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Item 1. Business

2024-07-15 compared with 2023-06-23 · 293 added, 411 removed, 50 unchanged (93% of the section changed)

1 unchanged sentence

“us,” “our,” and the “Company” refer to DarkPulse, Inc., a Delaware corporation, and its subsidiaries.

Corporate Overview

(“ DarkPulse ” or the " Company ") is a technology-security company incorporated in 1989 as

Klever Marketing, Inc.

One of our principal wholly-owned subsidiaries, DarkPulse

Technologies Inc.

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

Brunswick, Fredericton, Canada.

DPTI is comprised of multiple security platforms:

Patented Brillouin Optical Time Domain Analysis (“ BOTDA ”)

Fiber Optic sensor systems and Satellite Communications services.

On July 20, 2018, we

filed a Certificate of Amendment to our Certificate of Incorporation with the State of Delaware, changing the name of the Company to “DarkPulse,

Inc.” We filed a corporate action notification with FINRA, and our ticker symbol was changed to “DPLS.”

Our security and monitoring

systems will be delivered in applications for critical infrastructure/ key resources such as but not limited to 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.

Our 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.

(“ Klever ”).

Its’ 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.

Company’s patented BOTDA dark-pulse sensor technology allows for the monitoring of highly dynamic environments due to its greater

resolution and accuracy.

University of New Brunswick

In December 2010, DPTI entered into an Assignment

Agreement with the University, pursuant to which the University sold, transferred, and assigned to us Patents in exchange for the issuance

of a debenture to the University in the amount of C$1,500,000 (Canadian dollars).

In April 2017, DPTI issued the Debenture.

Patents and the Debenture were initially recorded in our accounts at $1,491,923, based upon the exchange rate between the U.S.

and the Canadian dollar on December 16, 2010, the date of the original debenture.

In addition to the repayment of principal and interest,

the Debenture requires 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 commencing on April 24, 2018, as well as to reimburse the University for its patent-related costs.

On February 1, 2024,

our board of directors approved entering into the Amendment No.

01 to Convertible Debenture (Secured) Term Debenture with the University

pursuant to which, effective January 17, 2024, section (c) of the recitals of the Convertible Debenture (Secured) Term Debenture effective

April 24, 2017 was amended to the following:

“(c) the date that

is seven (7) years from the Issue Date;

Section 3.1 of the Debenture

is amended to the following:

3.1 Payback on the Principal

Sum will commence over a four (4) year period upon the earlier of the following (each a “Payback Period”):

(a) three (3) years

following the Payor achieving a positive earnings before interest, taxes, depreciation and amortization for two (2) consecutive quarters;

or (b) the date that is seven (7) years from the Issue Date.

Section 3.2 of the Debenture

is amended to the following:

“3.2 The Payor

shall be required to pay the Payee, in quarterly installments over a four (4) year period commencing from the start of the Payback Period,

the following:

(a) Ninety-Three Thousand

Seven Hundred and Fifty Canadian Dollars ($93,750.00 CDN);

(b) interest accrued

on the Principal Sum on a declining balance;

with protecting the Technology.”

Our Operating Units

Founded in 1990, Optilan

is an international leading independent security and communications systems integrator.

Providing specialist technologies and techniques,

Optilan helps to protect businesses and organizations from external threats in the telecommunications, energy, rail, critical network

infrastructure, pipeline integrity systems, renewables and security sectors.

Headquartered in Warwick, United Kingdom with a 30-year history,

Optilan’s customers trust it to keep the integrity of their assets safe and secure, by managing the life cycle delivery risk of

Optilan’s solutions.

By fostering a collaborative design approach to complex problems, Optilan provides innovative solutions, custom

fit to even the most demanding of sites and scale of projects.

Importantly, Optilan’s commitment to its safety culture remains unaverred,

to ensure that everyone goes home safely every day.

Optilan orchestrates business resilience with a suite of end-to-end solutions, combined

with connectivity and professional service at a global level.

Today's business environment is more dynamic than ever, with continuous

change and disruption accepted as the new normal.

Optilan complements its tailored, integrated expertise with a curated ecosystem of leading

manufacturers, to achieve both high quality and enduring results.

Optilan is proud to foster a unique culture full of talented individuals.

Optilan’s sector focus ensures that its account teams are fully accredited in their operational areas.

Optilan is committed to creating

individually tailored solutions, using collaborative techniques and programming tools to deliver the networks of the future.

provided integrated solutions for leading oil and gas, industrial and energy companies around the world.

As an industry leader in deploying

communication networks with exceptional reliability, Optilan’s reputation for delivering the highest quality products remains unsurpassed.

This spans mobile, broadband, security systems and customer premise works.

Optilan’s professionals have the skill to adopt and embed

its expertise into existing platforms, processes, and cultures, delivering exceptional value for its clients.

Beyond Optilan’s operational

scope, Optilan strives to consider the impact of its global footprint and mitigate associated environmental and sustainability risks.

These factors combined set Optilan apart and establish why customers continue to trust and invest in Optilan’s services.

Remote Intelligence

Remote Intelligence (“ RI ”)

provides unmanned aerial drone and unmanned ground crawler (“ UGC ”) services to a variety of clients in all markets,

including, specifically:

industrial mapping and ecosystem, search and rescue, and pipeline security.

RI started in 2013 with a simple

vision, to use the new and developing field of unmanned aerial vehicles to produce higher quality, safer, and more effective products

for a variety of markets.

RI strives to equip, educate and advance the use of the most advanced unmanned aerial systems and unmanned ground

crawlers in the United States and around the world for commercial, government, and domestic use.

RI’s top priorities are to find

safe and ethical ways to use this new and exciting field of technology to make life better.

RI provides holistic intelligence consultation

and solutions including full-service methane detection and monitoring and quick, comprehensive site mapping and aerial inspection services.

RI specializes in fully integrated, geo-rectified, 3D modeled mapping and artificial intelligence (“ AI ”) for industrial

applications, specializing in the energy and environmental industries, with AI and live streaming capabilities anywhere in the world.

RI also provides aerial survey, video inspection services, emergency support services, wildlife and habitat surveys, and comprehensive

system design, training, and sales for both the commercial and private sectors.

Integrating the latest tech solutions like artificial

intelligence, RI is globally-connected with a base of operation in Wellsboro, Pennsylvania.

The Company’s subsidiaries consist of Remote

Intelligence, LLC, a company headquartered in Pennsylvania who provides unmanned aerial drone and unmanned ground crawler (UGC) services

to a variety of clients from industrial mapping and ecosystem services, to search and rescue, to pipeline security;

Wildlife Specialists,

LLC, a company headquartered in Pennsylvania who provides clients with comprehensive wildlife and environmental assessment, planning,

and monitoring services;

TerraData Unmanned, PLLC, a company headquartered in Florida who custom manufactures NDAA compliant drones and

unmanned ground crawlers to meet the needs of its customers;

and TJM Electronics West, Inc., a company headquartered in Arizona who is

manufacturer and tester of advanced electronics, cables and sub-assemblies specializing in advanced package and complex CCA and

TerraData Unmanned

Comprised of a team with

more than 30 years cumulative experience in the unmanned industry, TerraData Unmanned (“ TerraData ”) custom manufactures

National Defense Authorization Act (“ NDAA ”) compliant drones and unmanned ground crawlers to meet the needs of its

TerraData has successfully delivered a custom drone platform per a customer’s specifications which exceeds current industry

offering by more than 30 minutes.

The team has manufactured, and successfully flight tested a Quad Copter drone with 1.5KG payload capabilities

that delivers more than 60 minutes of continuous flight.

Comprised of a team with more than 30 years cumulative

experience in the unmanned industry, TerraData Unmanned (“ TerraData ”) custom manufactures National Defense Authorization

Act (“ NDAA ”) compliant drones and unmanned ground crawlers to meet the needs of its customers.

TerraData has successfully

delivered a custom drone platform per a customer’s specifications which exceeds current industry offering by more than 30 minutes.

The team has manufactured, and successfully flight tested a Quad Copter drone with 1.5KG payload capabilities that delivers more than

60 minutes of continuous flight.

This cutting-edge design is a combination of proprietary software and hardware.

The custom platform offers NDAA compliant autopilot, communications links, Technical Standard Orders (“ TSO ”) certified

GPS unit and ground control station.

Future designs include integrating Real-Time Kinematic (“ RTK ”) for mapping, methane

detectors, and true terrain following capabilities.

There are also improvements scheduled that are intended to further extend the endurance

and provide over 4KG of payload capacity, not including batteries.

TerraData has also announced the research, development and successful

testing of an autonomous crawler soon to be released to the market with methane and multi gas detection capabilities.

Working seamlessly

with its partners at DarkPulse and its subsidiary companies, TerraData can custom design, build and operate a system to meet our customers'

The custom platform

offers NDAA compliant autopilot, communications links, Technical Standard Orders (“ TSO ”) certified GPS unit and ground

control station.

Future designs include integrating Real-Time Kinematic (“ RTK ”) for mapping, methane detectors, and

true terrain following capabilities.

There are also improvements scheduled that are intended to further extend the endurance and provide

over 4KG of payload capacity, not including batteries.

TerraData has also announced the research, development and successful testing

of an autonomous crawler soon to be released to the market with methane and multi gas detection capabilities.

Working seamlessly with

its partners at DarkPulse and its subsidiary companies, TerraData can custom design, build and operate a system to meet our customers'

needs 24 hours a day 365 days a year around the globe.

Wildlife Specialists

(“ WS ”) was founded in 2007 to provide clients with comprehensive wildlife and environmental assessment, planning, and

monitoring services.

WS currently maintains two regional offices located in north central and southeastern Pennsylvania and is available

to provide services to clients nationwide and around the globe.

WS’ staff is made up of well-established professionals who have

a wide range of experience in wildlife management, research, and monitoring at the local and statewide levels throughout the United States.

In addition, WS has specific expertise in providing the full range of sensitive species and habitat assessments necessary for your development

WS’ mission is to provide consulting services that use the latest technology to produce the highest quality results compatible

with its clients’ management goals and the appropriate protocols developed by state and federal wildlife management agencies.

is fully insured to industry standards and committed to the safety of its staff, clients, and the public.

WS has maintained safety certification

through ISNetWorld and other third-party certifiers.

WS is also officially PennDOT, General Services Administration (“ GSA ”),

Small Business, and HUBZone certified.

TJM West Electronics

(“ TJM ”) is an ISO9001 and AS9100 certified electronics and electro-mechanical assembly operation.

TJM operates out

of a high tech, 20,000 sq.

facility in Tempe, Arizona.

TJM’s assembly team is trained to IPC 610 and J-STD-001 standards, Class

TJM has been in business since 1999.

TJM’s latest website was developed to be a customer interface for rapid costing, build

scheduling, open order status, and complete manufacturing history data records.

Registered users can enter build and fabrication parameters

for quantities of 2-20 units.

TJM’s calculator provides itemized labor, printed circuit board (“ PCB ”) fabrication

cost and delivery.

Registered users can also access factory floor for the updated status and delivery date of open orders, a review of

configuration, quotes and full quality history database.

and test of advanced electronics, cables and sub-assemblies, TJM specializes in advanced package and complex confidential architecture

(“ CCA ”) and hardware.

Certified to space and flight AS9100D, TJM has over 20 years supplying ultra-high reliability,

and fully documented electronic hardware.

Per aerospace management standard AS9100D, TJM maintains all material certifications, process

and measurement reports electronically as part of a complete quality history record.

Manufacturing PCB design services on the most popular

platforms including Cadence, Altium, and Mentor, TJM designs output data that integrates seamlessly to its automated manufacturing line.

From test development in circuit test (“ ICT ”) to functional and burn-in, TJM develops a test plan and hardware system

to deliver your 100% verified product.

Low cost, high reliability manufacturing is the net result of quality planning, optimizing automation

technology, operational efficiency, and communication.

TJM provides a high value, low-cost domestic solution to replace offshore manufacturing.

On August 9, 2021, we

entered into a Share Purchase Agreement with Optilan Guernsey Limited and Optilan Holdco 2 Limited, pursuant to which we 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.

In connection with the acquisition, the Company acquired $14,828,459 in assets

and assumed liabilities totaling $25,179,320.

On August 9, 2021, we entered into a Share Purchase

Agreement with Optilan Guernsey Limited and Optilan Holdco 2 Limited, pursuant to which we 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 ”),

In connection with the acquisition, the Company acquired $14,828,459 in assets and assumed liabilities totaling $25,179,320.

As a result of the transaction, Optilan became a wholly-owned subsidiary of the Company .

See Note 4 – BUSINESS ACQUISITIONS to the audited financial statements for the years ended December 31, 2022 and 2021 on page

On August 30, 2021, we

closed two separate Membership Interest Purchase Agreements with RI and WS pursuant to which we agreed to pay to the majority stockholder

of each of RI and WS an aggregate of 15,000,000 shares of our 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.

As a result of the transactions, RI

and WS each became subsidiaries of the Company with the respective non-controlling interests recoded on the consolidated balance sheets.

On September 8, 2021,

we entered into and closed the Stock Purchase Agreement with TJM and TJM’s stockholders, pursuant to which we agreed to purchase

all of the equity interests in TJM in exchange for $450,000, subject to adjustments as defined in the Stock Purchase Agreement.

of the transaction, TJM became a wholly-owned subsidiary of the Company.

Effective October 1,

2021, we entered into and closed the Membership Purchase Agreement with TerraData and Justin Dee, the sole stockholder of TerraData, pursuant

to which we agreed to purchase 60% of the equity interests in TerraData in exchange for 3,725,386 shares of our Common Stock and $400,000,

subject to adjustments as defined in the Membership Purchase Agreement, to be paid within 12 weeks of closing.

As a result of the transaction,

TerraData became a subsidiary of the Company.

System Dynamics, Inc.

On December 14,

2022, we entered into a Business Combination Agreement (the “ BCA ”) by, between, and among our company, Global System

Dynamics, Inc., a Delaware corporation (“ GSD ”), and Zilla Acquisition Corp, a Delaware corporation and wholly owned

subsidiary of GSD (the “ Merger Sub ”).

Pursuant to the terms of the BCA, a business combination between us and GSD

will be effected through the merger of Merger Sub with and into DarkPulse, with DarkPulse surviving the merger as a wholly owned subsidiary

of GSD (the “ Merger ”).

Our board of directors has (i) approved and declared advisable the BCA, the Merger and the

other transactions contemplated thereby and (ii) resolved to recommend approval of the BCA and related transactions by our stockholders.

The total consideration to be paid at closing (the “ Merger Consideration ”) by GSD to DarkPulse security holders will

be valued at $116,518,357.65.

The Merger Consideration will be payable in shares of GSD Common Stock, valued at $10.00 per share.

The transactions contemplated by the BCA, and

the other transactions contemplated by the other transaction documents contemplated by the BCA (collectively, the “ Proposed Business

Combination ”) will constitute a “Business Combination.” The Business Combination and the transactions contemplated

thereby were unanimously approved by the board of directors of the Company on December 14, 2022.

The Business Combination

The BCA provides, among other

things, that Merger Sub will merge with and into DarkPulse, with DarkPulse as the surviving company in the merger and, after giving effect

to such merger, DarkPulse shall be a wholly-owned subsidiary of GSD.

GSD will continue to be named “Global System Dynamics, Inc.”

and the combined entity will trade under the symbol “DARK.”

In accordance with the

terms and subject to the conditions of the BCA, at the Effective Time, among other things:

(i) each GSD Class A Share and each GSD

Class B Share that is issued and outstanding immediately prior to the Merger will become one share of common stock, par value $0.0001

per share, of GSD;

(ii) by virtue of the Merger and without any action on the part of any Party or any other Person, each share of DarkPulse

Common Stock (other than shares of DarkPulse Common Stock cancelled and extinguished pursuant to Section 2.1(a)(viii) of the BCA) issued

and outstanding as of immediately prior to the Effective Time shall be automatically canceled and extinguished and converted into the

right to receive that number of GSD Class A Shares equal to the Merger Consideration;

provided, however, that any DarkPulse shares that

are Restricted Shares shall be converted into restricted GSD Class A Shares, subject to the same vesting, transfer and other restrictions

as the applicable Restricted Shares;

(iii) by virtue of the Merger and without any action on the part of any Party or any other Person,

each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically cancelled

and extinguished and converted into one share of common stock, par value $0.0001, of DarkPulse;

(vi) Dennis O’Leary, Joseph Catalino,

George Pappas, Geoff Mullins, Wayne Bale and John Bartrum shall become the directors of GSD, Dennis O’Leary shall become the Chief

Executive Officer of GSD and of the surviving company, and J.

Richard Iler shall become the Chief Financial Officer of GSD, each to hold

office in accordance with the governing documents of GSD until such director’s or officer’s successor is duly elected or appointed

and qualified, or until the earlier of their death, resignation or removal;

(v) by virtue of the Merger and without any action on the

part of any Party or any other Person, each DarkPulse share held immediately prior to the Effective Time by DarkPulse as treasury stock

shall be automatically canceled and extinguished, and no consideration shall be paid with respect thereto.

The Business Combination

is expected to close in the third calendar quarter of 2023 but in no event later than August 9, 2023 (unless extended), following the

receipt of the required approval by the stockholders of DarkPulse and GSD, approval by the Nasdaq Stock Market (“ Nasdaq ”)

of GSD’s initial listing application filed in connection with the Business Combination, and the fulfillment of other customary closing

Representations and Warranties;

The parties to the BCA have

agreed to customary representations and warranties for transactions of this type.

In addition, the parties to the BCA agreed to be bound

by certain customary covenants for transactions of this type, including, among others, covenants with respect to the conduct of the Company

and its subsidiaries during the period between execution of the BCA and the Closing.

Each of the parties to the BCA has agreed to use

its reasonable best efforts to cause all actions and things necessary to consummate and expeditiously implement the Business Combination.

Conditions to Each Party’s Obligations

Under the BCA, the obligations

of the parties to consummate the Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective

parties, including, without limitation:

(i) the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements

Act of 1976 and the rules and regulations promulgated thereunder relating to the Business Combination having expired or been terminated

and any other required regulatory approvals applicable to the transactions contemplated by the BCA having been obtained and remaining

in full force and effect;

(ii) all the DarkPulse Preferred Stock being converted to DarkPulse Common Stock prior to the Effective Time;

(iii) no order or law issued by any court of competent jurisdiction or other governmental entity or other legal restraint or prohibition

preventing the consummation of the transactions contemplated by the Business Combination being in effect;

(iv) the registration statement

on Form S-4 containing the joint proxy statement/prospectus filed by DarkPulse and GSD relating to the BCA and the Merger (the “ Registration

Statement ”) becoming effective in accordance with the provisions of the Securities Act of 1933, as amended (the “ Securities

Act ”), no stop order being issued by Securities and Exchange Commission (the “ SEC ”) and remaining in effect

with respect to the Registration Statement, and no proceeding seeking such a stop order being threatened or initiated by the SEC and remaining

(v) GSD’s initial listing application with Nasdaq in connection with the Business Combination having been approved;

GSD’s Board consisting of the number of directors, and comprising the individuals, determined pursuant to the BCA;

(vii) the approval

and adoption of the BCA and the transactions contemplated thereby by the requisite vote of the DarkPulse’s stockholders;

the approval and adoption of the BCA and the transactions contemplated thereby by the requisite vote of GSD’s stockholders;

giving effect to the transactions contemplated (including the PIPE Financing), GSD has at least $5,000,001 of net tangible assets (as

determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act of 1934, as amended (the “ Exchange Act ”)) immediately

after the Effective Time;

(x) the absence of a DarkPulse Material Adverse Effect since the date of the BCA that is continuing, and

(xi) the absence of a GSD Material Adverse Effect since the date of the BCA that is continuing.

The BCA may be terminated

under certain customary and limited circumstances at any time prior to the Closing, including, without limitation, (i) by the mutual written

consent of GSD and DarkPulse;

(ii) by GSD, subject to certain exceptions, if any of the representations or warranties made by DarkPulse

are not true and correct or if DarkPulse fails to perform any of its covenants or agreements under the BCA (including an obligation to

consummate the Closing) such that certain conditions to the obligations of GSD could not be satisfied and the breach (or breaches) of

such representations or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be

cured within the earlier of (A) 30 days after written notice thereof, and (B) August 9, 2023 (the “ Termination Date ”);

(iii) by DarkPulse, subject to certain exceptions, if any of the representations or warranties made by us are not true and correct or

if GSD fails to perform any of GSD’s covenants or agreements under the BCA (including an obligation to consummate the Closing) such

that the condition to the obligations of DarkPulse could not be satisfied and the breach (or breaches) of such representations or warranties

or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier of (A) 30

days after written notice thereof, and (B) the Termination Date iv) by either GSD or DarkPulse, if the Closing does not occur on or prior

to the Termination Date, unless the breach of any covenants or obligations under the BCA by the party seeking to terminate proximately

caused the failure to consummate the transactions contemplated by the BCA;

(v) by either GSD or DarkPulse, if (A) any governmental entity

shall have issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated

by the BCA and such order or other action shall have become final and non-appealable;

or (B) if the required DarkPulse or GSD stockholder

consent is not obtained;

(vi) by GSD, if (A) DarkPulse does not deliver, or cause to be delivered to GSD a Transaction Support Agreement

duly executed by certain DarkPulse stockholders or (B) the DarkPulse stockholders meeting has been held, has concluded, DarkPulse stockholders

have duly voted, and DarkPulse stockholder approval was not obtained;

(vii) by GSD should DarkPulse not deposit into the Trust Account

in a timely manner the funds necessary to extend the period for us to complete an initial business combination for an additional period

of six months from February 9, 2023, in accordance with, and as required pursuant to, the BCA;

and (x) by GSD should:

(A) Nasdaq not approve

the initial listing application for the combined company with Nasdaq in connection with the Business Combination;

(B) the combined company

not have satisfied all applicable initial listing requirements of Nasdaq;

or (C) the common stock of the combined company not have been

approved for listing on Nasdaq prior to the Closing Date.

In the event of the termination

of this BCA, the BCA will become void (and there will be no Liability or obligation on the part of the Parties and their respective Non-Party

Affiliates) with the exception of Section 5.3(a) , this Section 7.2 , Article VIII and Article I (to

the extent related to the termination), each of which will survive such termination and remain valid and binding obligations of the Parties.

The Stockholder Transaction Support Agreement

Concurrently with, or

with respect to a certain stockholder holding all of the shares of Series A Preferred Stock of DarkPulse, within a specified time after

the signing of the BCA, the “DarkPulse Stockholder” (collectively, the “ Supporting Company Stockholder ”)

shall duly execute and deliver to GSD a transaction support agreement pursuant to which, among other things, such Supporting DarkPulse

Stockholder will agree to, support and vote in favor of the BCA, the Ancillary Documents which DarkPulse is or will be a party and the

transactions contemplated thereby (including the Merger).

We offer a full suite

of engineering, installation and security management solutions to industries and governments.

Coupled with our patented BOTDA technology,

we provide our customers a comprehensive data stream of critical metrics for assessing the health and security of their infrastructure.

Our comprehensive system provides for rapid, precise analysis and responsive activities predetermined by the end-user customer.

responses include the use of “smart” AI platformed cameras, facial recognition technologies and multiple drone platforms.

Our User Interface (UI) is cloud based which offers end-users access to their systems on any device located anywhere in the world.

programming of the UI is being completed within a game engine that will also offer access via Virtual Reality headsets, allowing end-users

to virtually inspection their assets.

Historically, distributed

sensor systems have been too costly, slow and limited in their capabilities to attain widespread use.

In addition, Brillouin-based sensors

have been plagued with temperature and strain cross-sensitivity, i.e.

the inability to distinguish between temperature and strain change

along the same fiber.

On August 30, 2021, we closed two separate Membership

Interest Purchase Agreements with RI and WS pursuant to which we agreed to pay to the majority stockholder of each of RI and WS

an aggregate of 15,000,000 shares of our 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.

As a result of the transactions, RI and WS each became

subsidiaries of the Company with the respective non-controlling interests recoded on the consolidated balance sheets.

On September 8, 2021, we entered into and closed

the Stock Purchase Agreement with TJM and TJM’s stockholders, pursuant to which we agreed to purchase all of the equity interests

in TJM in exchange for $450,000, subject to adjustments as defined in the Stock Purchase Agreement.

As a result of the transaction, TJM

became a wholly-owned subsidiary of the Company.

Effective October 1, 2021, we entered into and

closed the Membership Purchase Agreement with TerraData and Justin Dee, the sole stockholder of TerraData, pursuant to which we agreed

to purchase 60% of the equity interests in TerraData in exchange for 3,725,386 shares of our Common Stock and $400,000, subject to adjustments

as defined in the Membership Purchase Agreement, to be paid within 12 weeks of closing.

As a result of the transaction, TerraData became

a subsidiary of the Company.

On December 1, 2023, we entered into the Sale

Agreement with Optilan (UK) Limited (in liquidation) incorporated and registered in England and Wales with company number 02715788, and

Colin Hardman, Christopher Allen and Gregory Andrew Palfrey, as joint liquidators of the Optilan all of Evelyn Partners LLP.

we intended to purchase from Optilan for $65,000 all right, title, and interest in the following:

(1) shares in Optilan India PVT (India),

(2) shares in Optilan Communications & Security Systems Ltd (Turkey), and (3) the “Applicable Intellectual Property Rights,”

as defined in the agreement.

The closing of this agreement never occurred and Optilan India PVT (India) and Optilan Communications &

Security Systems Ltd (Turkey) were never acquired by us.

Liquidation/winding up of Optilan (UK) Limited

On May 3, 2023, Eversheds Sutherland (International)

LLP, a creditor of Optilan (UK) Limited, filed a petition to wind up (“Winding up Petition”) Optilan (UK) Limited, a wholly

owned subsidiary of the Company’s Subsidiary, Optilan HoldCo 3 Limited, and the matter was due to be heard in the Portsmouth Combined

Court Centre on June 28, 2023.

On June 28, 2023, the High Court of Justice in

the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of Optilan (UK) Limited (“Optilan

Liquidation”).

In conjunction with the order, the court appointed the Official Receiver’s Office (“OR”) to take

the appointment as liquidator of Optilan (UK) Limited and take control of Optilan (UK) Limited’s assets.

At the same time the court appointed the OR to

take the appointment as liquidator of Optilan (UK) Limited.

The OR has taken control of Optilan (UK) Limited’s assets.

ORs Office has initiated contact with Optilan but we still wait to receive details of the individual who will be taking the role of OR.

On July 3, 2023, Optilan (UK) Limited received

a letter from The Insolvency Service, an executive agency sponsored by the Department for Business and Trade located in the U.K.

to the letter of The Insolvency Services, the Company was required to provide information relating to Optilan (UK) Limited to the Official

Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official Receiver’s

Office to review the prospect of recovering the assets of Optilan (UK) Limited for the benefit of creditors.

The interview was scheduled

for July 18, 2023.

On July 18, 2023, the interview was held between

the Official Receiver’s Office (“OR”) and the CEO at time of dissolution.

The OR office requested a list of assets,

bank account information and amounts along with any contracts held by Optilan (UK) Limited to begin the liquidation process.

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

There are no new claims against Optilan (UK) Limited

as of July 15, 2024 and Evelyn Partners continue to liquidate the company’s assets.

The Company is an Unsecured creditor of Optilan

(UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany

relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known

for several months.

The Company has approximately $19.4 million intercompany payables due from Optilan (UK), which will increase the Company

liabilities for any obligations not repaid.

The Company expects the remaining assets held by Optilan (UK) Limited to be fully impaired

and reported as Loss on Deconsolidation during the second quarter of 2023 as a result of the winding-up order for liquidation.

time of this filing the Company is still evaluating the full effects of the winding-up order for liquidation and the material adverse

effects it will have on the Company’s continued operations and ability to meet future obligations.

Global System Dynamics, Inc.

On December 14, 2022, we entered into a Business

Combination Agreement (the “ BCA ”) by, between, and among our company, Global System Dynamics, Inc., a Delaware corporation

(“ GSD ”), and Zilla Acquisition Corp, a Delaware corporation and wholly owned subsidiary of GSD (the “ Merger

Pursuant to the terms of the BCA, a business combination between us and GSD will be effected through the merger of Merger

Sub with and into DarkPulse, with DarkPulse surviving the merger as a wholly owned subsidiary of GSD).

On August 8, 2023, we entered into Amendment No.

1 to the BCA pursuant to which the “Termination Date,” as defined in the BCA was amended from “August 9, 2023”

to “February 9, 2024.” No other changes were made to the BCA.

On January 23, 2024,

the BCA was terminated by mutual consent of the parties thereto.

Although, as the Sponsor of GSD, the Company still owns all of the issued

and outstanding shares of Class B Common Stock of GSD, all legal rights the Company had under the BCA have been terminated.

We offer a full suite of engineering, installation

and security management solutions to industries and governments.

Coupled with our patented BOTDA technology, we provide our customers

a comprehensive data stream of critical metrics for assessing the health and security of their infrastructure.

Our comprehensive system

provides for rapid, precise analysis and responsive activities predetermined by the end-user customer.

These responses include the

use of “smart” AI platformed cameras, facial recognition technologies and multiple drone platforms.

Our User Interface (UI)

is cloud based which offers end-users access to their systems on any device located anywhere in the world.

Additional programming of the

UI is being completed within a game engine that will also offer access via Virtual Reality headsets, allowing end-users to virtually inspection

their assets.

Historically, distributed sensor systems have

been too costly, slow and limited in their capabilities to attain widespread use.

In addition, Brillouin-based sensors have been plagued

with temperature and strain cross-sensitivity, i.e.

the inability to distinguish between temperature and strain change along the same

The loss of spatial resolution with an increase in fiber length has also limited the use of distributed sensor systems.

Due to these shortcomings, existing technologies are unable to succeed within today’s dynamic environments, and needs for more advanced

these shortcomings, existing technologies are unable to succeed within today’s dynamic environments, and needs for more advanced

sensor technologies have remained unsatisfied.

By contrast to

existing technologies, our BOTDA technology is a distributed-fiber sensing system, based on dark-pulse

Brillouin scattering, which reports in real-time on conditions such as temperature, stress, strain corrosion and

structural health monitoring of Critical Infrastructure/Key Resources including Bridges, Buildings, Roadways pipelines and mining

installations.

Our BOTDA technology’s

differentiators from and advantages over existing technologies:

By contrast to existing technologies, our BOTDA

technology is a distributed-fiber sensing system, based on dark-pulse Brillouin scattering, which reports in real-time on conditions

such as temperature, stress, strain corrosion and structural health monitoring of Critical Infrastructure/Key Resources including Bridges,

Buildings, Roadways pipelines and mining installations.

Our BOTDA technology’s differentiators from

and advantages over existing technologies:

Real-time Reporting:

9 unchanged sentences

Central station monitoring/cloud based GUI.

We believe that these key

advantages should allow us not only to enter existing markets, but more importantly, to open new market opportunities with new applications.

We intend to leverage new applications to target clients that have been unable to make use of distributed fiber optic technology to date.

The Company’s revenues

are generated primarily from the sales of our services, which consist primarily of advanced technology solutions for integrated communications

and security systems, as well as habitat management.

We believe that these key advantages should allow

us not only to enter existing markets, but more importantly, to open new market opportunities with new applications.

We intend to leverage

new applications to target clients that have been unable to make use of distributed fiber optic technology to date.

The Company’s revenues are generated primarily

from the sales of our services, which consist primarily of advanced technology solutions for integrated communications and security systems,

as well as habitat management.

The Company’s sales of products are primarily generated from our TJM subsidiaries.

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.

Our BOTDA technology allows for the monitoring of highly dynamic environments due to its magnitude

of increased resolution and greater accuracy.

The resulting high speed, real-time monitoring capabilities of our BOTDA technology should

satisfy a broad range of existing and emerging requirements.

Use of our BOTDA technology by our customers should result in lower production

costs with increased sensing capabilities that can integrate with existing technology and be upgraded cost effectively.

Due to the characteristics

of the fiber used in fiber optic sensing, the uses of our BOTDA technology are wide ranging.

Optical fiber is hard-wearing, which allows

it to be used in environments where other technologies fail (for example, at temperatures ranging from -40°C to 300°C and 1000psi).

Additionally, our BOTDA sensors allow for live sensing due to the speed at which the analysis takes place.

Our management team is

continually identifying markets in which our BOTDA technology may be readily applied.

Once these markets (as described below) have been

addressed, our technology may be adapted and applied to new markets.

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.

Our BOTDA technology allows for the monitoring of highly dynamic environments due to its magnitude of increased resolution

and greater accuracy.

The resulting high speed, real-time monitoring capabilities of our BOTDA technology should satisfy a broad range

of existing and emerging requirements.

Use of our BOTDA technology by our customers should result in lower production costs with increased

sensing capabilities that can integrate with existing technology and be upgraded cost effectively.

Due to the characteristics of the fiber used in

fiber optic sensing, the uses of our BOTDA technology are wide ranging.

Optical fiber is hard-wearing, which allows it to be used in environments

where other technologies fail (for example, at temperatures ranging from -40°C to 300°C and 1000psi).

Additionally, our BOTDA

sensors allow for live sensing due to the speed at which the analysis takes place.

Our management team is continually identifying

markets in which our BOTDA technology may be readily applied.

Once these markets (as described below) have been addressed, our technology

may be adapted and applied to new markets.

Structural Monitoring

23 unchanged sentences

Sea defense monitoring.

We utilize our BOTDA

technology as the foundation of our ongoing marketing initiatives.

Most notably, the greater magnitude of increased capabilities of our

BOTDA technology versus existing bright-pulsing technologies.

Existing bright-pulse Brillouin-based sensors have historically been plagued

with temperature and strain cross-sensitivity, i.e.

the inability to distinguish between temperature and strain change along the same

The loss of spatial resolution with an increase in fiber length is also a limiting factor for the use of distributed sensor systems.

Because of these shortcomings, existing bright-pulse Brillouin-based technologies are unable to succeed within today’s dynamic environments,

which coincides with our BOTDA technology’s increased capabilities over bright-pulse systems.

Our marketing initiatives include

daily, broad-based social media engagement, management of our website, email campaigns, national television commercials, magazine ads,

and other ongoing initiatives designed to increase awareness of our products and services and drive conversion and adoption rates.

The overall optical sensing

market is projected to reach USD $3.47 billion by 2023 from USD $1.13 billion in 2016, at a CAGR of 15.47% between 2017 and 2023.

We are active in the optical sensing market, including Oil & Gas pipeline health monitoring, Infrastructure, National Border Security

applications, and the mining industry.

We believe that fiber sensing applications which incorporate our BOTDA technology may provide significant

competitive advantages over structural health monitoring applications offered by the long-term leaders in the field, such as Schlumberger,

Hewlett-Packard, and Yokogawa, which collectively account for a significant portion of industry sales.

These companies, as well as others,

have numerous differences in feature sets and functionality, but all share certain basic attributes:

a bright-pulse technology as the

core of their systems architecture.

An architecture designed using bright-pulsing technology has limited sensing capabilities and resolutions

of one meter allowing for mostly long-term quasi-static deployments.

However, we utilize our

BOTDA technology allowing for multiple applications into those markets unavailable to companies using bright-pulse technology.

of the companies using bright-pulse technology have attempted to incorporate various sensing techniques into a legacy technology, none

have been able to offer the order of magnitude resolutions offered by our patented dark-pulse based BOTDA technology.

This magnitude in

resolution coupled with our BOTDA technology’s increased data collection speeds allows our technology to be installed into areas

of the market that our competitors cannot.

Our future financial condition and operating results depend on our ability to provide a high-quality

solution as well as increased distribution of the solutions in each of the markets in which we compete or intend to compete within.

https://www.marketsandmarkets.com/Market-Reports/optical-sensing-market-197592599.html

The markets for our products

and services are highly competitive and we are confronted by aggressive competition.

These markets are characterized by frequent product

introductions and rapid technological advances.

Our financial condition and operating results can be adversely affected by these and other

industry-wide downward pressures on gross margins.

Principal competitive factors important to us include price, product features, relative

price and performance, product quality and reliability, marketing and distribution capability, service and support and corporate reputation.

We utilize our BOTDA technology as the foundation

of our ongoing marketing initiatives.

Most notably, the greater magnitude of increased capabilities of our BOTDA technology versus existing

bright-pulsing technologies.

Existing bright-pulse Brillouin-based sensors have historically been plagued with temperature and strain

cross-sensitivity, i.e.

the inability to distinguish between temperature and strain change along the same fiber.

The loss of spatial resolution

with an increase in fiber length is also a limiting factor for the use of distributed sensor systems.

Because of these shortcomings, existing

bright-pulse Brillouin-based technologies are unable to succeed within today’s dynamic environments, which coincides with our BOTDA

technology’s increased capabilities over bright-pulse systems.

Our marketing initiatives include daily, broad-based social media

engagement, management of our website, email campaigns, national television commercials, magazine ads, and other ongoing initiatives designed

to increase awareness of our products and services and drive conversion and adoption rates.

The overall optical sensing market is projected

to reach USD $3.47 billion by 2023 from USD $1.13 billion in 2016, at a CAGR of 15.47% between 2017 and 2023.

[1] We are active

in the optical sensing market, including Oil & Gas pipeline health monitoring, Infrastructure, National Border Security applications,

and the mining industry.

We believe that fiber sensing applications which incorporate our BOTDA technology may provide significant competitive

advantages over structural health monitoring applications offered by the long-term leaders in the field, such as Schlumberger, Hewlett-Packard,

and Yokogawa, which collectively account for a significant portion of industry sales.

These companies, as well as others, have numerous

differences in feature sets and functionality, but all share certain basic attributes:

a bright-pulse technology as the core of their

systems architecture.

An architecture designed using bright-pulsing technology has limited sensing capabilities and resolutions of one

meter allowing for mostly long-term quasi-static deployments.

However, we utilize our BOTDA technology allowing

for multiple applications into those markets unavailable to companies using bright-pulse technology.

While many of the companies using

bright-pulse technology have attempted to incorporate various sensing techniques into a legacy technology, none have been able to offer

the order of magnitude resolutions offered by our patented dark-pulse based BOTDA technology.

This magnitude in resolution coupled with

our BOTDA technology’s increased data collection speeds allows our technology to be installed into areas of the market that our

competitors cannot.

Our future financial condition and operating results depend on our ability to provide a high-quality solution as well

as increased distribution of the solutions in each of the markets in which we compete or intend to compete within.

The markets for our products and services are

highly competitive and we are confronted by aggressive competition.

These markets are characterized by frequent product introductions

and rapid technological advances.

Our financial condition and operating results can be adversely affected by these and other industry-wide

downward pressures on gross margins.

Principal competitive factors important to us include price, product features, relative price and

performance, product quality and reliability, marketing and distribution capability, service and support and corporate reputation.

Intellectual Property

Our policy is to protect

our technology by, among other things, patents, trade secret protection and copyrights.

We have taken security measures to protect our

trade secrets and proprietary know-how, to the greatest extent possible.

Our means of protecting our proprietary rights may not prove

to be adequate and our competitors may independently develop technology or products that are similar to ours or that compete with ours.

Trade secret, patent and copyright laws afford only certain protections for our technology and products.

The laws of many countries do

not protect our proprietary rights to as great an extent as do the laws of the United States.

Despite our efforts to protect our proprietary

rights, unauthorized parties may attempt to obtain and use information that we regard as proprietary.

Third parties may also design around

our proprietary rights, which may render our protected technology and products less valuable, if the design around is favorably received

in the marketplace.

In addition, any of our products

or technology covered by patents or other intellectual property rights, could cause us to be subject to various legal actions.

may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the

proprietary rights of others, or to defend against claims of infringement, invalidity, misappropriation, or other claims.

Through DPTI’s April

2017 Intellectual Property agreement with the University, DPTI was sold, transferred, and assigned U.S.

7,245,790, 8,643,829,

and 9,534,965, each of which are related to our BOTDA dark-pulse technology.

Our policy is to protect our technology by, among

other things, patents, trade secret protection and copyrights.

We have taken security measures to protect our trade secrets and proprietary

know-how, to the greatest extent possible.

Our means of protecting our proprietary rights may not prove to be adequate and our competitors

may independently develop technology or products that are similar to ours or that compete with ours.

Trade secret, patent and copyright

laws afford only certain protections for our technology and products.

The laws of many countries do not protect our proprietary rights

to as great an extent as do the laws of the United States.

Despite our efforts to protect our proprietary rights, unauthorized parties

may attempt to obtain and use information that we regard as proprietary.

Third parties may also design around our proprietary rights,

which may render our protected technology and products less valuable, if the design around is favorably received in the marketplace.

In addition, any of our products or technology

covered by patents or other intellectual property rights, could cause us to be subject to various legal actions.

Litigation may be necessary

to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights

of others, or to defend against claims of infringement, invalidity, misappropriation, or other claims.

Through DPTI’s April 2017 Intellectual Property

agreement with the University, DPTI was sold, transferred, and assigned U.S.

7,245,790, 8,643,829, and 9,534,965, each of

which are related to our BOTDA dark-pulse technology.

In addition, Canadian Patent No.

2,502,275 was also assigned.

We currently rely on a full-time,

dedicated, external team of experienced professionals for the coding and maintenance of our products.

We believe we have mitigated

the associated risks of managing an external team of software and engineering development professionals by incorporating internal management

and oversight, as well as appropriate systems, protocols, controls, and procedures and ensuring that we have access to additional qualified

professionals to provide like or complementary services.

https://www.marketsandmarkets.com/Market-Reports/optical-sensing-market-197592599.html

We currently rely on a full-time, dedicated, external

team of experienced professionals for the coding and maintenance of our products.

We believe we have mitigated the associated risks of

managing an external team of software and engineering development professionals by incorporating internal management and oversight, as

well as appropriate systems, protocols, controls, and procedures and ensuring that we have access to additional qualified professionals

to provide like or complementary services.

Government Regulation

Government regulation is

not of significant concern for our business nor is government regulation expected to become an impediment to the business in the near-

or mid-term as management is currently unaware of any planned or anticipated government regulation that would have a material impact on

our business.

Our management believes it currently possesses all requisite authority to conduct our business as described in this Prospectus.

As of June 22, 2023, we had 182

full-time employees and no part-time employees.

Government regulation is not of significant concern

for our business nor is government regulation expected to become an impediment to the business in the near- or mid-term as management

is currently unaware of any planned or anticipated government regulation that would have a material impact on our business.

Our management

believes it currently possesses all requisite authority to conduct our business as described in this report.

As of July 15, 2024, we had three full-time

employees and no part-time employees.

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 1. Business