Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
DarkPulse, Inc. v. 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. T he
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 .
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Carebourn Capital, L.P. 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 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 (the “ 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. DarkPulse
contends that Carebourn’s motion is meritless and premature.
The Company remains committed to actively litigating
its claims for relief under the Exchange Act.
More Capital, LLC v. DarkPulse, Inc. et al
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 was 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 Exchange Act.
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Goodman et al. 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 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. v. 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 Exchange Act of
1934 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 Exchange Act. The complaint also asserts claims against Fireman
for control person liability under Section 20(a) of the Exchange 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 the conversion of 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. (Del. Chancery Court)
On December 13, 2021, 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 note.
On January 4, 2022, the Company filed a motion
to dismiss FirstFire’s complaint.
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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 the issuance of the certain convertible
promissory note to FirstFire 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 disclosed.
DarkPulse, Inc. v. 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 New York. The complaint alleges that EMA is an unregistered dealer acting in violation of Section 15(a) of the Exchange 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 Exchange Act. The complaint also asserts claims against Preston for control person
liability under Section 20(a) of the Exchange 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 Exchange Act and, pursuant to Section 29(b) of the Exchange
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 Exchange 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 Exchange Act.
In addition to the foregoing Legal Proceedings,
the Company is also actively investigating potential legal claims, including but not limited to stock fraud, market manipulation, and/or
defamation, against certain Twitter accounts, websites, and social media channels. The investigation is ongoing and should potential claims
be identified, the Company will evaluate commencing formal litigation proceedings.
From time to time, the Company may become involved
in litigation relating to claims arising out of its operations in the normal course of business. To the best of the Company’s knowledge,
no governmental authority is contemplating any proceeding to which the Company is a party or to which any of the Company’s properties
are subject, which would reasonably be likely to have a material adverse effect on the Company’s business, financial condition and
operating results.
From time to time, we may become involved in
litigation relating to claims arising out of our operations in the normal course of business. We are not currently involved in any pending
legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which
we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on our
business, financial condition and operating results.
ITEM 4. MINE SAFETY
DISCLOSURES
Not applicable.
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PART II
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.