What changed in this filing

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Item 3. Legal Proceedings

2024-07-15 compared with 2023-06-23 · 144 added, 135 removed, 16 unchanged (95% of the section changed)

LEGAL PROCEEDINGS

DarkPulse, Inc.

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

There are no material updates to this matter.

Carebourn Capital, L.P.

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.

On or about January 29, 2021, Carebourn Capital,

(“ Carebourn ”) commenced an action against the Company in Minnesota State Court.

Carebourn alleged that the Company

was in breach of certain securities purchase agreements and convertible promissory notes sold to Carebourn on or about July 17, 2018 and

July 24, 2018.

On or about August 31, 2021, the Company answered

Carebourn’s complaint and interposed affirmative defenses, including that Carebourn was an unregistered “dealer,” as

such term is defined in the Securities Exchange Act of 1934 (“ Exchange Act ”) and, therefore, all contracts between

the parties arising from or related to the securities purchase agreements and convertible promissory notes sold to Carebourn on or about

July 17, 2018 and July 24, 2018 were void pursuant to the Exchange Act.

The Company also asserted counterclaims against Carebourn under

the Minnesota Securities Act.

On or about April 21, 2023, the State Court ruled

in the Company’s favor on its motion for partial summary judgment on its Exchange Act defense, holding that (i) Carebourn is

a “dealer” under the Exchange Act in violation of the mandatory registration requirement imposed thereby, and (ii) all

contracts between the parties are void.

On or about November 17, 2023, the State Court

ruled in the Company’s favor on its motion for summary judgment on its Minnesota Securities Act counterclaims against Carebourn

and awarded damages for Carebourn’s violation of Minn.

§ 80A.76(d) in the amount of $124,012.91, attorney’s

fees in the amount of $239,923.33 and costs in the amount of $23,757.24 (or a total award in the amount of $387,693.48).

On or about March 25, 2024, the Minnesota Appellate

Court entered an Order, noting that Minn.

104.01 provides that appeals must be taken within 60 days of the date of the

final judgment and, therefore, it appears that Carebourn failed to timely take its appeal.

The Appellate Court requested the parties submit

informal briefing in response to two questions:

(a) Did the time to appeal the December 27, 2024 amended judgment expire on February

and (b) If the answer to (a) is yes, must this appeal be dismissed as untimely.

On or about April 4, 2024, DarkPulse filed

its informal briefing in response with the Appellate Court.

The Company is currently awaiting a decision from the Appellate Court.

of the date hereof, Carebourn has refused to voluntarily satisfy the final judgment.

Accordingly, the Company intends

to exercise all legal rights and remedies available to it to collect the amounts awarded.

DarkPulse intends to continue to exercise all

legal rights and remedies available to it to collect the amounts awarded should Carebourn fail to voluntarily pay the same.

More Capital, LLC 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 More Capital, LLC (“More”) in Minnesota state

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.

On or about June 29, 2021, More Capital, LLC (“ More ”)

commenced an action against the Company in Minnesota State Court.

More alleged that the Company was in breach of a certain securities

purchase agreement and convertible promissory note sold to More on or about August 20, 2018.

On or about September 3, 2021, the Company answered

More’s complaint and interposed affirmative defenses, including that More was an unregistered “dealer,” as such term

is defined in the Exchange Act and, therefore, all contracts between the parties arising from or related to the securities purchase agreement

and convertible promissory note sold to More on or about August 20, 2018 were void pursuant to the Exchange Act.

The Company also asserted

counterclaims against More under the Minnesota Securities Act.

On or about December 11, 2023, the Minnesota State

Court ruled in the Company’s favor on its motion for summary judgment on its (a) Exchange Act defense, holding that (1) More

is a “dealer” under the Exchange Act in violation of the mandatory registration requirement imposed thereby, and (ii) all

contracts between the parties are void, and (b) Minnesota Securities Act counterclaims against More and awarded damages for More’s

violation of Minn.

§ 80A.76(d) in the amount of $300,809.39, attorney’s fees in the amount of $110,029.00 and costs

in the amount of $210.25 (or a total award in the amount of $412,048.64).

On or about March 25, 2024, the Minnesota Appellate

Court entered an Order, noting that Minn.

104.01 provides that appeals must be taken within 60 days of the date of the

final judgment and, therefore, it appears that More failed to timely take its appeal.

The Appellate Court requested the parties submit

informal briefing in response to two questions:

(a) Did the time to appeal the December 27, 2024 amended judgment expire on February

and (b) If the answer to (a) is yes, must this appeal be dismissed as untimely.

On or about April 4, 2024, DarkPulse filed

its informal briefing in response with the Appellate Court.

The Company is currently awaiting a decision from the Appellate Court.

As of April 1, 2024, the final judgment had

not yet been satisfied by More, nor had a judgment been entered that stayed enforcement of that judgment.

Accordingly, the Company

took actions to enforce and collect the judgment including, inter alia , serving garnishment summons on More’s

As of the date hereof, More has refused to voluntarily

satisfy the final judgement.

Accordingly, the Company intends to exercise all legal rights and remedies available to it to collect the

amounts awarded.

Carebourn Capital et al v.

1 unchanged sentence

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.

intends to vigorously defend itself against the Noteholder Plaintiffs’ lawsuit.

Goodman et al.

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.

On or about May 20, 2022, Carebourn and More (together

with Carebourn, the “ Noteholders ”) commenced an action against the Company, certain members of the Company’s

executive team and board of directors and Standard Registrar and Transfer Company, Inc., the Company’s transfer agent, in the United

States District Court for the District of Utah.

The Noteholders’ complaint alleged various causes of action arising from certain

securities purchase agreements and convertible promissory notes the Company sold to the Noteholders.

On or about November 23, 2022, the Company and

the members of the Company’s executive team and board of directors named in this action moved to dismiss the Noteholders’

On or about February 21, 2023, the Court granted

the Company’s motion to dismiss in part and stayed the action pending resolution of the motion for summary judgment brought by the

Securities and Exchange Commission against Carebourn in the United States District Court for the District of Minnesota.

On or about November 1, 2023, the Noteholders

moved to dismiss the action.

On or about November 2, 2023, the Company moved

for sanctions against the Noteholders and their counsel of record.

On or about December 4, 2023, the Court entered

an order granting dismissal of the Noteholders’ claims with prejudice.

The Court acknowledged that notwithstanding its dismissal

of the Noteholders’ claims, the Court continues to retain jurisdiction over the Noteholders because of DarkPulse’s pending

motion for sanctions against the Noteholders and their attorneys.

On May 22, 2024, the Court scheduled oral arguments

on the Company’s sanction motion on July 2, 2024 and the oral arguments were held.

The Court has yet to render a decision.

DarkPulse, Inc.

1 unchanged sentence

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.

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.

Brunson Chandler & Jones,

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

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.

On or about December 31, 2021, the Company commenced

an action against FirstFire Global Opportunities Fund, LLC (“ FirstFire ”) and its control person, Eli Fireman (“ Fireman ,”

and together with FirstFire, the “ FirstFire Defendants ”), in the United States District Court for the Southern District

On or about May 5, 2022, the Company amended its

complaint against the FirstFire Defendants.

The amended complaint alleges that the FirstFire Defendants were liable to the Company for

rescission of certain convertible promissory notes and transitions effected thereunder and damages pursuant to the Racketeer Influenced

and Corrupt Organizations Act (“ RICO ”).

On or about January 17, 2023, the Court granted

the FirstFire Defendants’ motion to dismiss the Company’s operative pleading.

Later on the same day, the Company appealed

the Court’s decision to the United States Court of Appeals for the Second Circuit (“ Second Circuit ”).

Oral arguments were held before the Second Circuit

on the Company’s appeal on December 11, 2023.

On March 28, 2024, the Second Circuit issued its

decision and found that the District Court (a) properly found that the Delaware forum-selection clause was enforceable but, thereafter,

(b) improperly made a ruling on the merits of the Company’s claims for relief.

As a result, the Second Circuit affirmed the

District Court’s decision in part, vacated in part and remanded the case back to the District Court for transferring to the United

States District Court for the District of Delaware.

As of the date hereof, this action has not yet

transferred to the Delaware Court.

The Company remains committed to actively litigating its claims for relief under RICO.

DarkPulse, Inc., et al v.

Crown Bridge Partners,

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.

On or about September 23, 2022, the Company, Social

Life Network, Inc.

and Redhawk Holdings Corp.

commenced an action against Crown Bridge Partners, LLC (“ Crown Bridge ”)

and its control persons, Soheil Ahdoot and Sepas Ahdoot (collectively, the “ Crown Bridge Defendants ”) in the United

States District Court for the Southern District of New York.

The complaint alleges that the Crown Bridge Defendants are liable to each

of the plaintiffs for damages pursuant to RICO.

On or about September 29, 2023, the Court granted

the Crown Bridge Defendants’ motion to dismiss the plaintiffs’ complaint.

On October 23, 2023, the plaintiffs appealed the

Court’s decision to the Second Circuit.

As of the date hereof, the appeal is fully briefed.

The Company remains committed to actively litigating

its RICO claims against the Crown Bridge Defendants.

Benner et al v.

DarkPulse, Inc.

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.

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.

its claims for relief under RICO.

In addition to the foregoing Legal Proceedings,

we are also actively investigating potential legal claims, including but not limited to stock fraud, market manipulation, and/or defamation,

against certain Twitter accounts, websites, and social media channels.

The investigation is ongoing and should potential claims be identified,

we will evaluate commencing formal litigation proceedings.

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.

MINE SAFETY DISCLOSURES

1 unchanged sentence

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 3. Legal Proceedings