What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-04 compared with 2022-08-10 · 276 added, 388 removed, 796 unchanged (45% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30,

CURRENT ASSETS:

30 unchanged sentences

100 shares authorized;

100 and 0 issued and outstanding at June 30, 2022 and December 31, 2021, respectively)

100 and 0 issued and outstanding at September 30, 2022 and December 31, 2021, respectively)

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

100,000 shares authorized;

issued and outstanding at June 30, 2022 and December 31, 2021, respectively)

Common stock (par value $ 0.0001 ), 20,000,000,000 shares authorized, 5,594,156,736 and 5,197,821,885 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Treasury stock, 100,000 shares at June 30, 2022 and December 31, 2021

88,235 issued and outstanding at September 30, 2022 and December 31, 2021, respectively)

Common stock (par value $ 0.0001 ), 20,000,000,000 shares authorized, 6,145,852,186 and 5,197,821,885 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Treasury stock, 100,000 shares at September 30, 2022 and December 31, 2021

Paid-in capital in excess of par value

11 unchanged sentences

For the Three Months

For the Six Months

Ended June 30,

For the Nine Months

Ended September 30,

COST OF GOODS SOLD

( 4,373,771 )

( 4,234,872 )

OPERATING EXPENSES:

3 unchanged sentences

Depreciation and amortization

Debt transaction expenses

TOTAL OPERATING EXPENSES

2 unchanged sentences

( 2,485,484 )

( 18,246,928 )

( 3,008,773 )

OTHER INCOME (EXPENSE):

Interest expense

Interest income (expense)

Gain on the forgiveness of debt

7 unchanged sentences

( 18,375,506 )

( 1,924,311 )

Net loss attributable to noncontrolling interests in variable interest entity and subsidiary

18 unchanged sentences

For the Three Months

For the Six Months

Ended June 30,

For the Nine Months

Ended September 30,

$ ( 8,805,668 )

4 unchanged sentences

Unrealized Gain (Loss) on Foreign Exchange

( 1,956,159 )

( 2,913,602 )

COMPREHENSIVE LOSS

6 unchanged sentences

Consolidated Statement of Stockholders' Equity

For the Three Months Ended June 30, 2022 and

For the Three Months Ended September 30, 2022

Preferred Stock, Series A

12 unchanged sentences

5,594,156,736

Common stock issued for cash

Foreign currency adjustment

Balance, September 30, 2022

6,145,852,186

Controlling Interest in

20 unchanged sentences

$ ( 20,846,332 )

Preferred Stock

Controlling Interest in

Common stock issued for cash

Foreign currency adjustment

( 1,956,159 )

( 8,805,668 )

Balance, September 30, 2022

$ ( 3,198,065 )

$ ( 29,652,000 )

DARKPULSE, INC.

Consolidated Statement of Stockholders' Equity

For the Three Months Ended September 30, 2022 and 2021

Capital in Excess of Par

Balance, December 31, 2020

4,088,762,156

Conversion of convertible notes

Foreign currency adjustment

Balance, March 31, 2021

4,689,762,151

Conversion of convertible notes

Stock based loan acquisition cost

Foreign currency adjustment

Balance, June 30, 2021

4,770,327,191

Conversion of convertible notes

Issuance of common stock for public offering

Issuance of common stock for Wildlife Specialist acquisition

Issuance of common stock for Remote Intelligence acquisition

Share-based compensation

Distributions

Foreign currency adjustment - NCI

Foreign currency adjustment

Balance, September 30, 2021

4,922,968,442

Non-Controlling Interest in

Accumulated Other Comprehensive

Total Stockholders’

Distributions

Balance, December 31, 2020

1 unchanged sentence

$ ( 3,932,205 )

Conversion of convertible notes

3 unchanged sentences

$ ( 3,752,049 )

Conversion of convertible notes

4 unchanged sentences

$ ( 3,577,557 )

Conversion of convertible notes

Issuance of common stock for public offering

Issuance of common stock for Wildlife Specialist acquisition

Issuance of common stock for Remote Intelligence acquisition

Share-based compensation

Distributions

Foreign currency adjustment - NCI

Foreign currency adjustment

( 1,686,829 )

Balance, September 30, 2021

$ ( 8,374,480 )

See accompanying notes to consolidated financial

1 unchanged sentence

Consolidated Statements of Cash Flows

For the Six Months Ended

For the Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

14 unchanged sentences

Contract liability

( 1,439,504 )

Other current assets

2 unchanged sentences

( 2,949,406 )

( 4,362,016 )

Operating lease liabilities

2 unchanged sentences

( 19,456,701 )

( 7,446,593 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

Investment in demo box

Business acquisitions, net of cash received

Investment in patents

Net cash used by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from sale of common stock

Proceeds from convertible debentures

Payments on notes payable

Proceeds from sale of common stock from offering

Proceeds from convertible notes payable

Payments on convertible notes

Proceeds from notes payable

Net cash provided by financing activities

1 unchanged sentence

Effect of exchange rate on cash

( 1,434,126 )

CASH, beginning of period

CASH, end of period

Non-cash finance and investing activities for the six months ended June 30:

Non-cash finance and investing activities for the nine months ended September 30:

Stock issued for acquisition of TerraData

Stock issued for convertible notes payable and accrued interest

Issuance of common stock for Wildlife Specialists

Issuance of common stock for Remote Intelligence

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the six months ended June 30:

Cash paid during the nine months ended September 30:

See accompanying notes to consolidated financial

26 unchanged sentences

All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial

position as of June 30, 2022, and the results of operations for three and six months and cash flows for the six months ended June 30,

position as of September 30, 2022, and the results of operations for three and nine months and cash flows for the nine months ended September

30, 2022 have been included.

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of

the results to be expected for the full year.

The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative

of the results to be expected for the full year.

Description of Business

2 unchanged sentences

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

Its’ wholly-owned subsidiary,

DarkPulse Technologies Inc.

Its’ wholly-owned subsidiary, DarkPulse

Technologies Inc.

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

38 unchanged sentences

As shown in the accompanying financial statements,

during the six months ended June 30, 2022, the Company reported a net loss of $ 9,569,843 .

As of June 30, 2022, the Company’s current

liabilities exceeded its current assets by $ 8,585,281 .

As of June 30, 2022, the Company had $ 2,512,668 of cash.

during the nine months ended September 30, 2022, the Company reported a net loss of $ 18,375,506 .

As of September 30, 2022, the Company’s

current liabilities exceeded its current assets by $ 6,314,789 .

As of September 30, 2022, the Company had $ 5,967,984 of cash.

The Company will require additional funding during

46 unchanged sentences

The relevant translation rates are as follows:

for the periods ended June 30, 2022 closing rate at 1.216007 USD:GBP, average rate at 1.299973 USD:GBP and for the year ended December

for the periods ended September 30, 2022 closing rate at 1.113030 USD:GBP, average rate at 1.259161 USD:GBP and for the year ended December

31, 2021 closing rate at 1.353583 USD:

1 unchanged sentence

The relevant translation rates are as follows:

for the periods ended June 30, 2022 closing rate at 1.2872 CAD:USD, average rate at 1.2788 CAD:USD and for the year ended December 31,

for the periods ended September 30, 2022 closing rate at 1.3751 CAD:USD, average rate at 1.3213 CAD:USD and for the year ended December

31, 2021 closing rate at 1.2794 CAD:USD, average rate at 1.2534 CAD:USD.

93 unchanged sentences

unaudited consolidated balance sheets as current liabilities.

At June 30, 2022 and December 31, 2021, we had contract liabilities of $ 4,480,912

and $ 3,216,562 , respectively.

At September 30, 2022 and December 31, 2021, we had contract liabilities

of $ 4,050,438 and $ 3,216,562 , respectively.

Cost of Product Sales and Services

53 unchanged sentences

Restructuring Costs

The Company accounts for settlement of

employment contracts and one-time salary expenses, such as severance, as restructuring costs when incurred due to

specific restructuring event.

For the quarter ended June 30, 2022, the Company recognized $501,431 related to the

settlement of employment contracts and severance due to employment changes in our subsidiary, Optilan.

The Company accounts for settlement of employment

contracts and one-time salary expenses, such as severance, as restructuring costs when incurred due to specific restructuring event.

For the quarter ended September 30, 2022, the Company recognized $ 501,431 related to the settlement of employment contracts and severance

due to employment changes in our subsidiary, Optilan.

Beneficial Conversion Features

42 unchanged sentences

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

For the six months ended June 30, 2022, there

were no stock options outstanding.

For the six months ended June 30, 2022, common stock equivalents related to convertible preferred stock

and convertible debt have not been included in the calculation of diluted loss per common share because they are anti-dilutive.

basic loss per common share is the same as diluted loss per common share.

There are 28,316,441 common shares reserved for the potential

conversion of the Company's convertible debt.

For the nine months ended September 30, 2022,

there were no stock options outstanding.

For the nine months ended September 30, 2022, common stock equivalents related to convertible

preferred stock and convertible debt have not been included in the calculation of diluted loss per common share because they are anti-dilutive.

Therefore, basic loss per common share is the same as diluted loss per common share.

There are 28,316,441 common shares reserved for the

potential conversion of the Company's convertible debt.

Recently Issued Accounting Pronouncements

The Company has reviewed the accounting pronouncements

issued during the six months ended June 30, 2022 and concluded they were either not applicable or not expected to have a material

issued during the nine months ended September 30, 2022 and concluded they were either not applicable or not expected to have a material

impact on the Company’s condensed consolidated financial statements.

1 unchanged sentence

The following table is a summary of the Company’s

timing of revenue recognition for the three and six months ended June 30, 2022 and 2021:

timing of revenue recognition for the three and nine months ended September 30, 2022 and 2021:

Schedule of timing of revenue recognition

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Timing of revenue recognition:

4 unchanged sentences

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 three and six months ended June 30, 2022 and 2021:

Revenue by source consisted of the following for

the three and nine months ended September 30, 2022 and 2021:

Schedule of revenue by source consisted

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Revenue by products and services:

1 unchanged sentence

Revenue by geographic destination consisted of

the following for the three and six months ended June 30, 2022 and 2021:

the following for the three and nine months ended September 30, 2022 and 2021:

Schedule of revenue by geographic destination

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Revenue by geography:

7 unchanged sentences

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

As of June 30, 2022,

As of September

30, 2022, the Company did not have a contract assets balance.

6 unchanged sentences

( 3,359,023 )

Balance at June 30, 2022

Balance at September 30, 2022

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following

as of June 30, 2022 and December 31, 2021:

as of September 30, 2022 and December 31, 2021:

Schedule of accounts receivable

September 30,

Accounts receivable

2 unchanged sentences

NOTE 4 – INVENTORY

Inventory consisted of the following as of June

Inventory consisted of the following as of September

30, 2022 and December 31, 2021:

Schedule of inventory

September 30,

Raw materials

5 unchanged sentences

Property and equipment consisted of the following

as of June 30, 2022 and December 31, 2021:

as of September 30, 2022 and December 31, 2021:

Schedule of property, plant and equipment

September 30,

Property and equipment

3 unchanged sentences

Accounts payable and accrued expenses consisted

of the following as of June 30, 2022 and December 31, 2021:

of the following as of September 30, 2022 and December 31, 2021:

Schedule of accounts payable and accrued liabilities

September 30,

Accounts payable

8 unchanged sentences

The following was included in our balance sheet

as of June 30, 2022:

as of September 30, 2022:

Schedule of operating leases

Operating leases

September 30,

ROU operating lease assets

3 unchanged sentences

The weighted average remaining lease term and

weighted average discount rate at June 30, 2022 were as follows:

weighted average discount rate at September 30, 2022 were as follows:

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

Weighted average remaining lease term (years)

September 30,

Operating leases

8 unchanged sentences

The following table reconciles future minimum

operating lease payments to the discounted lease liability as of June 30, 2022:

operating lease payments to the discounted lease liability as of September 30, 2022:

Schedule of future minimum operating lease payments

8 unchanged sentences

The following table sets forth the changes in

the carrying amount of goodwill for the six months ended June 30, 2022:

the carrying amount of goodwill for the nine months ended September 30, 2022:

Schedule of changes in carrying amount of goodwill

2 unchanged sentences

( 1,802,491 )

Balance at June 30, 2022

Balance at September 30, 2022

Intangible Assets - Intrusion Detection Intellectual

1 unchanged sentence

on disclosure to protect its intellectual property rights.

As of June 30, 2022, the Company held three U.S.

and foreign patents on its

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

As of September 30, 2022, the Company held three U.S.

and foreign patents on

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

The DPTI issued patents cover a System and Method

12 unchanged sentences

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

For the six months ended June 30, 2022 and 2021,

For the nine months ended September 30, 2022 and

2021, the Company amortized $ 38,271 and $ 38,271 , respectively.

21 unchanged sentences

the Canadian Dollar and the U.S.

Dollar on June 30, 2022, the quarterly principal repayment amounts will be US$49,750.

The Debenture is

secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010.

Dollar on September 30, 2022, the quarterly principal repayment amounts will be US$49,750.

The Debenture

is secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010.

DPTI has pledged the Patents,

2 unchanged sentences

$1,491,923 equivalent US Dollar amount of Canadian $1,500,000 as of December 16, 2010, the date of the original Debenture.

The liability is being

adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the end of each quarter.

The adjustment

is recorded as unrealized gain or loss in the change of the value of the two currencies during the quarter.

The amounts recorded as an

unrealized loss for the three months ended June 30, 2022 and 2021, were $ 29,297 and $ 17,909 respectively.

These amounts are included in

Accumulated Other Comprehensive Loss in the Equity section of the consolidated balance sheet, and as Unrealized Loss on Foreign Exchange

on the consolidated statement of comprehensive loss.

The Debenture also includes a provision requiring DPTI to pay the University a 2%

royalty on sales of any and all products or services which incorporate the Patents for a period of five years from April 24, 2018.

For the six months ended June 30, 2022, and 2021,

the Company recorded interest expense of $ 24,854 and $ 26,746 , respectively.

As of June 30, 2022 the debenture liability totaled

$ 1,165,365 , all of which was long term.

liability is being adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the end of each

The adjustment is recorded as unrealized gain or loss in the change of the value of the two currencies during the quarter.

The amounts recorded as an unrealized loss for the three months ended September 30, 2022 and 2021, were $ 74,538

respectively.

These amounts are included in Accumulated Other Comprehensive Loss in the Equity section of the consolidated balance

sheet, and as Unrealized Loss on Foreign Exchange on the consolidated statement of comprehensive loss.

The Debenture also includes a

provision requiring DPTI to pay the University a 2% royalty on sales of any and all products or services which incorporate the

Patents for a period of five years from April 24, 2018.

For the nine months ended September 30, 2022,

and 2021, the Company recorded interest expense of $ 36,307 and $ 39,001 , respectively.

As of September 30, 2022 the debenture liability

totaled $ 1,090,827 , all of which was long term.

Future minimum required payments over the next 5 years and thereafter

1 unchanged sentence

Schedule of future minimum debt payments

Period ending June 30,

Period ending September 30,

2027 and after

5 unchanged sentences

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

issue of the debt security as of June 30, 2022.

issue of the debt security as of September 30, 2022.

Management determined the expected volatility of 124.08%, a risk-free rate of interest

of 2.8%, and contractual lives of the debt of six months.

The table below details the Company's four outstanding convertible notes, with

totals for the face amount, amortization of discount, initial loss, change in the fair market value, and the derivative liability.

of 4.05%, and contractual lives of the debt of three months.

The table below details the Company's four outstanding convertible notes,

with totals for the face amount, amortization of discount, initial loss, change in the fair market value, and the derivative liability.

Schedule of debt

Transaction expense

As of June 30, 2022 and December 31, 2021 respectively,

there was $ 378,263 and of convertible debt outstanding, net of debt

discount of $ 0 .

As of June 30, 2022 and December

31, 2021 respectively, there was a derivative liability of $ 366,597

and $ 533,753 related to convertible debt securities.

As of September 30, 2022 and December 31, 2021

respectively, there was $ 378,263 and of convertible debt outstanding, net of debt discount of $ 0 .

As of September 30, 2022 and December

31, 2021 respectively, there was a derivative liability of $ 296,308 and $ 533,753 related to convertible debt securities.

NOTE 10 - STOCKHOLDERS' EQUITY

As of June 30, 2022, there were 5,594,156,736

As of September 30, 2022, there were 6,145,852,186

shares of common stock and 88,335 shares of preferred stock issued and outstanding.

2 unchanged sentences

of Incorporation, the Company has authorized a total of 2,000,000 shares of preferred stock, par value $ 0.01 per share, for all classes.

As of June 30, 2022, and December 31, 2021, there were 88,335 and 88,235 , respectively total preferred shares issued and outstanding

As of September 30, 2022, and December 31, 2021, there were 88,335 and 88,235 , respectively total preferred shares issued and outstanding

for all classes.

15 unchanged sentences

Series A Preferred Stock shall have effective voting control of the Company, on a fully diluted basis.

Unless approved by a majority vote of the holders of Common Stock, the Series A Super Voting Preferred Stock

will terminate five years after the issuance date, which is June 24, 2027.

During the three months ended June 30, 2022, the

Company issued 100 shares of Series A preferred stock.

Unless approved by a majority vote of the holders

of Common Stock, the Series A Super Voting Preferred Stock will terminate five years after the issuance date, which is June 24, 2027.

During the three months ended September 30, 2022,

the Company issued 100 shares of Series A preferred 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.

As of June 30, 2022 and December

31, 2021, there were 5,594,156,736 and 5,197,821,885 common shares issued and outstanding.

During the three months ended June 30, 2022, the

Company issued the following shares of common stock:

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 3, 2022, the Company issued 16,579,569

shares of common stock for $ 500,000 .

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

As of September 30, 2022 and

December 31, 2021, there were 6,145,852,186 and 5,197,821,885 common shares issued and outstanding.

During the three months ended September 30, 2022,

the Company issued the following shares of common stock:

On July 1, 2022, the Company issued 33,525,465

shares of common stock for $ 556,750 .

On March 14, 2022, the Company issued 5,617,347

On July 11, 2022, the Company issued 32,756,532

shares of common stock for $ 556,750 .

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

On July 20, 2022, the Company issued 29,386,519

shares of common stock for $ 556,750 .

On April 1, 2022, the Company issued 3,725,386

shares of common stock valued at $ 200,000 for the completion of the acquisition of TerraData.

On April 8, 2022, the Company issued 23,746,816

On July 28, 2022, the Company issued 35,884,040

shares of common stock for $ 556,750 .

On May 3, 2022, the Company issued 29,522,276

On August 10, 2022, the Company issued 44,505,857

shares of common stock for $ 680,110 .

On May 13, 2022, the Company issued 26,100,979

On August 18, 2022, the Company issued 54,574,909

shares of common stock for $ 948,863 .

On May 23, 2022, the Company issued 25,025,540

On August 25, 2022, the Company issued 105,255,759

shares of common stock for $ 2,264,961 .

On June 1, 2022, the Company issued 25,901,921

On August 30, 2022, the Company received 33,898,377

shares of common stock for cancellation from a previous note holder.

On September 2, 2022, the Company issued 140,073,757

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

On June 16, 2022, the Company issued 23,799,766

On September 14, 2022, the Company issued 79,092,686

shares of common stock for $ 1,757,466 .

On June 24, 2022, the Company issued 38,391,106

On September 30, 2022, the Company issued 30,538,303

shares of common stock for $ 500,000 .

Stock Options

During the three months ended June 30, 2022, the

Company did not issue any stock options and had no stock options outstanding at June 30, 2022.

During the three months ended September 30, 2022,

the Company did not issue any stock options and had no stock options outstanding at September 30, 2022.

Public Offerings

9 unchanged sentences

Statement is filed with the SEC, but in no event more than 90 days after the GHS Registration Statement is filed.

Pursuant to the Equity Financing Agreement, on

January 12, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 23,372,430 shares of

Common Stock for total proceeds to us, net of discounts, of $ 1,150,000 , at an effective price of $0.054124 per share (the “ Second

EFA Closing ”).

We received approximately $ 1,033,975 in net proceeds from the Second EFA Closing after deducting the fees and

other estimated offering expenses payable by us.

We used the net proceeds from the Second EFA Closing for working capital and for general

corporate purposes.

Pursuant to the Equity Financing Agreement, on

January 21, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 33,454,988 shares of

Common Stock for total proceeds to us, net of discounts, of $ 1,150,000 , at an effective price of $0.037812 per share (the “ Third

EFA Closing ”).

We received approximately $ 1,033,975 in net proceeds from the Third EFA Closing after deducting the fees and

other estimated offering expenses payable by us.

We used the net proceeds from the Third EFA Closing for working capital and for general

corporate purposes.

Pursuant to the Equity Financing Agreement, on

February 7, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 16,040,411 shares of

Common Stock for total proceeds to us, net of discounts, of $ 500,000 , at an effective price of $0.0342884 per share (the “ Fourth

EFA Closing ”).

We received approximately $ 448,975 in net proceeds from the Fourth EFA Closing after deducting the fees and other

estimated offering expenses payable by us.

We used the net proceeds from the Fourth EFA Closing for working capital and for general corporate

Below is a table of all puts made by the Company

under the Equity Financing Agreement during 2022:

Schedule of equity financing

Number of Shares Sold

Total Proceeds, Net of Discounts

Effective Price per Share

On February 21, 2022, we sold 75,798,921 shares

4 unchanged sentences

our Common Stock at $ 0.071208 per share for total consideration of $ 400,000 .

Pursuant to the Equity Financing Agreement, on

March 23, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 29,257,395 shares of Common

Stock for total proceeds to us, net of discounts, of $ 1,500,000 , at an effective price of $0.056396 per share (the “ Fifth EFA

We received approximately $ 1,348,975 in net proceeds from the Fifth EFA Closing after deducting the fees and other

estimated offering expenses payable by us.

We used the net proceeds from the Fifth EFA Closing for working capital and for general corporate

Pursuant to the Equity Financing Agreement, on

April 11, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 23,746,816 shares of Common

Stock for total proceeds to us, net of discounts, of $ 1,000,000 , at an effective price of $0.04211091 per share (the “ Sixth EFA

We received approximately $ 898,975 in net proceeds from the Sixth EFA Closing after deducting the fees and other

estimated offering expenses payable by us.

We used the net proceeds from the Sixth EFA Closing for working capital and for general corporate

Pursuant to the Equity Financing Agreement, on

May 3, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 29,522,276 shares of Common

Stock for total proceeds to us, net of discounts, of $ 1,000,000 , at an effective price of $0.03387273 per share (the “ Seventh

EFA Closing ”).

We received approximately $ 898,975 in net proceeds from the Seventh EFA Closing after deducting the fees and

other estimated offering expenses payable by us.

We used the net proceeds from the Seventh EFA Closing for working capital and for general

corporate purposes.

Pursuant to the Equity Financing Agreement, on

May 13, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 26,100,979 shares of Common

Stock for total proceeds to us, net of discounts, of $ 556,750 , at an effective price of $0.0213306 per share (the “ Eighth EFA

We received approximately $ 500,050 in net proceeds from the Eighth EFA Closing after deducting the fees and other

estimated offering expenses payable by us.

We used the net proceeds from the Eighth EFA Closing for working capital and for general corporate

Pursuant to the Equity Financing Agreement, on

May 23, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 25,025,540 shares of Common

Stock for total proceeds to us, net of discounts, of $ 556,750 , at an effective price of $0.0222473 per share (the “ Ninth EFA

We received approximately $ 500,050 in net proceeds from the Ninth EFA Closing after deducting the fees and other

estimated offering expenses payable by us.

We used the net proceeds from the Ninth EFA Closing for working capital and for general corporate

Pursuant to the Equity Financing Agreement, on

June 1, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 25,901,921 shares of Common

Stock for total proceeds to us, net of discounts, of $ 556,750 , at an effective price of $0.02149454 per share (the “ Tenth EFA

We received approximately $ 500,050 in net proceeds from the Tenth EFA Closing after deducting the fees and other

estimated offering expenses payable by us.

We used the net proceeds from the Tenth EFA Closing for working capital and for general corporate

Pursuant to the Equity Financing Agreement, on

June 16, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 23,799,766 shares of Common

Stock for total proceeds to us, net of discounts, of $ 402,086 , at an effective price of $0.018584 per share (the “ Eleventh EFA

We received approximately $ 360,852 in net proceeds from the Eleventh EFA Closing after deducting the fees and other

estimated offering expenses payable by us.

We used the net proceeds from the Eleventh EFA Closing for working capital and for general

corporate purposes.

On May 27, 2022, we entered an Equity Financing

Agreement (the “ EFA ”) and Registration Rights Agreement (the “ RRA ”) with GHS, pursuant to which

GHS agreed to purchase up to $ 70,000,000 in shares of our Common Stock, from time to time over the course of 24 months after effectiveness

of a registration statement on Form S-1 (the “ Registration Statement ”) of the underlying shares of Common Stock.

On May 27, we entered an Equity Financing Agreement

(the “ EFA ”) and Registration Rights Agreement (the “ RRA ”) with GHS, pursuant to which GHS agreed

to purchase up to $70,000,000 in shares of our Common Stock, from time to time over the course of 24 months after effectiveness of a registration

statement on Form S-1 (the “ Registration Statement ”) of the underlying shares of Common Stock.

The RRA provides that we shall (i) use our best

3 unchanged sentences

SEC, but in no event more than 90 days after the GHS Registration Statement is filed.

Pursuant to the EFA, on June 24, 2022, we and

GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 38,391,106 shares of Common Stock for total proceeds

to us, net of discounts, of $ 643,539 , at an effective price of $0.01978 per share (the “ 1 st EFA Closing ”).

We received approximately $ 578,160 in net proceeds from the 1 st EFA Closing after deducting the fees and other estimated offering

expenses payable by us.

We used the net proceeds from the 1 st EFA Closing for working capital and for general corporate purposes.

Below is a table of all puts made by the Company

under the EFA during 2022:

Number of Shares Sold

Total Proceeds, Net of Discounts

Effective Price per Share

$ 0.017386441

$ 0.021518644

$ 0.021417288

$ 0.022220339

NOTE 11 – RELATED PARTY TRANSACTIONS

29 unchanged sentences

of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

On June 22, 2022, the Board of Directors of the

Company, with Dennis O’Leary abstaining, approved the Employment Agreement dated effective April 1, 2022 (the “Effective

Date”) with Mr.

O’Leary, the Company’s Chief Executive Officer (the “Agreement”).

The term of the Agreement

is three years from the Effective Date, subject to termination.

The Agreement may be terminated upon the death or disability of Mr.

or for “Cause,” as defined in the Agreement.

Pursuant to the Agreement, Mr.

O’Leary is entitled to an annual salary

of $ 300,000 , which may accrue and be paid once the Company has available funds.

Any accrued and unpaid base salary may also be converted

subject to mutual agreement of the Company and Mr.

Also, pursuant to the Agreement, upon the filing of the Certificate

of Designation with the Delaware Secretary of State, Mr.

O’Leary is to be issued 100 shares of Series A Super Voting Preferred Stock

of the Company.

During the six months ended June 30, 2022 and

2021, the Company’s Chief Executive Officer advanced personal funds in the amount of $ 0 and $ 329 for Company expenses.

30, 2022, the Company’s Chief Executive Officer is owed a total of $ 0 for advanced personal funds.

During the six months ended June 30, 2022

During the nine months ended September 30, 2022

and 2021, certain executives of the Company received $ 270,000

in Directors fees from Optilan for being members of Optilan’s Board of Directors.

in Directors fees from Optilan for being members of Optilan’s Board of Directors with an additional $90,000 accrued but

NOTE 12 - COMMITMENTS & CONTINGENCIES

4 unchanged sentences

Legal Matters

DarkPulse, Inc.

Twitter, Inc.

As disclosed in greater detail in the Company’s

Form 10-K, filed April 15, 2022, the Company’s investigation of the Investor News matter remains ongoing.

On October 21, 2022, the Company filed a petition

against Twitter, Inc.

in the Supreme Court of the State of New York County of New York to compel disclosure of the owner(s) and operator(s)

of two certain Twitter accounts:

“Mike Wood” (@MIKEWOOD) and “Bull Meechum” (@BullMeechum3).

The petition seeks

disclosure of the owner(s) and operator(s) of the aforementioned accounts so the Company can commence an action against such individuals

for damages arising from false, misleading, and untrue statements made by the same.

On October 25, 2022, the court signed an order

to show cause directing Twitter to show cause on or before November 4, 2022 as to why an order compelling disclosure of the identities

of the owner(s) / operator(s) of the @MIKEWOOD and @BullMeechum3 Twitter accounts should not be made.

Carebourn Capital, L.P.

1 unchanged sentence

As disclosed in greater detail in the Company’s

Form 10-Q, filed May 16, 2022, the Company remains in active litigation with Carebourn Capital, L.P.

(“Carebourn”).

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

On July 11, 2022, the Court denied Carebourn’s

motion to compel DPLS to produce a privilege log.

On July 15, 2022, the Court denied Carebourn’s

motion to disqualify or, in the alternative, seek limited discovery of DPLS’ legal counsel, consisting of the Taft Stettinius &

Hollister LLP and The Basile Law Firm P.C.

On July 27, 2022, Carebourn paid $18,858.18 for

attorneys’ fees awarded pursuant to the Court’s April 14, 2022 decision on the Company’s motion to compel Carebourn.

Form 10-Q, filed August 10, 2022, the Company remains in active litigation with Carebourn Capital, L.P.

(“Carebourn”) in Minnesota

There are no material updates to this litigation.

The Company remains committed to actively litigating

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

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

More Capital, LLC v.

1 unchanged sentence

As disclosed in greater detail in the Company’s

Form 10-Q, filed May 16, 2022, the Company remains in active litigation with More Capital, LLC (“More”).

Thus, the remainder

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

On July 11, 2022, the Court denied More’s

motion for summary judgment against the Company and granted DarkPulse’s motion to compel More.

The Court directed More to produce

all responsive documents to certain requests for production served by DarkPulse within seven days thereof.

Form 10-Q, filed August 10, 2022, the Company remains in active litigation with More Capital, LLC (“More”) in Minnesota State

There are no material updates to this litigation.

The Company remains committed to actively litigating

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

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

Goodman et al.

1 unchanged sentence

As disclosed in greater detail in the Company’s

Form 10-Q, filed May 16, 2022, 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”).

Thus, the remainder

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

As of the date hereof, there are no material updates

to this litigation.

The Company remains committed to actively litigating

its claims and defenses against the Series D Plaintiffs.

Form 10-Q, filed November 15, 2021, on September 10, 2021, Stephen Goodman, Mark Banash, and David Singer (“Former Officers”)

commenced suit against the Company in Arizona Superior Court, Maricopa County.

As of the date hereof, the Company is engaged

in settlement negotiations with the Former Officers.

DarkPulse, Inc.

FirstFire Global Opportunities

Fund, LLC, and Eli Fireman (SDNY)

FirstFire Global Opportunities Fund, LLC, and

As disclosed in greater detail in the Company’s

Form 10-Q, filed May 16, 2022, the Company remains in active litigation with FirstFire Global Opportunities Fund, LLC (“FirstFire”),

Form 10-Q, filed August 10, 2022, the Company remains in active litigation with FirstFire Global Opportunities Fund, LLC (“FirstFire”),

and Eli Fireman (“Fireman”) (FirstFire and Fireman together, the “FirstFire Parties”).

Thus, the remainder of

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

On May 26, 2022, the FirstFire Parties filed their

motion to dismiss the Company’s first amended complaint, filed on May 5, 2022, and opening memorandum of law in support thereof.

On June 16, 2022, the Company filed its memorandum

of law in opposition to the FirstFire Parties’ motion to dismiss, and on June 30, 2022, the FirstFire Parties filed their memorandum

of law in reply and further support of their motion to dismiss.

As of the date hereof, the FirstFire Parties’

motion to dismiss is fully submitted to the Court.

On May 26, 2022, the FirstFire Parties requested oral arguments on their motion to

As of the date hereof, oral arguments have not been scheduled and, further, no decision has been rendered on the FirstFire Parties’

motion to dismiss.

As previously disclosed therein, the FirstFire

Parties’ motion to dismiss the Company’s first amended complaint has been fully submitted to the Court.

On May 26, 2022, the

FirstFire Parties requested oral arguments on their motion to dismiss.

As of the date hereof, oral arguments have not been scheduled and,

further, no decision has been rendered on the FirstFire Parties’ motion to dismiss.

The Company remains committed to actively litigating

3 unchanged sentences

As disclosed in greater detail in the Company’s

Form 10-Q, filed May 16, 2022, the Company remains in active litigation with EMA Financial, LLC (“EMA”), EMA Group, Inc.

Group”), and Felicia Preston (“Preston”) (EMA, EMA Group, and Preston together, the “EMA Parties”).

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

On June 22, 2022, the EMA Parties filed their

motion to dismiss the Company’s first amended complaint, filed on March 28, 2022, and opening memorandum of law in support thereof.

On July 13, 2022, the Company filed its memorandum

of law in opposition to the EMA Parties’ motion to dismiss, and on July 22, 2022, the EMA Parties filed their memorandum of law

in reply and further support of their motion to dismiss.

As of the date hereof, no decision has been on

the EMA Parties’ motion to dismiss.

Form 10-Q, filed August 10, 2022, the Company remains in active litigation with EMA Financial, LLC (“EMA”), EMA Group, Inc.

(“EMA Group”), and Felicia Preston (“Preston”) (EMA, EMA Group, and Preston together, the “EMA Parties”).

As of July 22, 2022, the EMA Parties’ motion

to dismiss the Company’s first amended complaint is fully submitted.

As of the date hereof, no decision has been rendered on the

EMA Parties’ motion to dismiss.

The Company remains committed to actively litigating

its claims for relief under the Securities Exchange Act of 1934 and the Racketeer Influenced and Corrupt Organizations Act.

Carebourn Capital et al v.

Standard Registrar

and Transfer et al

On May 20, 2022, Carebourn Capital, L.P.

(“Carebourn”)

and More Capital, LLC (“More”) (Carebourn and More, together, the “MN Noteholders”) commenced an action in the

United States District Court for the District of Utah against (i) Standard Registrar and Transfer Co., Inc.

(“Standard”),

(ii) Amy Merrill (“Merrill”) (Standard and Merrill, together, the “TA Defendants”), (iii) DarkPulse, Inc., (iv)

Dennis O’Leary (“O’Leary”), (v) Thomas Seifert (“Seifert”), (vi) Carl Eckel (“Eckel”),

(vii) Anthony Brown (“Brown”), and (viii) Faisal Farooqui (“Farooqui”) (DarkPulse, O’Leary, Seifert, Eckel,

Brown, and Farooqui, collectively, the “DPLS Defendants”).

The MN Noteholders’ complaint alleges, among

other things, that the TA Defendants and DPLS Defendants conspired together and acted in unison to preclude the MN Noteholders’

from receiving the benefits of the convertible note transactions between Carebourn, More, and DarkPulse.

On July 5, 2022, the TA Defendants filed their

motion to dismiss the MN Noteholders’ complaint.

Pursuant to the local rules of the U.S.

Court for the District of Utah, the

MN Noteholders must reply to the TA Defendants’ motion to dismiss on or before August 2, 2022.

As of the date hereof, the DPLS Defendants have

not been served and, thus, no deadline exists by which the DPLS Defendants must answer or otherwise respond to the MN Noteholders’

The Company intends to vigorously defend itself

against the MN Noteholders’ lawsuit.

DarkPulse, Inc.

Brunson Chandler Jones et

On July 8, 2022, the Company commenced an action

against the law firm of Brunson Chandler & Jones, PLLC and Lance B.

Brunson (“Chandler Defendants”) in the United States

District Court for the District of Utah.

The Company’s claims, consisting of professional

negligence/malpractice and breach of contract, arise from the legal services and relationship between DarkPulse and the Chandler Defendants

and in connection with the merger between DarkPulse, DarkPulse Technologies Inc., and Klever Marketing, Inc.

its claims for relief under the Securities Exchange Act of 1934 and Racketeer Influenced and Corrupt Organizations Act.

From time to time, we may become involved in litigation

4 unchanged sentences

financial condition and operating results.

Bayliss Settlement Agreement

The CEO, William Bayliss, of the Company’s

subsidiary, Optilan, was terminated effective April 30, 2022.

Optilan entered into a settlement agreement with Mr.

Bayliss in which he

received £125,000 in lieu of the six months’ salary provided for in Mr.

Bayliss’s employment agreement.

O’Leary Employment Agreement

On June 22, 2022, the Board of Directors of the

“Company, with Dennis O’Leary abstaining, approved the Employment Agreement dated effective April 1, 2022 (the “Effective

Date”) with Mr.

O’Leary, the Company’s Chief Executive Officer (the “Agreement”).

The term of the Agreement

is three years from the Effective Date, subject to termination.

The Agreement may be terminated upon the death or disability of Mr.

or for “Cause,” as defined in the Agreement.

Pursuant to the Agreement, Mr.

O’Leary is entitled to an annual salary

of $ 300,000 , which may accrue and be paid once the Company has available funds.

Any accrued and unpaid base salary may also be converted

subject to mutual agreement of the Company and Mr.

Also, pursuant to the Agreement, upon the filing of the Certificate

of Designation with the Delaware Secretary of State, Mr.

O’Leary is to be issued 100 shares of Series A Super Voting Preferred Stock

of the Company.

NOTE 13 – SUBSEQUENT EVENTS

Pursuant to the EFA, on July 1, 2022, the Company

and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from the Company, 33,525,465 shares of Common Stock

for total proceeds to the Company, net of discounts, of $556,750, at an effective price of $0.019596 per share (the “ 2 nd

EFA Closing ”).

The Company received approximately $500,050 in net proceeds from the 2 nd EFA Closing after deducting

the fees and other estimated offering expenses payable by the Company.

The Company used the net proceeds from the 2 nd EFA Closing

for working capital and for general corporate purposes.

On July 5, 2022, the Company entered into a Joint

Cooperation Contract with Salman International Company, headquartered at 98 Banks Division Al-Waha District, Nasr City, Egypt (the “Salman”).

The purpose of the agreement is for the parties to cooperate jointly, where the Company sells its products through Salman, which is an

authorized distributor of Siemens products.

Pursuant to the agreement, Salman agrees to appoint

the Company as the sole integration provider for MoonLand Resort, located in Hurghada, Egypt, at reasonable market prices.

and Salman agree to jointly market the Company’s and Seimens’ products.

Subject to the early termination provisions in the

agreement, the term of the agreement is for five years;

provided that the agreement is implemented within three months from the date of

Pursuant to the EFA, on July 11, 2022, the Company

and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from the Company, 32,756,532 shares of Common Stock

for total proceeds to the Company, net of discounts, of $556,750, at an effective price of $0.01699661 per share (the “ 3 rd

EFA Closing ”).

The Company received approximately $550,050 in net proceeds from the 3 rd EFA Closing after deducting

the fees and other estimated offering expenses payable by the Company.

The Company used the net proceeds from the 3 rd EFA Closing

for working capital and for general corporate purposes.

On July 13, 2022, the Company issued a press release

which announced it has signed an LOI for the acquisition of Om Optel Industries Pvt.

a fiber optic cable and HDPE pipe manufacturer based in India.

Pursuant to the EFA, on July 20, 2022, the Company

and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from the Company, 29,386,519 shares of Common Stock

for total proceeds to the Company, net of discounts, of $556,750, at an effective price of $0.01894558 per share (the “ 4 th

EFA Closing ”).

The Company received approximately $550,050 in net proceeds from the 4 th EFA Closing after deducting

the fees and other estimated offering expenses payable by the Company.

The Company used the net proceeds from the 4 th EFA Closing

for working capital and for general corporate purposes.

Pursuant to the EFA, on July 28, 2022, the Company

and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from the Company, 35,884,040 shares of Common Stock

for total proceeds to the Company, net of discounts, of $556,750, at an effective price of $0.018308 per share (the “ 5 th

EFA Closing ”).

The Company received approximately $500,050 in net proceeds from the 5 th EFA Closing after

deducting the fees and other estimated offering expenses payable by the Company.

the Company used the net proceeds from the 5 th

EFA Closing for working capital and for general corporate purposes.

On October 12, 2022 the Company entered into

and closed the Purchase Agreement pursuant to which the Company purchased 2,623,120 shares of Class B Common Stock and 4,298,496

Private Placement Warrants, each of which is exercisable to purchase one share of Class A Common Stock of Gladstone Acquisition

Corp., a Delaware corporation (NASDAQ:

GLEE) (the " SPAC "), from Gladstone Sponsor, LLC (" Original

Sponsor ") for $1,500,000 (the “ Purchase Price ”).

In addition to the payment of the Purchase Price,

the Company also assumed the following obligations:

(i) responsibility for all of SPAC’s public company reporting obligations, (ii)

the right to provide an extension payment and extend the deadline of the SPAC to complete an initial business combination from 15 months

from August 9, 2021 to 18 months for an additional $1,150,000, and (iii) all other obligations and liabilities of the Original Sponsor

related to the SPAC.

On October 14, 2022, the Company and GHS agreed

that the Company would issue and sell to GHS, and GHS would purchase from the Company, 30,538,303 shares of Common Stock for total proceeds

to the Company, net of discounts, of $500,000, at an effective price of $0.0140339 per share (the “ Closing ”).

received approximately $463,975 in net proceeds from the Closing after deducting the fees and other estimated offering expenses payable

by the Company.

The Company used the net proceeds from the Closing for working capital and for general corporate purposes.

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-Q

Item 1. Financial Statements