Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
DarkPulse, Inc. v. Twitter, Inc.
As disclosed in greater detail in the Company’s
Form 10-Q, filed October 24, 2022, the Company is actively investigating potential claims against the @MIKEWOOD and @BullMeechum3 Twitter
accounts. There are no material updates to this matter.
Carebourn Capital, L.P. v. DarkPulse, Inc.
As disclosed in greater detail in the Company’s
Form 10-Q, filed October 24, 2022, the Company remains in active litigation with Carebourn Capital, L.P. (“Carebourn”) in
Minnesota state court. The following discloses the material updates for this matter.
On April 21, 2023, the Minnesota state court granted
the Company’s motion for partial summary judgment on its affirmative defenses. Specifically, the Court found that Carebourn is an
unregistered dealer, acting in violation of Section 15(a) of the Securities Exchange Act of 1934 and, thus, the contracts between the
Company and Carebourn are now void pursuant to Section 29(b) of the Exchange Act.
The Company is actively litigating its counterclaims
asserted under the Minnesota Uniform Securities Act.
More Capital, LLC v. DarkPulse, Inc. et al
As disclosed in greater detail in the Company’s
Form 10-Q, filed October 24, 2022, the Company remains in active litigation with More Capital, LLC (“More”) in Minnesota state
court. There are no material updates to this litigation.
The Company remains committed to actively litigating
its affirmative defenses and claims for relief under the Securities Exchange Act of 1934 and Minnesota Uniform Securities 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,” and together with Carebourn, the “Noteholder Plaintiffs”) commenced an action 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 ”)
in the United States District Court for the District of Utah.
The Noteholder Plaintiffs’ complaint alleges
the DPLS Defendants violated the Racketeer Influenced and Corrupt Organizations (RICO) Act, are liable for attorneys’ fees pursuant
to the Company’s breach of securities contracts between the Company and, separately, Carebourn and More, and engaged in civil conspiracy,
fraudulent concealment, tortious interference with economic relations and conversion against the Noteholder Plaintiffs.
Thereafter, the TA Defendants and DPLS Defendants
separately moved to dismiss the Noteholder Plaintiffs’ complaint. On February 10, 2023, the Court denied both motions without prejudice
and stayed the action pending the conclusion of enforcement action commenced by the U.S. Securities and Exchange Commission against Carebourn
and its principal, Chip Rice, in the U.S. District Court for the District of Minnesota.
The Company contends that the Noteholder Plaintiffs’
lawsuit is duplicative of the first-filed lawsuits commenced by the Noteholder Plaintiffs’ in Minnesota state court. The Company
intends to vigorously defend itself against the Noteholder Plaintiffs’ lawsuit.
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Goodman et al. v. DarkPulse, Inc.
As disclosed in greater detail in the Company’s
Form 10-Q, filed October 24, 2022, 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 and Former
Officers have entered into a mutual settlement. Thus, the Former Officers’ lawsuit against the Company has been dismissed with prejudice.
Any expenses or amounts awed have been recorded as of December 31, 2022 and are properly disclosed.
DarkPulse, Inc. v. FirstFire Global Opportunities
Fund, LLC, and Eli Fireman
As disclosed in greater detail in the Company’s
Form 10-Q, filed October 24, 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”). The following discloses
the material updates for this matter.
On January 17, 2023, the Court granted the FirstFire
Parties’ motion to dismiss the Company’s complaint. Also on January 17, 2023, the Company appealed the trial court’s
decision to the United States Court of Appeals for the Second Circuit. Briefing is currently taking place on the Company’s appeal.
The Company remains committed to actively litigating
its claims for relief under the Securities Exchange Act of 1934 and Racketeer Influenced and Corrupt Organizations (RICO) Act.
DarkPulse, Inc. v. EMA Financial, LLC et al
As disclosed in greater detail in the Company’s
Form 10-Q, filed October 24, 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”).
The following discloses the material updates for this matter.
On March 1, 2023, the Court granted the EMA Parties’
motion to dismiss the Company’s claims asserted under the Securities Exchange Act of 1934, but denied dismissal of the Company’s
claim asserted under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
On or about May 15, 2023, the Company and the
EMA Parties reached an understanding of settlement, which was subsequently memorialized. The action was subsequently dismissed on or
about June 14, 2023.
DarkPulse, Inc. v. Brunson Chandler & Jones,
PLLC et al
On July 8, 2022, the Company commenced litigation
against Brunson Chandler & Jones, PLLC (“Brunson Firm”), and Lance B. Brunson (“Brunson,” and together with
the Brunson Firm, the “Brunson Parties”) through the filing of a complaint in the United States District Court for the District
of Utah. The Company is alleging that the Brunson Parties have committed professional negligence and breach of contract.
On March 2, 2023, the Brunson Parties filed an
answer, affirmative defenses, and counterclaims to the Company’s complaint, wherein the Brunson Firm alleged claims for (i) breach
of contract against the Company, (ii) breach of contract against the Company’s subsidiary, DarkPulse Technologies, Inc., and (iii)
quantum meruit.
On June 5, 2023, the Company filed its answer
and affirmative defenses to the Brunson Firm’s counterclaims. The Company remains committed to litigating its claims and affirmative
defenses against the Brunson Parties.
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DarkPulse, Inc., et al v. Crown Bridge Partners,
LLC, et al
On September 23, 2022, the Company commenced an
action along with two other plaintiffs (“Crown Bridge Plaintiffs”) against Crown Bridge Partners, LLC, Soheil Ahdoot, and
Sepas Ahdoot (“Crown Bridge Defendants”) in the United States District Court for the Southern District of New York alleging
violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act.
On January 13, 2023, the Crown Bridge Defendants
filed a motion to dismiss. As of May 16, 2023, the Crown Bridge Defendants’ motion to dismiss was fully submitted to the court.
As of the date hereof, no decision has been made on the motion.
The Company remains committed to actively litigating
its RICO claims against the Crown Bridge Defendants.
Benner et al v. DarkPulse, Inc. et al
On March 29, 2023, J. Merlin Benner, Phillip J.
Benner, Benjamin P. Benner, Jonas M. Benner, and Angelica M. Benner (collectively, the “Benner Parties”) commenced an action
in the United States District Court for the Southern District of Texas against the Company and its Chief Executive Officer, Dennis O’Leary,
individually, alleging (i) the Company is in breach of contracts between the Company and the Benner Parties as it concerns Remote Intelligence,
LLC and Wildlife Specialists, LLC, (ii) violation of Texas Uniform Fraudulent Transfer Act by the Company, and (iii) defamation by Mr.
O’Leary.
Pursuant to a stipulation entered into by the
parties to this matter, the Company and Mr. O’Leary are scheduled to file their answer to the Benner Parties’ complaint on
or before June 30, 2023.
GS Capital Partners, LLC v. DarkPulse, Inc.
On June 2, 2023, GS Capital Partners, LLC (“GS
Capital”) commenced an action in the Supreme Court for New York County against the Company through the filing of motion for summary
judgment in lieu of a complaint. The motion claims that the Company is in breach of a convertible promissory note, dated July 14, 2021,
and accompanying securities purchase agreement, dated the same.
The motion claims that GS Capital is entitled
to an award of $2,407,671, plus prejudgment interest and attorney’s fees, costs and disbursements.
The Company is currently looking to retain legal
counsel to represent it in this matter, and intends to vigorously defend itself against GS Capital.
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