What changed in this filing

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Item 1A. Risk Factors

2025-04-14 compared with 2024-07-15 · 103 added, 59 removed, 1080 unchanged (13% of the section changed)

Readers should carefully consider the risks and

uncertainties described below.

RISK FACTORS.

Readers of this Form 10-K should carefully consider

the risks and uncertainties described below.

Our failure to successfully address the risks

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of new technology, our business is inherently risky.

Our common shares are considered speculative during the development of our

business operations.

Our common shares are considered speculative during the development of our business

Prospective investors should consider carefully the risk factors set out below.

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If we default on the Secured Debenture, the secured holder could take possession of our assets, including our patents and other intellectual property.

Several of the convertible notes issued by us are in litigation with uncertain outcomes.

Our stockholders have limited voting power compared to the holder of our Series A Preferred Stock.

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There is no assurance that we will achieve profitability or that our revenue and business models will be successful.

We will require additional capital to support business growth,

and this capital might not be available or may require stockholder approval to obtain.

We will require additional capital to support business growth, and this capital might not be available or may require stockholder approval to obtain.

You may experience dilution of your ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock.

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

There are no new claims as of April 16, 2024 against

Optilan (UK) Limited and Evelyn Partners continue to liquidate the company’s assets.

There are no new claims as of the date hereof

against Optilan (UK) Limited and Evelyn Partners continues to liquidate the company’s assets.

We are an unsecured creditor of Optilan (UK) Limited

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order for liquidation and the material adverse effects it will have on our continued operations and ability to meet future obligations.

In the event we lose the repayment obligations of Optilan (UK) Limited, our financial condition could be materially adversely effected.

In the event we lose the repayment obligations of Optilan (UK) Limited, our financial condition could be materially adversely affected.

Due to the failure of GSD to consummate

a business combination with DarkPulse by February 9, 2024, GSD will be forced to liquidate, which may make the shares of GSD owned by

DarkPulse worthless and DarkPulse may be unable to recoup any expenses spent on acquiring securities of GSD and loans to GSD.

On January 23, 2024,

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

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

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

had until February 9, 2024 to consummate a business combination.

Due the fact that GSD did not consummate a business combination by February

9, 2024, there will be a mandatory liquidation and subsequent dissolution.

or about April 17,2024 GSD has redeemed the remaining public shares and has been liquidated and dissolved.

The Company may be subject

to claims of creditors based on the type and nature of claims stemming from this transaction, however any such prospective claims at this

point in time are speculative at best.

GSD is a blank check

company with limited resources.

Since there are limits on use of the Trust Funds for GSD’s working capital in connection with a

business combination, GSD must rely on DarkPulse, its Sponsor, management or outside sources to pay for the various expenses associated

with completing a business combination.

For this purpose, DarkPulse has advanced to GSD non-interest-bearing working capital loans.

of January 23, 2024, GSD had issued to DarkPulse non-interest bearing non-convertible promissory notes for working capital loans in the

principal amount of $679,582.

In addition, on October 12, 2022, DarkPulse paid Gladstone Sponsor, LLC (GSD’s original sponsor) $1,500,000

for 2,623,120 shares of Class B Common and 4,298,496 Private Placement Warrants issued by GSD to Gladstone Sponsor, LLC in order to become

GSD’s Sponsor.

DarkPulse has also expended an additional estimated $1,142,241 to third-party service providers in connection with

the attempted business combination with GSD.

Together, DarkPulse expended an estimated aggregate of $3,321,823 in connection with the

attempted business combination with GSD.

All funds loaned to GSD

by DarkPulse can only be repaid only from funds held outside of GSD’s Trust Account and GSD does not have material funds held outside

of its Trust Account.

Due to the fact that GSD failed to complete a business combination by February 9, 2024, it will now be forced to

DarkPulse, as the Sponsor of GSD and owner of an aggregate of 2,623,120 shares of Class B Common Stock and 4,298,496 GSD Private

Placement Warrants, each of which is exercisable to purchase one share of Class A Common Stock of GSD, will not be able to participate

in the liquidation as a holder of Class B Common Stock of GSD due to DarkPulse having agreed to waive its rights to any liquidation distributions,

which means the shares of Class B Common Stock of GSD owned by DarkPulse are worthless.

As a result of GSD’s liquidation, DarkPulse’s

investment in GSD will be worthless and DarkPulse will be unable to recoup its expenses.

We may be adversely affected by natural

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O’Leary holds all

of the shares of Series A Preferred Stock, he is expected to hold a majority of our outstanding voting power and he will control the outcome

the shares of Series A Preferred Stock, he is expected to hold a majority of our outstanding voting power and he will control the outcome

of matters submitted to a stockholder vote, including the appointment of all directors of the Company.

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Assume liabilities;

Record goodwill and non-amortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges;

Record goodwill and nonamortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges;

Incur amortization expenses related to certain intangible assets;

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financing, our business will fail.

On July 10, 2023, we entered the Second Amended

Equity Financing Agreement with GHS, pursuant to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock, from time

to time over the course of 12 months.

On January 30, 2024, we and GHS entered into the Amendment No.

1 to the EFA pursuant to which the

Contract Period was amended to 24 months.

The EFA grants us the right, from time to time

at our sole discretion (subject to certain conditions) during the Contract Period (as defined in the EFA), to direct GHS to purchase shares

On August 14, 2024, we entered into the EFA with

GHS, pursuant to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock, from time to time over the course of 12

months (the “ Contract Period ”) after effectiveness of a registration statement on Form S-1 of the underlying shares

of Common Stock.

The EFA grants us the right, from time to time at

our sole discretion (subject to certain conditions) during the Contract Period (as defined in the EFA), to direct GHS to purchase shares

of Common Stock on any business day (a “ Put ”), provided that at least five Trading Days (as defined in the EFA) have

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ownership limitation while never holding more than 4.99% of our outstanding shares.

From August 2021 until February 9, 2024, GHS has purchased

and sold 2,272,007,223 and 2,055,590,956 shares of our Common Stock, respectively.

From August 2021 until April 14,

2025, GHS has purchased and sold 3,903,802,753 and 3,748,743,031 shares of our Common Stock, respectively.

Due to these limitations, we may be unable to

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Our independent registered public accounting firm

reports (from two separate independent registered public accounting firms) on our audited financial statements for the years ended December

31, 2023 and 2022, each indicate that there are a number of factors that raise substantial risks about our ability to continue as a going

Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations,

the excess of liabilities over assets, and our dependence upon obtaining adequate additional financing to pay our liabilities.

not able to continue as a going concern, investors could lose their investments.

report on our audited financial statements for the years ended December 31, 2024 and 2023 indicates that there are a number of factors

that raise substantial risks about our ability to continue as a going concern.

Such factors identified in the report are our accumulated

deficit since inception, our failure to attain profitable operations, the excess of liabilities over assets, and our dependence upon obtaining

adequate additional financing to pay our liabilities.

If we are not able to continue as a going concern, investors could lose their investments.

There is no assurance that we will achieve

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changes in accounting standards, policies, guidance, interpretations or principles;

general economic conditions in either domestic or international markets

general economic conditions in either domestic or international markets, including the impact of the ongoing COVID-19 pandemic.

Our operating results may fall below the expectations

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operations and financial condition, and may have a corresponding material adverse effect on capital ratios.

RISKS RELATED TO OUR

EMPLOYEES AND OTHER SERVICE PROVIDERS

Risks Related to Our Employees and Other Service

We are heavily reliant on Dennis O’Leary,

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O’Leary, we cannot be certain that

he will desire to continue with us for the necessary time it will to complete the product development and initial sales channel development.

The departure or loss of Mr.

he will desire to continue with us for the necessary time to complete the product development and initial sales channel development.

departure or loss of Mr.

O’Leary, or the inability to hire and retain a qualified replacement, could negatively impact our ability

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failures of internal controls exist and may in the future discover areas of our internal control that need improvement.

Public company compliance may make it more

difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and rules subsequently

implemented by the SEC have required changes in corporate governance practices of public companies.

As a public company, we expect these

rules and regulations to increase our compliance costs in 2024 and beyond and to make certain activities more time consuming and costly.

As a public company, we also expect that these rules and regulations may make it more difficult and expensive for us to obtain director

and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially

higher costs to obtain the same or similar coverage.

As a result, it may be more difficult for us to attract and retain qualified people

to serve on our Board of Directors or as executive officers.

You could lose all of your investment.

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We may not ever be

able to satisfy the listing requirements for our common stock to be listed on a national securities exchange, which is often a more widely-traded

and liquid market.

able to satisfy the listing requirements for our common stock to be listed on a national securities exchange, which is often a more widely

traded and liquid market.

Some, but not all, of the factors which may delay or prevent the listing of our common stock on a more widely-traded

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securities in the future at a time and price that we deem reasonable or appropriate.

Offers or availability for sale of a substantial

number of shares of our common stock may cause the price of our common stock to decline.

If our stockholders sell substantial amounts of

our common stock in the public market, including upon the expiration of any statutory holding period under Rule 144, or issued upon the

conversion of preferred stock or exercise of warrants, it could create a circumstance commonly referred to as an "overhang"

and in anticipation of which the market price of our common stock could fall.

The existence of an overhang, whether or not sales have

occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related

securities in the future at a time and price that we deem reasonable or appropriate.

RISKS RELATED TO GOVERNMENT

The issuance of shares pursuant to the Settlement

Agreement with GS Capital Partners, LLC may have a significant dilutive effect.

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

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.

Depending on the number of shares we issue pursuant

to the Settlement Agreement, it could have a significant dilutive effect upon our existing shareholders.

Although the number of shares

that we may issue pursuant to the Settlement Agreement will vary based on our stock price (the higher our stock price, the less shares

we have to issue), there may be a potential dilutive effect to our shareholders, based on different potential future stock prices, if

issuances for the full amount of the Settlement Agreement are realized.

As of April 14, 2025, 450,000,000 shares have been issued pursuant

to the Settlement Agreement.

Based on the three lowest VWAP’s of our Common Stock for the five prior trading days on April 14, 2025,

we would have to issue approximately 272,896,666 shares of Common Stock to satisfy our remaining obligations.

Risks Related to Government Regulation

Legislative and regulatory actions taken

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to regulatory compliance, this could lead to delays and errors and may force us to choose between prioritizing compliance matters over

administrative support for business activities, or may ultimately force us to cease offering certain products or services globally or

in certain jurisdictions.

administrative support for business activities or may ultimately force us to cease offering certain products or services globally or in

certain jurisdictions.

Any delays or errors in implementing regulatory compliance could lead to substantial monetary damages and fines,

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reputational damage, and other factors.

RISKS RELATED TO OUR

INTELLECTUAL PROPERTY

Risks Related to Our Intellectual Property

Our intellectual property rights are valuable,

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asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products

or services or using certain technologies, force us to implement expensive work-arounds, or impose other unfavorable terms.

or services or using certain technologies, force us to implement expensive workarounds, or impose other unfavorable terms.

to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors