What changed in this filing

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Item 1. Financial Statements

2024-07-15 compared with 2023-11-15 · 914 added, 714 removed, 612 unchanged (73% of the section changed)

Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

DARKPULSE, INC.

Consolidated Balance Sheets

CURRENT ASSETS:

1 unchanged sentence

Accounts receivable, net

Contract assets

Due from related party

6 unchanged sentences

Investment in related party

Joint venture

Intangible assets, net

Other assets, net

3 unchanged sentences

Accounts payable and accrued expenses

Contract liabilities

Loss provision for contracts in progress

Convertible notes, net

16 unchanged sentences

stock - par value $ 0.01 ;

100 shares designated, 100 shares issued and outstanding at both September 30, 2023 and December 31, 2022

shares designated, 100

shares issued and outstanding at both March 31, 2024 and December 31, 2023

Convertible preferred stock - Series

D, par value $ 0.01 , 100,000 shares designated, 88,235 shares issued and outstanding as of both September 30, 2023 and December 31,

Common stock, par value $ 0.0001 ,

20,000,000,000 shares authorized, 7,639,945,289 and 6,427,395,360 shares issued as of September 30, 2023 and December 31, 2022, respectively

D, par value $ 0.01 ,

shares designated, 88,235

shares issued and outstanding as of both March 31, 2024 and December 31, 2023

Common stock, par value $ 0.0001 , 20,000,000,000 shares

authorized, 8,330,852,145 and 8,100,117,720 shares

issued as of March 31, 2024 and December 31, 2023, respectively.

Treasury stock at cost, 100,000

shares at September 30, 2023 and December 31, 2022

shares at March 31, 2024 and December 31, 2023

Additional paid-in capital

Common Stock to be issued

Non-controlling interests

7 unchanged sentences

( 17,071,135 )

( 16,675,319 )

TOTAL LIABILITIES AND STOCKHOLDERS'

See the accompanying

notes to the unaudited condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Nine Months Ended

September 30,

See the accompanying notes

to the unaudited condensed consolidated financial statements

DARKPULSE, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Three Month Ended

COST OF REVENUES

GROSS PROFIT (LOSS)

( 4,373,771 )

( 4,234,872 )

OPERATING EXPENSES:

1 unchanged sentence

Salaries, wages and payroll taxes

Bad debt expense

Professional fees

Depreciation and amortization

Bad debt expense

Impairment expense

2 unchanged sentences

( 14,606,074 )

( 17,583,706 )

( 18,246,928 )

OTHER INCOME (EXPENSE):

1 unchanged sentence

Loss on deconsolidation

( 1,642,795 )

Change in fair market of derivative liabilities

Loss on equity investment

Gain on the forgiveness of debt

Restructuring costs

Foreign currency exchange rate variance

1 unchanged sentence

( 14,799,264 )

( 8,805,668 )

( 19,915,940 )

( 18,375,506 )

Net loss attributable to non-controlling interests

2 unchanged sentences

$ ( 14,019,568 )

$ ( 19,093,964 )

$ ( 18,119,671 )

Net loss per share - basic and diluted

2 unchanged sentences

6,958,719,650

7,282,672,517

5,539,124,247

See the accompanying

notes to the unaudited condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE

Three Months Ended

Nine Months Ended

September 30,

$ ( 998,576 )

$ ( 8,805,668 )

Three Month Ended

$ ( 536,398 )

2 unchanged sentences

Foreign currency translation

( 2,694,033 )

( 2,913,602 )

COMPREHENSIVE LOSS

1 unchanged sentence

$ ( 15,261,609 )

$ ( 20,031,408 )

$ ( 21,289,108 )

See the accompanying

notes to the unaudited condensed consolidated financial statements

CONDSENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

FOR THE THREE MONTHS ENDED September 30, 2023

Balance at December 31, 2021

5,197,821,885

Conversion of convertible notes

Common stock issued for cash

Foreign currency adjustment

Balance at March 31, 2022 (unaudited)

5,397,942,951

Common stock issued for cash

Common stock issued for TerraData acquisition

Stock based compensation

Foreign currency adjustment

Balance at June 30, 2022 (unaudited)

5,594,116,746

Common stock issued for cash

Stock based compensation

Foreign currency adjustment

Balance at September 30, 2022 (unaudited)

6,145,812,186

See the accompanying notes to the unaudited condensed

consolidated financial statements

DARKPULSE, INC.

Consolidated Statement

of Stockholders' Deficit

For the Years Ended March

31, 2024 and 2023

Preferred Stock

stock to be issued

Balance at December 31, 2022

2 unchanged sentences

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

Balance at March 31, 2023 (unaudited)

Balance at March 31, 2023

7,256,066,860

Common stock issued for cash

Foreign currency adjustment

Balance at June 30, 2023 (unaudited)

Balance at December 31, 2023

8,100,117,720

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

Balance at September 30, 2023 (unaudited)

Balance at March 31, 2024

8,152,280,717

Treasury stock

Additional paid-in

Non- controlling

other comprehensive

Accumulated other comprehensive

stockholders’ deficit

2 unchanged sentences

$ ( 46,555,334 )

Conversion of convertible notes

Common stock issued for cash

Foreign currency adjustment

$ ( 328,994 )

( 5,384,270 )

Balance at March 31, 2022 (unaudited)

$ ( 504,032 )

$ ( 16,660,760 )

Common stock issued for cash

Common stock issued for TerraData acquisition

Stock based compensation

Foreign currency adjustment

( 4,185,572 )

Balance at June 30, 2022 (unaudited)

$ ( 1,241,906 )

$ ( 20,846,332 )

Common stock issued for cash

Stock based compensation

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

1 unchanged sentence

( 14,799,264 )

( 8,805,668 )

Balance at March 31, 2023

$ ( 1,600,247 )

Balance at September 30, 2022 (unaudited)

$ ( 60,574,902 )

6 unchanged sentences

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

( 14,019,568 )

( 14,799,264 )

Balance at March 31, 2023 (unaudited)

$ ( 1,600,247 )

$ ( 60,574,902 )

$ ( 11,512,902 )

Common stock issued for cash

Foreign currency adjustment

( 4,087,103 )

( 4,118,100 )

Balance at June 30, 2023 (unaudited)

$ ( 1,995,755 )

$ ( 64,662,005 )

$ ( 15,488,659 )

Common stock issued for cash, net of fees

Foreign currency adjustment

Balance at September 30, 2023 (unaudited)

Balance at March 31, 2024

$ ( 1,253,356 )

1 unchanged sentence

$ ( 17,071,135 )

See the accompanying

notes to the unaudited condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

See the accompanying notes to the unaudited condensed

consolidated financial statements

DARKPULSE, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

Three Month Ended

Cash flows from operating activities:

3 unchanged sentences

Depreciation and amortization

Gain on forgiveness of payables and liabilities

Loss on equity investment

4 unchanged sentences

Operating lease expense

Gain on forgiveness of debt

Change in fair market of derivative liabilities

Restructuring costs

Changes in operating assets and liabilities:

5 unchanged sentences

Accounts payable and accrued expenses

( 2,949,406 )

Operating lease liabilities, net

Other current liabilities

Other liabilities

Net cash used in operating activities

( 2,323,783 )

( 19,456,701 )

Cash flows from investing activities:

Purchases of property and equipment

Investment in related party

Investment in joint venture

2 unchanged sentences

Net cash used in investing activities

( 1,409,128 )

Cash flows from financing activities:

Proceeds from sale of common stock, net of fees

Issuance of common stock, net of fees

Proceeds from convertible notes

4 unchanged sentences

Effect of exchange rate on cash

( 1,434,126 )

Cash at beginning of period

Cash at end of period

Cash at beginning of year

Cash at end of year

Supplemental disclosure of cash flow information:

3 unchanged sentences

Stock issued for acquisition of TerraData

See the accompanying

notes to the unaudited condensed consolidated financial statements

See the accompanying notes to the unaudited condensed

consolidated financial statements

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

1 unchanged sentence

OF SIGNIFICANT ACCOUNTING POLICIES

and Description of Business

(“DPI” or “Company”) is a technology-security company incorporated in 1989 as Klever Marketing, Inc.

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.

The Company’s patented BOTDA dark-pulse sensor technology allows for the monitoring of highly dynamic environments

due to its greater resolution and accuracy.

The Company’s subsidiaries consisted of Optilan

HoldCo 3 Limited, a company headquartered in Coventry, United Kingdom (“Optilan”) whose focus is in telecommunications, energy,

rail, critical network infrastructure, pipeline integrity systems, renewables and security;

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;

Organization and Description of Business

DarkPulse, Inc.

(“DPI” or “Company”)

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

Its’ wholly-owned subsidiary,

DarkPulse Technologies Inc.

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

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.

The Company’s patented

BOTDA dark-pulse sensor technology allows for the monitoring of highly dynamic environments due to its greater resolution and accuracy.

The Company’s subsidiaries consisted of

Optilan HoldCo 3 Limited, a company headquartered in Coventry, United Kingdom (“Optilan”) whose focus is in telecommunications,

energy, rail, critical network infrastructure, pipeline integrity systems, renewables and security;

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;

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 a U.S.

manufacturer and tester of advanced

electronics, cables and sub-assemblies specializing in advanced package and complex CCA and hardware.

Liquidation/winding

up of Optilan (UK) Limited

manufacturer and tester of

advanced electronics, cables and sub-assemblies specializing in advanced package and complex CCA and hardware.

Liquidation/winding up of Optilan (UK) Limited

On May 3, 2023, Eversheds Sutherland (International)

17 unchanged sentences

The interview occurred July

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

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

2 unchanged sentences

liabilities for any obligations not repaid.

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.

On August 9, 2023, Evelyn Partners

was appointed Joint Liquidator.

Quarter Ended March 31 Accounting Analysis

The Company performed an analysis of the trade

receivables related to Optilan (UK) Limited and determined that an additional $ 2,422,457 may not be collectible pursuant to the Optilan

As of March 31, 2023, the Company recorded a bad debt provision for this amount.

As a result of the Optilan Liquidation, management

determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s reporting unit

may not be recoverable as of March 31, 2023.

The qualitative assessment was primarily due to the customer contracts held by Optilan (UK)

Limited at March 31, 2023 and the associated revenue projections by the UK subsidiary that is subject to the potential winding up.

such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $ 6,925,137

pertaining to impairment and goodwill in the consolidated statements of operations.

The Company recorded impairment of the indefinite-lived

intangible asset of $ 356,260 , and impairment of goodwill of $ 6,568,877 .

The Company has one reporting unit which was evaluated in the

impairment test noted above.

As a result of the impairment, the Company had a carrying value of $ 0 pertaining to goodwill and intangible

assets as of September 30, 2023.

Quarter Ended September 30 Accounting Analysis

Optilan (UK) Limited became subject to the control

of a government and was appointed an administrator.

In this situation, when the parent ceases to have a financial interest in a subsidiary

and does not retain an investment in that subsidiary, the parent should deconsolidate the subsidiary and recognize a gain or loss on deconsolidation

in accordance with ASC 810-10-40-5.

In addition, ASC 810-10-40-3A states when a

parent deconsolidates a subsidiary or derecognizes a group of assets, the parent no longer controls the subsidiary's assets and

liabilities or the group of assets.

The parent therefore shall derecognize the assets, liabilities, and equity components related to

that subsidiary or group of assets.

The equity components will include any noncontrolling interest as well as amounts previously

recognized in accumulated other comprehensive income.

If the subsidiary or group of assets being deconsolidated or derecognized is a

foreign entity (or represents the complete or substantially complete liquidation of the foreign entity in which it resides), then

the amount of accumulated other comprehensive income that is reclassified and included in the calculation of gain or loss shall

include any foreign currency translation adjustment related to that foreign entity.

Upon the liquidation, on June 28, 2023, the Company

derecognized Optilan UK’s assets and liabilities and recorded a loss on consolidation of $1,642,795, which was recognized in other

income (expenses) in the consolidated statements of operations.

Included in the loss on consolidation of $1,642,795

are the gains on intercompany receivables and payables and currency translation adjustment $12,721,532 and $1,545,008 respectively, offset

by the net loss of $12,623,745 which is the impairment of investments and intercompany receivables no longer expected to be collected.

In addition, the allowance of $2,422,457 was recorded

against receivables that have been deemed uncollectible.

At the 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

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

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 that time DarkPulse, Inc.

no longer had any involvement in the operations of Optilan (UK) Ltd.

NOTE 2 – SIGNIFICANT ACCOUNTING

Basis of Presentation and

Principles of Consolidation

The consolidated

financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles of the United States

of America (“U.S.

GAAP”) and the rules and regulations of the U.S Securities and Exchange Commission for Interim Financial

The condensed consolidated financial statements of the Company include the Company and its wholly owned subsidiaries.

intercompany transactions and balances have been eliminated.

All adjustments (consisting of normal recurring items) necessary to present

fairly the Company’s financial position as of September 30, 2023, and the results of operations for nine months and cash flows for

the nine months ended September 30, 2023 and 2022 have been included.

evaluates its relationships with other entities to identify whether they are variable interest entities (“VIE”) as

defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic

810, Consolidation (“ASC 810”), and to assess whether it is the primary beneficiary of such entities.

determination is made that the Company is the primary beneficiary, then that entity is consolidated.

Basis of Presentation and Principles of Consolidation

The consolidated financial statements and accompanying

notes are prepared in accordance with generally accepted accounting principles of the United States of America (“U.S.

and the rules and regulations of the U.S Securities and Exchange Commission for Interim Financial Information.

The condensed consolidated

financial statements of the Company include the Company and its wholly owned subsidiaries.

All intercompany transactions and balances

have been eliminated.

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

position as of March 31, 2024, and the results of operations for three months and cash flows for the three months ended March 31, 2024

and 2023 have been included.

The Company evaluates its relationships with

other entities to identify whether they are variable interest entities (“VIE”) as defined by Financial Accounting

Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“ASC

810”), and to assess whether it is the primary beneficiary of such entities.

If the determination is made that the Company is

the primary beneficiary, then that entity is consolidated.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated

balance sheet as of September 30,2023, the unaudited condensed consolidated statements of operations for the three and nine months ended

September 30, 2023 and 2022 and of cash flows for the nine months ended September 30, 2023 and 2022 have been prepared by the Company,

pursuant to the rules and regulations of the SEC for the interim financial statements.

Certain information and footnote disclosures normally

included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations.

the Company believes that the disclosures are adequate to make the information presented not misleading.

balance sheet as of March 31, 2024, the unaudited condensed consolidated statements of operations for the three and three months ended

March 31, 2024 and 2023 and of cash flows for the three months ended March 31, 2024 and 2023 have been prepared by the Company, pursuant

to the rules and regulations of the SEC for the interim financial statements.

Certain information and footnote disclosures normally included

in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations.

Company believes that the disclosures are adequate to make the information presented not misleading.

The unaudited interim consolidated

6 unchanged sentences

for the year ended December 31, 2022 included in the Company’s Annual Form 10-K filed with SEC on June 23, 2023.

Use of Estimates

The preparation of the Company’s financial

35 unchanged sentences

Also, the Company adopted ASU 2016-13 in January 2023 and the adoption did not have

a material impact on the Company’s condensed consolidated financial statements and related disclosures for the period ended September

Each month, the Company reviews its receivables

on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or perceived

collection issues.

Any balances that are eventually deemed uncollectible are written off against the allowance after all means of collection

have been exhausted and the potential for recovery is considered remote.

As of both September 30, 2023 and December 31, 2022, the Company

determined that the allowance for doubtful accounts was $ 0 and $ 3,320,983 , respectively.

The allowance pertaining to Optilan UK was derecognized

upon the Optilan Liquidation.

a material impact on the Company’s condensed consolidated financial statements and related disclosures for the year ended March

Each month, the Company reviews its

receivables on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts is necessary based on any known

or perceived collection issues.

Any balances that are eventually deemed uncollectible are written off against the allowance after

all means of collection have been exhausted and the potential for recovery is considered remote.

As of both March 31, 2024 and

December 31, 2023, the Company determined that the allowance for doubtful accounts was $ 0

and $ 0 , respectively.

Accounts receivable includes retainage amounts

1 unchanged sentence

we reach certain construction milestones or complete the project.

As of September 30, 2023 and December 31, 2022, retainage receivable

was $ 0 and $ 824,777 , respectively.

The retainage pertaining to Optilan UK was derecognized upon the Optilan Liquidation.

As of March 31, 2024 and December 31, 2023, retainage receivable was

The retainage pertaining to Optilan UK was derecognized

upon the Optilan Liquidation.

Foreign Currency Translation

1 unchanged sentence

The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, British Pound (“GBP”)

as the functional currency, as well as the Turkish lira, Emirates Dirham, Azerbajani Manat and Indian Rupee.

as the functional currency, as well as the Turkish lira, Emiraes Dirham, Azerbajani Manat and Indian Rupee.

The accounts of one of the

7 unchanged sentences

currency are included in the statements of operations as foreign currency exchange variance.

The relevant translation rates are as follows:

for the nine months ended September 30, 2023 closing rate at 1.2197 , average rate at 1.2384 US$:

GBP, and closing rate at 1.3586 US$:CAD.

The relevant translation rates are as follows:

for the nine months ended September 30, 2022 closing rate at 1.113030 US$:GBP, average rate at 1.259161 US$:GBP, and closing rate at 1.3751

*Optilian has been deconsolidated, and as a result,

no translation rates were applied for the three months ending March 31, 2024.

The relevant translation rates are as

for the three months ended March 31, 2023 closing rate at 1.23682 S$:GBP, average rate at 1.2033 US$:GBP,

and closing rate at 1.3751 US$:CAD.

Long-Lived Assets and Goodwill

16 unchanged sentences

assets in accordance with ASC 350, Intangibles – Goodwill and Other .

Goodwill represents the excess of the purchase price

of an entity over the estimated fair value of the assets acquired and liabilities assumed.

ASC 350 requires that goodwill and other intangibles

with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value

of an asset has decreased below its carrying value.

This guidance simplifies the accounting for goodwill impairment by removing Step 2

of the goodwill impairment test, which requires a hypothetical purchase price allocation.

Goodwill represents the excess of the purchase

price of an entity over the estimated fair value of the assets acquired and liabilities assumed.

ASC 350 requires that goodwill and other

intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the

fair value of an asset has decreased below its carrying value.

This guidance simplifies the accounting for goodwill impairment by removing

Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.

The quantitative impairment test calculates

4 unchanged sentences

The Company has one reporting unit it evaluates during its impairment test.

As a result of the Optilan Liquidation as described

in Note 1, management determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s

reporting unit may not be recoverable.

The qualitative assessment was primarily due to the customer contracts held by Optilan (UK) Limited

and the associated revenue projections by the UK subsidiary that is subject to the potential winding up.

As such, the Company compared

the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $ 6,925,137 pertaining to impairment and

goodwill in the consolidated statements of operations.

The Company recorded impairment of the indefinite-lived intangible asset of $ 356,260 ,

As a result of the Optilan Liquidation as

described in Note 1, management determined that certain events and circumstances occurred that indicated that the carrying amount of

the Company’s reporting unit may not be recoverable.

The qualitative assessment was primarily due to the customer contracts

held by Optilan (UK) Limited and the associated revenue projections by the UK subsidiary that is subject to the potential winding

As such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of

pertaining to impairment and goodwill in the consolidated statements of operations.

The Company recorded impairment of the

indefinite-lived intangible asset of $ 356,260 ,

and impairment of goodwill of $ 1,681,410 .

The Company has one reporting unit which was evaluated in the impairment test noted above.

a result of the impairment, the Company had a carrying value of $ 0 pertaining to goodwill and intangible assets as of September 30, 2023.

As a result of the impairment, the

Company had a carrying value of $ 0

pertaining to goodwill and intangible assets as of March 31, 2024 and December 31, 2023.

Property and Equipment

71 unchanged sentences

retainers and not based on the value, those are recorded as contract liabilities.

In accordance with ASU No.

2016-12, Revenue

from Contracts with Customers (Topic 606):

Narrow-Scope Improvements and Practical Expedient , which is to (1) clarify the objective

of the collectability criterion for applying paragraph 606-10-25-7;

(2) permit an entity to exclude amounts collected from customers for

all sales (and other similar) taxes from the transaction price;

(3) specify that the measurement date for noncash consideration is contract

(4) provide a practical expedient that permits an entity to reflect the aggregate effect of all modifications that occur before

the beginning of the earliest period presented when identifying the satisfied and unsatisfied performance obligations, determining the

transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations;

(5) clarify that a completed

contract for purposes of transition is a contract for which all (or substantially all) of the revenue was recognized under legacy GAAP

before the date of initial application, and (6) clarify that an entity that retrospectively applies the guidance in Topic 606 to each

prior reporting period is not required to disclose the effect of the accounting change for the period of adoption.

The amendments of this

ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years.

There was no impact

as a result of adopting this ASU on the financial statements and related disclosures.

Based on the terms and conditions of the product

arrangements, the Company believes that its products and services can be accounted for separately as its products and services have value

to the Company’s customers on a stand-alone basis.

When a transaction involves more than one product or service, revenue is allocated

to each deliverable based on its relative fair value;

otherwise, revenue is recognized as products are delivered or as services are provided

over the term of the customer contract.

Discontinued Operations

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 that time DarkPulse,

Inc no longer had any involvement in the operations of Optilan (UK) Ltd.

The business of an entity that is in the process of disposing

its assets by sale, or that intends to cease operations, is reported as discontinued operations if the transaction represents a strategic

shift that will have a major effect on an entity’s operations and financial results.

As such, the Company’s Optilan (UK) Ltd

company business is now reported as discontinued operations.

Cost of Revenues

27 unchanged sentences

the lease term.

Derivative Financial Instruments

The Company evaluates the embedded conversion

feature within its convertible debt instruments under ASC 815-15 and ASC 815-40 to determine if the conversion feature meets the definition

of a liability and, if so, whether to bifurcate the conversion feature and account for it as a separate derivative liability.

For derivative

financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is

then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

For stock-based derivative

financial instruments, the Company uses a lattice model, in accordance with ASC 815-15 , Derivative and Hedging, to value

the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether

such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

Derivative instrument

liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument

could be required within 12 months after the balance sheet date.

Fair Value of Financial Instruments

1 unchanged sentence

liabilities in accordance with the requirements of FASB ASC 820, Fair Value Measurements and Disclosures.

As defined in FASB ASC

820, the fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date (exit price).

The Company utilized the market data of similar entities in its industry or

assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent

in FASB ASC 820, the fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date (exit price).

The Company utilized the market data of similar entities in its industry

or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent

in the inputs to the valuation technique.

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Level 3 liability measured at fair value on a recurring basis.

Equity Investments

The Company uses the equity method to account

for investments in which it has the ability to exercise significant influence over the investee’s operating and financial policies,

or in which its holds a partnership or limited liability company interest in an entity with specific ownership accounts, unless it has

virtually no influence over the investee’s operating and financial policies.

The Company follows the guidance in ASC 323-10-30-2,

Joint Ventures, which prescribes the use of the equity method for investments in joint ventures where the Company has significant influence.

Equity method investments are recorded at cost and are adjusted to recognize (1) the Company’s share, based on percentage ownership

or other contractual basis, of the investee’s net income or loss after the date of investment, (2) amortization of the recorded

investment that exceeds the Company’s share of the book value of the investee’s net assets, (3) additional contributions made

and dividends received, and (4) impairments resulting from other-than-temporary declines in fair value.

Gain (loss) on equity investment

includes realized gains or losses upon the sale of the investment and are included as other income (expense) in the consolidated statements

of operations and comprehensive (loss).

Per ASC 323-10-30-2, Joint Ventures are accounted for using the equity method, in which the Company initially

records its investment at cost, including transaction costs.

Under the equity method, an investment in common stock and in-substance common

stock is presented on the balance sheet of an investor as a single amount.

However, any difference between the cost of the investment

and the underlying equity in net assets of an investee — commonly referred to as a basis difference — should be accounted

for as if the investee were a consolidated subsidiary.

The Company accounts for income taxes pursuant

to the provision of ASC 740-10, (“ASC 740-10”) which requires, among other things, an asset and liability approach to calculating

deferred income taxes.

The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected

future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.

allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred

asset will not be realized.

The Company follows the provision of ASC 740-10

related to Accounting for Uncertain Income Tax Positions.

When tax returns are filed, there may be uncertainty about the merits of positions

taken or the amount of the position that would be ultimately sustained.

In accordance with the guidance of ASC 740-10, the benefit of

a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes

it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes,

Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more likely than not

recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement

with the applicable taxing authority.

The portion of the benefit associated with tax positions taken that exceed the amount measured as

described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated

interest and penalties that would be payable to the taxing authorities upon examination.

The Company believes its tax positions are all

more likely than not to be upheld upon examination.

As such, the Company has not recorded a liability for uncertain tax benefits.

The Company has adopted ASC 740-10-25, Definition

of Settlement which provides guidance on how an entity should determine whether a tax position is effectively settled for the

purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion

and examination by a taxing authority without being legally extinguished.

For tax positions considered effectively settled, an entity

would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based

solely on the basis of its technical merits and the statute of limitations remains open.

The federal and state income tax returns of the

Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

The Company's U.S.

subsidiaries were incorporated in 2017, and tax

returns have not yet been filed.

The Company does not anticipate a tax liability for the years 2022 and 2021, however may be subject to

certain penalties.

The Company has filed tax returns in Canada for the year ended December 31, 2018, and they are still subject to audit.

Non-controlling Interests

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via its subsidiaries TerraData, Remote Intelligence and Wildlife Specialists.

During the nine months ended September 30, 2023

and 2022, the Company recorded a loss of $ 821,977 and $ 255,835 , respectively, attributable to non-controlling interests.

During the three months ended March 31, 2024

and 2023, the Company recorded a loss of $ 3,009

and $ 779,696 ,

respectively, attributable to non-controlling interests.

Comprehensive Loss

Comprehensive loss includes net loss as well as

other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

the nine months ended September 30, 2023 and 2022, the Company’s only element of other comprehensive loss was foreign currency translation.

Comprehensive loss includes net loss well as other

changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

three months ended March 31, 2024 there was no comprehensive loss for foreign currency translation and 2023 Company’s only element

of other comprehensive loss was foreign currency translation.

Stock-based Compensation

Stock-based compensation is accounted for based

on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of

the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director

is required to perform the services in exchange for the award (presumptively, the vesting period).

The ASC also requires measurement of

the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 718, for share-based payments

to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized

over the vesting period of the award.

Until the measurement date is reached, the total amount of compensation expense remains uncertain.

The Company initially records compensation expense based on the fair value of the award at the reporting date.

Further, ASC Topic 718,

provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification

accounting in Topic 718, such as the repricing of share options, which would revalue those options and the accounting for the cancellation

of an equity award whether a replacement award or other valuable consideration is issued in conjunction with the cancellation.

the cancellation is viewed as a replacement and not a modification, with a repurchase price of $ 0 .

Loss Per Common Share

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earnings (loss) per share.

Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number

of common shares outstanding for the year.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted

average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each

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

Potentially dilutive items outstanding as of

September 30, 2023 and 2022 are as follows:

Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of

common shares outstanding for the year.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average

number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.

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

Potentially dilutive items outstanding as of March 31,

2024 and December 31, 2023 are as follows:

Schedule of antidilutive shares

September 30,

Convertible notes

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Recent Accounting Pronouncements

In April 2019, the FASB issued ASU 2019-04, Codification

Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging , and Topic 825, Financial

Instruments, which amends and clarifies several provisions of Topic 326.

In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit

Losses (Topic 326):

Targeted Transition Relief , which amends Topic 326 to allow the fair value option to be elected for certain financial

instruments upon adoption.

ASU 2019-10 extended the effective date of ASU 2016-13 until December 15, 2022.

The Company adopted this new

guidance, including the subsequent updates to Topic 326, on January 1, 2023 and the adoption did not have a material impact on the Company’s

condensed consolidated financial statements and related disclosures.

On January 1, 2023, the Company adopted ASU 2016-13,

Financial Instruments – Credit Losses (Topic 326):

In November 2021, the FASB issued ASU No.

2021-08, Business

Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , issued by the Financial

Accounting Standards Board.

This ASU requires entities to recognize and measure contract assets and contract liabilities acquired in a

business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606).

The update will generally result

in the recognition of contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before

the acquisition date rather than at fair value.

The Company expects that there would be no material impact on the Company’s condensed

consolidated financial statements upon the adoption of this ASU.

In August 2020, the FASB issued ASU 2020-06, which

simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for convertible

debt with a cash conversion feature and convertible instruments with a beneficial conversion feature.

As a result, entities will not separately

present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless

certain other conditions are met.

The elimination of these models will reduce reported interest expense and increase reported net income

for entities that have issued a convertible instrument that is within the scope of ASU 2020-06.

ASU 2020-06 is applicable for fiscal years

beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020.

adopted ASU 2020-06 on January 1, 2022 and the adoption of this ASU did not have a material impact on the Company’s consolidated

financial statements and related disclosures.

On January 1, 2023, the Company adopted ASU 2016-13, Financial

Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (ASC 326).

standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss

(“CECL”) methodology.

CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using

historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured

at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as

unfunded commitments to extend credit.

Financial assets measured at amortized cost will be presented at the net amount expected to be

collected by using an allowance for credit losses.

The Company adopted this new guidance on January 1, 2023 and the adoption did not have

a material impact on the Company’s condensed consolidated financial statements and related disclosures.

This standard

replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”)

CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience,

current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including

loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend

Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance

for credit losses.

The Company adopted this new guidance on January 1, 2023 and the adoption did not have a material impact on the Company’s

condensed consolidated financial statements and related disclosures.

Management does not believe that any other recently

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3 – LIQUIDITY AND GOING CONCERN

generated net losses of $ 19,915,940 and $ 18,375,506 during the nine months ended September

30, 2023 and 2022, respectively, and net cash used in operating activities of $ 4,066,096 and $ 19,456,701 , respectively.

As of September

30, 2023, the Company’s current liabilities exceeded its current assets by $ 18,527,365 and has an accumulated deficit of $ 65,649,298 .

As of September 30, 2023, the Company had $ 64,892 of cash.

Lastly, the Optilan Liquidation no longer raises serious concerns about the

viability of the Optilan (UK) Limited entity.

Optilan (UK) Limited and its subsidiaries are not controlled by DarkPulse, Inc.

will require additional funding during the next twelve months to finance the growth of its current operations and achieve its strategic

These factors, as well as the uncertain conditions that the Company faces relative to capital raising activities, create substantial

doubt as to the Company’s ability to continue as a going concern.

The Company is seeking to raise additional capital principally

through private placement offerings and is targeting strategic partners in an effort to finalize the development of its products and begin

generating revenues.

The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings

or alternative financing arrangements or expansion of its operations.

The accompanying consolidated financial statements do not include

any adjustments that might be necessary should the Company be unable to continue as a going concern.

Management is actively pursuing additional

sources of financing sufficient to generate enough cash flow to fund its operations for twelve months from the issuance date of these

consolidated financial statements.

The Company generated net losses of $ 536,398 and

$ 14,799,264 during the three months ended March

31, 2024 and 2023, respectively, and net cash used in operating activities of $ 91,687 and

$ 2,323,783 ,

respectively.

As of March 31, 2024, the Company’s current liabilities exceeded its current assets by $ 18,532,909 and

has an accumulated deficit of $ 67,909,611 .

As of March 31, 2024, the Company had $ 990 of cash.

the Optilan Liquidation raises serious concerns about the viability of the Optilan (UK) Limited entity and related operations of the

Optilan subsidiaries.

The Company will require additional funding during

the next twelve months to finance the growth of its current operations and achieve its strategic objectives.

These factors, as well as

the uncertain conditions that the Company faces relative to capital raising activities, create substantial doubt as to the Company’s

ability to continue as a going concern.

The Company is seeking to raise additional capital principally through private placement offerings

and is targeting strategic partners in an effort to finalize the development of its products and begin generating revenues.

of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements

or expansion of its operations.

The accompanying consolidated financial statements do not include any adjustments that might be necessary

should the Company be unable to continue as a going concern.

Management is actively pursuing additional sources of financing sufficient

to generate enough cash flow to fund its operations for twelve months from the issuance date of these consolidated financial statements.

However, management cannot make any assurances that such financing will be secured.

The following

table is a summary of the Company’s timing of revenue recognition for the three and nine months ended September 30, 2023 and 2022:

NOTE 4 – BUSINESS

Wildlife Specialists, LLC and Remote Intelligence,

On August 30, 2021, the Company closed two separate

Membership Interest Purchase Agreements (the “ MPAs ”) with Remote Intelligence, Limited Liability Company, a Pennsylvania

limited liability company (“ RI ”) and Wildlife Specialists, LLC, a Pennsylvania limited liability company (“ WS ”)

pursuant to which the Company agreed to pay to the majority shareholder of each of RI and WS an aggregate of 15,000,000 shares of the

Company’s common stock (at the fair value of $0.07 per share), $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.

RI and WS are now subsidiaries of the Company.

The Company has accounted for the purchase using

the acquisition method of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated to the

underlying assets and liabilities in proportion to their respective fair values.

The excess of the consideration transferred over the

estimated fair values of the net assets acquired was recorded as goodwill.

The following table summarizes the acquired assets and assumed

liabilities for the fair value of the assets and liabilities recognized at the date of acquisition:

Schedule of condensed consolidated balance sheet

Consideration

Purchase price

The allocation of the total purchase price to the tangible and

intangible assets acquired and liabilities assumed by DarkPulse based on the estimated fair values as of August 29, 2021 was as follows:

Schedule of fair value of assets and liabilities in acquisition

(Amounts in US$’s)

Amounts Recognized as of Acquisition Date

Measurement Period Adjustments

Accounts receivable

Other current assets

Property & equipment

Assumed liabilities

Non-controlling interest

Total Consideration for 60% of equity interests

TJM Electronics West, Inc.

On September 8, 2021,

the Company entered into and closed the Stock Purchase Agreement with TJM Electronics West, Inc., an Arizona corporation (“ TJM ”),

and TJM’s shareholders, pursuant to which we agreed to purchase all of the equity interests in TJM in exchange for $ 450,000 .

is now a wholly-owned subsidiary of the Company.

The Company has accounted for the purchase using

the acquisition method of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated to the

underlying assets and liabilities in proportion to their respective fair values.

The excess of the consideration transferred over the

estimated fair values of the net assets acquired was recorded as goodwill.

The following table summarizes the acquired assets and assumed

liabilities for the fair value of the assets and liabilities recognized at the date of acquisition:

Schedule of fair value of assets and liabilities in acquisition

Accounts receivable

Property & equipment

Total Consideration

TerraData Unmanned, PLLC

Effective October 1, 2021 the Company entered

into and closed the Membership Purchase Agreement (the “ TerraData MPA ”) with TerraData Unmanned, PLLC, a Florida limited

liability company (“ TerraData ”), and Justin Dee, the sole shareholder of TerraData, pursuant to which the Company agreed

to purchase 60 % of the equity interests in TerraData in exchange for 3,725,386 shares of the Company’s Common Stock (at the fair

value of $0.05 per share) $ 400,000 , subject to adjustments as defined in the TerraData MPA, to be paid within 12 weeks of closing.

is now a subsidiary of the Company.

The shares were issued to Justin Dee during 2022.

The Company has accounted for the purchase using

the acquisition method of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated to the

underlying assets and liabilities in proportion to their respective fair values.

The excess of the consideration transferred over the

estimated fair values of the net assets acquired was recorded as goodwill.

The following table summarizes the acquired assets and assumed

liabilities for the fair value of the assets and liabilities recognized at the date of acquisition:

Schedule of condensed consolidated balance sheet

Consideration

Purchase price

The allocation of the total purchase price

to the tangible and intangible assets acquired and liabilities assumed by the Company based on the fair values as of October 1, 2021 was

Schedule of fair value of assets and liabilities in acquisition

(Amounts in US$'s)

Assumed liabilities

Non-controlling interest

Total Consideration for 60% of equity interests

NOTE 5 – REVENUE

The following table is a summary of the Company’s

timing of revenue recognition for the three months ended March 31, 2024 and 2023:

Schedule of timing of revenue recognition

Three Months Ended

Nine Months Ended

September 30,

Services and products transferred at a point in time

1 unchanged sentence

Total revenue

disaggregates revenue by source and geographic destination to depict how the nature, amount, timing and uncertainty of revenue and cash

flows are affected by economic factors.

by source consisted of the following for the three and nine months ended September 30, 2023 and 2022:

The Company disaggregates revenue by source and

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 months ended March 31, 2024 and 2023:

Schedule of revenue by source

Three Months Ended

Nine Months Ended

September 30,

Total revenue

by geographic destination consisted of the following for the three and nine months ended September 30, 2023 and 2022:

Revenue by geographic destination consisted of

the following for the three months ended March 31, 2024 and 2023:

Schedule of revenue by geographic destination

Three Months Ended

Nine Months Ended

September 30,

North America

48 unchanged sentences

represents costs and estimated earnings in excess of billings, which arise when revenue has been recorded but the amount has not been

As of September 30, 2023, contract assets were $0 upon derecognized pursuant to the Optilan Liquidation.

Contract liabilities on September 30, 2023 are $0 upon the deconsolidation

Contract liabilities on March 31, 2024 are $ 0 upon the deconsolidation

related to the Optilan liquidation.

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NOTE 6 – ACCOUNTS RECEIVABLE

receivable consisted of the following as of September 30, 2023 and December 31, 2022:

Accounts receivable consisted of the following

as of March 31, 2024 and December 31, 2023:

Schedule of accounts receivable

September 30,

Accounts receivable

Allowance for doubtful accounts

( 3,320,983 )

Accounts receivable, net

The Company performed an analysis of the trade

receivables related to Optilan (UK) Limited and determined that an additional $ 2,364,977 may not be collectible pursuant to the Optilan

As of March 31, 2023, the Company recorded a bad debt provision for this amount.

NOTE 7 – PROPERTY AND EQUIPMENT

and equipment consisted of the following as of September 30, 2023 and December 31, 2022 :

Property and equipment consisted of the following

as of March 31, 2024 and December 31, 2023:

Schedule of property and equipment

September 30,

Property and equipment

2 unchanged sentences

Less - accumulated depreciation

( 2,055,484 )

Property and equipment, net

7 – GOODWILL AND OTHER INTANGIBLE ASSETS

following is a summary of activity of goodwill for the nine months ended September 30, 2023:

Schedule of changes in carrying amount of goodwill

NOTE 8 – GOODWILL AND OTHER INTANGIBLE

The following is a summary of activity of goodwill

for the three months ended March 31, 2024:

Schedule of activity of goodwill

Balances at December 31, 2023

Impairment of goodwill pertaining to Optilan

( 6,568,877 )

Foreign exchange translation

Balances at September 30, 2023

Intangible Assets,

On January 1, 2023, the

Company revised the estimated useful life of the trade name intangible asset from 25 years to 10 years.

Amortization expense for the nine

months ended September 30, 2023 and 2022 was $ 34,225 and $ 38,271 , respectively.

During the three months

ended March 31, 2023, the Company recorded impairment of the trade name of $ 356,260 .

At September 30, 2023 and December 31, 2022, the

carrying value of the intangible assets was $ 0 and $ 390,330 , respectively.

Patents - Intrusion

Detection Intellectual Property

following is a summary of the DPTI patents:

Balances at March 31, 2024

Patents - Intrusion Detection Intellectual

The Company relies on patent laws and restrictions

on disclosure to protect its intellectual property rights.

As of March 31, 2024 and 2023, 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

for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber Optic Deformation

System Sensor and Method.

Maintenance of intellectual property rights and the protection thereof is important to our business.

that may be issued may not sufficiently protect the Company's intellectual property and third parties may challenge any issued patents.

Other parties may independently develop similar or competing technology or design around any patents that may be issued to the Company.

The Company cannot be certain that the steps it has taken will prevent the misappropriation of its intellectual property, particularly

in foreign countries where the laws may not protect proprietary rights as fully as in the United States.

Further, the Company may be required

to enforce its intellectual property or other proprietary rights through litigation, which, regardless of success, could result in substantial

costs and diversion of management's attention.

Additionally, there may be existing patents of which the Company is unaware that could

be pertinent to its business, and it is not possible to know whether there are patent applications pending that the Company's products

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

For the years ended March 31, 2024 and 2023, the

Company had patent amortization costs on its intrusion detection technology totaling $ 14,212 and $ 75,087 , respectively.

Patents costs

are being amortized over the remaining life of each patent, which is from 7 to 16 years .

The DPTI issued patents cover a System and Method

for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber Optic Deformation

System Sensor and Method.

Maintenance of intellectual property rights and the protection thereof is important to our business.

that may be issued may not sufficiently protect the Company's intellectual property and third parties may challenge any issued patents.

Other parties may independently develop similar or competing technology or design around any patents that may be issued to the Company.

The Company cannot be certain that the steps it has taken will prevent the misappropriation of its intellectual property, particularly

in foreign countries where the laws may not protect proprietary rights as fully as in the United States.

Further, the Company may be required

to enforce its intellectual property or other proprietary rights through litigation, which, regardless of success, could result in substantial

costs and diversion of management's attention.

Additionally, there may be existing patents of which the Company is unaware that could

be pertinent to its business, and it is not possible to know whether there are patent applications pending that the Company's products

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

The following is a summary of the DPTI patents:

Schedule of patents

September 30,

accumulated amortization

the nine months ended September 30, 2023 and 2022, the Company amortized $ 38,271 and $ 38,271 , respectively.

8 – JOINT VENTURE

For the three months ended March 31, 2024

and 2023, the Company amortized $ 0 and

respectively.

Future expected amortization of patents is

Schedule of future expected amortization of patent

As of December 31,

Total patents

NOTE 9 – JOINT VENTURE

On September 9, 2022, the Company entered into

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The Company has 50 % ownership in NSI.

The Company determined that the investment was accounted for as an equity

investment under ASC 323-10-30-2.

During the nine months ended September 30, 2023,

the Company contributed $ 113,124 to the joint venture and recorded a loss on the equity investment of $ 159,849 .

9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and

accrued expenses consisted of the following as of September 30, 2023 and December 31, 2022:

The Company determined that the investment was accounted for as an equity investment

under ASC 323-10-30-2.

During the three months

ended March 31, 2024, the Company contributed $ 0 to the joint venture and recorded a loss on the equity investment of $ 0 .

NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED

Accounts payable and accrued expenses consisted

of the following as of March 31, 2024 and December 31, 2023:

Schedule of accounts payable and accrued expenses

September 30,

Accounts payable

1 unchanged sentence

Total accounts payable and accrued expenses

As of September

30, 2023 and December 31, 2022, there was $ 334,491 and $ 378,263 of convertible debt outstanding.

September 30, 2023 and December 31, 2022 there was a derivative liability of $ 597,318

and $ 306,467 .

The Company uses the

Black-Scholes Model to calculate the derivative value of its convertible debt.

The valuation result generated by this pricing model

is necessarily driven by the value of the underlying common stock incorporated into the model.

The values of the common stock used

were based on the price at the date of issue of the debt security as of September 30, 2023.

Management determined the expected

volatility of 130.58% to 170.54%, a risk-free rate of interest of 5.46% to 5.53%, and contractual lives of the debt of three months (with

exception for the August 2023 notes, which has contractual lives of the debt of one year).

7, 2023, the Company entered into a convertible note for a principal of $ 57,750 .

The note bears interest at a rate of 10 % per annum and

matures after one year.

NOTE 11 – DEBT

Convertible Notes

The Company uses the Black-Scholes Model to calculate

the derivative value of its convertible debt.

The valuation result generated by this pricing model is necessarily driven by the value

of the underlying common stock incorporated into the model.

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

issue of the debt security as of December 31, 2023 and 2022.

In 2023 management determined the expected volatility of 106.90 %, a risk-free

rate of interest of 5.48 %, and contractual lives of the debt of three months.

In 2022 management determined the expected volatility of

140.30 %, a risk-free rate of interest of 4.73 %, and contractual lives of the debt of three months.

Management made the determination to

use an expected life rather than contractual life for the calculations for the matured debt as of December 31, 2023 and 2022.

On August 7, 2023, the

Company entered into a convertible note for a principal of $ 57,750 .

The note bears interest at a rate of 10 % per annum and matures after

Following 180 days from the note, the noteholder may convert at a discount of 39 %.

The Company has reserved a

sufficient number of shares of common stock for issuance upon full conversion of the note in accordance with the terms.

The Company has reserved a sufficient number

of shares of common stock for issuance upon full conversion of the note in accordance with the terms.

On September 29, 2023,

the Company entered into a convertible note for a principal of $ 57,750 , which was funded on October 4, 2023.

The note bears

interest at a rate of 10% per annum and matures after one year.

Following 180 days from the note, the noteholder may convert at a discount

The Company has reserved a sufficient number of shares of common stock for issuance upon full conversion of the note in accordance

with the terms (see Note 16).

As of September

30, 2023, all outstanding convertible debt is in default with exception for the August and September 2023 notes.

The following is a summary of convertible notes:

The note bears interest at

a rate of 10 % per annum and matures after one year.

Following 180 days from the note, the noteholder may convert at a discount of 39 %.

The Company has reserved a sufficient number of shares of common stock for issuance upon full conversion of the note in accordance with

the terms (see Note 16).

On December 4, 2023, the Company entered into a convertible note for a principal of $ 51,150 , which was funded

on December 7, 2023.

The note bears interest at a rate of 10 % per annum and matures after one year.

Following 180 days from the note,

the noteholder may convert at a discount of 39 %.

The Company has reserved a sufficient number of shares of common stock for issuance upon

full conversion of the note in accordance with the terms.

As of both March 31, 2024 and December 31,

2023, there was $ 166,650

of convertible debt outstanding and a derivative liability of $ 108,958 .

The summary of convertible notes are:

Schedule of convertible notes

September 30, 2023

December 31, 2022

Principal Outstanding

1 unchanged sentence

Convertible notes, net

nine months ended September 30, 2023 and 2022, $ 9,625 and $ 0 of the debt discount was amortized.

14, 2021, the Company entered a Securities Purchase Agreement (the “ GS SPA ”) with GS Capital Partners, LLC pursuant

to which the Company issued to the Lender a 6% Redeemable Note in the principal amount of $ 2,000,000 (the “ GS Note ”).

As of March 31, 2024, all outstanding convertible

debt is default.

Notes Payable

On July 14, 2021, the Company entered a

Securities Purchase Agreement (the “ GS SPA ”) with GS Capital Partners, LLC pursuant to which the Company issued

to the Lender a 6% Redeemable Note in the principal amount of $ 2,000,000 (the

“ GS Note ”).

The purchase price of the GS Note is $1,980,000.

The GS Note matures on July 14, 2022 upon which time all accrued and unpaid interest

will be due and payable.

Interest accrues on the GS Note at 6 % per annum until the GS Note becomes due and payable.

The GS Note is subject

to various “Events of Default,” which are disclosed in the GS Note.

Upon the occurrence of an “Event of Default,”

the interest rate on the GS Note will be 18%.

The GS Note is not convertible into shares of the Company’s Common Stock and is not

dilutive to existing or future shareholders and the Company used a portion of the proceeds of the GS Note to retire convertible debt.

As of September 30, 2023 and December 31, 2022, $ 2,000,000 remains outstanding.

As of September 30, 2023, the GS Note is in default.

The Company’s

RI and WS subsidiaries have various loans including Small Business Association (“SBA”) Economic Injury Disaster Loan (“EIDL”)

loans, lines of credit and other advances.

The GS Note matures on July

14, 2022 upon which time all accrued and unpaid interest will be due and payable.

Interest accrues on the GS Note

per annum until the GS Note becomes due and payable.

The GS Note is subject to various “Events of Default,” which are

disclosed in the GS Note.

Upon the occurrence of an “Event of Default,” the interest rate on the GS Note will be 18%.

The GS Note is not convertible into shares of the Company’s Common Stock and is not dilutive to existing or future

shareholders and the Company used a portion of the proceeds of the GS Note to retire convertible debt.

As of March 31, 2024

and December 31, 2023, $ 0

and $ 1,923,868 remains outstanding.

As of March 31, 2024, the GS note is in default.

Loans Payable

The Company’s RI and WS subsidiaries have

various loans including Small Business Association (“SBA”) Economic Injury Disaster Loan (“EIDL’) loans, lines

of credit and other advances.

The loans bear interest with varying rates up to 9.25% per annum.

The following is a summary

of the loans payable at September 30, 2023 and December 31, 2022:

Schedule of loans payable

September 30,

The following is a summary of the loans

payable at March 31, 2024 and December 31, 2023:

Schedule of loans

RI - line of credit

8 unchanged sentences

Loan payable, non-current

11 – SECURED DEBENTURE

a convertible Debenture to the University (see Note 1) in exchange for the Patents assigned to the Company, in the amount of Canadian

$1,500,000, or US$1,491,923 on December 16, 2010, the date of the Debenture.

On April 24, 2017 DPTI issued a replacement secured term

Debenture in the same CAD 1,500,000 amount as the original Debenture.

The interest rate is the Bank of Canada Prime overnight rate plus

1% per annum.

The Debenture had an initial required payment of CAD 42,000 (US$33,385) due on April 24, 2018 for reimbursement to the University

of its research and development costs, and this has been paid.

NOTE 12 – SECURED DEBENTURE

DPTI issued a convertible Debenture to the University

(see Note 1) in exchange for the Patents assigned to the Company, in the amount of Canadian $1,500,000, or US$1,491,923 on December 16,

2010, the date of the Debenture.

On April 24, 2017 DPTI issued a replacement secured term Debenture in the same CAD 1,500,000 amount as

the original Debenture.

The interest rate is the Bank of Canada Prime overnight rate plus 1% per annum.

The Debenture had an initial required

payment of CAD 42,000 (US$33,385) due on April 24, 2018 for reimbursement to the University of its research and development costs, and

this has been paid.

Interest-only maintenance payments are due annually starting after April 24, 2018.

Payment of the principal begins on the earlier of (a) three years following two consecutive quarters of positive earnings before

interest, taxes, depreciation and amortization, (b) six years from April 24, 2017, or (c) in the event DPTI fails to raise defined capital

amounts or secure defined contract amounts by April 24 in the years 2018, 2019, and 2020.

The Company has raised funds in excess of the

amount required for 2020, 2019 and 2018.

Beginning in 2023, The principal repayment

amounts will be due quarterly over a six year period in the amount of Canadian Dollars 62,500.

Based on the exchange rate between the

Canadian Dollar and the U.S.

Dollar on December 31, 2018, the quarterly principal repayment amounts will be US$48,447.

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,

and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University.

The Debenture

was initially recorded at the $1,491,923 equivalent U.S.

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 U.S.

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 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.

Payment of the principal begins

on the earlier of (a) three years following two consecutive quarters of positive earnings before interest, taxes, depreciation and amortization,

(b) six years from April 24, 2017, or (c) in the event DPTI fails to raise defined capital amounts or secure defined contract amounts

by April 24 in the years 2018, 2019, and 2020.

The Company has raised funds in excess of the amount required for 2020, 2019 and 2018.

in 2023, The principal repayment amounts will be due quarterly over a six year period in the amount of Canadian Dollars 62,500.

on the exchange rate between the Canadian Dollar and the U.S.

Dollar on December 31, 2018, the quarterly principal repayment amounts will

be US$48,447.

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, and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University.

The Debenture was initially recorded at the $1,491,923

equivalent U.S.

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 U.S.

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 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.

To date, no royalties have been paid.

are current at the present time.

For the nine months ended

September 30, 2023, and 2022, the Company recorded interest expense of $ 19,401 and $ 36,307 , respectively.

As of September 30, 2023 and December 31, 2022, the debenture liability

totaled $ 1,099,250 and $ 1,090,827 , respectively.

The following was included

in our balance sheet as of September 30, 2023 and December 31, 2022:

Schedule of operating leases

September 30,

For the three months ended March 31, 2024, and

2023, the Company recorded interest expense of $ 0 and $ 28,275 , respectively.

As of March 31, 2024 and December 31, 2023, the debenture

liability totaled $ 1,099,250

and $ 1,099,250 ,

respectively.

NOTE 13 – LEASES

The following was included in our balance sheet

as of March 31, 2024 and December 31, 2023:

Schedule of operating lease

Operating leases

3 unchanged sentences

Total operating lease liabilities

The weighted average

remaining lease term and weighted average discount rate at September 30, 2023 and December 31, 2022 were as follows:

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

September 30,

The weighted average remaining lease term and

weighted average discount rate at March 31, 2024 and December 31, 2023 were as follows:

Schedule of weighted average remaining lease term and

discount rate

Operating leases

2 unchanged sentences

Operating Leases

12, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Mumbai, India.

This three-year agreement commenced January 12, 2021 with an annual rent of approximately $ 50,000 .

2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Warwick, United

This ten-year agreement commenced May 27, 2021 with an annual rent of approximately $ 85,000 with the first six months rent

31, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Tempe, Arizona.

This five-year agreement commenced August 31, 2021 with an annual rent of approximately $ 192,000 .

20, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Warwick, United

This ten-year agreement commenced October 20, 2021 with an annual rent of approximately $ 200,000 with the first six months

On January 12, 2021, the Company’s newly

acquired subsidiary entered into an operating lease agreement to rent office space in Mumbai, India.

This three-year agreement commenced

January 12, 2021 with an annual rent of approximately $ 50,000 .

On May 27, 2021, the Company’s newly acquired

subsidiary entered into an operating lease agreement to rent office space in Warwick, United Kingdom.

This ten-year agreement commenced

May 27, 2021 with an annual rent of approximately $ 85,000 with the first six months rent free.

On August 31, 2021, the Company’s newly

acquired subsidiary entered into an operating lease agreement to rent office space in Tempe, Arizona.

This five-year agreement commenced

August 31, 2021 with an annual rent of approximately $ 192,000 .

On October 20, 2021, the Company’s newly

acquired subsidiary entered into an operating lease agreement to rent office space in Warwick, United Kingdom.

This ten-year agreement

commenced October 20, 2021 with an annual rent of approximately $ 200,000 with the first six months rent free.

On March 9, 2022, the Company entered into an

3 unchanged sentences

of approximately $ 81,000 with the first twelve months rent free.

On June 28, 2023, the Company recognized a gain on deconsolidation of

$1,775,869 related to Optilan (UK) and its subsidiaries leases.

13 - STOCKHOLDERS' EQUITY (DEFICIT)

accordance with the Company’s Certificate 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 September 30, 2023 and December 31, 2022, there were 88,335

total preferred shares issued and outstanding for all classes, respectively.

accordance with the Company’s Certificate of Incorporation, the Company has authorized a total of 20,000,000,000

shares of common stock, par value $ 0.0001

As of September 30, 2023 and December 31, 2022, there were 7,639,945,289

and 6,427,395,360

common shares issued, respectively.

As of September 30, 2023 and December 31, 2022, there were 7,639,845,289

and 6,427,295,360

common shares outstanding, respectively.

On June 28, 2023, the Company recognized a gain

on deconsolidation of $1,642,146 related to Optilan (UK) and its subsidiaries leases.

NOTE 14 – STOCKHOLDERS' EQUITY (DEFICIT)

Preferred Stock

In accordance with the Company’s bylaws,

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 March 31, 2024 and December 31, 2023, there were 88,335 and 88,335 total preferred shares issued and outstanding

for all classes, respectively.

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

As of March 31, 2024 and December 31, 2023, there were 8,330,852,145

and 8,100,117,720 common shares issued,

respectively.

As of March 31, 2024 and December 31, 2023, there were 8,330,852,145

and 8,100,117,720 common shares outstanding,

respectively.

2022 Transactions

On May 27, 2022 we entered an Equity Financing

2 unchanged sentences

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

On April 28, 2023 the Company entered into an

Equity Financing Agreement with GHS, to which GHS agreed to Purchase $30,000,000 in shares of our Common Stock over the course of 12 months

at 92% of the current market price.

On June 13, 2023 the Company entered into an Amendment

to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to Purchase $30,000,000 in shares of our Common Stock over the course

of 12 months at 92% of the current market price.

On July 10,2023 the Company entered into a Second Amendment to the 2023

Equity Financing Agreement with GHS, to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock over the course of

12 months at 92% of the current market price.

On September 5, 2023, we entered into a Stock

Purchase Agreement with an investor for the purchase of 100,000,000 shares of Common Stock for a total consideration of $100,000.

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.

The below table of puts from 1/12/2023 through

4/11/2023 were made by the Company under the 2022 EFA during 2023.

The put from 4/28/2023 was made under the EFA dated 4/28/2023.

puts from 6/26/2023 and 7/3/2023 were made by the Company under the Amended EFA dated June 13, 2023.

The 7/10/2023 put was made by the

Company under the Second Amended EFA dated July 10, 2023.

2023 Transactions

On April 28, 2023 the

Company entered into an Equity Financing Agreement with GHS, to which GHS agreed to Purchase $30,000,000 in shares of our Common Stock

over the course of 12 months at 92% of the current market price.

On June 13, 2023 the

Company entered into an Amendment to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to Purchase $30,000,000 in shares

of our Common Stock over the course of 12 months at 92% of the current market price.

On July 10,2023 the Company

entered into a Second Amendment to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to purchase up to $30,000,000 in

shares of our Common Stock over the course of 12 months at 92% of the current market price.

On September 5, 2023,

we entered into a Stock Purchase Agreement with an investor for the purchase of 100,000,000 shares of Common Stock for a total consideration

The RRA provides that we shall (i) use our best efforts to file with the SEC a Registration Statement within

45 days of the date of the GHS Registration Rights Agreement;

and (ii) have the Registration Statement declared effective by the SEC within

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

Statement is filed.

Below is a table of all puts made by the Company

under the 2022 EFA during 2024:

Schedule of equity financing agreement

2 unchanged sentences

Effective Price per Share

Issued shares pursuant to an individual stock purchase agreement with an unrelated investor (not under 2022 EFA)

In January 2023, the Company entered into a settlement

of a dispute between certain stockholders in which the Company decided, during the period ended June 30, 2023, to issue shares to settle

In January 2023, the Company issued 297,000,000 shares of common stock to the individuals.

In January 2023, the Company issued 297,000,000

shares of common stock to the individuals.

The fair value of $ 1,989,900 ,

or $ 0.0067 per share, was included in professional fees in the consolidated statements of operations in the nine months ended September

As part of this transaction $280,536 of accrued liabilities have been

14 - COMMITMENTS & CONTINGENCIES

Royalty Payments

in consideration of the terms of the debenture to the University of New Brunswick, shall pay to the University a two percent royalty on

sales of any and all products or services, which incorporate the Company's patents for a period of five years from April 24, 2018.

DarkPulse, Inc.

Twitter, Inc.

As disclosed in greater detail in the Company’s

Form 10-Q, filed September 22, 2023, the Company is actively investigating potential claims against the @MIKEWOOD and @BullMeechum3 Twitter

There are no material updates to this matter.

per share, was included in professional fees in the consolidated statements of operations in the three months ended March 31,

As part of this transaction $280,536 of accrued liabilities have been reversed.

Stock Options

As of March 31, 2024 and December

31, 2023, the Company had no outstanding

stock options.

NOTE 15 – COMMITMENTS & CONTINGENCIES

Potential Royalty Payments

The Company, in consideration of the terms of

the debenture to the University of New Brunswick, shall pay to the University a two percent royalty on sales of any and all products or

services, which incorporate the Company's patents for a period of five years from April 24, 2018.

Legal Matters

Carebourn Capital, L.P.

DarkPulse, Inc.

As disclosed in greater detail in the Company’s

Form 10-Q, filed September 22, 2023, 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 August 22, 2023, the Minnesota

state held oral arguments on the Company’s motion for summary judgment on its counterclaims, which seek an award of damages in the

amount of $124,012.91 (excluding pre- and post-judgment interest), attorneys’ fees in the amount of $267,951.33, and costs in the

amount of $50,785.50.

The Company is currently awaiting

a decision on its motion for summary judgment.

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 23, 2024, Carebourn appealed

the final judgment entered by the State Court against Carebourn and in favor of the Company.

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.

As 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 September 22, 2023, the Company remains in active litigation with More Capital, LLC (“More”)

in Minnesota state court.

The following discloses the material updates for this matter.

On August 22, 2023, the Minnesota

state held oral arguments on the Company’s motion for summary judgment on its motion for summary judgment on its affirmative defenses

and counterclaims, the latter of which seek an award of damages in the amount of $300,809.39 (excluding pre- and post-judgment interest),

attorneys’ fees in the amount of $111,019.00, and costs in the amount of $195.75.

The Company is currently awaiting

a decision on its motion for summary judgment.

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 23, 2024, More appealed the

final judgment entered by the State Court against More and in favor of the Company.

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 banks.

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

As disclosed in greater detail

in the Company’s Form 10-Q, filed September 22, 2023, the Company remains in active litigation with Carebourn Capital, L.P.

(“Carebourn”)

and More Capital, LLC (“More,” and together with Carebourn, the “Noteholders”) in the United States District Court

for the District of Utah.

The following discloses the material updates for this matter.

On September 27, 2023, the U.S.

Securities and Exchange Commission (“SEC”) prevailed on its motion for summary judgment against Carebourn that sought declaratory

judgment that Carebourn is an unregistered dealer acting in violation of Section 15(a) of the Securities Exchange Act of 1934.

On November 1, 2023, the Noteholders

filed a motion to dismiss this litigation with prejudice (the “Dismissal Motion”).

On November 2, 2023, the Company

filed a cross-motion to the Dismissal Motion, wherein the Company did not oppose the Noteholders’ request for dismissal with prejudice

and cross-moved for sanctions against the Noteholders and their attorneys of record.

The Noteholders’ opposition thereto is due

on or before November 16, 2023.

The Company maintains that the

Noteholder’s lawsuit is duplicative of the first-filed lawsuits commenced by the Noteholder’s in Minnesota state court.

Company intends to vigorously defend itself against the Noteholder’s Utah lawsuit.

Goodman et al.

As disclosed in greater detail

in the Company’s Form 10-Q, filed September 22, 2023, the Company settled a dispute with Stephen Goodman, Mark Banash, and David

Accordingly, there are no material updates for this matter.

DarkPulse, Inc.

Global Opportunities Fund, LLC, and Eli Fireman

As disclosed in greater detail

in the Company’s Form 10-Q, filed September 22, 2023, 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 September 12, 2023, the United

States Court of Appeals for the Second Circuit (“Second Circuit”) calendared oral arguments for the appeal—which challenges

United States District Court for the Southern District of New York’s granting the FirstFire Parties’ motion to dismiss—for

the week of December 11, 2023.

On October 12, 2023, the Second

Circuit scheduled oral arguments for the appeal on December 13, 2023.

The Company remains committed to actively litigating its claims for relief

under the Securities Exchange Act of 1934 and Racketeer Influenced and Corrupt Organizations Act.

DarkPulse, Inc.

EMA Financial, LLC et al

As disclosed in greater detail

in the Company’s Form 10-Q, filed September 22, 2023, the Company settled a dispute with EMA Financial, LLC (“EMA”),

EMA Group, Inc.

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

Accordingly, there are no material updates for this matter.

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.

DarkPulse, Inc.

Brunson Chandler & Jones,

As disclosed in greater detail

in the Company’s Form 10-Q, filed September 22, 2023, the Company remains in active litigation with Brunson Chandler & Jones,

PLLC (“Brunson Firm”), and Lance B.

Brunson (“Brunson,” and together with the Brunson Firm, the “Brunson

The Company remains committed

to litigating its claims and affirmative defenses against the Brunson Parties.

FirstFire Global Opportunities

Fund, LLC, and Eli Fireman

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,

As disclosed in greater detail

in the Company’s Form 10-Q, filed September 22, 2023, the Company—alongside two other plaintiffs, Social Life Network, Inc.

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

Life Network, Inc.

and Redhawk Holdings Corp.

—remains in active litigation with Crown Bridge Partners, LLC, Soheil Ahdoot, and Sepas Ahdoot (“Crown

Bridge Defendants”).

The following discloses the material updates for this matter.

On September 29, 2023, the United

States District Court for the Southern District of New York granted the Crown Bridge Defendants’ motion to dismiss.

On October 24, 2023, the Company,

alongside Social Life Network, Inc.

and RedHawk Holdings Corp., appealed the district court’s decision to the United States Court

of Appeals for the Second Circuit.

Briefing has not yet been scheduled for this appeal.

The Company remains committed

to actively litigating its Racketeer Influenced and Corrupt Organizations Act claims against the Crown Bridge Defendants.

Benner et al v.

DarkPulse, Inc.

As disclosed in greater detail

in the Company’s Form 10-Q, filed September 22, 2023, the Company and its CEO, Dennis O’Leary (together with the Company,

the “DPLS Defendants”), remain in active litigation with J.

Merlin Benner, Phillip J.

Benner, Benjamin P.

Benner, Jonas M.

Benner, and Angelica M.

Benner (collectively, the “Benner Parties”) in the United States District Court for the Southern District

The following discloses the material updates for this matter.

On June 30, 2023, the DPLS Defendants

filed their answer to the Benner Parties’ complaint, wherein they interposed numerous affirmative defenses.

The parties have since

began conducting discovery in this matter.

The Company remains committed

to actively litigating its affirmative defenses to the Benner Parties’ claims.

GS Capital Partners, LLC v.

DarkPulse, Inc.

As disclosed in greater detail

in the Company’s Form 10-Q, filed September 22, 2023, the Company was sued by GS Capital Partners, LLC (“GS Capital”)

in the Supreme Court for New York County.

The following discloses the material updates for this matter.

On or about September 27, 2023,

the Company and GS Capital confidentially settled the dispute.

On or about October 3, 2023, the parties filed a stipulation with the court

to vacate the judgment entered against the Company and in favor of GS Capital, vacate the motion filed by the Company, and discontinue

On or about October 9, 2023, the court vacated the

The parties are currently waiting for the court to dismiss the action.

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.

NOTE 15 – RELATED

PARTY TRANSACTIONS

follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related

party transactions.

Pursuant to Section 850-10-20 the related parties include a) affiliates of the Company;

b) Entities for which

investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection

of Section 825-10-15, to be accounted for by the equity method by the investing entity;

c) trusts for the benefit of employees, such as

pension and profit-sharing trusts that are managed by or under the trusteeship of management;

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 claims for relief under RICO.

NOTE 16 – RELATED PARTY TRANSACTIONS

The Company follows subtopic 850-10 of the FASB

Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

to Section 850-10-20 the related parties include a) affiliates of the Company;

b) Entities for which investments in their equity securities

would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted

for by the equity method by the investing entity;

c) trusts for the benefit of employees, such as pension and profit-sharing trusts that

are managed by or under the trusteeship of management;

d) principal owners of the Company;

e) management

of the Company;

f) other parties with which the Company may deal if one party controls or can significantly influence the management or

operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate

and g) Other parties that can significantly influence the management or operating policies of the transacting parties or that

have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of

the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures

of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary

course of business.

However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements

is not required in those statements.

e) management of the Company;

f) other parties

with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other

to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests;

and g) Other parties

that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in

one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might

be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party

transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business.

disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in

those statements.

The disclosures shall include:

a) the nature of the relationship(s) involved;

b) a description of

the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income

statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial

c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of

any change in the method of establishing the terms from that used in the preceding period;

and d) amounts due from or to related parties

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

nine months ended September 30, 2023 and 2022, certain executives of the Company received $ 120,000 and $ 0 , respectively, in Directors

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

b) a description of the transactions,

including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented,

and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements;

dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the

method of establishing the terms from that used in the preceding period;

and d) amounts due from or to related parties as of the date

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

During the three months ended March 31, 2024

and 2023, certain executives of the Company received $ 0

and $ 120,000 ,

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

Remote Intelligence and Wildlife Specialists

4 unchanged sentences

non-interest bearing and due on demand.

As of both September 30, 2023 and December 31, 2022, the outstanding balance was $ 226,247 .

As of both March 31, 2024 and December 31, 2023, the outstanding balance was $ 226,247 .

WS has a loan payable with the former majority

2 unchanged sentences

non-interest bearing and due on demand.

As of both September 30, 2023 and December 31, 2022, the outstanding balance was $ 135,500 .

12, 2022, the Company entered into and closed the Purchase Agreement (the “Agreement”) pursuant to which the Company purchased

2,623,120 shares of Class B Common Stock (the “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 (the “Warrants,” together, with the Class B Common Stock,

the “Securities”) of Gladstone Acquisition Corp., a Delaware corporation (NASDAQ:

GLEE) (the “SPAC”), from Gladstone

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

The SPAC subsequently changed its name

to Global Systems Dynamics, Inc.

As of September

30, 2023 and December 31, 2022, the Company’s $ 1,500,000 investment in GSD was accounted for as cost.

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.

The principal balance of this note shall be payable by GSD on the earlier to occur of:

(i) the date on which

GSD consummates its initial business combination (the “Business Combination”) and (ii) the date that the winding up of GSD

is effective.

As of both March 31, 2024 and December 31, 2023, the outstanding balance was $ 135,500 .

SPAC Transaction

On October 12, 2022, the Company entered into

and closed the Purchase Agreement (the “Agreement”) pursuant to which the Company purchased 2,623,120 shares of

Class B Common Stock (the “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 (the “Warrants,” together, with the Class B Common Stock, the “Securities”)

of Gladstone Acquisition Corp., a Delaware corporation (NASDAQ:

GLEE) (the “SPAC”), from Gladstone Sponsor, LLC (“Original

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

The SPAC subsequently changed its name to Global Systems Dynamics,

As of March 31, 2024 and December 31, 2023, the

Company’s $ 1,500,000 investment in GSD was accounted for as cost.

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.

The principal balance of this note shall be payable by GSD on the

earlier to occur of:

(i) the date on which GSD consummates its initial business combination (the “Business Combination”)

and (ii) the date that the winding up of GSD is effective.

The note does not bear interest.

On February 7, 2023 and March 9, 2023, GSD issued a non-convertible promissory note in

the aggregate principal amount of $ 167,894 ($83,947 per month) to the Company in connection with the extension of the termination date

for the GSD’s initial business combination.

As of September 30, 2023 and December 31, 2022, the outstanding note receivable was

$ 1,612,565 and $ 1,049,248 , respectively.

As of September 30, 2023 and December 31, 2022,

the Company has $ 948,362 and $ 318,025 , respectively, owed from GSD and included as due from related party on the consolidated balance

These advances were made to pay for certain expenses on behalf of the SPAC, as well as $120,000 in accrued management fees.

advances are unsecured, non-interest bearing and due on demand.

16 – SUBSEQUENT EVENTS

Subsequent to period end, the Company issued 88,888,888

shares to a third party in exchange for cash in accordance with its equity agreement.

September 29, 2023, the Company entered into a convertible note for a principal of $57,750, which was funded on October 4, 2023.

bears interest at a rate of 10% per annum and matures after one year.

Following 180 days from the note, the noteholder may convert at

a discount of 39%.

The Company has reserved a sufficient number of shares of common stock for issuance upon full conversion of the note

in accordance with the terms .

On February 7, 2023 and March 9, 2023,

GSD issued a non-convertible promissory note in the aggregate principal amount of $ 167,894 ($83,947

per month) to the Company in connection with the extension of the termination date for the GSD’s initial business combination.

As of March 31, 2024 and December 31, 2023, the outstanding note receivable was $ 29,817

respectively.

As of March 31, 2024 and December 31, 2023,

the Company has $ 30,000 and $ 0 ,

respectively, owed from GSD and included as due from related party on the consolidated balance sheet.

These advances were made to pay

for certain expenses on behalf of the SPAC, as well as $120,000 in accrued management fees.

The advances are unsecured, non-interest

bearing and due on demand.

On January 24,2024 the SPAC was terminated and the outstanding due from related party was determined to be

uncollectible, therefore, written off as bad debt as of December 31, 2023.

NOTE 17 – SUBSEQUENT EVENTS

On April 9, 2024 the court dismissed both Carebourn

and Moore’s appeal that concluded the original judgment case in which DarkPulse won its counterclaims.

The Company is now actively

enforcing the judgments.

On May 2, 2024, we entered

into a Stock Purchase Agreement with an investor for the purchase of 104,166,667 shares of Common Stock for a total consideration of $50,000.

On May 20, 2024 the Company

entered into a Stock Purchase Agreements with investors for the purchase of 288,888,889 shares of Common Stock for a total consideration

On May 23, 2024 the Company

entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration

On June 9, 2024

the Company entered into a Stock Purchase Agreement with an investor for the purchase of 48,888,888 shares of Common Stock for a total

consideration of $22,000.

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