

Dennis O’Leary

Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Secretary &

Anthony Brown

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

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 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.

Chief Executive Officer of Optilan

O’Leary, Chairman, CEO, President,

O’Leary was appointed as the Company’s Chief Executive Officer, President, Chief Financial Officer and Chairman

of the Board in April 2018.

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.

co-founded DarkPulse Technologies Inc., a wholly-owned subsidiary of the Company, which is developing specialized devices that monitor

activities along national borders and provide structural health and safety monitoring of oil and gas pipelines.

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 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.

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

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

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.

O’Leary was appointed as a Director due to his extensive experience

in the industries in which we operate.

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

public companies.

Anthony Brown, Director .

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.

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.

has served as a Director of the Company since April 2019.

He 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.

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.

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.

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 UNB.

From 2013 through the present, Dr.

served as a data scientist for Xplornet Communications, Inc.

Brown served as an Adjunct

Professor at UNB.

From 2013 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.

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

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.

Brown was appointed as a Director due to his extensive experience in the

development of Brillouin scattering-based distributed fiber optic sensing.

Brown is not, and has not been during the past five years,

the director of any other public companies.

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 has served

as a Director of the Company since April 2019.

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.

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 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.

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.

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.

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.

From 1999 to 2000, Mr.

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

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 Deputy Maintenance Manager for ITT where he was responsible for maintenance of AFSCN mission

control communications systems.

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.

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 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.

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.

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

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 was appointed as a Director due to his extensive

management experience within the government and the private sectors in such areas and industries where our technology systems may be advantageously

Eckel is not, and has not been during the past five years, the director of any other public companies.

Bill Bayliss, CEO, Optilan .

has served as the CEO of Optilan since February 2020.

Bayliss has been actively involved in leadership positions in both the public

and private industrial/energy sector;

including living and working in North America, Middle East and Norway.

Bayliss started his career

in support to the power generation and petrochemical businesses in a wide range of roles including project management, sales and commercial.

He entered the oil and gas business with Brown and Root (B&R) in both London and Aberdeen.

He subsequently moved to Norway with Kvaerner

Engineering and returned back to UK with Kellogg B&R (KBR) fulfilling various roles including Senior Manager for the Hibernia Development

in Canada, Business Manager for the Conoco Southern North Sea operations, maintenance and major project work before being promoted to

KBR Global Operations and Maintenance Director.

Bayliss moved to Petrofac to set up an engineering, procurement, construction

and commissioning support business that grew significantly from an initial seed corn start up investment, and within his role as Vice

President, developed the business into five divisional areas with an annual turnover of circa $300 million and a support staff of 1,800.

In 2009, he moved to Dubai as Chief Operating Officer of Topaz Engineering and was accountable for four business units with a circa $300

million turnover and over 4000 personnel.

Bayliss joined Viking Seatech in September 2011 as Group CEO to take the business through

financial and organizational restructuring and professionalization.

Bayliss led the sale of this HSBC private equity backed debt leveraged

business which was sold in August 2013 for £150million to USA trade buyer Actuant.

At the end of 2014 Mr.

Bayliss moved to work

as an independent consultant helping a number of Private Equity houses including Bluewater Energy and Energy Ventures in their due diligence

activities for the acquisition of various targets covering are Operational, Commercial (including financial elements), HSEQ, the supply

chain, organizational structures and general management support.

In mid-2016 Bill joined ICR.

As Group CEO, he developed and executed

a comprehensive strategy with the “end in mind” that delivered valuable change not only in terms of EBITDA but attractiveness

in terms of exit multiples with the addition of new organic product lines and geographies.

At its peak under Bills guidance the business

nearly doubled in size.

During late 2019, Mr.

Bayliss decided to pursue other activities and was appointed as the CEO of Optilan.

Bayliss has a Master of Science Degree in Engineering and Risk Management.

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.

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

1 unchanged sentence

of our directors and executive officers.

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

Audit Committee

As of December 31, 2021, we did not have a functioning

Audit Committee.

Our management is currently reviewing our SEC filings and relying on outside experts to assist with this process.

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

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.

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.

We are not aware of any common stock transactions

during the year ended December 31, 2021 for which either Forms 3, 4, or 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, 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

ethics due to a small number of members of management,.

We plan to adopt a Code of Ethics during the fiscal year ending December 31, 2022.

Summary Compensation for Named Executive Officers

The following table shows the executive compensation

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

paid to our named executive officers for the years ended December 31, 2021 and 2020.

Name and Principal Position

Year Ended Dec 31,

Dennis O’Leary

All Other Compensation

Dennis O’Leary

Chairman/CEO and Director

Anthony Brown

___________________________

(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.

Summary Compensation for Directors

The following table shows the executive compensation

paid to our directors (excluding named executive officers) for the year ended December 31, 2021.

Name and Principal Position

Year Ended Dec 31,

Anthony Brown, Director

Carl Eckel, Director

Equity Awards

1 unchanged sentence

equity awards.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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 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

of Beneficial Owners

Directors, Executive Officers and >5% Stock Owners

Dennis O’Leary (through Fantastic Northamerica, LLC)

1345 Avenue of the Americas

21,853,351,983

New York, NY 10105

Anthony Brown

1345 Avenue of the Americas

5,633,455,712

New York, NY 10105

1345 Avenue of the Americas

New York, NY 10105

27,486,807,695

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE

Accrued Compensation

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.

directors, named executive officers, 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 5,379,559,651 (5,379,471,416 common plus 88,235 preferred) shares as of April 11, 2022.

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

no stock options outstanding as of April 11, 2022.

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 address for each

of our directors, named executive officers, and executive officers is 1345 Avenue of the Americas, 2 nd Floor, New York, NY

Name and Position

Stock Owned (1)

Ownership (2)

Percentage of Beneficial Ownership

Dennis O’Leary, CEO and Director

Anthony Brown, Director

Carl Eckel, Director

Bill Bayliss, CEO, Optilan

Total named executive officers, executive officers, and directors (four persons)

*Less than 1%

Each share of Series D Preferred Stock is convertible, at the option of the holder, into two shares of our Common

Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security

includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has

(i) voting power, which includes the power to vote, or to direct the voting of shares;

and (ii) investment power, which

includes the power to dispose or direct the disposition of shares.

Certain shares may be deemed to be beneficially owned by more

than one person (if, for example, persons share the power to vote or the power to dispose of the shares).

In addition, shares are

deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option)

within 60 days of the date as of which the information is provided.

In computing the percentage ownership of any person, the amount

of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason

of these acquisition rights.

As a result, the percentage of outstanding shares of any person as shown in the above table does not

necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually

outstanding on the date of this prospectus.

CERTAIN RELATIONSHIPS

AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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.

The term “affiliate”

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 members Eckel and Brown are independent directors.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

We are not currently subject to listing requirements

of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors

be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority

of “independent directors.”

We currently have not established any committees

of the Board of Directors.

Our Board of Directors may designate from among its members an executive committee and one or more other committees

in the future.

We do not have a nominating committee or a nominating committee charter.

Further, we do not have a policy with regard

to the consideration of any director candidates recommended by security holders.

To date, other than as described above, no security

holders have made any such recommendations.

The entire Board of Directors performs all functions that would otherwise be performed by

Given the present size of our board it is not practical for us to have committees.

If we are able to grow our business and

increase our operations, we intend to expand the size of our board and allocate responsibilities accordingly.

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.

reports, services performed in connection with filings with the SEC, and related other services that were provided by Boyle CPA (“ Boyle ”),

our previous independent registered public accounting firm, and Urish Popeck & Co., LLC (“ Urish ”), our current

independent registered public accounting firm, 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.

by the Company to Boyle and Urish for professional services rendered for the years ended December 31, 2021 and 2020, 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, 2020 and 2019.

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, 2021 and 2020.

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

11 unchanged sentences

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:

Title of Document

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.

Company’s 2021 and 2020 audit fees, audit-related fees and all other fees.

AND FINANCIAL STATEMENT SCHEDULES

The following exhibits are included as part of

this Form 10-K:

Exhibit Description

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

and DPTH Acquisition Corporation

dated April 27, 2018

of Amendment No.

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

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.

and DPTH Acquisition

Corporation dated June 29, 2018

of Amendment No.

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

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)

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

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,

and DPTH Acquisition

Corporation dated August 17, 2018, effective as of July 18, 2018

Certificate of Incorporation of Klever Marketing, Inc.

a Delaware corporation

of Amendment to Certificate of Incorporation

of Designation of Series D Preferred Stock

of Amendment to Certificate of Incorporation filed February 5, 2019

of Amendment to Certificate of Incorporation filed February 20, 2020

of Amendment for Series D Preferred Stock filed December 23, 2021

Promissory Note dated July 14, 2018

Promissory Note dated July 17, 2018, effective July 18, 2018

Promissory Note dated July 24, 2018, and effective July 27, 2018

Promissory Note dated August 20, 2018, effective August 24, 2018

Promissory Note issued to EMA dated September 25, 2018, effective September 28, 2018

Promissory Note issued to Auctus dated September 25, 2018, effective September 27, 2018

Promissory Note issued to FirstFire dated September 24, 2018, and effective October 9, 2018

Convertible Redeemable Note issued to GS Capital Partners, LLC dated January 10, 2019

of Convertible Promissory Note issued to Crown Bridge Partners, LLC dated February 5, 2019

Promissory Note issued to Geneva Roth Remark Holdings, Inc.

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,

Promissory Note Issued as of April 26, 2021 to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC

Redeemable Note dated July 14, 2021 issued to GS Capital Partners, LLC in the principal amount of $2,000,000

Purchase Agreement dated July 14, 2021 with GS Capital Partners, LLC

Purchase Agreement by and between DarkPulse, Inc.

and GS Capital Partners, LLC dated January 10, 2019

of Securities Purchase Agreement between DarkPulse, Inc.

and Crown Bridge Partners, LLC dated February 5, 2019

Purchase Agreement with Geneva Roth Remark Holdings, Inc.

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.

Certification of President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board of Directors Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Instance Document

XBRL Schema Document

XBRL Calculation Linkbase Document

XBRL Definition Linkbase Document

XBRL Label Linkbase Document

XBRL Presentation Linkbase Document

Agreement effective December 23, 2020 with Faisal Farooqui

Agreement with the University of New Brunswick, Canada

Debenture (Secured) Issued April 24, 2017

Fee Agreement dated January 8, 2021 with J.H.

Darbie & Co., Inc.

Purchase Agreement dated as of April 26, 2021 with FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC

Rights Agreement dated April 26, 2021 to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC

of Terms with Remote Intelligence LLC and Unleash Live, Inc.

dated May 10, 2021

Agreement with Dr.

Joseph Catalino Jr.

dated May 17, 2021

and Mutual Release Agreement with Auctus Fund, LLC dated June 3, 2021

of Intent with Remote Intelligence, Limited Liability Company dated June 8, 2021

of Intent with Wildlife Specialists, LLC dated June 8, 2021

Agreement with Crae-Con Construction Inc.

dated June 22, 2021

Agreement with SurSafe LLC dated June 24, 2021

of Intent with TerraData Unmanned, PLLC dated June 25, 2021

Agreement dated effective July 22, 2021 with Rick Gibson

Agreement and Terms and Conditions dated August 3, 2021 with Energy & Industrial Advisory Partners, LLC

of Intent dated June 8, 2021 with Remote Intelligence, Limited Liability Company

of Intent dated June 8, 2021 with Wildlife Specialists, LLC

Purchase Agreement dated August 9, 2021with Optilan Guernsey Limited and Optilan Holdco 2 Limited

Agreement August 9, 2021 with Optilan HoldCo 3 Limited

of Intent dated effective August 18, 2021 with TJM Electronics West, Inc.

Interest Purchase Agreement dated August 30, 2021 with Remote Intelligence, Limited Liability Company

Interest Purchase Agreement dated August 30, 2021 with Wildlife Specialists, LLC

of Intent dated June 25, 2021 with TerraData Unmanned, PLLC

1 to Letter of Intent with TerraData Unmanned, PLLC dated effective August 24, 2021

2 to Letter of Intent with TerraData Unmanned, PLLC dated effective September 3, 2021

to Letter of Intent with TJM Electronics West, Inc.

dated effective August 31, 2021

Purchase Agreement dated September 8, 2021 with TJM Electronics West, Inc.

Agreement dated September 21, 2021 with the Arizona Board of Regents

Purchase Agreement with TerraData Unmanned, PLLC dated effective October 1, 2021

Agreement with CADG Engineering Pte Ltd dated effective October 5, 2021

Financing Agreement with GHS Investments LLC dated November 9, 2021

Rights Agreement with GHS Investments LLC dated November 9, 2021

Investor Relations Agreement dated December 15, 2021 with RedChip Companies, Inc.

from Boyle CPA Dated January 28, 2022 Regarding Change in Certifying Accountant

of Subsidiaries

of Boyle CPA, independent registered public accounting firm

Rule 13a-14(a) Certification by Principal Executive Officer and Principal Financial and Accounting

Section 1350 Certification of Principal Executive Officer and Principal Financial and Accounting

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded

within the Inline XBRL document)

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted in Inline XBRL, and included in exhibit 101).

FORM 10-K SUMMARY

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/s/ Dennis M.

O’Leary

Chairman, Chief Executive Officer and President

Chief Financial Officer

Principal Executive Officer

Principal Financial Officer

Principal Accounting Officer

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

Officer, Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities

2 unchanged sentences

/s/ Dennis M.

O’Leary

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

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

Principal Financial Officer, and Principal Accounting Officer

April 15, 2022

Anthony Brown

April 15, 2022

Anthony Brown

/s/ Carl Eckel

April 15, 2022

DARKPULSE, INC.

2 unchanged sentences

and for the Years Ended December 31, 2021 and

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (2021 PCAOB ID 1013 ) (2020 PCAOB

Consolidated Balance Sheets

1 unchanged sentence

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Stockholders’

Consolidated Statements of Stockholders’ Deficit

Consolidated Statements of Cash Flows

Notes to the Financial Statements

Boyle CPA, LLC

Certified Public Accountants & Consultants

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

Shareholders and Board of Directors

Of DarkPulse, Inc.

the Financial Statements

We have audited

the accompanying consolidated balance sheet of DarkPulse, Inc.

and its subsidiaries (the “Company”) as of December 31, 2021,

the related consolidated statements of operations, comprehensive loss, stockholders’ deficit, and cash flows for the year ended

December 31, 2021, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021, and the results

of its operations and its cash flows for the year ended December 31, 2021 , 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 – See also Critical Audit Matters Section Below

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the consolidated

financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency at December 31, 2021.

These conditions raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these

matters are also described in Note 3.

The consolidated financial statements do not include any adjustments that might result from the

outcome of this uncertainty.

These consolidated

financial statements are the responsibility of the Company’s management.

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

consolidated financial statements based on our audits.

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 the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

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

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.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the consolidated 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

consolidated financial statements.

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

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

that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current period audit of the consolidated 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 consolidated 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 consolidated 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 6 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 period.

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

The value of the embedded derivative

liabilities related to the convertible debentures was $533,753 at December 31, 2021.

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

Our audit procedures related to the Company’s

accounting considerations and significant estimate included the following, among others:

· We reviewed the accounting considerations made

by the Company in determining the nature of the various features;

· We evaluated of the potential derivatives and

potential bifurcation in the instruments;

· We evaluated 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

against current accounting guidance.

· We tested the mathematical accuracy of management’s

calculations related to the estimate.

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.

Going Concern Uncertainty – See also

Going Concern Uncertainty explanatory paragraph above

As described further in Note 3 to the consolidated

financial statements, the Company has suffered recurring losses from operations and does not have an established source of revenues sufficient

to cover its operating costs.

The ability of the Company to continue as a going concern is dependent on executing its business plan and

ultimately to attain profitable operations.

Accordingly, the Company has determined that these factors raise substantial doubt as to the

Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements.

intends to continue to fund its business by way of public or private offerings of the Company’s stock or through loans from private

investors, in order satisfy the Company’s obligations as they come due for at least one year from the financial statement issuance

However, the Company has not concluded that these plans alleviate the substantial doubt related to its ability to continue as a

going concern.

We determined the Company’s ability to continue

as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company’s available capital and

the risk of bias in management’s judgments and assumptions in their determination.

Our audit procedures related to the Company’s

assertion on its ability to continue as a going concern included the following, among others:

· We performed testing procedures such as analytical procedures

to identify conditions and events that indicate that there could be substantial doubt about the Company’s ability to continue

as a going concern for a reasonable period of time.

· We reviewed and evaluated management's plans

for dealing with adverse effects of these conditions and events.

· We inquired of Company management and reviewed

company records to assess whether there are additional factors that contribute to the uncertainties disclosed.

· We assessed whether the Company’s determination

that there is substantial doubt about its ability to continue as a going concern was adequately disclosed.

Revenue Recognition

The Company recognizes revenue upon transfer of

control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for

those services.

Significant judgment is exercised by the Company

in determining revenue recognition for customer agreements, and include the pattern of delivery (i.e., timing of when revenue is recognized)

for each distinct performance obligation.

The related audit effort in evaluating management’s

judgments in determining revenue recognition for customer agreements required a high degree of auditor judgment.

Our principal audit procedures related to the

Company’s revenue recognition for customer agreements included the following:

· We gained an understanding of internal controls

related to revenue recognition.

· We evaluated management’s significant accounting

policies for reasonableness.

· We selected a sample of revenues recognized and

performed the following procedures:

o Obtained and read contract source documents for each selection and other documents that were part of the

agreement, if applicable.

o Assessed the terms in the customer agreement and evaluated the appropriateness of management’s application

of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions.

o We tested the mathematical accuracy of management’s calculations

of revenue and the associated timing of revenue recognized in the financial statements.

Business Combinations – Valuation

of Intangible Assets

As described in note 4 of the Consolidated Financial

Statements, the Company completed the acquisitions of 100% of Optilan Guernsey Limited and Optilan Holdco 2 Limited (Optilan) and TJM

Electronics West for $694,527 and $450,000, respectively and 60% of Wildlife Specialists LLC, Remote Intelligence, LLC and TerraData Unmanned,

PLLC for $1,478,000 and $1,478,000, and $600,000 respectively (collectively referred to as the “Acquisitions”) and accounted

for as business combinations.

The acquired intangible assets included Optilan Holdco 3, Limited tradename for valued at $4,033,638.

Company recorded the acquired intangible assets at fair value on the date of acquisition considering a discounted cash flow methodology.

The methods used to estimate the fair value of acquired intangible assets involve assumptions.

The assumptions applied by management in

estimating the fair value of acquired intangible assets included income projections and discount rates.

The principal considerations for our determination

that performing procedures relating to the valuation of intangible assets in the Acquisitions is a critical audit matter are (1) there

was a degree in significant auditor judgement and subjectivity in applying procedures to the fair value of the intangible assets acquired

due to the judgment by management when developing estimates and (2) audit effort was required relating to the estimates, projections,

discount rates, and weighted average cost of capital utilized by the Company.

In addition, the audit effort involved the use of professionals

with specialized skill and knowledge to assist in performing these procedures and evaluating the conclusions.

Our principal audit procedures to evaluate the

valuation of intangible assets included the following:

· We read the purchase agreements used in the underlying

acquisitions and utilized by the Company to allocate the purchase price.

· We obtained the valuation reports prepared by

management’s third-party expert.

· Utilized professionals with specialized skill

and knowledge to evaluate the reasonableness of the methodology, assumptions, including the discount rate and weighted average cost of

capital, as compared to their experience and publically available market data.

· Considered the reasonableness of the overall

allocation of the total purchase price.

/s/ Urish Popeck & Co., LLC

We have served as the Company's auditor since

April 15, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Shareholders and Board of Directors of

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balance sheets of DarkPulse, Inc.

(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.

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

stockholders’ deficit, and cash flows for the year then ended, 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 the results of its operations and its cash flows for the year then ended, 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

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.

2 unchanged sentences

These financial statements are the responsibility

of the Company’s management.

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”)

of the Company’s management.

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.

1 unchanged sentence

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

We conducted our audits in accordance with standards

We conducted our audit 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

Those standards require that we plan and perform the audit 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

As part of our audit

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

Our audit 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

3 unchanged sentences

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.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Boyle CPA, LLC

We have served as the Company’s auditor since 2019

We have served as the Company’s auditor from 2019 through 2022

April 15, 2021

361 Hopedale Drive SE

P (732) 822-4427

Bayville, NJ 08721

F (732) 510-0665

DARKPULSE, INC.

1 unchanged sentence

CURRENT ASSETS:

Prepaid expenses

Accounts receivable, net

Unbilled revenue

Other current assets

TOTAL CURRENT ASSETS

NON-CURRENT ASSETS:

Property and equipment, net

Operating lease right-of-use assets

Intangible assets

Other assets, net

TOTAL NON-CURRENT ASSETS

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:

Accounts payable

Accounts payable and accrued liabilities

Convertible notes, net of discount $ 0 and $ 35,525 respectively

Notes payable

Customer deposits

Derivative liability

Accrued liabilities

Contract liability, related party

Related party notes payable

Contract liabilities

Operating lease liabilities - current

Other current liabilities

TOTAL CURRENT LIABILITIES

NON-CURRENT LIABILITIES:

Secured debenture

Operating lease liabilities – non-current

Other liabilities – non-current

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES

Commitments and contingencies

STOCKHOLDERS’

STOCKHOLDERS’ DEFICIT:

Convertible preferred stock - Class D (par value $ 0.01 ;

1 unchanged sentence

88,235 issued and outstanding at December 31, 2021 and, 2020, respectively)

Common stock (par value $0.0001), 20,000,000,000 shares authorized, 4,088,762,151 and 1,392,042,112 shares issued and outstanding at December 31, 2020 and, 2019, respectively

Treasury stock, 100,000 shares at December 31, 2020 and December 31, 2019

Common stock (par value $ 0.0001 ), 20,000,000,000 shares authorized,

5,197,821,885 and 4,088,762,151 shares issued and outstanding at December 31, 2021 and, 2020, respectively

Treasury stock, 100,000 shares at December 31, 2021 and 2020

Paid-in capital in excess of par value

(11,877,864 )

Non-controlling interest in variable interest entity and subsidiary

1 unchanged sentence

Accumulated deficit

TOTAL STOCKHOLDERS’

TOTAL LIABILITIES AND STOCKHOLDERS’

( 11,276,490 )

( 6,450,170 )

TOTAL STOCKHOLDERS’ DEFICIT

( 3,932,205 )

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

See accompanying notes to consolidated financial

DARKPULSE, INC.

Consolidated Statements of Operations

Consolidated Statements

of Operations

For the Year Ended

COST OF GOODS SOLD

OPERATING EXPENSES:

General and administrative

Payroll and compensation

Selling, general and administrative

Salaries, wages and payroll taxes

Professional fees

Depreciation and amortization

Debt transaction expenses

Amortization of patents

TOTAL OPERATING EXPENSES

OPERATING LOSS

( 8,848,020 )

OTHER INCOME (EXPENSE):

Interest expense

Gain (Loss) on convertible notes

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

Gain (Loss) on forgiveness of debt

TOTAL OTHER EXPENSE

Net loss attributable to non-controlling interests in variable interest entity and subsidiary

Gain (Loss) on convertible notes

Gain on forgiveness of debt

Foreign currency exchange rate variance

TOTAL OTHER INCOME (EXPENSE)

( 4,826,320 )

Net loss attributable to non-controlling interests in variable interest entity

and subsidiary

Net loss attributable to Company stockholders

$ ( 4,692,618 )

$ ( 275,842 )

LOSS PER SHARE

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4,775,929,690

2,323,180,245

See accompanying notes to consolidated financial

DARKPULSE, INC.

Consolidated Statements of Comprehensive Loss

Consolidated Statements

of Comprehensive Loss

For the Year Ended

$ ( 4,692,618 )

$ ( 275,842 )

OTHER COMPREHENSIVE LOSS

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$ ( 4,666,079 )

$ ( 296,785 )

See accompanying notes to consolidated financial

DARKPULSE, INC.

Consolidated Statement of Stockholders' Deficit

Consolidated Statement

of Stockholders' Deficit

For the Years Ended December 31, 2021 and 2020

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Accumulated Other Comprehensive

Total Stockholders’

Balance, December 31, 2019

1,392,042,112

$ ( 11,877,864 )

$ ( 6,174,328 )

$ ( 3,807,552 )

Conversion of convertible notes

2,696,720,039

( 26,794,968 )

Change to Par Value

( 40,478,745 )

Closing of DarkPulse East LLC

Foreign currency adjustment

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4,088,762,151

Conversion of convertible notes

$ ( 6,450,170 )

Change to Par Value

$ ( 3,932,205 )

Conversion of convertible notes

Common stock issued for cash

Common stock issued for acquisitions

Stock based compensation

Foreign currency adjustment

( 4,826,320 )

Balance, December 31, 2021

5,197,821,885

$ ( 284,463 )

$ ( 11,276,490 )

See accompanying notes to consolidated financial

DARKPULSE, INC.

Consolidated Statements of Cash Flows

For the Year Ended

Consolidated Statements

of Cash Flows

the Year Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 4,826,320 )

$ ( 275,842 )

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

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Gain on extinguishment of debt

Debt discount

( 3,488,860 )

Operating lease expense

( 1,346,808 )

Amortization of debt discount

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Changes in operating assets and liabilities:

Accounts payable

Prepaid expenses

Accrued liabilities

Accounts receivable

Unbilled revenue

Contract liability

Customer deposits

Accounts payable and accrued expenses

( 2,041,131 )

Operating lease liabilities

Other current liabilities

( 3,672,703 )

Net cash used by operating activities

( 11,363,470 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

Business acquisitions, net of cash received

Capitalized patents

Net cash used by investing activities

( 1,689,153 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from sale of common stock

Proceeds from convertible debentures

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Proceeds from related party notes payable

Proceeds from notes payable

Net cash provided by financing activities

NET INCREASE (DECREASE) IN CASH

Effect of exchange rate on cash

CASH, beginning of year

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Cash paid during the year ended December 31:

Non-cash finance and investing activities during the year ended December 31:

Issuance of common stock for convertible notes payable and interest

Issuance of common stock for Wildlife Specialists and Remote Intelligence

Non-controlling interest for Wildlife Specialists and Remote Intelligence

See accompanying notes to consolidated financial

DARKPULSE, INC.

Notes to the Consolidated Financial Statements

Notes to the Consolidated

Financial Statements

For the Years ended December 31, 2021 and 2020

NOTE 1 –

BASIS OF FINANCIAL STATEMENT

NOTE 1 – BASIS OF FINANCIAL STATEMENT

Organization and Description of Business

("DPI"

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

("Klever").

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.

DarkPulse, Inc.

(“DPI” or “Company”)

is a technology-security company incorporated in 1989 as Klever Marketing, Inc.

Its’ wholly-owned subsidiary,

DarkPulse Technologies Inc.

(“DPTI”), originally started as a technology spinout from the University of New Brunswick, Fredericton,

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 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.

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

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

NOTE 2 –

SIGNIFICANT ACCOUNTING POLICIES

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

was changed to DPLS.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies

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Consolidation

The Company’s consolidated financial statements

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

The Company’s consolidated financial statements

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

The consolidated

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DarkPulse Technologies Inc.

(“DPTI”),

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

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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")

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

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

in the State of Delaware.

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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.

On August 9, 2021, the Company entered into a

Share Purchase Agreement with Optilan Guernsey Limited and Optilan Holdco 2 Limited (the “Sellers”), pursuant to which the

Company purchased from the Sellers all of the issued and outstanding equity interests of Optilan HoldCo 3 Limited, a private company

incorporated in England and Wales (“Optilan”) for £1.00 and also a commitment to enter into the Subscription (as defined

As of August 9, 2021, the Company owns all of the equity interests of Optilan.

On August 30, 2021, the Company closed two

separate Membership Interest Purchase Agreements with Remote Intelligence, Limited Liability Company, a Pennsylvania limited

liability company (“ RI ”) and Wildlife Specialists, LLC, a Pennsylvania limited liability company

(“ WS ”) pursuant to which the Company agreed to pay to the majority shareholder of each of RI and WS an aggregate

of 15,000,000

shares of the Company’s Common Stock and $ 1,000,000

in exchange for 60 %

ownership of each of RI and WS.

On September 8, 2021, the Company entered into

and closed the Stock Purchase Agreement with TJM Electronics West, Inc., an Arizona corporation (“ TJM ”), and

TJM’s shareholders, pursuant to which we agreed to purchase all of the equity interests in TJM in exchange for $ 450,000 .

Effective October 1, 2021 the Company entered

into and closed the Membership Purchase Agreement with TerraData Unmanned, PLLC, a Florida limited liability company (“ TerraData ”),

and Justin Dee, the sole shareholder of TerraData, pursuant to which the Company agreed to purchase 60 %

of the equity interests in TerraData in exchange for 3,725,386

shares of the Company’s Common Stock and $ 400,000 .

Use of Estimates

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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”)

The Company’s reporting currency is US

The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, British Pound (“GBP”)

as the functional currency.

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

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.

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.

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.

The relevant translation rates are as

for the year ended December 31, 2021 closing rate at 1.353583

GBP, average rate at 1.375671

US$:GBP and for the Optilan acquisition closing rate at 1.38138 US$:

The relevant translation rates are as follows:

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31, 2020 closing rate at 1.2754 US$:

CAD, average rate at 1.3234 US$.

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.

CAD, average rate at 1.3388 US$:CAD.

Long-Lived Assets and Goodwill

The Company accounts for long-lived assets in

accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived Assets.

This accounting

standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying

amount may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an

asset to future undiscounted net cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds its estimated

future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value

of the asset.

The Company accounts for goodwill and intangible

assets in accordance with ASC 350, Intangibles – Goodwill and Other.

Goodwill represents the excess of the purchase price of an

entity over the estimated fair value of the assets acquired and liabilities assumed.

ASC 350 requires that goodwill and other intangibles

with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value

of an asset has decreased below its carrying value.

During the fourth quarter of 2020, the Company adopted ASU No.

2017-04, Intangibles

– Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment.

This guidance simplifies the accounting for goodwill

impairment by removing Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.

Goodwill impairment

will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of

The adoption of this standard had no material impact on the Consolidated Financial Statements.

During fiscal 2021 and 2020,

the Company recorded no impairments.

Intangible Assets - Intrusion Detection Intellectual

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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.

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, 2021, the Company

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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.

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, 2021:

Intangible Assets

Balance at January 1, 2021

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assets is as follows:

Future expected amortization of intangible assets

Year Ending December 31,

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.

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

Property and equipment are carried at historical

cost less accumulated depreciation.

Depreciation is based on the estimated service lives of the depreciable assets and is calculated

using the straight-line method.

Expenditures that increase the value or productive capacity of assets are capitalized.

Fully depreciated

assets are retained in the property and equipment, and accumulated depreciation accounts until they are removed from service.

When property

and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are

removed from the accounts and any gain or loss is included in operations.

Repairs and maintenance are expensed as incurred.

The estimated useful lives of property and equipment

are generally as follows:

Schedule of estimated useful lives

Office furniture and fixtures

Plant and equipment

Leasehold Improvements

Motor Vehicles

Revenue Recognition

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.

The Company’s revenues are generated primarily

from the sale of our products, which consist primarily of advanced technology solutions for integrated communications and security systems.

At contract inception, we assess the goods and services promised in the contract with customers and identify a performance obligation

To determine the performance obligation, we consider all products and services promised in the contract regardless of whether

they are explicitly stated or implied by customary business practices.

The timing of satisfaction of the performance obligation is not

subject to significant judgment.

We measure revenue as the amount of consideration expected to be received in exchange for transferring

goods and services.

We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria

have been met.

The Company recognizes revenue when its customer

obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for

those goods or services.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606,

we perform the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize

revenue when (or as) we satisfy a performance obligation.

The five-step model is applied to contracts when it is probable that we will

collect the consideration we are entitled to in exchange for the goods or services transferred to the customer.

At contract inception,

once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and

determine those that are performance obligations and assess whether each promised good or service is distinct.

We then recognize revenue

in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation

is satisfied.

In accordance with ASU No.

2016-12, Revenue

from Contracts with Customers (Topic 606):

Narrow-Scope Improvements and Practical Expedient , which is to (1) clarify the objective

of the collectability criterion for applying paragraph 606-10-25-7;

(2) permit an entity to exclude amounts collected from customers

for all sales (and other similar) taxes from the transaction price;

(3) specify that the measurement date for noncash consideration is

contract inception;

(4) provide a practical expedient that permits an entity to reflect the aggregate effect of all modifications that

occur before the beginning of the earliest period presented when identifying the satisfied and unsatisfied performance obligations, determining

the transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations;

(5) clarify that

a completed contract for purposes of transition is a contract for which all (or substantially all) of the revenue was recognized under

legacy GAAP before the date of initial application, and (6) clarify that an entity that retrospectively applies the guidance in Topic

606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption.

The amendments

of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

no impact as a result of adopting this ASU on the financial statements and related disclosures.

Based on the terms and conditions of

the product arrangements, the Company believes that its products and services can be accounted for separately as its products and services

have value to the Company’s customers on a stand-alone basis.

When a transaction involves more than one product or service, revenue

is allocated to each deliverable based on its relative fair value;

otherwise, revenue is recognized as products are delivered or as services

are provided over the term of the customer contract.

Contract liabilities is shown separately in the

unaudited consolidated balance sheets as current liabilities.

At December 31, 2021 and December 31, 2020, we had contract liabilities

of $ 3,216,562 and $ 0 , respectively.

Cost of Product Sales and Services

Cost of sales consists primarily of materials,

airtime and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other

implementation costs incurred to install our products and train customer personnel, and customer service and third-party original equipment

manufacturer costs to provide continuing support to our customers.

There are certain costs which are deferred and recorded as prepaids,

until such revenue is recognized.

Refer to revenue recognition above as to what constitutes deferred revenue.

Concentration of Credit Risk

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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

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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.

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.

Effective January 1, 2019, the Company accounts

for its leases under ASC 842, Leases .

Under this guidance, arrangements meeting the definition of a lease are classified as operating

or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated

by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing

Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the

For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line

rent expense over the lease term.

For finance leases, interest on the lease liability and the amortization of the right of use asset

results in front-loaded expense over the lease term.

Variable lease expenses are recorded when incurred.

In calculating the right of use asset and lease

liability, the Company has elected to combine lease and non-lease components.

The Company excludes short-term leases having initial terms

of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over

the lease term.

Derivative Financial Instruments

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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.

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

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Beneficial Conversion Features

The Company evaluates the conversion feature for

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

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

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The Company measures

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

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(level 3 measurement) as follows:

Level 1 –

Quoted prices are available in

Level 1 – Quoted prices are available in

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

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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

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

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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

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.

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,

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.

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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.

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

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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

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

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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 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 2021 and 2020.

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

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

Stock-based Compensation

Stock-based compensation is accounted for based

on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of

the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director

is required to perform the services in exchange for the award (presumptively, the vesting period).

The ASC also requires measurement

of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 718, for share-based payments

to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized

over the vesting period of the award.

Until the measurement date is reached, the total amount of compensation expense remains uncertain.

The Company initially records compensation expense based on the fair value of the award at the reporting date.

Further, ASC Topic 718,

provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification

accounting in Topic 718, such as the repricing of share options, which would revalue those options and the accounting for the cancellation

of an equity award whether a replacement award or other valuable consideration is issued in conjunction with the cancellation.

the cancellation is viewed as a replacement and not a modification, with a repurchase price of $ 0 .

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"

and "diluted"

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

(loss) per share.

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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

December 31, 2019

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.

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

Schedule of antidilutive shares

Convertible preferred stock

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Recently Issued Accounting Pronouncements

On February 25, 2016, the FASB issued Accounting

Standards Update No.

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

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

Standards Update No.

2018-15 (“ASU 2018-15”), Intangibles —

Goodwill and Other —

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 .

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.

In October 2016, the FASB issued ASU 2016-16,

“ Income Taxes (Topic 740):

Intra-Entity Transfers of Assets Other than Inventory ”, which eliminates the exception

that prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until

the asset has been sold to an outside party.

The updated guidance is effective for annual periods beginning after December 15, 2019,

including interim periods within those fiscal years.

Early adoption of the update is permitted.

The adoption of ASU 2016-16 did not have

a material impact on the consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04

Intangibles-Goodwill and Other (“ASC 350”):

Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”).

ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test.

In computing the

implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing

date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in

determining the fair value of assets acquired and liabilities assumed in a business combination.

Instead, under ASU 2017-04, an entity

should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.

An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value;

however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

Additionally, an entity

should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill

impairment loss, if applicable.

ASU 2017-04 is effective for annual or any interim goodwill impairment tests for fiscal years beginning

after December 15, 2019.

The adoption of ASU 2017-04 did not have a material impact on the consolidated financial statements.

In July 2021, the FASB issued ASU No.

Lessors—Certain Leases with Variable Lease Payments (Topic 842), Which requires a lessor to classify a lease with variable

lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease

on the commencement date of the lease if specified criteria are met.

ASU 2021-05 is effective for the fiscal year beginning after December

15, 2022, including interim periods within that fiscal year.

The Company expects that there would be no material impact on the Company’s

condensed consolidated financial statements upon the adoption of this ASU.

In November 2021, the FASB issued ASU No.

Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , issued

by the Financial Accounting Standards Board.

This ASU requires entities to recognize and measure contract assets and contract liabilities

acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606).

The update will

generally result in the recognition of contract assets and contract liabilities at amounts consistent with those recorded by the acquiree

immediately before the acquisition date rather than at fair value.

The Company expects that there would be no material impact on the

Company’s condensed consolidated financial statements upon the adoption of this ASU.

Although there are several other new accounting

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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

NOTE 3 – GOING CONCERN

As shown in the accompanying financial statements,

the Company generated net losses of $ 4,826,320 and $ 275,842 during the years ended December 31, 2021 and 2020, 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

As of December 31, 2021, the Company’s

current liabilities exceeded its current assets by $ 10,120,885 .

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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.

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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.

or 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

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will be secured.

NOTE 4 –

CONVERTIBLE DEBT SECURITIES

NOTE 4 – BUSINESS ACQUISITIONS

Optilan Holdco 3 Limited

On August 9, 2021, the Company entered into a

Share Purchase Agreement with Optilan Guernsey Limited and Optilan Holdco 2 Limited (the “Sellers”), pursuant to which the

Company purchased from the Sellers all of the issued and outstanding equity interests of Optilan HoldCo 3 Limited, a private company

incorporated in England and Wales (“Optilan”) for £1.00 and also a commitment to enter into the Subscription (as defined

As of August 9, 2021, the Company owns all of the equity interests of Optilan.

The Company has accounted for the purchase using

the acquisition method of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated to the

underlying assets and liabilities in proportion to their respective fair values.

The excess of the consideration transferred over the

estimated fair values of the net assets acquired was recorded as goodwill.

The following table summarizes the acquired assets and assumed

liabilities for the fair value of the assets and liabilities recognized in the Condensed Consolidated Balance Sheet at December 31, 2021:

Schedule of fair value of assets and liabilities in acquisition

(Amounts in US$’s)

Amounts Recognized as of Acquisition Date

Measurement Period Adjustments (1)

Accounts receivable

Property & equipment

Right-of-use assets

Unbilled revenue

Intangible assets:

Accounts payable

Contract deposits

Contract liabilities, current

Lease liabilities, current

Other current liabilities

Lease liabilities, noncurrent

Total purchase consideration

Wildlife Specialists, LLC and Remote Intelligence,

On August 30, 2021, the Company closed two separate

Membership Interest Purchase Agreements (the “ MPAs ”) with Remote Intelligence, Limited Liability Company, a Pennsylvania

limited liability company (“ RI ”) and Wildlife Specialists, LLC, a Pennsylvania limited liability company (“ WS ”)

pursuant to which the Company agreed to pay to the majority shareholder of each of RI and WS an aggregate of 15,000,000

shares of the Company’s Common Stock, $500,000 to be paid on the closing date, and an additional $500,000 to be paid 12

weeks from closing date in exchange for 60 %

ownership of each of RI and WS.

RI and WS are now subsidiaries of the Company.

The Company has accounted for the purchase using

the acquisition method of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated to the

underlying assets and liabilities in proportion to their respective fair values.

The excess of the consideration transferred over the

estimated fair values of the net assets acquired was recorded as goodwill.

The following table summarizes the acquired assets and assumed

liabilities for the fair value of the assets and liabilities recognized in the Condensed Consolidated Balance Sheet at December 31, 2021:

Schedule of Condensed Consolidated Balance Sheet

WILDLIFE SPECIALISTS

Consideration

Purchase price

The allocation of the total purchase price to

the tangible and intangible assets acquired and liabilities assumed by DarkPulse based on the estimated fair values as of August 29,

2021 was as follows:

Schedule of fair value of assets and liabilities in acquisition

WILDLIFE SPECIALISTS

(Amounts in US$’s)

Recognized as

of Acquisition

Accounts receivable

Other current assets

Property & equipment

Assumed liabilities

Non-controlling interest

Total Consideration for 60% of equity interests

Schedule of Condensed Consolidated Balance Sheet

REMOTE INTELLIGENCE

Consideration

Purchase price

The allocation of the total purchase price to

the tangible and intangible assets acquired and liabilities assumed by the Company based on the estimated fair values as of August 29,

2021 was as follows:

Schedule of fair value of assets and liabilities in acquisition

REMOTE INTELLIGENCE

(Amounts in US$’s)

Accounts receivable

Property & equipment

Assumed liabilities

Non-controlling interest

Total Consideration for 60% of equity interests

TJM Electronics West, Inc.

On September 8,

2021, the Company entered into and closed the Stock Purchase Agreement with TJM Electronics West, Inc., an Arizona corporation

(“ TJM ”), and TJM’s shareholders, pursuant to which we agreed to purchase all of the equity interests in TJM

in exchange for $ 450,000 .

TJM is now a wholly-owned subsidiary of the Company.

The Company has accounted for the purchase using

the acquisition method of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated to the

underlying assets and liabilities in proportion to their respective fair values.

The excess of the consideration transferred over the

estimated fair values of the net assets acquired was recorded as goodwill.

The following table summarizes the acquired assets and assumed

liabilities for the fair value of the assets and liabilities recognized in the Condensed Consolidated Balance Sheet at December 31, 2021:

Schedule of fair value of assets and liabilities in acquisition

Accounts receivable

Property & equipment

Total Consideration

TerraData Unmanned, PLLC.

Effective October 1, 2021 the Company entered

into and closed the Membership Purchase Agreement (the “ TerraData MPA ”) with TerraData Unmanned, PLLC, a Florida limited

liability company (“ TerraData ”), and Justin Dee, the sole shareholder of TerraData, pursuant to which the Company

agreed to purchase 60 %

of the equity interests in TerraData in exchange for 3,725,386

shares of the Company’s Common Stock and $ 400,000 ,

subject to adjustments as defined in the TerraData MPA, to be paid within 12 weeks of closing.

TerraData is now a subsidiary of the Company.

The Company has accounted for the purchase using

the acquisition method of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated to the

underlying assets and liabilities in proportion to their respective fair values.

The excess of the consideration transferred over the

estimated fair values of the net assets acquired was recorded as goodwill.

The following table summarizes the acquired assets and assumed

liabilities for the fair value of the assets and liabilities recognized in the Condensed Consolidated Balance Sheet at December 31, 2021:

Schedule of Condensed Consolidated Balance Sheet

Consideration

Purchase price

The allocation of the total purchase price to

the tangible and intangible assets acquired and liabilities assumed by the Company based on the estimated fair values as of October 1,

2021 was as follows:

Schedule of fair value of assets and liabilities in acquisition

(Amounts in US$'s)

Assumed liabilities

Non-controlling interest

Total Consideration for 60% of equity interests

Unaudited Supplemental Pro Forma Data

Unaudited pro forma results of operations for

the nine months ended December 31, 2021 and 2020 as though the Company acquired Optilan, Wildlife Specialists, Remote Intelligence, TJM

Electronic West and TerraData Unmanned (the “Acquired Companies”) on the first day of each fiscal year are set forth below.

results of operations

Year Ended December 31,

Pro forma revenues

Pro forma operating income (loss)

$ ( 16,627,266 )

Pro forma net income (loss)

$ ( 11,308,866 )

Pro forma net income (loss) attributable to DarkPulse

$ ( 11,367,321 )

NOTE 5 – REVENUE

The following table is a summary of the Company’s

timing of revenue recognition for the years ended December 31, 2021 and 2020:

Schedule of timing of revenue recognition

Timing of revenue recognition:

Services and products transferred at a point in time

Services and products transferred over time

Total revenue

The Company disaggregates revenue by source and

geographic destination to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Revenue by source consisted of the following

for the years ended December 31, 2021 and 2020:

Schedule of revenue by source consisted

Revenue by products and services:

Total revenue

Revenue by geographic destination consisted of

the following for the for the years ended December 31, 2021 and 2020:

Schedule of revenue by geographic destination

Revenue by geography:

North America

International

Total revenue

Contract Balances

The Company records contract assets when it has

a right to consideration and records accounts receivable when it has an unconditional right to consideration.

Contract liabilities consist

of cash payments received (or unconditional rights to receive cash) in advance of fulfilling performance obligations.

As of December

31, 2021, the Company did not have a contract assets balance.

The following table is a summary of the Company’s

opening and closing balances of contract liabilities related to contracts with customers.

Schedule of contract liabilities related to contracts with customers

Balance at December 31, 2020

Additions through advance billings to or payments from vendors

Additions through business acquisition

Revenue recognized from current period advance billings to or payments from vendors

Revenue recognized from amounts acquired through business acquisition

Balance at December 31, 2021

NOTE 6 – CONVERTIBLE DEBT SECURITIES

The Company uses the Black-Scholes Model to calculate

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market value, and the derivative liability.

Schedule of convertible debt

Transaction expense

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

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

The Company received $ 40,000

The Company was notified on October 15, 2019 that the note was in default and subject to a 200% penalty.

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

On April 16, 2021, Geneva converted $ 47,850 of principal and $2,153 into 8,065,040 shares of common stock.

On January 4, 2021, the Company entered into

a securities purchase agreement with 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

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The Company received $ 35,000

For the year ended December 31, 2020, Geneva has not converted principal into common stock.

As of December 31, 2020 and 2019 respectively,

there was $966,683 and $1,040,663 of convertible debt outstanding, net of debt discount of $35,525, and $93,138, As of December 31, 2020

and 2019 respectively, there was derivative liability of $1,220,880 and $323,481 related to convertible debt securities.

On July 12, 2021, Geneva converted $ 42,350 of principal and $1,540 into 1,784,146 shares of common stock.

On February 3, 2021, the Company entered into

a securities purchase agreement with 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 two

trading prices of the Company's common stock during the 10 prior trading days.

The Company received $ 75,000

On July 14, 2021, the Company repaid $ 94,200 of principal.

On February 18, 2021, the Company entered

into a securities purchase agreement with Geneva issuing to Geneva a convertible promissory note in the aggregate principal amount

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 two

trading prices of the Company's common stock during the 10 prior trading days.

The Company received $ 60,000

On July 14, 2021, the Company repaid $ 76,200 of principal.

On April 5, 2021, the Company entered into a

securities purchase agreement with Geneva issuing to Geneva a convertible promissory note in the aggregate principal amount of

with a $ 10,700

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 two

trading prices of the Company's common stock during the 10 prior trading days.

The Company received $ 50,000

On July 14, 2021, the Company repaid $64,200 of principal.

On April 26, 2021, the Company entered a

Securities Purchase Agreement and Registration Rights with FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, a Delaware limited liability

company (the “ FirstFire ”), pursuant to which the Company issued to FirstFire a Convertible Promissory Note in the

principal amount of $ 825,000 (the

“ FirstFire Note ”).

The purchase price of the FirstFire Note is $ 750,000 .

The FirstFire Note matures on January

26, 2022 upon which time all accrued and unpaid interest will be due and payable.

Interest accrues on the FirstFire Note at 10 %

per annum guaranteed until the FirstFire Note becomes due and payable, whether at maturity or upon acceleration or by prepayment or

The FirstFire Note is convertible at any time after 180 days from issuance, upon the election of the FirstFire, into

shares of the Company’s Common Stock at $ 0.015 per

The FirstFire Note is subject to various “Events of Default,” which are disclosed in the FirstFire Note.

occurrence of an “Event of Default,” the conversion price would become $ 0.005 .

On November 17, 2021, FirstFire converted $825,000 of principal and $61,875 of interest into 177,375,000 shares

of common stock.

On December 31, 2021, the Company commenced an

action against FirstFire Global Opportunities Fund, LLC, and Eli Fireman (“Fireman”) in the United States District Court for

the Southern District of New York.

The complaint alleges that FirstFire is an unregistered dealer acting in violation of Section 15(a)

of the Securities Exchange Act of 1934 (the “Act”), and that the Company is entitled to rescissionary relief from certain

convertible promissory notes and securities purchase agreements entered into by the Company and FirstFire pursuant to Section 29(b) of

The complaint also asserts claims against Fireman for control person liability under Section 20(a) of the Act, unjust enrichment

of FirstFire, and constructive trust against FirstFire.

On May 19, 2021, the Company entered into a Stipulation

of Settlement with four note holders pursuant to which the Company agreed to pay $ 173,000 to the note holders.

On June 3, 2021, the Company entered into a

Settlement and Mutual Release Agreement with Auctus Fund, LLC.

Pursuant to the Agreement, the Auctus agreed to convert the

Promissory Note issued on September 25, 2018 by the Company to the Lender in the principal amount of $ 100,000 (the

“ Auctus Note”) into 12,500,000 shares of the Company’s Common stock (the “ Auctus

Shares ”) as consideration for full and complete satisfaction of and settlement of the Auctus Note, which also terminates

all obligations owing under both the Auctus Note and the corresponding Securities Purchase Agreement dated September 25, 2018

between the Company and Auctus.

Auctus also agreed to limit the resales of the Auctus Shares in the public market to no more than 2,500,000 shares

per calendar week until all of the Auctus Shares have been sold.

On July 14, 2021, the Company entered a

Securities Purchase Agreement (the “ GS SPA ”) with GS Capital Partners, LLC pursuant to which the Company issued

to the Lender a 6% Redeemable Note in the principal amount of $ 2,000,000 (the

“ GS Note ”).

The purchase price of the GS Note is $ 1,980,000 .

The GS Note matures on July 14,

2022 upon which time all accrued and unpaid interest will be due and payable.

Interest accrues on the GS Note at 6 %

per annum until the GS Note becomes due and payable.

The GS Note is subject to various “Events of Default,” which are

disclosed in the GS Note.

Upon the occurrence of an “Event of Default,” the interest rate on the GS Note will be 18%.

The GS Note is not convertible into shares of the Company’s Common Stock and is not dilutive to existing or future

shareholders and the Company used a portion of the proceeds of the GS Note to retire convertible debt.

As of December 31, 2021,

$2,000,000 remains outstanding.

As of December 31, 2021 and 2020

respectively, there was $ 378,263

and $ 931,158 of convertible

debt outstanding, net of debt discount of $ 0 ,

and $ 35,525 .

As of December 31, 2021 and 2020 respectively, there was derivative liability of $ 533,753

and $ 1,220,880 related to

convertible debt securities.

NOTE 7 - DEBENTURE

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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.

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.

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.

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.

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.

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

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.

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

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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

The Debenture also includes a provision requiring DPTI to pay the University a 2% royalty on sales of any and all products or services which incorporate the Patents for a period of five years from April

For the years ended December 31, 2021 and 2020, the Company recorded

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next 5 years and thereafter are as follows:

Future minimum required payments

Period ending December 31,

2026 and after

NOTE 6 –

ACCRUED LIABILITIES

NOTE 8 – LEASES

The Company adopted ASC 842

“Leases” using the modified retrospective approach, electing the practical expedient that allows the Company not to

restate its comparative periods prior to the adoption of the standard on January 1, 2019.

As such, the disclosures required under

ASC 842 are not presented for periods before the date of adoption.

The following was included in our balance sheet

as of December 31, 2021 and 2020:

Schedule of operating leases

Operating leases

ROU operating lease assets

Current portion of operating lease

Operating lease, net of current portion

Total operating lease liabilities

The weighted average remaining lease term and

weighted average discount rate at December 31, 2021 were as follows:

Schedule of weighted average remaining lease term and weighted average discount rate

Weighted average remaining lease term (years)

Operating leases

Weighted average discount rate

Operating leases

Operating Leases

On January 12, 2021, the Company’s newly

acquired subsidiary entered into an operating lease agreement to rent office space in Mumbai, India.

This three-year agreement commenced

January 12, 2021 with an annual rent of approximately $ 50,000 .

On May 27, 2021, the Company’s newly acquired

subsidiary entered into an operating lease agreement to rent office space in Warwick, United Kingdom.

This ten-year agreement commenced

May 27, 2021 with an annual rent of approximately $ 85,000 with the first six months rent free.

On August 31, 2021, the Company’s newly

acquired subsidiary entered into an operating lease agreement to rent office space in Tempe, Arizona.

This five-year agreement commenced

August 31, 2021 with an annual rent of approximately $ 192,000 .

On October 20, 2021, the Company’s newly

acquired subsidiary entered into an operating lease agreement to rent office space in Warwick, United Kingdom.

This ten-year agreement

commenced October 20, 2021 with an annual rent of approximately $ 200,000 with the first six months rent free.

The following table reconciles future minimum

operating lease payments to the discounted lease liability as of December 31, 2021:

Schedule of future minimum operating lease payments

2026 and later

Total lease payments

Less imputed interest

Total lease obligations

Less current lease obligations

Long-term lease obligations

NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accrued liabilities consist of the following as of December 31:

Accrued payroll

Accrued interest

NOTE 7 –

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.

Schedule of accounts payable and accrued liabilities

Accounts payable

Accrued liabilities

NOTE 10 – INCOME TAXES

The domestic and foreign components of loss before

(benefit) provision for income taxes were as follows:

of income components

$ ( 4,285,237 )

Total income (loss) before income taxes

$ ( 4,826,320 )

The provision (benefit) for income taxes for

the years ended December 31, 2021 and 2020 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

1 unchanged sentence

Statutory tax rate

Statutory tax rate:

Foreign rate differential

Change in valuation allowance:

The Company’s deferred tax assets and liabilities as of December

31, 2021 and 2020 are as follows:

Deferred Tax assets and liabilities

Deferred Tax (Liabilities):

1 unchanged sentence

Intangible assets

Right of use asset

Stock based compensation

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 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 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.

( 2,365,571 )

( 1,351,897 )

Deferred tax assets (liabilities)

The Company has approximately $ 7,448,199

of federal and state net operating loss carryforwards as of December 31, 2021, which will not expire but will be limited to 80%

The company also has net operating losses in the United Kingdom of $ 1,414,454

which will not expire and $ 636,852

of net operating loss carryforwards in Canada which will begin to expire in 2038.

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, 2021 and 2020, the Company calculated its estimated annualized effective tax rate at 0 %

respectively, for both the United States, Canada and the United Kingdom.

The Company had no

income tax expense on its losses for the years ended December 31, 2021 and 2020, respectively.

The Company recognizes the financial statement

6 unchanged sentences

31, 2021 and 2020, 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.

federal, New York, and Delaware jurisdictions.

Tax years 2011 to current remain open to examination by Canadian authorities;

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.

federal, New York, and Delaware jurisdictions and the United Kingdom jurisdictions.

Tax years 2011

to current remain open to examination by Canadian authorities;

the tax year 2018 remains open to examination by U.S.

NOTE 8 –

PREFERRED STOCK

In accordance with the Company’s bylaws,

NOTE 11 – 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.

1 unchanged sentence

31, 2021 and 2020 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

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 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,

On December 23, 2021, pursuant to the approval of the Board of Directors

and a majority vote of the holders of Series D Preferred Stock, the Company amended the Certificate of Designation for the Series D Preferred

Stock so that each share of Series D Stock is convertible, at the sole and exclusive election of the holder, into two shares of Common

Stock of the Company.

NOTE 12 – COMMON STOCK

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.

1 unchanged sentence

2020, there were 5,197,821,885 and 4,088,762,156 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.

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.

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 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 April 15, 2021, the Company issued an aggregate

of 8,065,040 shares of common stock upon the conversion of convertible debt, as issued on October 7, 2020, in the amount of $ 47,850 and

interest of $ 2,153 .25.

On April 30, 2021, the Company issued 60,000,000

shares of common stock as compensation for loan acquisition costs associated with the note issued on the same date for the amount of

On June 4, 2021, the Company issued an aggregate

of 12,500,000 shares of common stock upon the conversion of convertible debt, as issued on September 25, 2018, in the amount of $ 76,656 .83

and interest of $ 260 .61.

On July 12, 2021, the Company issued an aggregate

of 1,784,146 shares of common stock upon the conversion of convertible debt, as issued on January 12, 2021, in the amount of $ 42,350 .

On July 14, 2021, the Company issued an aggregate

of 45,037,115 shares of common stock upon the conversion of convertible debt, as issued on October 7, 2020, in the amount of $ 93,864

and interest of $ 26,246 .

On July 19, 2021, the Company issued an aggregate

of 2,898,382 shares of common stock upon the conversion of convertible debt, as issued on October 7, 2020, in the amount of $ 10,497 and

interest of $ 6,748 .

On August 25, 2021, the Company issued 31,799,260

shares of common stock for $ 3,000,000 .

On August 31, 2021, the Company issued 27,297,995

shares of common stock for $ 3,000,000 .

On September 22, 2021, the Company issued 25,630,272

shares of common stock for $ 2,000,000 .

On September 30, 2021, the Company issued 15,000,000

shares of common stock pursuant to two separate Membership Interest Purchase Agreements with Remote Intelligence, and Wildlife Specialists,

On September 30, 2021, the Company issued 3,194,081

shares of common stock as compensation valued at $ 250,000

for loan acquisition costs associated with proceeds raised.

On October 1, 2021, the Company issued 37,187,289

shares of common stock for $ 3,000,000 .

On October 15, 2021, the Company issued 14,282,304

shares of common stock for $ 1,055,000 .

On October 22, 2021, the Company issued 1,596,594

shares of common stock as compensation valued at $ 250,000

for loan acquisition costs associated with proceeds raised.

On October 25, 2021, the Company issued 634,778

shares of common stock as compensation valued at $ 250,000

for loan acquisition costs associated with proceeds raised.

On November 17, 2021, the Company issued an aggregate

of 177,375,000 shares of common stock upon the conversion of convertible debt, as issued on April 30, 2021, in the amount of $ 825,000

and interest of $ 61,875 .

On December 21, 2021, the Company issued an aggregate

of 43,777,478 shares of common stock for $ 2,538,327 .

At December 31, 2021, the Company had 1,589,257,888

in common shares reserved for issuance for convertible debt securities.

NOTE 10 –

STOCK OPTIONS

NOTE 13 – STOCK OPTIONS

As of December 31, 2021 and 2020, the Company

had no outstanding stock options.

NOTE 11 –

COMMITMENTS AND CONTINGENCIES

NOTE 14 – COMMITMENTS AND CONTINGENCIES

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.

This agreement expired on September 5, 2019.

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.

Legal Matters

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 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.

Twitter, Inc.

On January 24, 2022, the Company filed a petition

in the Supreme Court of the State of New York County of New York to compel a disclosure from Twitter, Inc.

The petition sought to compel

Twitter, Inc.

to disclose the owner and operator of the “Investor News” Twitter account (@newsfilterio) so the Company could

commence an action for damages arising from false, misleading, and untrue statements made by the Investor News.

On February 23, 2022, the Court ordered Twitter

to release information concerning the owner and operator of the Investor News account to the Company.

Company will continue to pursue and expose the identities of those individuals or groups and shall take any and all legal action to pursue

the violators .

Carebourn Capital, L.P.

DarkPulse, Inc.

As disclosed in greater detail in the Company’s

Form 10-Q, filed November 15, 2021, the Company remains in active litigation with Carebourn Capital, L.P.

(“Carebourn”).

The remainder of this disclosure will address all material updates since the aforementioned Form 10-Q.

On November 1, 2021, the Company filed a motion

to compel Carebourn to produce certain documents and supplement its responses to certain interrogatories.

On September 27, 2021, Carebourn filed a declaratory

judgment and a motion for declaratory judgment, dismissal of the Company’s claims, and summary judgment (“Dispositive Motion”).

On February 15, 2022, the Court rendered its

decision on the aforesaid motions, denying the Dispositive Motion in its entirety and granting in part, and denying in part, the Company’s

motion to compel.

Pursuant to the Court’s ruling in the Company’s favor on its motion to compel, the Court has awarded the

Company attorneys’ costs and fees in connection with the successful portions of its motion to compel.

On January 19, 2022, the Company filed a motion

for enforcement of a protective order.

It is the Company’s position that Carebourn has violated a protective order that was entered

into by the parties and seeks to protect confidential information exchanged during the litigation.

The Court has not yet rendered a decision

on this motion.

On March 24, 2022, Carebourn filed a Motion to

Compel against DarkPulse, alleging that DarkPulse failed to fulfill its discovery obligations by not producing a privilege log.

contends that Carebourn’s motion is meritless and premature.

The Company remains committed to actively litigating

its claims for relief under the Securities Exchange Act of 1934.

More Capital, LLC v.

DarkPulse, Inc.

As disclosed in greater detail in the Company’s

Form 10-Q, filed November 15, 2021, the Company remains in active litigation with More Capital, LLC (“More”).

The remainder

of this disclosure will address all material updates since the aforementioned Form 10-Q.

On October 27, 2021, the Company served its initial

discovery requests, consisting of interrogatories, requests for admission, and requests for production, on More.

On November 24, 2021, More served its responses

to the Company’s initial discovery requests.

After reviewing More’s responses, it is the Company’s position that More’s

responses are false, misleading, untrue, and/or evasive.

On February 28, 2022, the Company filed its motion

to compel More to produce certain documents and supplement or otherwise modify its responses to certain interrogatories and requests

for admission.

DarkPulse’s motion will be heard on April 14, 2022.

On March 9, 2022, More filed a motion for summary

judgment against the Company.

The Company’s opposition is being filed on or before March 23, 2022, and More’s motion will

be heard on April 6, 2022.

The Company remains committed to actively litigating

its claims for relief under the Securities Exchange Act of 1934.

Goodman et al.

DarkPulse, Inc.

As disclosed in greater detail in the Company’s

Form 10-Q, filed November 15, 2021, the Company remains in active litigation with Stephen Goodman (“Goodman”), Mark Banash

(“Banash”), and David Singer (“Singer”) (Goodman, Banash, and Singer together, the “Series D Plaintiffs”).

The remainder of this disclosure will address all material updates since the aforementioned Form 10-Q.

On August 20, 2021, the Company and the Series

D Plaintiffs entered into a stipulation, pursuant to which the Company withdrew its motion to dismiss and the Company was provided with

an extended period of time to respond to the complaint.

On September 8, 2021, the Company filed its Answer

and Counterclaims, wherein the Company alleges counterclaims arising from various breaches of fiduciary duties by the Series D Plaintiffs

while they were employed as officers of the Company.

On December 9, 2021, the parties participated

in private mediation.

No understanding of settlement was reached at the conclusion thereof.

The Company remains committed to actively litigating

its claims and defenses against the Series D Plaintiffs.

DarkPulse, Inc.

FirstFire Global Opportunities

Fund, LLC, and Eli Fireman (SDNY)

On December 31, 2021, the Company commenced an

action against FirstFire Global Opportunities Fund, LLC (“FirstFire”), and Eli Fireman (“Fireman”) (FirstFire

and Fireman together, the “FirstFire Parties”) in the United States District Court for the Southern District of New York.

The complaint alleges that FirstFire is an unregistered dealer acting in violation of Section 15(a) of the Securities Exchange Act of

1934 (the “Act”), and that the Company is entitled to rescissionary relief from certain convertible promissory notes and

securities purchase agreements entered into by the Company and FirstFire pursuant to Section 29(b) of the Act.

The complaint also asserts

claims against Fireman for control person liability under Section 20(a) of the Act, unjust enrichment of FirstFire, and constructive

trust against FirstFire.

On January 14, 2022, the Company moved for entry

of a temporary restraining order and award of a preliminary injunction against FirstFire to enjoin them from selling or attempting to

sell, transfer, or otherwise dispose of the 177,275,000 common shares the Company believed were in FirstFire’s possession pursuant

to a certain note.

On January 14, 2022, the Court denied the Company’s

order to show cause seeking a temporary restraining order.

Following expedited briefing by the parties,

on January 21, 2022, the Court denied the Company’s motion for preliminary injunction.

On March 14, 2022, the FirstFire Parties filed

their letter request for a motion to dismiss the Company’s complaint.

The Company responded to the FirstFire Parties’ letter

on March 17, 2022.

As of the filing date, the Court has not yet issued a decision on the FirstFire Parties letter request to file its

motion to dismiss.

FirstFire Global Opportunities Fund, LLC v.

DarkPulse, Inc.

Chancery Court)

On December 13, 2021, FirstFire Global Opportunities

Fund, LLC (“FirstFire”) commenced an action against the Company in the Court of Chancery of the State of Delaware.

The complaint

seeks declaratory judgment of the issuance of 177,375,000 shares of Company common stock pursuant to a certain convertible promissory

On January 4, 2022, the Company filed a motion

to dismiss FirstFire’s complaint.

On February 11, 2022, the Company filed its opening

memorandum of law in support of its motion to dismiss.

The Company’s memorandum argues that FirstFire the certain convertible promissory

note that the issuance was made under is void ab initio as it violates New York’s criminal usury laws, and that FirstFire improperly

amended the governing law provision of the void convertible note to evade being declared void ab initio and, instead, continue to enforce

the unlawful transaction.

On March 14, 2022, FirstFire filed a notice of

voluntary dismissal of its complaint.

As of December 31, 2021, DarkPulse views the

aforesaid FirstFire Delaware Chancery matter as fully closed.

DarkPulse, Inc.

EMA Financial, LLC et al

On January 4, 2022, the Company commenced an

action against EMA Financial, LLC (“EMA”), EMA Group, Inc.

(“EMA Group”), and Felicia Preston (“Preston”)

(EMA, EMA Group, and Preston together, the “EMA Parties”) in the United States District Court for the Southern District of

The complaint alleges that EMA is an unregistered dealer acting in violation of Section 15(a) of the Securities Exchange Act

of 1934 (the “Act”), and that the Company is entitled to rescissionary relief from certain convertible promissory notes and

securities purchase agreements entered into by the Company and EMA pursuant to Section 29(b) of the Act.

The complaint also asserts claims

against Preston for control person liability under Section 20(a) of the Act, unjust enrichment of EMA, EMA Group, and Preston, and constructive

trust against the EMA Parties.

On March 28, 2022, the Company filed its first

amended complaint against the EMA Parties.

The amended complaint alleges the same causes of action asserted in the initial complaint—(1)

that EMA is an unregistered dealer acting in violation of Section 15(a) of the Act and, pursuant to Section 29(b) of the Act, the Company

is entitled to rescissionary relief from certain convertible promissory notes and securities purchase agreements entered into by the

Company and EMA, (2) that Preston is liable pursuant to Section 20(a) of the Act, and (3) unjust enrichment—along with two claims:

that the EMA Parties, first, violated and, second conspired to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act

for engaging in the collection of an unlawful debt.

The Company remains committed to actively litigating

its claims for relief under the Securities Exchange Act of 1934.

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

11 unchanged sentences

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.

7 unchanged sentences

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.

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;

NOTE 15 – 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;

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 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.

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 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;

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.

a) the nature of the relationship(s)

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 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

During the years ended December 31, 2021 and

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 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.

2020, the Company’s Chief Executive Officer advanced personal funds in the amount of $ 593 and $ 68,254 for Company expenses.

NOTE 16 – SUBSEQUENT EVENTS

On January 12, 2022, the Company issued 23,372,430

shares of common stock for $1,150,000.

On January 21, 2022, the Company issued 33,454,988

shares of common stock for $1,150,000.

On February 7, 2022, the Company issued 16,040,411

shares of common stock for $500,000.

On March 7, 2022, the Company issued 75,798,921

shares of common stock for $2,500,000.

On March 23, 2022, the Company issued 29,257,395

shares of common stock for $1,500,000.

On April 11, 2022, the Company issued 23,746,816

shares of common stock for $1,000,000.

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