What changed in this filing

/stocks — the workspaceLOADING

Item 1. Legal Proceedings

2024-12-12 compared with 2023-08-31 · 210 added, 80 removed, 2 unchanged (99% of the section changed)

Legal Proceedings

See Note 14 to the unaudited consolidated condensed

financial statements.

Benner et al v.

Carebourn Capital, L.P.

DarkPulse, Inc.

On March 29, 2023, J.

Merlin Benner, Phillip J.

Benner, Benjamin P.

Benner, Jonas M.

Benner, and Angelica M.

Benner (collectively, the “ Benner Parties ”) commenced

an action in the United States District Court for the Southern District of Texas against the Company and its Chief Executive Officer,

Dennis O’Leary, individually, alleging (i) the Company is in breach of contracts between the Company and the Benner Parties as it

concerns Remote Intelligence, LLC and Wildlife Specialists, LLC, (ii) violation of Texas Uniform Fraudulent Transfer Act by the Company,

and (iii) defamation by Mr.

On June 30, 2023, the Company and Mr.

O'Leary filed their Answer to

the Benner Parties' Complaint.

The Company intends to vigorously defend itself against the Benner Parties’ lawsuit.

Optilan (UK) Limited

– Compulsory Liquidation

On June 28, 2023, an

order was made by the English courts to place Optilan (UK) Limited (“ Optilan UK ”) into compulsory liquidation.

liquidation is a formal, legal insolvency procedure that results in a company being forcibly liquidated by the courts.

was initiated by the presentation of a winding petition served on Optilan UK by an unpaid creditor.

Optilan UK was unable to settle

the creditor payment ahead of the wining up hearing in court and consequently, the court made an order for the company to be wound up/liquidated.

At the point the order was made, Optilan UK ceased operating, and the directors’ powers ceased.

All employment contracts terminated

as did other contractual relationships with clients and customers whose contracts allowed for termination following the company’s

entry into liquidation.

We understand the other companies in the Optilan group remain solvent and continue to operate.

At the same time, the

court appointed the Official Receiver's Office (the “ OR ”) to take the appointment as liquidator of Optilan UK.

An official receiver is a licensed insolvency practitioner who has been appointed by the courts to ensure the company is wound down as

per the compulsory order.

The OR has taken control of the Optilan UK’s assets.

The primary objective

of the OR, who is also an officer of the court, is to repay as much as possible to the creditors.

The OR will undertake an initial

interview with the directors to identify urgent matters, and thereafter undertake a full interview with the directors to further their

investigation work.

The OR will also conduct a separate interview as regards the directors’ conduct and report this back to the

Insolvency Service.

Creditors can also nominate

their own choice of liquidator to replace the OR.

The OR will consider nominations from creditors and ordinarily the largest unsecured

creditor will be able to appoint their own choice of liquidator.

The liquidator acts in the interests of all creditors.

intention for DarkPulse (as largest unsecured creditor of Optilan UK) to try and replace the liquidator for one of its choice.

The liquidator's fees

are generally paid out of the company's assets.

The liquidator must make payment to creditors in a particular order as set out below:

· Secured creditors with a fixed charge;

· Liquidator fees;

· Preferential creditors (employees);

· Secondary preferential creditors (HMRC);

· Secured creditors with a floating charge;

· Unsecured creditors (which includes DarkPulse debts).

Unsecured creditors rank equally.

The main result of compulsory

liquidation is the complete dissolution of the business of Optilan UK.

However, assets of Optilan UK can be purchased at fair market value.

DarkPulse has expressed a desire to acquire certain assets of Optilan UK from the liquidator.

If DarkPulse does not

purchase the assets of Optilan UK, the liquidator will go out to competitors and may try to find a buyer.

If they cannot find one, any

contracts will be disclaimed (cannot be performed), and tangible assets will be disposed of at auction to get the best price.

Most liquidations take

around 6 to 12 months to conclude.

This period usually affords the liquidator sufficient time to dispose of the company’s assets,

agree creditor claims and make a distribution to creditors (if there are any funds available), conclude the company’s tax affairs

and fill the necessary closure paperwork.

During the process,

the subsidiaries can continue to operate, and DarkPulse can support those operations as well as attempt to sign new contracts with the

current customers of Optilan UK.

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.

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 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 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 November 5, 2024, the final judgment has

not been satisfied by More.

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

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

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

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 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.

FirstFire Global Opportunities Fund, LLC, and

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 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”).

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.

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.

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.

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.

DarkPulse, Inc.

On July 24, 2024 The Company resolved certain

disputes with one of its lenders, GS Capital Partners LLC (“GS”), on terms mutually agreeable to both Darkpulse and GS.

Specifically,

DarkPulse and GS compromised over $2,600,000 of debt owed to GS in return for issuing shares to GS, as provided by the settlement agreement

between the parties.

This settlement is expected to be approved by the District Court for Clark County, Nevada,on or about August 15,

2024, and such approval will also resolve the collaborative proceeding initiated in such court to obtain approval of the settlement under

Section 3(A)(10) of the Securities Act.

Importantly, through this settlement, DarkPulse was able to negotiate a strict leak-out clause

concerning the shares issued to GS, which DarkPulse believes will allow it to maintain its going concern value without the distraction

of expensive and protracted litigation.

TJM West, Inc v Thomas J McCarthy Family Limited

On or about July 25,2023 TJM West filed an action

in Maricopa court against its landlord for illegal lockout from the company’s facilities.

On or about August 18,2023 TJM West’s motion

for Temporary Restraining Order was granted.

September 27, 2023 TJM West counsel motion to

withdraw was accepted.

On or about October 6, 2923.

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 to a withdrawal.

On or about November 6,2023 TJM West engaged

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

for Temporary Restraining Order.

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

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.

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/A

Item 1. Legal Proceedings