What changed in this filing

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Item 1. Financial Statements

2024-11-19 compared with 2024-08-19 · 546 added, 533 removed, 1073 unchanged (50% of the section changed)

1 unchanged sentence

DARKPULSE, INC.

Balance Sheets

Consolidated Balance Sheets

CURRENT ASSETS:

7 unchanged sentences

Operating lease right-of-use assets

Notes receivable, related party

Investment in related party

Other assets, net

Intangible assets, net

TOTAL NON-CURRENT ASSETS

20 unchanged sentences

stock - par value $ 0.01 ;

shares designated, 100

shares issued and outstanding at both June 30, 2024 and December 31, 2023

100 shares designated, 100 shares issued and outstanding at both September 30, 2024 and December 31, 2023

Convertible preferred stock - Series

D, par value $ 0.01 ,

shares designated, 88,235

shares issued and outstanding as of both June 30, 2024 and December 31, 2023

D, par value $ 0.01 , 100,000 shares designated, 88,235 shares issued and outstanding as of both September 30, 2024 and December 31,

Common stock, par value $ 0.0001 ,

20,000,000,000 shares

authorized, 8,928,508,901 and

8,100,117,720 shares

issued as of June 30, 2024 and December 31, 2023, respectively.

20,000,000,000 shares authorized, 10,301,957,534 and 8,100,117,720 shares issued as of September 30, 2024 and December 31,

2023, respectively.

Treasury stock at cost, 100,000

shares at June 30, 2024 and December 31, 2023

shares at September 30, 2024 and December 31, 2023

Additional paid-in capital

1 unchanged sentence

Non-controlling interests

Accumulated other comprehensive income (loss)

Accumulated other comprehensive

income (loss)

( 2,475,811 )

11 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

COST OF REVENUES

3 unchanged sentences

Salaries, wages and payroll taxes

Bad debt expense

Professional fees

Depreciation and amortization

Bad debt expense

Impairment expense

Gain on forgiveness of payables

TOTAL OPERATING EXPENSES

2 unchanged sentences

( 17,583,706 )

( 17,106,482 )

OTHER INCOME (EXPENSE):

2 unchanged sentences

( 1,642,795 )

Change in fair market of derivative liabilities

1 unchanged sentence

( 1,500,000 )

Gain on the forgiveness of debt

Restructuring costs

Exceptional Costs gain

Foreign currency exchange rate variance

4 unchanged sentences

( 19,915,940 )

( 2,416,706 )

( 4,118,096 )

( 2,953,104 )

( 18,917,360 )

Net loss attributable to non-controlling interests

11 unchanged sentences

Three Months Ended

Six Months Ended

( 2,416,706 )

( 4,118,096 )

( 2,953,104 )

( 18,917,360 )

Nine Months Ended

September 30,

OTHER COMPREHENSIVE INCOME (LOSS)

1 unchanged sentence

COMPREHENSIVE LOSS

$ ( 2,416,705 )

$ ( 4,513,604 )

$ ( 2,953,103 )

$ ( 19,775,213 )

See the accompanying notes to the unaudited condensed consolidated

financial statements

See the accompanying notes to the unaudited condensed

consolidated financial statements

DARKPULSE, INC.

Consolidated Statement of Stockholders' Deficit

For the Six Months Ended June 30, 2024 and

Preferred Stock

For the Nine Months Ended September 30, 2024

Balance at December

6,427,395,360

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Balance at March

7,256,066,860

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 June 30, 2023 (audited)

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Balance at June

30, 2023 (audited)

7,459,909,231

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Balance at September

30, 2023 (audited)

7,639,945,289

Balance at December

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

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Balance at March

8,152,280,717

Common stock issued for cash, net of fees

Issuance of common stock for conversion of convertible debt

Common Stock to be issued

Foreign currency adjustment

Balance at June 30, 2024 (unaudited)

Common stock issued

for cash, net of fees

Issuance of common

stock for conversion of convertible debt

Common Stock to

Foreign currency

Balance at June

30, 2024 (unaudited)

8,928,508,901

Common stock issued

for cash, net of fees

1,373,448,633

Issuance of common

stock for conversion of convertible debt

Common Stock to

Foreign currency

Common stock to

be issued for cash

Balance at September

30, 2024 (unaudited)

10,301,957,534

Treasury stock

4 unchanged sentences

Balance at December

$ ( 1,137,902 )

$ ( 46,555,334 )

$ ( 328,994 )

Common stock issued for cash, net of fees

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

$ ( 1,600,247 )

$ ( 60,574,902 )

$ ( 11,512,902 )

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

( 4,087,099 )

( 4,118,096 )

Balance at June 30, 2023 (audited)

$ ( 1,995,755 )

$ ( 64,662,001 )

$ ( 15,488,656 )

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

at March 31, 2023

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

at June 30, 2023 (audited)

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

at September 30, 2023 (audited)

Balance at December

$ ( 1,253,356 )

$ ( 67,376,221 )

$ ( 16,675,319 )

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Foreign currency adjustment

Balance at March 31, 2024

$ ( 1,253,356 )

$ ( 67,909,610 )

$ ( 17,071,136 )

Common stock issued for cash

Issuance of common stock for conversion of convertible debt

Foreign currency adjustment

( 2,410,261 )

( 2,416,706 )

Balance at June 30, 2024

$ ( 1,253,356 )

$ ( 70,319,873 )

$ ( 19,156,322 )

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Foreign currency

at March 31, 2024

Common stock issued

Issuance of common

stock for conversion of convertible debt

Foreign currency

at June 30, 2024

Common stock issued

for cash, net of fees

Issuance of common

stock for conversion of convertible debt

Common Stock to

Foreign currency

Common stock issued

Balance at September

30, 2024 (unaudited)

See the accompanying notes to the unaudited condensed

2 unchanged sentences

CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

40 unchanged sentences

Effect of exchange rate on cash

( 1,379,338 )

Cash at beginning of year

24 unchanged sentences

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.

The Company’s subsidiaries consist of

DarkPulse UK Ltd, a company headquartered in,

United Kingdom whose focus is in engineering, telecommunications, energy, rail, critical network infrastructure, pipeline integrity systems,

renewables and security;

Optilan India, PVT located in Kilpauk, Chennai India and Optilan Communication & Security Systems, Ltd located

in Ankara, Turkey provid project engineering & design, system provisioning and contract bid services globally and throughout Europe;

Remote Intelligence, Limited Liability Company, 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

Wildlife Specialists, Limited Liability Company, 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;

DarkPulse Electronics Manufacturing

Inc., a company headquartered in Arizona who is a U.S.

manufacturer of advanced electronics, cables and sub-assemblies specializing in

advanced package and complex CCA and hardware.

Liquidation/winding up of Optilan (UK) Limited

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

At that time DarkPulse,

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

At the same time the court appointed the OR to

17 unchanged sentences

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

Liquidation of Optilan (UK) Limited

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,

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

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

8 unchanged sentences

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

position as of June 30, 2024, and the results of operations for three and six months and cash flows for the six months ended June 30,

position as of September 30, 2024, and the results of operations for three and nine months and cash flows for the nine months ended September

30, 2024 and 2023 have been included.

7 unchanged sentences

The accompanying unaudited condensed consolidated

balance sheet as of June 30, 2024, the unaudited condensed consolidated statements of operations for the three and six months ended June

30, 2024 and 2023 and of cash flows for the six months ended June 20, 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.

balance sheet as of September 30, 2024, the unaudited condensed consolidated statements of operations for the three and nine months ended

September 30, 2024 and 2023 and of cash flows for the nine months ended September 20, 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.

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

The unaudited interim consolidated

28 unchanged sentences

Accounts Receivable

Accounts receivable and contract assets include

amounts billed to customers under the terms and provisions of the contracts.

Most billings are determined based on contractual terms.

As is common practice in the industry, the Company classifies all accounts receivable and contract assets, including retainage, as current

The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on

those contracts may extend beyond one year.

Contract assets include amounts billed to customers under retention provisions in construction

Such provisions are standard in the Company’s industry and usually allow for a portion of progress billings on the contract

price, typically 5-10%, to be withheld by the customer until after the Company has completed work on the project.

Billings for such retention

balances at each balance sheet date are finalized and collected after project completion.

Generally, unbilled amounts will be billed and

collected within one year.

The Company determined that there are no material amounts due past one year and no material amounts billed

but not expected to be collected within one year.

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 year ended June 3,

receivable and contract assets include amounts billed to customers under the terms and provisions of the contracts.

Most billings are

determined based on contractual terms.

As is common practice in the industry, the Company classifies all accounts receivable and contract

assets, including retainage, as current assets.

The contracting cycle for certain long-term contracts may extend beyond one year, and

accordingly, collection of retainage on those contracts may extend beyond one year.

Contract assets include amounts billed to customers

under retention provisions in construction contracts.

Such provisions are standard in the Company’s industry and usually allow

for a portion of progress billings on the contract price, typically 5-10%, to be withheld by the customer until after the Company has

completed work on the project.

Billings for such retention balances at each balance sheet date are finalized and collected after project

Generally, unbilled amounts will be billed and collected within one year.

The Company determined that there are no material

amounts due past one year and no material amounts billed but not expected to be collected within one year.

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 year ended December 31, 2023.

Each month, the Company reviews its receivables

3 unchanged sentences

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

As of both June 30, 2024 and December 31, 2023, the Company determined

that the allowance for doubtful accounts was $ 0 and $ 0 , respectively.

Accounts receivable includes retainage

amounts for the portion of the contract price earned by us for work performed but held for payment by the customer as a form of

security until we reach certain construction milestones or complete the project.

As of June 30, 2024 and December 31, 2023,

retainage receivable was $ 0 ,

respectively.

As of both September 30, 2024 and December 31, 2023, the Company

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

Accounts receivable includes retainage amounts

for the portion of the contract price earned by us for work performed but held for payment by the customer as a form of security until

we reach certain construction milestones or complete the project.

As of September 30, 2024 and December 31, 2023, retainage receivable

was $ 0 and $ 0 , respectively.

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

Foreign Currency Translation

The Company’s reporting currency is U.S.

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, Emiraes Dirham, Azerbajani Manat and Indian Rupee.

The accounts of one of the

Company’s subsidiaries are maintained using the appropriate local currency, Canadian Dollar (“CAD”) as the functional

Company’s reporting currency is U.S.

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, Emiraes Dirham, Azerbajani

Manat and Indian Rupee.

The accounts of one of the Company’s subsidiaries are maintained using the appropriate local currency, Canadian

Dollar (“CAD”) as the functional currency.

All assets and liabilities are translated into U.S.

Dollars at balance sheet date, shareholders' equity is translated at historical

rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period.

The translation

adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain.

Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional

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

Dollars at balance sheet date,

shareholders' equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for

the year or the reporting period.

The translation adjustments are reported as a separate component of stockholders’ equity, captioned

as accumulated other comprehensive (loss) gain.

Transaction gains and losses arising from exchange rate fluctuations on transactions

denominated in a currency other than the functional currency are included in the statements of operations as foreign currency exchange

*Optilian has been deconsolidated, and as a result, no translation

rates were applied for the six-months ending June 30, 2024.

rates were applied for the nine-months ended September 30, 2024.

The relevant translation rates are as follows:

for the six months ended June, 2024 closing rate at 1.3740 US$:CAD.

for the nine months ended September 30, 2024 closing rate at 1.35229 US$:CAD .01193 INR and .02936 TL

Long-Lived Assets and Goodwill

40 unchanged sentences

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 June 30, 2024 and December 31, 2023.

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

30, 2024 and December 31, 2023.

Property and Equipment

10 unchanged sentences

Repairs and maintenance are expensed as incurred.

The estimated useful lives of property and equipment are generally as follows:

The estimated useful lives of property and equipment

are generally as follows:

Schedule of estimated useful lives of property and equipment

62 unchanged sentences

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 inception;

(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.

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.

(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.

Liquidation of Optilan (UK) Limited

142 unchanged sentences

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.

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

11 unchanged sentences

via its subsidiaries TerraData, Remote Intelligence and Wildlife Specialists.

During the six months ended June 30, 2024 and 2023, the Company recorded

a loss of $ 9,453 and $ 810,693 , respectively, attributable to non- controlling interests.

During the nine months ended September 30, 2024

and 2023, the Company recorded a loss of $ 5,598 and $ 821,977 , respectively, attributable to non- controlling interests.

Comprehensive Loss

Comprehensive loss includes net loss well as other

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

six months ended June 30, 2024 there was no comprehensive loss for foreign currency translation and 2023 Company’s only element

of other comprehensive loss was foreign currency translation.

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.

During the nine months ended September 30, 2024 and 2023 the Company’s only

element of other comprehensive loss was foreign currency translation.

Stock-based Compensation

25 unchanged sentences

Potentially dilutive items outstanding as of

June 30, 2024 and December 31, 2023 are as follows:

September 30, 2024 and December 31, 2023 are as follows:

Schedule of anti dilutive securities

September 30,

Convertible notes

35 unchanged sentences

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.

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

4 unchanged sentences

The Company generated net losses of $ 3,540,148

and $ 18,917,360 during the six months ended June 30, 2024 and 2023, respectively, and net cash used in operating activities of $ 313,725

and $ 19,915,940 during the nine months ended September 30, 2024 and 2023, respectively, and net cash used in operating activities of $ 29,782

and ($ 4,066,096 ), respectively.

As of June 30, 2024, the Company’s current liabilities exceeded its current assets by $ 19,044,331

As of September 30, 2024, the Company’s current liabilities exceeded its current assets by $ 22,119,689

and has an accumulated deficit of $ 70,910,772 .

As of June 30, 2024, the Company had $ 953 of cash.

Lastly, the Optilan Liquidation no longer

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

As of September 30, 2024, the Company had $ 165,186 of cash.

Lastly, the Optilan Liquidation

no longer 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

12 unchanged sentences

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

NOTE 4 – BUSINESS ACQUISITIONS

Wildlife Specialists, LLC and Remote

Intelligence, LLC

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.

4 – BUSINESS ACQUISITIONS

Optilan India PV,TLtd and Optilan Communication

& Security Systems, Ltd.

On September 11, 2024, the Company closed a sale

agreement with COLIN HARDMAN, CHRISTOPHER ALLEN AND GREGORY ANDREW PALFREY as Joint Liquidators, Optilan (UK) Limited incorporated and

registered in England and Wales acting by the Joint Liquidators (Seller), purchasing the right, title and interest of shares in Optilan

India, PVT located in Kilpauk, Chennai India and Optilan Communication & Security Systems, Ltd located in Ankara, Turkey along with

the applicable intellectual property rights including the following software;

(a) the accounting systems ;

(b) customer resource management;

and (c) the user interface for sensor systems.

(2) The “Optilan.com” domain name and continued use of the “@optilan.com”

email accounts.

The Company agreed to pay $ 65,000 USD for both companies and the intellectual property rights.

The Company has accounted for the purchase using

8 unchanged sentences

Consideration

Property, Plant & Equipment

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,

the tangible and intangible assets acquired and liabilities assumed by DarkPulse based on the estimated fair values as of September 11,

2024 was as follows:

Schedule of fair values

assets acquired and liabilities

Schedule of fair value assets acquired and liabilities

(Amounts in US$’s)

Amounts Recognized as of Acquisition Date

Measurement Period Adjustments

Accounts receivable

4 unchanged sentences

Total Consideration for 100% 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 .

TJM 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 values

assets acquired and liabilities

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 acquired assets and assumed

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 as follows:

Schedule of fair values

assets acquired and liabilities

(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 and six months ended June 30, 2024 and 2023:

The following table is a summary of the Company’s timing of revenue

recognition for the three and nine months ended September 30, 2024 and 2023:

Schedule of timing of revenue

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Services and products transferred at a point in time

3 unchanged sentences

to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Revenue by source consisted of the following for the three and six

months ended June 30, 2024 and 2023:

Revenue by source consisted of the following for the three and nine

months ended September 30, 2024 and 2023:

Schedule of revenue by source

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Total revenue

Revenue by geographic destination consisted of the following for the

three and six months ended June 30, 2024 and 2023:

three and nine months ended September 30, 2024 and 2023:

Schedule of revenue by geographic destination

Three Months Ended

Six 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

Contract liabilities on June 30, 2024 are $ 0 upon the deconsolidation

Contract liabilities on September 30, 2024 are $ 0 upon the deconsolidation

related to the Optilan liquidation.

16 unchanged sentences

NOTE 6 – ACCOUNTS RECEIVABLE

Accounts receivable

consisted of the following as of June 30, 2024 and December 31, 2023:

Accounts receivable consisted of the following as of September 30,

2024 and December 31, 2023:

Schedule of accounts receivable

September 30,

Accounts receivable

1 unchanged sentence

Accounts receivable, net

The Company performed an analysis of the

trade receivables related to Wildlife Specialists and determined that $ 5,458 is uncollectible.

As of June 30, 2023, the Company

recorded a bad debt provision for this amount.

The Company performed an analysis of the trade

receivables related to Wildlife Specialists and determined that $ 5,458 is uncollectible.

As of September 30, 2023, the Company recorded

a bad debt provision for this amount.

NOTE 7 – PROPERTY AND EQUIPMENT

Property and equipment

consisted of the following as of June 30, 2024 and December 31, 2023:

Property and equipment consisted of the following as of September 30,

2024 and December 31, 2023:

Schedule of property and equipment

September 30,

Property and equipment

4 unchanged sentences

NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS

The following

is a summary of activity of goodwill for the three months ended June 30, 2024:

The following is a summary of activity of goodwill for the three months

ended September 30, 2024:

Schedule of goodwill activity

Balances at December 31, 2023

Impairment of goodwill pertaining to Optilan

Balances at June 30, 2024

Goodwill pertaining to new Acquisitions

Balances at September 30, 2024

Patents - Intrusion Detection Intellectual Property

1 unchanged sentence

on disclosure to protect its intellectual property rights.

As of June 30, 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).

As of September 30, 2024 and 2023, the Company held three U.S.

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

The DPTI issued patents cover a System and Method

12 unchanged sentences

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

For the six months ended June 30, 2024 and

2023, the Company had patent amortization costs on its intrusion detection technology totaling $ 25,514 and

respectively.

Patents costs are being amortized over the remaining life of each patent, which is from 7

to 16 years .

For the nine months ended September 30, 2024 and

2023, the Company had patent amortization costs on its intrusion detection technology totaling $ 38,271 and $ 38,271 respectively.

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

12 unchanged sentences

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:

The following is a summary of the DPTI patents:

Schedule of patents

September 30,

accumulated amortization

For the six months ended June 30, 2024 and 2023, the Company amortized $25,524 and $25,514, respectively.

Future expected

amortization of patents is as follows:

For the nine months ended September 30, 2024 and 2023, the Company

amortized $ 38,271 and $ 38,271, respectively.

Future expected amortization of patents is as follows:

Schedule of future expected amortization of patents

1 unchanged sentence

Total patents

NOTE 9 – JOINT VENTURE

– JOINT VENTURE

On September 9, 2022, the Company entered into

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under ASC 323-10-30-2.

During the six months ended June 30, 2024, the

Company contributed $ 0 to the joint venture and recorded a loss on the equity investment of $ 0 .

During the nine months ended September 30, 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 June 30, 2024 and December 31, 2023:

of the following as of September 30, 2024 and December 31, 2023:

Schedule of accounts payable and accrued expenses

September 30,

Accounts payable

8 unchanged sentences

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

issue of the debt security as of June 30, 2024 and December 31, 2023.

issue of the debt security as of September 30, 2024 and December 31, 2023.

In 2024 management determined the expected volatility of 164.21 %,

3 unchanged sentences

Management made the determination

to use an expected life rather than contractual life for the calculations for the matured debt as of June 30, 2024 and December 31, 2023.

to use an expected life rather than contractual life for the calculations for the matured debt as of September 30, 2024 and December 31,

On August 7, 2023, the Company entered into a

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

As of both June 30, 2024 and December 31, 2023,

As of both September 30, 2024 and December 31,

2023, there was $ 0 and $ 120,925 of convertible debt outstanding respectively, and a derivative liability of $ and $ 108,958 respectively.

The summary of

convertible notes is as follows:

The summary of convertible notes is as follows:

Schedule of convertible notes

September 30,

Principal Outstanding

2 unchanged sentences

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

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 June 30, 2024 and December 31, 2023, $ 2,435,691

and $ 1,923,868 remains outstanding.

As of June 30, the GS note is in default.

July 24, 2024, we and GS Capital Partners,

LLC entered into a Settlement Agreement pursuant to which the Company entered into a confession of judgment in favor of GS Capital

in the amount of $ 2,673,423 .19 (the “ Balance ”).

Upon approval of the court on August 19, 2024, the Company will

issue to GS Capital free-trading and unrestricted shares of Common Stock pursuant to drawdown requests in the amounts determined by

GS Capital, subject to a 4.99 % beneficial ownership limitation.

The shares will be issued a price per share equal to the average of

the three lowest VWAPs for the five prior trading days.

GS Capital will be allowed to sell, the greater of (1) in one week, no more

than 1% of the total outstanding shares of the Company on a non-cumulative basis at the “ask” price, and (2) 15% of the

daily trading volume of the Common Stock on any single trading day.

Each drawdown will reduce the Balance.

The Company is required

to reserve 2,500,000,000 shares of Common Stock.

On August 19, 2024, the Eighth Judicial District Court in Clark County, Nevada

approved the settlement agreement and the litigation action (Case No:

A-24-896764-C) has been concluded.

Loans Payable

4 unchanged sentences

The following is a summary of the loans

payable at June 30, 2024 and December 31, 2023:

Schedule of loans

payable at September 30, 2024 and December 31, 2023:

Schedule of loans payable

September 30,

RI - line of credit

2 unchanged sentences

WS- Short-term loans

Optilan Communication & Security Ltd – Short Term Loan

Loan payable, current

12 unchanged sentences

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.

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.

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.

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,

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

10 unchanged sentences

To date, no royalties have been paid.

For the six months ended June 30, 2024, and 2023, the Company recorded

interest expense of $ 77,644 and $ 28,275 , respectively.

As of June 30, 2024 and December 31, 2023, the debenture liability totaled $ 1,099,250

and $ 1,099,250 , respectively.

On February 1, 2024, our board of directors approved

entering into the Amendment No.

01 to Convertible Debenture (Secured) Term Debenture with the University pursuant to which, effective

January 17, 2024, section (c) of the recitals of the Convertible Debenture (Secured) Term Debenture effective April 24, 2017 was amended

to the following:

“(c) the date that is seven (7) years from

the Issue Date;

Section 3.1 of the Debenture is amended to the

3.1 Payback on the Principal Sum will commence

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

(a) three (3) years following the

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

or (b) the date

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

Section 3.2 of the Debenture is amended to the

“3.2 The Payor shall be required to pay

the Payee, in quarterly installments over a four (4) year period commencing from the start of the Payback Period, the following:

(a) Ninety-Three Thousand Seven Hundred and Fifty

Canadian Dollars ($93,750.00 CDN);

(b) interest accrued on the Principal Sum on a

declining balance;

For the nine months ended September 30, 2024,

and 2023, the Company recorded interest expense of $ 12,008 and $ 28,275 , respectively.

As of September 30, 2024 and December 31, 2023,

the debenture liability totaled $ 1,110,300 and $ 1,099,250 , respectively.

NOTE 13 – LEASES

The following was

included in our balance sheet as of June 30, 2024 and December 31, 2023:

The following was included in our balance sheet

as of September 30, 2024 and December 31, 2023:

Schedule of operating lease

Operating leases

September 30,

ROU operating lease assets

3 unchanged sentences

The weighted average remaining lease term and

weighted average discount rate at June 30, 2024 and December 31, 2023 were as follows:

Schedule of weighted average remaining lease term and

discount rate

weighted average discount rate at September 30, 2024 and December 31, 2023 were as follows:

Schedule of weighted average remaining lease term and discount rate

Operating leases

September 30,

Weighted average remaining lease term (years)

1 unchanged sentence

Operating Leases

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 operating lease agreement

to rent office space in Houston, Texas.

This ten-year agreement commenced March 9.

2022 with an annual rent of approximately $ 81,000 with

the first twelve months rent free.

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

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

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.

March 9, 2022, the Company entered into an operating lease agreement to rent office space in Houston, Texas.

This ten-year agreement commenced

2022 with an annual rent of approximately $ 81,000 with the first twelve months rent free.

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)

2 unchanged sentences

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

As of June 30,

As of September

30, 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 June 30, 2024 and December 31, 2023, there were 8,928,508,901 and 8,100,117,720 common shares issued, respectively.

As of June 30, 2024 and December 31, 2023, there were 8,928,508,901 and 8,100,117,720 common shares outstanding, 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 per share.

As of September 30, 2024 and

December 31, 2023, there were 10,301,957,534 and 8,100,117,720 common shares issued, respectively.

2022 Transactions

13 unchanged sentences

On June 13, 2023, the Company entered into an Amendment to the

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.

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

1 unchanged sentence

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.

2024 Transactions

On August 14, 2024, the Company entered into a

Third Amendment to the 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

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

11 unchanged sentences

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.

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 six months ended June 30,

January 2023, the Company entered into a settlement of a dispute between certain stockholders in which the Company decided, during the

period ended September 30, 2023, to issue shares to settle the dispute.

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 30, 2024.

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

Stock Options

As of June 30, 2024 and December 31, 2023, the Company had no outstanding

stock options.

As of September 30, 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.

Our agreement with the University of New Brunswick

requires a royalty of 2% beginning April 24, 2018;

however, no royalties have been paid to the University of New Brunswick as the period

for royalties has expired prior to any sales of the patented technology.

The Company has no further

requirement to pay royalties.

Legal Matters

3 unchanged sentences

(“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

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.

1 unchanged sentence

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.

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

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

3 unchanged sentences

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 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

2 unchanged sentences

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:

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.

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.

As of November 5, 2024, the final judgment has not been satisfied

by Carebourn.

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.

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 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

4 unchanged sentences

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

§ 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 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

8 unchanged sentences

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.

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.

As of November 5, 2024, the final judgment has not been satisfied

DarkPulse intends to continue to exercise all legal rights and remedies available to it to collect the amounts awarded should

More fail to voluntarily pay the same.

Carebourn Capital et al v.

Standard Registrar and Transfer et al

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

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

5 unchanged sentences

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

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

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

2 unchanged sentences

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.

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 September 10, 2024, the Court entered an order granting in part

the Company’s motion for sanctions against the Noteholders and their counsel of record.

As of the date hereof, the Company has submitted

declarations detailing its costs and expenses, including attorney’s fees, incurred from this action, which the Noteholders and their

counsel of record challenged.

The Court has not yet rendered its decision on the monetary sanctions that will be imposed against the Noteholders

and their counsel of record.

DarkPulse, Inc.

2 unchanged sentences

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

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”).

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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,

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.

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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.

On September 9, 2024, the FirstFire Defendants

filed their opening memorandum of law in support of their motion to dismiss.

Shortly thereafter, the Company opposed the FirstFire Defendants’

motion and the FirstFire Defendants filed their reply in further support.

As of the date hereof, the Court has not scheduled

oral arguments on the FirstFire Defendants’ motion to dismiss or rendered its decision thereon.

The Company remains committed to

actively litigating its claims for relief against the FirstFire Defendants.

DarkPulse, Inc., et al v.

Crown Bridge Partners, LLC, et al

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

Life Network, Inc.

On or about September 23, 2022, the Company,

Social Life Network, Inc.

and Redhawk Holdings Corp.

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

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

States District Court for the Southern District of New York.

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

of the plaintiffs for damages pursuant to RICO.

On or about September 29, 2023, the Court granted the Crown Bridge

Defendants’ motion to dismiss the plaintiffs’ complaint.

On October 23, 2023, the plaintiffs appealed the Court’s decision

to the Second Circuit.

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

The Company remains committed to actively litigating its claims for

relief under RICO.

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.

On August 19, 2024, the Second Circuit issued

its decision and found that the District Court erred when granting the Crown Bridge Defendants’ motion to dismiss.

the Second Circuit vacated the District Court’s decision and remanded the case back to the District Court for further proceedings

consistent with its decision.

On September 30, 2024, the District Court entered a scheduling order,

setting forth deadlines for discovery and dispositive motion practice.

The Company remains committed to actively litigating

its claims for relief against the Crown Bridge Defendants.

GS Capital Partners, LLC v.

On July 24, 2024 The Company resolved certain

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On or about October 6, 2923.

TJM West hired new counsel to assist with

a short deadline to file answers to landlords motion.

TJM West hired new counsel to assist

with a short deadline to file answers to landlords motion.

On or about November 6,2023 TJM West and its counsel mutually agreed

2 unchanged sentences

On or about May 8,2024 TJM West dropped its motion for Temporary Restraining

On or about May 24,2024 TJM West counsel filed motion to continue discovery.

On or about May 24,2024 TJM West’s counsel left the firm handling

the litigation it was determined in the best interest of the company to terminate its relationship with the law firm.

As of today the

company is interviewing new counsel and evaluating its claims against landlord to determine if it’s financially responsible to incur

additional fees related to exercising TJM’s right against the landlord for terminating the lease.

On or about May 24,2024 TJM West counsel filed motion to continue

On or about May 24,2024 TJM West’s counsel

left the firm handling the litigation it was determined in the best interest of the company to terminate its relationship with the law

As of today the company is interviewing new counsel and evaluating its claims against landlord to determine if it’s financially

responsible to incur additional fees related to exercising TJM’s right against the landlord for terminating the lease.

On or about June 28, 2024, the Company discussed with possible new

counsel the feasibility of recovering its damages utilizing the courts.

At that time, it appeared the cost of recovery would exceed the

recoverable amount should the Company be successful in its litigation.

TJM West is awaiting updates from the court in Maricopa County

as to the status of the case.

The facilities in question had served as TJM West’s manufacturing

facility and is located at 2640 W Medtronic Way Tempe, AZ 85281.

Currently, we do not have access to the facility nor have we signed a

new lease signed with the landlord.

In addition to the foregoing Legal Proceedings, we are also actively

investigating potential legal claims, including but not limited to stock fraud, market manipulation, and/or defamation, against certain

Twitter accounts, websites, and social media channels.

The investigation is ongoing and should potential claims be identified, we will

evaluate commencing formal litigation proceedings.

From time to time, we may become involved in litigation relating to

claims arising out of our operations in the normal course of business.

We are not currently involved in any pending legal proceeding or

litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to

which any of our properties is subject, which would reasonably be likely to have a material adverse effect on our business, financial

condition and operating results.

NOTE 16 – RELATED PARTY TRANSACTIONS

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

During the six months ended June 30, 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

During the nine months ended September 30, 2024

and 2023, certain executives of the Company received $ 0 and $ 0 , respectively, in Directors fees from Optilan for being members of Optilan’s

Board of Directors.

4 unchanged sentences

non-interest bearing and due on demand.

As of both June 30, 2024 and December 31, 2023, the outstanding balance was $ 226,247 .

As of both September 30, 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 June 30, 2024 and December 31, 2023, the outstanding balance was $ 135,500 .

As of both September 30, 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”).

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.

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

(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.

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

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

As of June 30, 2024 and December 31, 2023, the outstanding note receivable was $ 0 and

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, 2024 and December 31, 2023, the outstanding note receivable was $ 0 and

$ 1,702,014 , respectively.

As of June 30, 2024 and December 31, 2023, the

Company has $ 0 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 and the remaining as of June 30, 2024.

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 of $130,000.

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 of $10,000.

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.

On June 18, 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 of $10,000.

On July 1, 2024 the Company entered into a Stock

Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On July 9, 2024 the Company entered into a Stock

Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On July 12, 2024 the Company entered into a Stock

Purchase Agreement with an investor for the purchase of 33,333,333 shares of Common Stock for a total consideration of $15,000.

On July 15, 2024 the Company entered into a Stock

Purchase Agreement with an investor for the purchase of 88,888,888 shares of Common Stock for a total consideration of $40,000.

On July 18, 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 of $10,000.

As of September 30, 2024 and December 31, 2023,

the Company has $ 0 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.

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 and the remaining as of September

– SUBSEQUENT EVENTS

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