What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-04-14 compared with 2024-07-15 · 1127 added, 1282 removed, 960 unchanged (72% of the section changed)

77 unchanged sentences

Anthony Brown

Director and Chief Commercial Officer of Optilan

George Pappas

O’Leary, Chairman, CEO, President,

62 unchanged sentences

Atkin is not, and has not been during the past five years, the director of any other public companies.

Jason Keith, Former CEO, Optilan –

On July 4, 2023, Optilan (UK) received an official letter that all employees’ contracts were terminated as of June 28, 2023.

that time Mr.

Keith’s tenure as CEO of Optilan expired.

George Pappas, Director .

served as a Director of DarkPulse since November 2024.

Pappas is a national security, foreign policy, intelligence, and special operations

expert with over four decades of experience as a government executive, and military officer.

Pappas has served as Staff Director,

House Permanent Select Committee on Intelligence;

Deputy Chief Financial Executive at the Defense Intelligence Agency;

and in other senior

posts across the intelligence and special operations communities.

Pappas’ longstanding relationships and

experiences have been critical to the safety and security of the nation.

Legal Proceedings

33 unchanged sentences

There are no new claims against Optilan UK Ltd

as of April 16, 2024 and Evelyn partners continue to liquidate the company’s assets.

as of the date hereof and Evelyn Partners continues to liquidate the company’s assets.

We are an unsecured creditor of Optilan (UK) Limited

24 unchanged sentences

We plan to adopt a Code of Ethics during the fiscal year ending December 31, 2025.

Insider Trading Policy

We do no t maintain insider

trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by our directors, officers,

and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations applicable

We have failed to do so due to limited number of members of management, limited resources, and the lack of equity awards granted

to management.

EXECUTIVE COMPENSATION.

4 unchanged sentences

Dennis O’Leary

$ 165,000 (1)

Chairman/CEO and Director

20 unchanged sentences

Craig Atkin, Director

Carl Eckel, Director

George Pappas, Director

_________________

All of this amount was accrued and unpaid.

2 unchanged sentences

equity awards.

Policies and Practices Related to the Timing

of Grants of Certain Equity Awards

It is management’s practice to approve ordinary

course annual equity grants during a scheduled meeting held each year.

At this meeting, management will approve each named executive officer’s

annual equity award, if any.

At this time, we do not currently anticipate granting stock options to any of our named executive officers.

We do not schedule our equity grants in anticipation of the release of material, non-public information , nor do we time the release of

material nonpublic information based on equity grant dates.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

10 unchanged sentences

The address for each of our directors,

named executive officers, and executive officers is 815 Walker Street, Suite 1155, Houston, Texas 77002.

named executive officers, and executive officers is 3 Columbus Circle, Floor 15, New York, NY 10019.

Name and Position

Preferred Stock

Amount and Nature of

1 unchanged sentence

Percentage of

Dennis O’Leary, CEO and Director

26,500,884,714

Anthony Brown, Director

Craig Atkin, Director

Bill Bayliss, CEO, Optilan

George Pappas

Total named executive officers, executive officers, and directors (four persons)

26,503,237,634

*Less than 1%

The shares of Series A Preferred Stock are not convertible into shares of the Company’s Common Stock.

The holders of the Series A Preferred Stock shall be entitled to vote, on a pro-rata basis, on all matters subject to a vote or written consent of the holders of the Company’s Common Stock, and on all such matters, the shares of Series A Preferred Stock shall be entitled to that number of votes equal to the number of votes that all issued and outstanding shares of Common Stock and all other securities of the Company are entitled to, as of any such date of determination, on a fully diluted basis, plus 1,000,000 votes, it being the intention that the holders of the Series A Preferred Stock shall have effective voting control of the Company, on a fully diluted basis.

Each share of Series D Preferred Stock is convertible, at the option of the holder, into two shares of our Common Stock.

Each share of Series D Preferred Stock entitles the holder to 6,000 votes on all matters submitted to a vote of our stockholders and is convertible at the election of the holder into two shares of Common Stock.

Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

4 unchanged sentences

In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.

As a result, the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on the date of this report.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

2 unchanged sentences

Executive Compensation.

From August 2023 to January 30, 2024, Mr.

served as a director of GSD.

Director Independence

19 unchanged sentences

professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly

reports, services performed in connection with filings with the SEC, and related other services that were provided by Boyle CPA (“ Boyle ”)

and Mazars USA LLP (“ Mazars ”) , our previous independent registered public

accounting firms, and Fruci & Associates II, PLLC (“ Fruci ”) , our current

independent registered public accounting firm, in connection with statutory and regulatory filings or engagements.

reports, services performed in connection with filings with the SEC, and related other services that were provided by Mazars

USA LLP (“ Mazars ”) and Fruci & Associates II, PLLC (“ Fruci ”) ,

our previous independent registered public accounting firms, and Boladale Lawal & Co.

(“ BLC ”), our current independent

registered public accounting firm, in connection with statutory and regulatory filings or engagements.

The following is a summary of the fees incurred

by the Company to Urish, Mazars, and Fruci for professional services rendered for the years ended December 31, 2023 and 2022, respectively.

by the Company Mazars, Fruci, and BLC for professional services rendered for the years ended December 31, 2024 and 2023, respectively.

Audit-Related Fees

31 unchanged sentences

and DPTH Acquisition Corporation dated August 17, 2018, effective as of July 18, 2018

Business Combination Agreement, by, between, and among DarkPulse, Inc., Global System Dynamics, Inc., and Zilla Acquisition Corp.

Sale Agreement dated September 11, 2024 with Optilan (UK) Limited (in liquidation) incorporated and registered in England and Wales with company number 02715788 and Colin Hardman, Christopher Allen and Gregory Andrew Palfrey, as joint liquidators of the Seller all of Evelyn Partners LLP

Restated Certificate of Incorporation of Klever Marketing, Inc.

35 unchanged sentences

1 to Second Amended Equity Financing Agreement dated January 30, 2024 with GHS Investments, LLC

Third Amended Equity Financing Agreement dated August 14, 2024 with GHS Investments, LLC

Waiver and Rights Agreement with GHS Investments LLC dated August 14, 2024

Settlement Agreement with GS Capital Partners LLC dated July 24 2024

Letter from Boyle CPA Dated January 28, 2022 Regarding Change in Certifying Accountant

Letter from Urish Popeck & Co., LLC Dated January 4, 2023 Regarding Change in Certifying Accountant

Letter from Fruci & Associates II, PLLC to the SEC, dated July 3, 2024

List of Subsidiaries

Consent of Boladale Lawal & Co., independent registered public accounting firm

Consent of Mazars USA LLP, independent registered public accounting firm

Consent of Attorney

Rule 13a-14(a) Certification by Principal Executive Officer

Rule 13a-14(a) Certification by Principal Financial and Accounting Officer

Section 1350 Certification of Principal Executive Officer and Principal Financial and Accounting Officer

S ection 1350 Certification of Principal Executive Officer and Principal Financial and Accounting Officer

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

6 unchanged sentences

Indicates management contract or compensatory plan or arrangement.

Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601.

The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

Furnished not filed.

FORM 10-K SUMMARY.

3 unchanged sentences

DARKPULSE, INC.

July 15, 2024

/s/ Dennis M.

2 unchanged sentences

Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities

indicated on this 15th day of July 2024.

indicated on this 14th day of April 2025.

/s/ Dennis M.

Chairman, Chief Executive Officer, President, Chief Financial Officer, Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer

July 15, 2024

April 14, 2025

Anthony Brown

July 15, 2024

April 14, 2025

Anthony Brown

/s/ Craig Atkin

July 15, 2024

April 14 , 2025

/s/ George Pappas

April 14 , 2025

George Pappas

DARKPULSE, INC.

2 unchanged sentences

and for the Years Ended December 31, 2024 and

Report of Independent Registered Public Accounting Firm (Boladale Lawal &

Co., Lagos, Nigeria, PCAOB ID 6993 ) 2023

Report of Independent Registered Public Accounting Firm

( Mazars USA LLP, Fort Washington, PA., PCAOB ID 339 ) 2022

( Boladale Lawal & Co ., Lagos, Nigeria , PCAOB ID 6993 )

Audited Consolidated Balance Sheets

3 unchanged sentences

Audited Consolidated Statements of Cash Flows

Notes to the Audited Consolidated Financial Statement

Report of Independent Registered Public

Accounting Firm

Notes to the Audited Consolidated Financial Statements

Report of Independent Registered Public Accounting

The Board of Directors and Stockholders of

2 unchanged sentences

We have audited the accompanying consolidated

balance sheets of Darkpulse, Inc (the ‘Company’) as of December 31, 2023, and the related consolidated statements of operations

and comprehensive loss, changes in stockholders’ equity/ (deficit) and cash flows for the year ended December 31, 2023, and the

related notes (collectively referred to as the “financial statements”).

balance sheets of Darkpulse, Inc (the ‘Company’) as of December 31, 2024 and 2023, and the related consolidated statements

of operations and comprehensive loss, changes in stockholders’ equity/ (deficit) and cash flows for each of the two years in the

period ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements

present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the results

of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted

in the United States of America.

present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the

results of its operations and its cash flows for each of the two years in the period ended December 31, 2024 and 2023, in conformity with

accounting principles generally accepted in the United States of America.

Going Concern

41 unchanged sentences

or on the accounts or disclosures to which they relate.

Revenue Recognition:

The Company recognizes

revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to

receive in exchange for those services.

Significant judgment

is exercised by the Company in determining revenue recognition for customer agreements, and include the pattern of delivery (i.e., timing

of when revenue is recognized) for each distinct performance obligation.

The related audit effort

in evaluating management’s judgments in determining revenue recognition for customer agreements up to the date of liquidation required

a high degree of auditor judgment

The procedures performed to address the matter included.

· We gained an understanding of internal controls

related to revenue recognition.

· We evaluated management’s significant accounting

policies for reasonableness

· We Obtained and reviewed revenue contract agreements

for each sample selected

· We check the reasonableness of the terms in the

customer agreement and evaluated the appropriateness of management’s application of their accounting policies, along with their

use of estimates, in the determination of revenue recognition conclusions.

· We tested the mathematical accuracy of management’s

calculations of revenue and the associated timing of revenue recognized in the financial statements.

Going Concern Uncertainty – See

also Going Concern Uncertainty explanatory paragraph above:

Business Combinations

As described in Note 4 of the Consolidated Financial

Statements, the Company completed the acquisitions of 100% of 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 (1)

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 recorded the acquired assets and liabilities

initially at cost and subsequently performed a material adjustment affecting the assets, and liabilities of the acquired companies in

determining the fair value.

We considered this a critical audit matter because

the adjustment is significantly material to the consolidated financial statement.

Our principal audit procedures to evaluate the

impact of the adjustment included the following:

· We read the purchase agreements used in the underlying acquisitions and utilized by the Company to allocate the purchase price.

· We reviewed the adjusting entries made by the acquired companies impacting the net assets acquired.

· Considered the reasonableness of the overall allocation of the total purchase price.

Going Concern Uncertainty

– See also Going Concern Uncertainty explanatory paragraph above:

As described in Note

3 to the consolidated financial statements, the Company has significant operating losses and a working capital deficiency.

the company lost majority of its revenue as a result of the discontinuation of the subsidiary (Optilan UK).

The ability of the Company

to continue as a going concern is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities

to execute its plans and continue operations.

These conditions raise substantial doubt about the Company’s ability to continue as

a going concern.

The procedures performed to address the matter included.

· We inquired of executive officers, and key members

of management, of the Company regarding factors that would have an impact on the Company’s ability to continue as a going concern,

· We evaluated management’s plan for addressing

the adverse effects of the conditions identified, including assessing the reasonableness of forecasted information and underlying assumptions

by comparing to actual results of prior periods and actual results achieved to date, and utilizing our knowledge of the entity, its business

and management in considering liquidity needs and the Company’s ability to generate sufficient cash flow,

· We assessed the possibility of raising additional

debt or credit,

· We evaluated the completeness and accuracy of

disclosures in the consolidated financial statements.

During the year 2023, the company recognised an

impairment loss of $6,948,349 on the balance of Goodwill and other intangible assets recognized on acquisition of Optilan the UK subsidiary

Management determined that certain events and circumstances occurred that resulted into the liquidation of the subsidiary company

(Optilan Uk) as a result, the carrying amount of the Company’s reporting is not recoverable and full impairment was recognised.

Also, during the year, company recognized bad

debt expenses of $5,248,218 as a result of impairment on trade and other receivables from which a material amount of $2,422,457 is the

effect of doubt on the recoverability of the account receivables from Optilan (UK) customers due to the liquidation.

We considered the computation of the impairment

charged on Goodwill and other intangible assets and bad debt written off on account receivables as a critical audit matter because it

required an estimation and significant judgement by management.

The procedures performed to address the matter included.

· We reviewed the company impairment assessment memo

· We reviewed the primary events and circumstances that resulted into the liquidation

of the subsidiary.

· We circularized the independent legal advisor and other related parties

· We inquired from the management about the possibility of contingent liabilities

on the disputed contract.

· We reviewed the bad debt schedule and board approval on bad debt written

· We evaluated the adequacy of the Company’s disclosures in the financial

statements related to the impairment.

of the Company to continue as a going concern is dependent on obtaining additional working capital funding from the sale of equity and/or

debt securities to execute its plans and continue operations.

These conditions raise substantial doubt about the Company’s ability

to continue as a going concern.

The procedures performed to address the matter

· We inquired of executive officers, and key members of management, of the Company regarding factors that would have an impact on the

Company’s ability to continue as a going concern,

· We evaluated management’s plan for addressing the adverse effects of the conditions identified, including assessing the reasonableness

of forecasted information and underlying assumptions by comparing to actual results of prior periods and actual results achieved to date,

and utilizing our knowledge of the entity, its business and management in considering liquidity needs and the Company’s ability

to generate sufficient cash flow,

· We assessed the possibility of raising additional debt or credit,

· We evaluated the completeness and accuracy of disclosures in the consolidated financial statements.

/S/ Boladale Lawal

BOLADALE LAWAL & CO.

3 unchanged sentences

We have served as the Company’s auditor

July 15, 2024

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

of DarkPulse, Inc.

Opinion on the Consolidated

Financial Statements

We have audited the accompanying

consolidated balance sheet of DarkPulse, Inc.

(the “Company”) as of December 31, 2022, and the related consolidated statements

of operations, comprehensive loss, stockholders’ (deficit) equity, and cash flows for the year ended December 31, 2022, and the

related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash

flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt

about the Company’s Ability to Continue as a Going Concern

The accompanying financial

statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the financial statements,

the Company has incurred significant operating losses and negative cash flows.

The Company also has an accumulated deficit of approximately

$46.6 million at December 31, 2022.

The Company is dependent on obtaining additional working capital funding from the sale of equity and/or

debt securities to execute its plans and continue operations.

These conditions raise substantial doubt about the Company’s ability

to continue as a going concern.

Management’s plans regarding those matters are also described in Note 3.

The financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements

are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial

statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)

(“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws

and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit

in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to

have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required

to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness

of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing

procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management,

as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to

the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved challenging,

subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements,

taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit

matters or on the accounts or disclosures to which it relates.

Revenue Recognition

As discussed in Note

2 to the financial statements, the Company recognizes revenue from the sale of services, which consist primarily of advanced technology

solutions for integrated communications and security systems.

At contract inception, the Company assesses the goods and services promised

in the contract with customers and identifies a performance obligation for each, in accordance with ASC 606, Revenue from Contracts with

To determine the performance obligation, the Company considers all products and services promised in the contract.

is recognized over time using the input measure as it most accurately represents the value of goods and services transferred to the customer.

The primary procedures

we performed to address this critical audit matter included:

We reviewed the underlying agreements and contracts and assessed the terms to determine if the performance obligation was met and for the correct amount.

We recalculated the mathematical accuracy of the revenue.

We tested the contract costs to ensure they are being properly recorded.

We assessed the adequacy of any loss provisions by reviewing the Company’s estimated costs to complete contracts and to ensure it is sufficient.

We recalculated the margins on contracts to ensure they are consistent over the entire term of the contract and its related performance obligation.

Impairment Analysis

As discussed in Note

8 to the financial statements, management performed their annual impairment analysis during the year ended December 31, 2022.

by management, the determination of fair value using the income approach requires the use of significant estimates and assumptions, including

forecasted revenue growth rates and discount rates.

The determination of fair value using the market multiples approach requires the use

of revenue multiples, as applicable, based on operating data from guideline publicly traded companies.

If the fair value of the reporting

unit is less than its carrying value, a non-cash impairment charge is recorded in an amount equal to that difference with the loss not

to exceed the total amount of goodwill allocated to the reporting unit.

Additionally, intangible assets subject to amortization were also

reviewed for impairment.

An impairment on the intangible assets shall be recognized only if the carrying amount is not recoverable and

exceeds its fair value.

The carrying amount of an intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows

expected to result from the use and eventual disposal of the asset.

An impairment loss shall be measured as the amount by which the carrying

amount of an intangible asset exceeds its fair value.

As a result of the annual

impairment assessment, the Company concluded that there was impairment to the intangible assets and goodwill in the aggregate of approximately

$12.2 million.

The principal considerations

for our determination that performing procedures relating to the impairment analyses is a critical audit matter are the significant

judgment by management when developing the fair value measurements of the reporting unit, which in turn led to a high degree of auditor

judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management's significant assumptions

related to forecasted revenue growth rates, discount rates, and revenue multiples, as applicable.

In addition, the audit effort involved

the use of professionals with specialized skill and knowledge.

Addressing the matter

involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial

These procedures included, among others (1) testing management’s process for developing the fair value estimates of

the reporting units, (2) evaluating the allocation of assets and liabilities to the reporting units, (3) evaluating the appropriateness

of the income and market approaches, (4) testing the completeness and accuracy of the underlying data used in the income and market multiple

approaches, and (5) evaluating the significant assumptions used by management related to forecasted revenue growth rates, discount rates,

and revenue multiples, as applicable.

Evaluating management’s assumptions related to forecasted revenue growth rates involved evaluating

whether the assumptions used by management were reasonable considering (1) the current and past performance of the reporting unit, (2)

the actions necessary to achieve future forecasts, (3) the consistency with external market data, and (4) whether these assumptions were

consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist

in the evaluation of the income approach and the discount rates, as well as the selection and calculation of revenue multiples, as applicable.

The primary procedures

we performed to address this critical audit matter included:

We evaluated and recomputed the methodology used in connection with the Company’s impairment analysis, including review of the appropriate accounting literature, valuation model, significant assumptions used, and the completeness and accuracy of the underlying data used;

With the assistance of our valuation specialists, we assessed the significant assumptions used by management relating to forecasted revenue growth rates, discount rates, and revenue multiples as applicable.;

We assessed the appropriate interpretation and application used by management of the FASB’s Accounting Standards Codification for the impairment analysis including topics ASC 350 - Intangibles – Goodwill and Other , ASC 360 - Property, Plant, and Equipment , and ASC 820 – Fair Value Measurements and Disclosures;

We evaluated the reasonableness of the Company’s projections of future cash flows by comparing the assumptions used in the projections to actual results and other information deemed necessary as well as tested the mathematical accuracy of the calculations;

We evaluated the adequacy of the Company’s disclosures in the financial statements related to the impairment.

/s/ Mazars USA LLP

served as the Company’s auditor since 2023.

Fort Washington, PA

April 14, 2025

DARKPULSE, INC.

Consolidated Balance

Consolidated Balance Sheets

CURRENT ASSETS:

36 unchanged sentences

Series A Super Voting preferred stock - par value $ 0.01 ;

100 shares designated, 100

shares issued and outstanding at both December 31, 2023 and December 31, 2022

Convertible preferred stock - Series D, par value $ 0.01 , 100,000

shares designated, 88,235

shares issued and outstanding as of both December 31, 2023 and December 31, 2022

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

Convertible preferred stock - Series D, par value $ 0.01 , 100,000 shares designated, 88,235 shares issued and outstanding as of both December 31, 2024 and December 31, 2023

Common stock, par value $ 0.0001 , 20,000,000,000 shares authorized, 10,551,957,534 and 8,100,117,720 shares issued as of December 31, 2024 and December 31, 2023, respectively,

11 unchanged sentences

( 16,996,834 )

( 16,675,319 )

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

See notes to consolidated financial statements.

to audited consolidated financial statements.

DARKPULSE, INC.

2 unchanged sentences

GROSS PROFIT (LOSS)

( 5,443,274 )

OPERATING EXPENSES:

13 unchanged sentences

Loss on deconsolidation

( 1,642,146 )

Change in fair market of derivative liabilities

Loss on equity investment

( 1,500,000 )

Gain on the forgiveness of debt

Foreign currency exchange rate variance

Exceptional Costs Gain

TOTAL OTHER INCOME (EXPENSE)

1 unchanged sentence

( 3,893,859 )

( 21,723,043 )

Net loss attributable to non-controlling interests

6 unchanged sentences

7,411,100,872

See notes to consolidated financial statements.

to audited consolidated financial statements.

DARKPULSE, INC.

Consolidated Statements

of Comprehensive Loss

Consolidated Statements of Comprehensive Loss

$ ( 3,893,859 )

5 unchanged sentences

$ ( 21,838,497 )

See notes to consolidated financial statements.

to audited consolidated financial statements.

DARKPULSE, INC.

Statement of Stockholders’ Deficit

For the Years Ended

December 31, 2023 and 2022

Consolidated Statement of Stockholders’

For the Years Ended December 31, 2024 and 2023

Preferred stock

Accumulated other

Total stockholders’

Treasury stock

comprehensive

at December 31, 2021

5,197,821,885

Balance at December 31, 2022

6,427,395,360

( 1,137,902 )

Conversion of convertible

Issuance of preferred

Common stock issued

( 46,555,334 )

Common shares returned

and cancelled

Common stock issued for cash, net of fees

1,375,722,360

Common stock issue

for TerraData acquisition

Foreign currency

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

( 20,820,887 )

4 unchanged sentences

$ ( 67,376,221 )

Common stock issued

for cash, net of fees

$( 16,675,319 )

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Common stock issued for cash, net of fees

2,146,127,502

Issuance of common stock for legal settlement

2,305,555,556

Conversion of convertible debt into common stock

Common Stock to be issued

Foreign currency adjustment

( 3,883,455 )

( 3,893,859 )

Balance at December 31, 2024

3 unchanged sentences

( 71,259,677 )

See notes to consolidated financial statements.

( 16,996,834 )

notes to audited consolidated financial statements.

DARKPULSE, INC.

25 unchanged sentences

Accounts payable and accrued expenses

( 2,609,891 )

Operating lease liabilities, net

2 unchanged sentences

Other liabilities

( 1,556,932 )

Net cash used in operating activities

3 unchanged sentences

Purchases of property and equipment

( 2,074,627 )

Investment in related party

( 1,500,000 )

Investment in joint venture

Issuance of note receivable, related party

( 1,049,248 )

Advances to related party

Net cash used in investing activities

( 5,045,405 )

Cash flows from financing activities:

2 unchanged sentences

Net repayments of loan payable

( 1,866,432 )

Net cash provided by financing activities

1 unchanged sentence

( 2,236,303 )

( 2,618,146 )

Effect of exchange rate on cash

5 unchanged sentences

Non-cash financing and investing activities:

Stock issued for acquisition of TerraData

See notes to consolidated financial statements.

Conversion of convertible debt

notes to audited consolidated financial statements.

DARKPULSE, INC.

Notes to the Consolidated

Financial Statements

For the Years ended

December 31, 2023 and 2022

1 – BASIS OF FINANCIAL STATEMENT PRESENTATION

and Description of Business

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

Its’ wholly-owned subsidiary, DarkPulse Technologies Inc.

(“DPTI”), originally started as a technology spinout from

the University of New Brunswick, Fredericton, Canada.

The Company’s security and monitoring systems will initially be delivered

in applications for border security, pipelines, the oil and gas industry and mine safety.

Current uses of fiber optic distributed sensor

technology have been limited to quasi-static, long-term structural health monitoring due to the time required to obtain the data and its

poor precision.

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

due to its greater resolution and accuracy.

Company’s subsidiaries consist of DarkPulse UK, Ltd which concentrates on the sale and engineering of distributed fiber

optic sensors;

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

ceased its business operations;

Remote Intelligence, LLC, a company headquartered in

Pennsylvania who provides unmanned aerial drone and unmanned ground crawler (UGC) services to a variety of clients from industrial

mapping and ecosystem services, to search and rescue, to pipeline security;

Wildlife Specialists, LLC, a company headquartered in

Pennsylvania who provides clients with comprehensive wildlife and environmental assessment, planning, and monitoring services;

TerraData Unmanned, PLLC, a company headquartered in Florida who custom manufactures NDAA compliant drones and unmanned ground

crawlers to meet the needs of its customers;

and DarkPulse Manufacturing formerly TJM Electronics West, Inc., a company

headquartered in Arizona who is a U.S.

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

advanced package and complex CCA and hardware.

Liquidation/winding

up of Optilan (UK) Limited

On May 3, 2023, Eversheds Sutherland (International)

LLP, a creditor of Optilan (UK) Limited, filed a petition to wind up (“Winding up Petition”) Optilan (UK) Limited, a wholly

owned subsidiary of the Company’s Subsidiary, Optilan HoldCo 3 Limited, and the matter was due to be heard in the Portsmouth Combined

Court Centre on June 28, 2023.

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

Audited Consolidated Financial Statements

For the Years ended December 31, 2024 and 2023

NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION

Organization and Description of Business

DarkPulse, Inc.

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

wholly- owned subsidiary, DarkPulse Technologies Inc.

(“DPTI”), originally started as a technology spinout from the University

of New Brunswick, Fredericton, Canada.

The Company’s security and monitoring systems will initially be delivered in applications

for border security, pipelines, the oil and gas industry and mine safety.

Current uses of fiber optic distributed sensor technology have

been limited to quasi-static, long-term structural health monitoring due to the time required to obtain the data and its poor precision.

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

resolution and accuracy.

The Company’s subsidiaries consist of:

DarkPulse, Inc., based in New York;

Terradata Unmanned PLLC, based in Florida;

Optilan India Pvt Ltd based in Navi-Mumbai and

Optilan Communications & Security Systems Ltd, based in Ankara Turkey.

Optilan India Pvt Ltd, operating in India, provides

project engineering & design, system provisioning and contract bid services for the Company globally.

Optilan Communications &

Security Systems Ltd, provides project engineering & design, system provisioning and contract bid services for the Company throughout

DarkPulse Manufacturing Inc., based in Arizona (formerly

TJM Electronics West, Inc.), is no longer providing products or services as a result of the Company’s relationship with Sanmina

Corporation who is handling both the design and manufacturing of the Company’s patented hardware.

Remote Intelligence, LLC and Wildlife Specialists,

LLC are no longer providing services as a result of redundant service offerings that are now being offered by TerraData Unmanned.

Liquidation/winding up of Optilan (UK) Limited

On May 3, 2023, Eversheds Sutherland

(International) LLP, a creditor of Optilan (UK) Limited, filed a petition to wind up (“Winding up Petition”) Optilan (UK)

Limited, a wholly owned subsidiary of the Company’s Subsidiary, Optilan HoldCo 3 Limited, and the matter was due to be heard in

the Portsmouth Combined Court Centre on June 28, 2023.

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”).

1 unchanged sentence

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

At the same time the court appointed the OR to

take the appointment as liquidator of Optilan (UK) Limited.

At the same time the court appointed

the OR to take the appointment as liquidator of Optilan (UK) Limited.

The OR has taken control of Optilan (UK) Limited’s assets.

ORs Office has initiated contact with Optilan but we still wait to receive details of the individual who will be taking the role of OR.

On July 3, 2023, Optilan (UK) Limited received

a letter from The Insolvency Service, an executive agency sponsored by the Department for Business and Trade located in the U.K.

to the letter of The Insolvency Services, the Company was required to provide information relating to Optilan (UK) Limited to the Official

Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official Receiver’s

Office to review the prospect of recovering the assets of Optilan (UK) Limited for the benefit of creditors.

The interview occurred July

The Company is an Unsecured creditor of Optilan

(UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany

relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known

for several months.

The Company has approximately $ 19.4 million intercompany payables due from Optilan (UK), which will increase the Company

liabilities for any obligations not repaid.

At the time of this filing the Company is still evaluating the full effects of the winding-up

order for liquidation and the material adverse effects it will have on the Company’s continued operations and ability to meet future

On August 9, 2023, Evelyn Partners

was appointed Joint Liquidator.

2 – SIGNIFICANT ACCOUNTING POLICIES

of the significant accounting policies consistently applied in the preparation of the accompanying financial statements are as follows:

of Presentation and Principles of Consolidation

The Company’s consolidated

financial statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

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

All material intercompany

balances and transactions have been eliminated in consolidation.

Our consolidated

financial statements as of December 31, 2022 and 2021 include the accounts of DarkPulse Inc.

and its subsidiaries:

Technologies Inc.

(“DPTI”), a New Brunswick, Canada corporation, a wholly owned subsidiary, incorporated December 16, 2010.

100% of DarkPulse Technology Holdings Inc., a New York corporation, incorporated July 6, 2017.

9, 2021, the Company entered into a Share Purchase Agreement with Optilan Guernsey Limited and Optilan Holdco 2 Limited (the “Sellers”),

pursuant to which the Company purchased from the Sellers all of the issued and outstanding equity interests of Optilan HoldCo 3 Limited,

a private company incorporated in England and Wales (“Optilan”) for £1.00.

In connection with the acquisition,

the Company acquired $14,828,459 in assets and assumed liabilities totaling $25,179,320.

In 2023, Optilan was deemed insolvent

by the entered liquidation.

August 30, 2021, the Company closed two separate Membership Interest Purchase Agreements 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 and $ 1,000,000 in exchange for 60 % ownership of each of RI and WS.

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 .

October 1, 2021 the Company entered into and closed the Membership Purchase Agreement 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 and $ 400,000 .

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

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

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

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

To date the ORs Office has initiated contact with Optilan but we still wait to receive details of the individual who will be taking the

On July 3, 2023, Optilan (UK) Limited

received a letter from The Insolvency Service, an executive agency sponsored by the Department for Business and Trade located in the U.K.

Pursuant to the letter of The Insolvency Services, the Company was required to provide information relating to Optilan (UK) Limited to

the Official Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official

Receiver’s Office to review the prospect of recovering the assets of Optilan (UK) Limited for the benefit of creditors.

The interview

occurred July 18, 2023.

The Company is an Unsecured creditor

of Optilan (UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several

intercompany relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may

not be known for several months.

The Company has approximately $19.4 million intercompany payables due from Optilan (UK), which will increase

the Company liabilities for any obligations not repaid.

At the time of this filing the Company is still evaluating the full effects of

the winding-up order for liquidation and the material adverse effects it will have on the Company’s continued operations and ability

to meet future obligations.

On August 9, 2023, Evelyn Partners was appointed

Joint Liquidator.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies

consistently applied in the preparation of the accompanying financial statements are as follows:

Basis of Presentation and Principles of Consolidation

The Company’s consolidated financial

statements are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

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

All material intercompany balances

and transactions have been eliminated in consolidation.

The Company evaluates its relationships

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

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

and to assess whether it is the primary beneficiary of such entities.

If the determination is made that the Company is the primary beneficiary,

then that entity is consolidated.

Use of Estimates

The preparation of the Company’s financial

statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and

liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of

revenues and expenses during the reporting period.

Significant estimates and assumptions reflected in these financial statements include,

but are not limited to, assumptions used to calculate derivative liabilities, revenue recognition and impairment of long-lived assets.

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes

to be reasonable under the circumstances.

On an ongoing basis, management evaluates its estimates when there are changes in circumstances,

facts and experience.

The preparation of the Company’s

financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of

assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported

amounts of revenues and expenses during the reporting period.

Significant estimates and assumptions reflected in these financial statements

include, but are not limited to, assumptions used to calculate derivative liabilities, revenue recognition and impairment of long-lived

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that

it believes to be reasonable under the circumstances.

On an ongoing basis, management evaluates its estimates when there are changes in

circumstances, facts and experience.

Changes in estimates are recorded in the period in which they become known.

Actual results could differ from those

considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents.

The Company places

its cash with high credit quality financial institutions.

The Company’s account at this institution is insured by the Federal Deposit

Insurance Corporation (“FDIC”) up to $250,000.

To reduce its risk associated with the failure of such a financial institution,

the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

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 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 consolidated financial statements and

related disclosures for the year ended December 31, 2023.

Actual results could

differ from those estimates.

The Company considers all highly liquid

investments with a maturity of three months or less when acquired to be cash equivalents.

The Company places its cash with high credit

quality financial institutions.

The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation

(“FDIC”) up to $250,000.

To reduce its risk associated with the failure of such a financial institution, the Company evaluates

at least annually the rating of the financial institution in which it holds deposits.

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

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

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 consolidated financial statements and related disclosures for the year ended December 31, 2024.

Each month, the Company reviews its

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

or perceived collection issues.

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

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

As of December 31, 2023 and 2022,

the Company determined that the allowance for doubtful accounts was $ 0

and $ 3,320,983 ,

respectively.

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

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 December 31, 2023 and 2022,

retainage receivable was $ 0 and $ 824,777 , respectively.

The retainage pertaining to Optilan UK was derecognized upon the Optilan

Currency Translation

The Company’s

reporting currency is US Dollars.

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

The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, Canadian Dollar (“CAD”)

as the functional currency.

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

perceived collection issues.

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

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

As of December 31, 2024 and 2023, the Company determined

that the allowance for doubtful accounts was $ 5,457 and $ 0 , respectively.

The allowance pertaining to Optilan UK was derecognized upon

the Optilan Liquidation.

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 December 31, 2024 and 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 US Dollars.

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.

of one of the Company’s subsidiaries is 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

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.

relevant translation rates are as follows:

for the year ended December 31, 2023 a closing rate at 1.2197

GBP, average rate at 1.2384

US$:GBP, and closing rate of 1.27

relevant translation rates are as follows:

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

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.

The relevant translation rates are as

for the year ended December 31, 2024 a closing rate at 1.2516 US$:

GBP, average rate at 1.23710

US$:GBP and for the Optilan acquisition closing rate at 1.375103 US$:

GBP, average rate at 1.2633 US$:GBP, and closing rate of 1.27

The relevant translation rates are as

for the year ended December 31, 2023 a closing rate at 1.2197 US$:

GBP, average rate at 1.2384 US$:GBP and closing rate at 1.27

Long-Lived Assets and Goodwill

The Company accounts for long-lived assets

in accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived

This accounting standard requires that long-lived assets be reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount may not be recoverable.

Recoverability of assets to be held and used is measured by

a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset.

carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the

carrying amount of the asset exceeds the fair value of the asset.

Indefinite-lived

intangible assets established in connection with business combinations consist of the tradename.

The impairment test for identifiable

indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value.

If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

accounts for goodwill and intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other .

Goodwill represents

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

ASC 350 requires

that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances

indicate that the fair value of an asset has decreased below its carrying value.

This guidance simplifies the accounting for goodwill

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

The quantitative

impairment test calculates any goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value,

but not to exceed the carrying amount of goodwill.

It is our practice, at a minimum, to perform a qualitative or quantitative goodwill

impairment test in the fourth quarter every year.

The Company accounts for long-lived

assets in accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived Assets.

This accounting standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate

that the carrying amount may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying

amount of an asset to future undiscounted net cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds

its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the

fair value of the asset.

Indefinite-lived intangible assets

established in connection with business combinations consist of the tradename.

The impairment test for identifiable indefinite-lived intangible

assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value.

If the carrying value exceeds

its fair value, an impairment loss is recognized in an amount equal to that excess.

The Company accounts for goodwill and

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

Goodwill represents the excess of the purchase

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

ASC 350 requires that goodwill and other

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

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

This guidance simplifies the accounting for goodwill impairment by removing

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

The quantitative impairment test calculates

any goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying

amount of goodwill.

It is our practice, at a minimum, to perform a qualitative or quantitative goodwill impairment test in the fourth

quarter every year.

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

During the year ended December 31, 2022, management

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

may not be recoverable.

The qualitative assessment was primarily due to underperformance of the Company’s subsidiaries as compared

to the Company’s initial projections at the time of each respective acquisition.

Specifically, in 2022 the Company determined that

certain revenue targets would not be achieved and anticipated costs to complete projects were higher than forecasted.

As such, the Company

compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $ 12,222,598 pertaining to impairment

and goodwill in the consolidated statements of operations.

The Company recorded impairment of the indefinite-lived intangible asset of

$2,703,456, and impairment of goodwill of $9,519,143.

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

Refer to Note 7.

During the year ended December 31, 2023, as a

result of Optilan Liquidation as described in Note 1, management determined that certain events and circumstances occurred that indicated

that the carrying amount of the Company’s reporting unit may not be recoverable.

The qualitative assessment was primarily due to

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

potential winding up.

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

loss of $ 6,948,349

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

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 December 31, 2023.

and Equipment

and equipment are carried at historical cost less accumulated depreciation.

Depreciation is based on the estimated service lives of the

depreciable assets and is calculated using the straight-line method.

Expenditures that increase the value or productive capacity of assets

are capitalized.

Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they

are removed from service.

When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and

related accumulated depreciation are removed from the accounts and any gain or loss is included in operations.

Repairs and maintenance

are expensed as incurred.

During the year ended December 31,

2023, as a result of Optilan Liquidation as described in Note 1, management determined that certain events and circumstances occurred

that indicated that the carrying amount of the Company’s reporting unit may not be recoverable.

The qualitative assessment was primarily

due to the customer contracts held by Optilan (UK) Limited and the associated revenue projections by the UK subsidiary that is subject

to the potential winding up.

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

impairment loss of $ 6,948,349 pertaining to impairment and goodwill and intangible assets in the consolidated statements of operations.

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 December 31, 2023.

Property and Equipment

Property and equipment are carried

at historical cost less accumulated depreciation.

Depreciation is based on the estimated service lives of the depreciable assets and is

calculated using the straight-line method.

Expenditures that increase the value or productive capacity of assets are capitalized.

depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they are removed from service.

When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation

are removed from the accounts and any gain or loss is included in operations.

Repairs and maintenance are expensed as incurred.

The estimated

useful lives of property and equipment are generally as follows:

Schedule of estimated

Schedule of estimated useful lives of property and equipment

Office furniture and fixtures

2 unchanged sentences

Motor vehicles

The Company’s

revenues are generated primarily from the sale of our services, which consist primarily of advanced technology solutions for integrated

communications and security systems, as well as habitat management.

The Company’s sales of products are primarily generated from

our TJM subsidiaries.

Sales of products and services are separate from one another.

At contract inception, we assess the goods and services

promised in the contract with customers and identify a performance obligation for each.

To determine the performance obligation, we consider

all products and services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices.

The timing of satisfaction of the performance obligation is not subject to significant judgment.

We measure revenue as the amount of consideration

expected to be received in exchange for transferring goods and services.

We recognize service revenues as the performance obligations

are met, which is generally as milestones are satisfied over time.

We generally recognize product revenues at the time of shipment, provided

that all other revenue recognition criteria have been met.

recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which

we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines

are within the scope of ASC 606, we perform the following five steps:

Revenue Recognition

The Company’s revenues are generated

primarily from the sale of our services, which consist primarily of advanced technology solutions for integrated communications and security

systems, as well as habitat management.

The Company’s sales of products are primarily generated from our TJM subsidiaries.

of products and services are separate from one another.

At contract inception, we assess the goods and services promised in the contract

with customers and identify a performance obligation for each.

To determine the performance obligation, we consider all products and services

promised in the contract regardless of whether they are explicitly stated or implied by customary business practices.

The timing of satisfaction

of the performance obligation is not subject to significant judgment.

We measure revenue as the amount of consideration expected to be

received in exchange for transferring goods and services.

We recognize service revenues as the performance obligations are met, which

is generally as milestones are satisfied over time.

We generally recognize product revenues at the time of shipment, provided that all

other revenue recognition criteria have been met.

The Company recognizes revenue when

its customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in

exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines are within the scope

of ASC 606, we perform the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the

performance obligations in the contract;

(ii) identify the performance obligations

in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance

obligations in the contract;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) we satisfy a performance obligation.

The five-step model is applied

to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred

to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services

promised within each contract and determine those that are performance obligations and assess whether each promised good or service is

We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation

when (or as) the performance obligation is satisfied.

considers each individual sale of service contract to be its own performance obligation.

Services in the contract are highly interdependent

and interrelated, and the successful completion of each milestone is necessary for the overall success of the contract.

Therefore, each

milestone is not separately identifiable from other promises in the contract, and not distinct and ultimately not individual performance

records revenue over time using the input measure as it is the most faithful depiction of an entity’s performance because it directly

measures the value of the goods and services transferred to the customer.

The Company utilizes the Right to Invoice for these contracts,

as the pricing structure is based on various milestones that are specified in the contract.

These milestones include Construction Phase

Plan, Start of the construction phase, installation phase, site surveys, fiber splicing, recoveries, and closeouts.

There are specified

payments associated with these milestones in the contract, and the value allocated is commensurate with work done.

In the event that

there are advances such as upfront retainers and not based on the value, those are recorded as contract liabilities.

The five-step model is applied to contracts when it is probable

that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the customer.

inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract

and determine those that are performance obligations and assess whether each promised good or service is distinct.

We then recognize revenue

in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation

is satisfied.

The Company considers each individual

sale of service contract to be its own performance obligation.

Services in the contract are highly interdependent and interrelated, and

the successful completion of each milestone is necessary for the overall success of the contract.

Therefore, each milestone is not separately

identifiable from other promises in the contract, and not distinct and ultimately not individual performance obligations.

The Company records revenue over time

using the input measure as it is the most faithful depiction of an entity’s performance because it directly measures the value of

the goods and services transferred to the customer.

The Company utilizes the Right to Invoice for these contracts, as the pricing structure

is based on various milestones that are specified in the contract.

These milestones include Construction Phase Plan, Start of the construction

phase, installation phase, site surveys, fiber splicing, recoveries, and closeouts.

There are specified payments associated with these

milestones in the contract, and the value allocated is commensurate with work done.

In the event that there are advances such as upfront

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

In accordance with ASU No.

2016-12, Revenue

from Contracts with Customers (Topic 606):

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

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

Revenue from Contracts with Customers (Topic 606):

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

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

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

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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

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.

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are provided over the term of the customer contract.

revenues consists primarily of materials and overhead costs incurred internally and amounts incurred to contract manufacturers to produce

our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer service

and third-party original equipment manufacturer costs to provide continuing support to our customers.

Cost of revenues also includes direct

labor attributable to revenue service arrangements.

Concentration of

instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents.

The Company has not experienced any losses related to its cash and does not believe that it is subject to unusual credit risk beyond

the normal credit risk associated with commercial banking relationships.

As of December 31, 2022, one customer accounted for

38 % of gross accounts receivable.

As of December 31, 2023,

one customer accounted for 39 % of gross accounts receivable.

accounts for its leases under ASC 842, Leases .

Under this guidance, arrangements meeting the definition of a lease are classified

as operating or financing leases and are recorded on the consolidated balance sheet as both a right of use asset and lease liability,

calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental

borrowing rate.

Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized

Cost of Revenues

Cost of revenues consists primarily

of materials and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and

other implementation costs incurred to install our products and train customer personnel, and customer service and third- party original

equipment manufacturer costs to provide continuing support to our customers.

Cost of revenues also includes direct labor attributable

to revenue service arrangements.

Concentration of Credit Risk

Financial instruments that potentially

subject the Company to concentrations of credit risk consist principally of cash and cash equivalents.

The Company has not experienced

any losses related to its cash and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated

with commercial banking relationships.

As of December 31, 2024, one customer accounted for 39 % of gross accounts receivable.

The Company accounts for its leases

under ASC 842, Leases .

Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing

leases and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting

fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate.

Lease liabilities

are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term.

For operating

leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease

For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense

over the lease term.

For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line

rent expense over the lease term.

For finance leases, interest on the lease liability and the amortization of the right of use asset results

in front-loaded expense over the lease term.

Variable lease expenses are recorded when incurred.

In calculating

the right of use asset and lease liability, the Company has elected to combine lease and non-lease components.

The Company excludes short-term

leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on

a straight-line basis over the lease term.

Financial Instruments

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

conversion feature meets the definition of a liability and, if so, whether to bifurcate the conversion feature and account for it as a

separate derivative liability.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is

initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements

of operations.

For stock-based derivative financial instruments, the Company uses a lattice model, in accordance with ASC 815-15 , Derivative

and Hedging, to value the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative

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

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

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

Value of Financial Instruments

In calculating the right of use asset

and lease liability, the Company has elected to combine lease and non-lease components.

The Company excludes short-term leases having

initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line

basis over the lease term.

Derivative Financial Instruments

The Company evaluates the embedded

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

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

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

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

For stock-based

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

the derivative instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether

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

Derivative instrument

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

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

Fair Value of Financial Instruments

The Company measures its financial

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

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

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

The Company utilized the market data of

similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including

assumptions about risk and the risks inherent in the inputs to the valuation technique.

These inputs can be readily observable,

market corroborated, or generally unobservable.

The Company classifies fair value balances based on the observability of those

FASB ASC 820 established a fair value hierarchy that prioritizes the inputs used to measure fair value.

The hierarchy gives

the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the

lowest priority to unobservable inputs (level 3 measurement) as follows:

– Quoted prices are available in active markets for identical assets or liabilities as of the reporting date.

Active markets are

those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing

Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

– Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable

as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies.

models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time

value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic

Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be

derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

– Pricing inputs include significant inputs that are generally less observable from objective sources.

These inputs may be used

with internally developed methodologies that result in management’s best estimate of fair value.

The Company’s

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

uses the equity method to account for investments in which it has the ability to exercise significant influence over the investee’s

operating and financial policies, or in which its holds a partnership or limited liability company interest in an entity with specific

ownership accounts, unless it has virtually no influence over the investee’s operating and financial policies.

The Company follows

the guidance in ASC 323-10-30-2, Joint Ventures, which prescribes the use of the equity method for investments in joint ventures where

the Company has significant influence.

Equity method investments are recorded at cost and are adjusted to recognize (1) the Company’s

share, based on percentage ownership or other contractual basis, of the investee’s net income or loss after the date of investment,

(2) amortization of the recorded investment that exceeds the Company’s share of the book value of the investee’s net assets,

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

Gain (loss) on equity investment includes realized gains or losses upon the sale of the investment and are included as other income (expense)

in the consolidated statements of operations and comprehensive (loss).

323-10-30-2, Joint Ventures are accounted for using the equity method, in which the Company initially records its investment at cost,

including transaction costs.

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

balance sheet of an investor as a single amount.

However, any difference between the cost of the investment and the underlying equity

in net assets of an investee — commonly referred to as a basis difference — should be accounted for as if the investee were

a consolidated subsidiary.

accounts for income taxes pursuant to the provision of ASC 740-10, (“ASC 740-10”) which requires, among other things, an asset

and liability approach to calculating deferred income taxes.

The asset and liability approach requires the recognition of deferred tax

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

of assets and liabilities.

A valuation allowance is provided to offset any net deferred tax assets for which management believes it is

more likely than not that the net deferred asset will not be realized.

follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions.

When tax returns are filed, there may be

uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained.

In accordance with the

guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all

available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the

resolution of appeals or litigation processes, if any.

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

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

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

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

in the inputs to the valuation technique.

These inputs can be readily observable, market corroborated, or generally unobservable.

Company classifies fair value balances based on the observability of those inputs.

FASB ASC 820 established a fair value hierarchy that

prioritizes the inputs used to measure fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets

for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement) as follows:

Level 1 – Quoted prices are available

in active markets for identical assets or liabilities as of the reporting date.

Active markets are those in which transactions for the

asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 1 primarily consists

of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are

other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported

date and includes those financial instruments that are valued using models or other valuation methodologies.

These models are primarily

industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors,

and current market and contractual prices for the underlying instruments, as well as other relevant economic measures.

Substantially all

of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data

or are supported by observable levels at which transactions are executed in the marketplace.

Instruments in this category generally include

non- exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include

significant inputs that are generally less observable from objective sources.

These inputs may be used with internally developed methodologies

that result in management’s best estimate of fair value.

The Company’s derivative liability is a

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

Equity Investments

The Company uses the equity method

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

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

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

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

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

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

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

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

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

Gain (loss) on equity investment

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

of operations and comprehensive (loss).

Per ASC 323-10-30-2, Joint Ventures

are accounted for using the equity method, in which the Company initially records its investment at cost, including transaction costs.

Under the equity method, an investment in common stock and in-substance common stock is presented on the balance sheet of an investor

as a single amount.

However, any difference between the cost of the investment and the underlying equity in net assets of an investee

— commonly referred to as a basis difference — should be accounted for as if the investee were a consolidated subsidiary.

The Company accounts for income taxes

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

to calculating deferred income taxes.

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

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

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

the net deferred asset will not be realized.

The Company follows the provision of

ASC 740-10 related to Accounting for Uncertain Income Tax Positions.

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

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

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

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

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

processes, if any.

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

Tax positions

that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent

likely of being realized upon settlement with the applicable taxing authority.

The portion of the benefit associated with tax positions

taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying

balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

believes its tax positions are all more likely than not to be upheld upon examination.

As such, the Company has not recorded a liability

for uncertain tax benefits.

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

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

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

Tax positions that meet the more likely

than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized

upon settlement with the applicable taxing authority.

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

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

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

The Company believes its tax positions

are all more likely than not to be upheld upon examination.

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

The Company has adopted ASC 740-10-25,

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

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

completion and examination by a taxing authority without being legally extinguished.

For tax positions considered effectively

settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not

to be sustained based solely on the basis of its technical merits and the statute of limitations remains open.

The federal and state

income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years

after they are filed.

The Company's

subsidiaries were incorporated in 2017, and tax returns have not yet been filed.

The Company does not anticipate a tax liability

for the years 2023 and 2022, 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.

For tax positions considered effectively settled,

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

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

The federal and state income tax returns

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

The Company's U.S.

subsidiaries were

incorporated in 2017.

The Company does not anticipate a tax liability for the years 2024 and 2023, 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

Non-controlling

interests are classified as a separate component of equity in the Company's consolidated balance sheets and statements of changes in stockholders’

Non-controlling interests are classified

as a separate component of equity in the Company's consolidated balance sheets and statements of changes in stockholders’ equity.

Net income (loss) and comprehensive income (loss) attributable to non-controlling interests are reflected separately from consolidated

8 unchanged sentences

via its subsidiaries TerraData, Remote Intelligence and Wildlife Specialists.

the years ended December 31, 2023 and 2022, the Company recorded a loss of $ 902,156

and $ 238,661

respectively, attributable to non-controlling interests.

During the years ended December 31,

2024 and 2023, the Company recorded a loss of $ 10,404 and $ 902,156 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.

During the years ended December 31, 2023 and 2022, the Company’s only element of other comprehensive loss

was foreign currency translation.

compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the

consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments

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

The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date

fair value of the award.

to ASC Topic 718, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement

date.” The expense is recognized over the vesting period of the award.

Until the measurement date is reached, the total amount of

compensation expense remains uncertain.

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

reporting date.

Further, ASC Topic 718, provides guidance about which changes to the terms or conditions of a share-based payment award

require an entity to apply modification accounting in Topic 718, such as the repricing of share options, which would revalue those options

and the accounting for the cancellation of an equity award whether a replacement award or other valuable consideration is issued in conjunction

with the cancellation.

Comprehensive loss includes net loss

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

During the years ended December 31, 2024 and 2023, the Company’s only element of other comprehensive loss was foreign currency translation.

Stock-based Compensation

Stock-based compensation is accounted

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

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

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

The ASC also requires measurement

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

Pursuant to ASC Topic 718, for share-based

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

is recognized over the vesting period of the award.

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

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

Topic 718, provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply

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

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

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

Per Common Share

The Company accounts for earnings per share pursuant

to ASC 260, Earnings per Share , which requires disclosure on the financial statements of "basic" and "diluted"

earnings (loss) per share.

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

of common shares outstanding for the year.

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

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

Loss Per Common Share

accounts for earnings per share pursuant to ASC 260, Earnings per Share , which requires disclosure on the financial statements

of "basic" and "diluted" earnings (loss) per share.

Basic earnings (loss) per share are computed by dividing net income

(loss) by the weighted average number of common shares outstanding for the year.

Diluted earnings (loss) per share is computed by dividing

net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to

stock options and warrants for each year.

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

Potentially dilutive items outstanding as of

December 31, 2023 and 2022 are as follows:

Schedule of anti dilutive shares

dilutive items outstanding as of December 31, 2024 and 2023 are as follows:

Schedule of anti dilutive securities

Convertible notes

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Recently Issued Accounting Pronouncements

In November 2021, the FASB issued ASU No.

2021-08, Business

Combinations (Topic 805):

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

Accounting Standards Board.

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

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

The update will generally result

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

the acquisition date rather than at fair value.

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

consolidated financial statements upon the adoption of this ASU.

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

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

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

As a result, entities will not separately

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

certain other conditions are met.

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

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

ASU 2020-06 is applicable for fiscal years

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

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

financial statements and related disclosures.

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

Instruments – Credit Losses (Topic 326):

On January 1, 2023, the Company adopted

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

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

This standard

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

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

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

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

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

for credit losses.

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

consolidated financial statements and related disclosures.

Management does not believe that any other recently

issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.

As new accounting

pronouncements are issued, the Company will adopt those that are applicable

3 – LIQUIDITY AND GOING CONCERN

Company generated net losses of $ 21,723,043 and

during the years ended December 31, 2023 and 2022, respectively, and net cash used in operating activities of $ 5,653,214

and $ 21,738,542 ,

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

loss (“CECL”) methodology.

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

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

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

unfunded commitments to extend credit.

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

collected by using an allowance for credit losses.

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

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

Management does not believe that any

other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.

As new accounting pronouncements are issued, the Company will adopt those that are applicable

NOTE 3 – LIQUIDITY AND GOING CONCERN

The Company generated net losses of $ 3,893,859 and

$ 21,723,043 during the years ended December 31, 2024 and 2023, respectively, and net cash used in operating activities of $ 1,514,351 and

$ 5,653,215 , respectively.

1 unchanged sentence

and an accumulated deficit of $ 71,259,677 .

As of December 31, 2023, the Company had $ 11,912 of

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

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

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

The Company is seeking to raise additional capital

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

and begin generating revenues.

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

offerings or alternative financing arrangements or expansion of its operations.

The accompanying consolidated financial statements do

not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Management is actively

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

date of these consolidated financial statements.

As of December 31, 2024, the Company had $ 86,531 of cash.

The Company will require additional

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

These factors,

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

Company’s ability to continue as a going concern.

The Company is seeking to raise additional capital principally through private

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

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

financing arrangements or expansion of its operations.

The accompanying consolidated financial statements do not include any adjustments

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

Management is actively pursuing additional sources

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

financial statements.

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

The following

table is a summary of the Company’s timing of revenue recognition for the years ended December 31, 2023 and 2022:

Schedule of timing of revenue

NOTE 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 (1) 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 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 actual values as of the purchase date.

The excess of the consideration transferred over

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

The following table summarizes the acquired assets

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

Schedule of acquired assets and assumed liabilities

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 actual values as of September 11, 2024,

and measurement period adjustments resulting from the Optilan India fiscal audit period April 2023 – March 2024 which was

completed in December 2024 are as follows:

Schedule of fair value assets acquired and liabilities

(Amounts in US$’s)

Amounts Recognized as of Acquisition Date

Accounts receivable

Other current assets

Property & equipment

Assumed liabilities

Gain on acquisition

Total Consideration for 100% of equity interests

NOTE 5 – REVENUE

The following table is a summary of the Company’s

timing of revenue recognition for the years ended December 31, 2024 and 2023:

Schedule of timing of revenue recognition

Services and products transferred at a point in time

1 unchanged sentence

Total revenue

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

flows are affected by economic factors.

by source consisted of the following for the years ended December 31, 2023 and 2022:

Schedule of revenue

The Company disaggregates revenue by

source and geographic destination to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic

Revenue by source consisted of the following

for the years ended December 31, 2024 and 2023:

Schedule of revenue by source

Total revenue

by geographic destination consisted of the following for the for the years ended December 31, 2023 and 2022:

Revenue by geographic destination consisted of

the following for the for the years ended December 31, 2024 and 2023:

Schedule of revenue by geographic destination

3 unchanged sentences

Total revenue

Contract revenue is recognized over time using

the cost-to-cost measure of progress for fixed price contracts.

The cost-to-cost measure of progress best depicts the continuous transfer

of control of goods or services to the customer.

The contractual terms provide that the customer compensates the Company for services

Contract costs include all direct materials, labor

and subcontracted costs, as well as indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and

the costs of capital equipment.

Contract revenue is recognized over

time using the cost-to-cost measure of progress for fixed price contracts.

The cost-to-cost measure of progress best depicts the continuous

transfer of control of goods or services to the customer.

The contractual terms provide that the customer compensates the Company for

services rendered.

Contract costs include all direct materials,

labor and subcontracted costs, as well as indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs

and the costs of capital equipment.

The cost estimation and review process for recognizing revenue over time under the cost-to- cost method

10 unchanged sentences

Performance Obligations

A performance obligation is a contractual promise

to transfer a distinct good or service to the customer and is the unit of account under Accounting Standards Codification (“ASC”)

A performance obligation is a contractual

promise to transfer a distinct good or service to the customer and is the unit of account under Accounting Standards Codification (“ASC”)

The transaction price of a contract is allocated to distinct performance obligations and recognized as revenue when or as the

7 unchanged sentences

obligations are completed within one year.

When more than one contract is entered into with

a customer on or close to the same date, the Company evaluates whether those contracts should be combined and accounted for as a single

contract as well as whether those contracts should be accounted for as more than one performance obligation.

This evaluation requires

significant judgment and is based on the facts and circumstances of the various contracts, which could change the amount of revenue and

profit recognition in a given period depending upon the outcome of the evaluation.

As of December 31, 2022, the Company had backlog

of approximately $7,079,000.

When more than one contract is entered

into with a customer on or close to the same date, the Company evaluates whether those contracts should be combined and accounted for

as a single contract as well as whether those contracts should be accounted for as more than one performance obligation.

This evaluation

requires significant judgment and is based on the facts and circumstances of the various contracts, which could change the amount of revenue

and profit recognition in a given period depending upon the outcome of the evaluation.

As of December 31, 2024, the Company

had backlog of approximately $0.

During the year ended December 31, 2023, there was approximately $0 in revenue recognized pertaining

to backlog as of December 31, 2021.

to any backlog.

Contract Assets and Liabilities

The Company bill its customers based on contractual

terms, including, milestone billings based on the completion of certain phases of the work.

Sometimes, billing occurs after revenue recognition,

resulting in unbilled revenue, which is accounted for as a contract asset.

Sometimes the Company receives advances payments from our

customers before revenue is recognized, resulting in deferred revenue, which is accounted for as a contract liability.

Contract assets in the consolidated balance sheets

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

Contract assets consist of the following:

Schedule of contract assets and liabilities

Costs and estimated earnings in excess of billings on uncompleted contracts

Total contract assets

Contract liabilities consist of the following:

Billings in excess of costs and estimated earnings on uncompleted contracts

Total contract liabilities

Contract assets and liabilities on December 31, 2023 are $ 0

upon the deconsolidation related to the Optilan liquidation.

The following table is a summary of the Company’s

activity of contract liabilities related to contracts with customers.

Rollforward of contract liabilities

The Company bill its customers based

on contractual terms, including, milestone billings based on the completion of certain phases of the work.

Sometimes, billing occurs after

revenue recognition, resulting in unbilled revenue, which is accounted for as a contract asset.

Sometimes the Company receives advances

payments from our customers before revenue is recognized, resulting in deferred revenue, which is accounted for as a contract liability.

Contract assets in the consolidated

balance sheets represents costs and estimated earnings in excess of billings, which arise when revenue has been recorded but the amount

has not been billed.

Contract assets and liabilities on December 31,

2023 are $ 0 upon the deconsolidation

related to the Optilan liquidation.

The following table is a summary of the Company’s activity of contract liabilities related

to contracts with customers.

Schedule of roll forward of contract liabilities

Balance at December 31, 2021

7 unchanged sentences

Variable Consideration

Transaction pricing for the Company’s contracts

may include variable consideration, such as unapproved change orders, claims, incentives and liquidated damages.

Management estimates

variable consideration for a performance obligation utilizing estimation methods that best predict the amount of consideration to which

the Company will be entitled.

Variable consideration is included in the estimated transaction price to the extent it is probable that

a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration

Transaction pricing for the Company’s

contracts may include variable consideration, such as unapproved change orders, claims, incentives and liquidated damages.

estimates variable consideration for a performance obligation utilizing estimation methods that best predict the amount of consideration

to which the Company will be entitled.

Variable consideration is included in the estimated transaction price to the extent it is probable

that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration

Management’s estimates of variable consideration and determination of whether to include estimated amounts in transaction

7 unchanged sentences

NOTE 6 – ACCOUNTS RECEIVABLE

receivable consisted of the following:

Schedule of accounts

Accounts receivable consisted of the following:

Schedule of accounts receivable

Accounts receivable

Allowance for doubtful accounts

( 3,320,983 )

Accounts receivable, net

6 – PROPERTY AND EQUIPMENT, NET

and equipment, net consisted of the following:

Schedule of property

and equipment, net

NOTE 7 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the

Schedule of property and equipment

Property and equipment

2 unchanged sentences

Less - accumulated depreciation

( 2,055,484 )

Property and equipment, net

expenses was $ 508,935 and $ 1,331,972 for the years ended December 31, 2023 and 2022, respectively.

7 - GOODWILL AND INTANGIBLE ASSETS

The following

is a summary of activity of goodwill for the years ended December 31, 2023 and 2022:

Schedule of changes in carrying amount of goodwill

Depreciation expenses was $ 128,489 and $ 523,147 for the years

ended December 31, 2024 and 2023, respectively.

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

The following is a summary of activity of goodwill for the years ended December 31, 2024 and 2023:

Schedule of goodwill activity

Balances at December 31, 2023

( 9,519,143 )

Foreign exchange translation

( 1,107,205 )

Balances at December 31, 2024

Impairment of goodwill

( 6,948,349 )

Foreign currency translation

Balances at December 31, 2023

Intangible Assets, Net

In connection with the Optilan acquisition, the

Company recognized an intangible asset, a trade name, of $4,033,638.

The trade name has a useful life of 25 years.

During the Company’s impairment analysis

at December 31, 2022 (see Note 2), the Company recorded impairment of the trade name of $2,703,456.

The following is a summary of intangible assets,

Summary of intangible assets

The following is a summary of intangible assets, net:

Schedule of intangible assets

Trade name per business combination

( 3,059,716 )

( 2,703,456 )

accumulated amortization

1 unchanged sentence

Intangible assets, net

Amortization expense was $ 34,070 and

$ 161,346 for the years ended December 31, 2023 and 2022, respectively.

- Intrusion Detection Intellectual Property

relies on patent laws and restrictions on disclosure to protect its intellectual property rights.

As of December 31, 2023 and 2022, 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).

issued patents cover a System and Method for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor,

and a Flexible Fiber Optic Deformation System Sensor and Method.

Maintenance of intellectual property rights and the protection thereof

is important to our business.

Any patents that may be issued may not sufficiently protect the Company's intellectual property and third

parties may challenge any issued patents.

Other parties may independently develop similar or competing technology or design around any

patents that may be issued to the Company.

The Company cannot be certain that the steps it has taken will prevent the misappropriation

of its intellectual property, particularly in foreign countries where the laws may not protect proprietary rights as fully as in the United

Further, the Company may be required to enforce its intellectual property or other proprietary rights through litigation, which,

regardless of success, could result in substantial costs and diversion of management's attention.

Additionally, there may be existing

patents of which the Company is unaware that could be pertinent to its business, and it is not possible to know whether there are patent

applications pending that the Company's products might infringe upon, since these applications are often not publicly available until

a patent is issued or published.

years ended December 31, 2023 and 2022, the Company had patent amortization costs on its intrusion detection technology totaling $ 14,212

Amortization expense was $ 0 and $ 34,070 for the years ended December

31, 2024 and 2023, respectively.

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

issued patents cover a System and Method for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor,

and a Flexible Fiber Optic Deformation System Sensor and Method.

Maintenance of intellectual property rights and the protection thereof

is important to our business.

Any patents that may be issued may not sufficiently protect the Company's intellectual property and third

parties may challenge any issued patents.

Other parties may independently develop similar or competing technology or design around any

patents that may be issued to the Company.

The Company cannot be certain that the steps it has taken will prevent the misappropriation

of its intellectual property, particularly in foreign countries where the laws may not protect proprietary rights as fully as in the United

Further, the Company may be required to enforce its intellectual property or other proprietary rights through litigation, which,

regardless of success, could result in substantial costs and diversion of management's attention.

Additionally, there may be existing

patents of which the Company is unaware that could be pertinent to its business, and it is not possible to know whether there are patent

applications pending that the Company's products might infringe upon, since these applications are often not publicly available until

a patent is issued or published.

following is a summary of the DPTI patents as of December 31, 2023 and 2022:

Patents - Intrusion Detection Intellectual

The Company relies on patent laws and

restrictions on disclosure to protect its intellectual property rights.

As of December 31, 2024 and 2023, the Company held three U.S.

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

of maintenance fees).

The DPTI issued patents cover a System

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

Deformation System Sensor and Method.

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

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

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

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

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

Further, the Company may be required

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

costs and diversion of management's attention.

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

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

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

For the years ended December 31, 2024 and 2023,

the Company had patent amortization costs on its intrusion detection technology totaling $ 51,028 and $ 14,212 , respectively.

Patents costs

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

The DPTI issued patents cover a System

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

Deformation System Sensor and Method.

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

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

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

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

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

Further, the Company may be required

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

costs and diversion of management's attention.

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

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

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

The following is a summary of the DPTI patents

as of December 31, 2024 and 2023:

Schedule of patents

1 unchanged sentence

expected amortization of patents is as follows:

Schedule of future amortization of intangible assets

Schedule of future expected amortization of patents

As of December 31,

Total patents

8 – JOINT VENTURE

On September 9, 2022, the Company entered into

a Joint Venture Agreement with Neural Signals Inc, (“NSI”), for the purpose of developing, marketing and selling products

NOTE 9 – JOINT VENTURE

On September 9, 2022, the Company entered

into a Joint Venture Agreement with Neural Signals Inc, (“NSI”), for the purpose of developing, marketing and selling products

and services based on the patents issued to NSI.

4 unchanged sentences

under ASC 323-10-30-2.

During the year ended

December 31, 2023, the Company contributed $ 113,124 to the joint venture and recorded a loss on the equity investment of $ 159,849 .

the year ended December 31, 2022, the Company contributed $ 103,505 to the joint venture and recorded a loss on the equity investment

of $ 51,753 .

9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consists of the following as of December 31, 2023 and December 31, 2022:

Schedule of accounts

payable and accrued expenses

During the year ended December 31, 2024, the Company

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

During the year ended December 31, 2023, the Company

contributed $ 113,125 to the joint venture and recorded a loss on the equity investment of $ 159,849 .

NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED

Accounts payable and accrued expenses consists

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

Schedule of accounts payable and accrued expenses

Accounts payable

1 unchanged sentence

Total accounts payable and accrued expenses

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

The valuation result generated by this

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

The values of the common

stock used were based on the price at the date of issue of the debt security as of December 31, 2023 and 2022.

In 2023 management determined

the expected volatility of 106.90%, a risk-free rate of interest of 5.48%, and contractual lives of the debt of three months.

management determined the expected volatility of 140.30%, a risk-free rate of interest of 4.73%, and contractual lives of the debt of

three months.

Management made the determination to use an expected life rather than contractual life for the calculations for the matured

debt as of December 31, 2023 and 2022.

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

NOTE 11 – DEBT

Convertible Notes

The Company uses the Black-Scholes

Model to calculate the derivative value of its convertible debt.

The valuation result generated by this pricing model is necessarily driven

by the value of the underlying common stock incorporated into the model.

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

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

In 2023 management determined the expected volatility of 106.90 %,

a risk-free rate of interest of 5.48 %, and contractual lives of the debt of three months.

In 2022 management determined the expected volatility

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

Management made the determination

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

On August 7, 2023, the Company entered

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

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

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

The Company has reserved a sufficient number of shares of common

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

On September 29, 2023, the Company

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

The note bears interest at a rate of

1 unchanged sentence

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

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

with the terms.

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

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

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

a discount of 39 %.

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

in accordance with the terms (see Note 15).

December 4, 2023, the Company entered into a convertible note for a principal of $ 51,150 , which was funded on December 7, 2023.

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

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

a discount of 39 %.

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

in accordance with the terms.

of December 31, 2023 and, 2022, there was $ 166,650 and

convertible debt principal outstanding.

During the year ended December 31, 2023 and 2022, $ 12,025

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

(see Note 15).

On December 4, 2023, the Company entered

into a convertible note for a principal of $ 51,150 , which was funded on December 7, 2023.

The note bears interest at a rate of 10 % per

annum and matures after one year.

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

The Company has reserved

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

As of December 31, 2024 and, 2023,

there was $ 0 and $ 166,650 of convertible debt principal outstanding.

During the year ended December 31, 2024 and 2023, $ 0 and $ 12,025

of the debt discount was amortized.

The summary of convertible notes

The summary of convertible notes are:

Schedule of convertible notes

2 unchanged sentences

Convertible notes, net

The table below details the Company's

outstanding convertible notes and related derivative liability:

Outstanding convertible notes and derivative liability

table below details the Company's outstanding convertible notes and related derivative liability:

Schedule of outstanding convertible notes and derivative liability

Derivative Liability

1800 Diagonal Lending

During the years ended December 31,

2023 and 2022, change in fair value of the derivative liability was $167,582 and $227,286, respectively.

The following is a summary of

the derivative liability:

During the years ended December 31, 2024 and

2023, change in fair value of the derivative liability was $(45,268) and $167,582, respectively.

The following is a summary of the derivative

Schedule of derivative liability

Balances at December 31, 2021

Change in fair value

Derivative Liability

Balances at December 31, 2023

4 unchanged sentences

Balances at December 31, 2024

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

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

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

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

will be due and payable.

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

The GS Note is

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

Upon the occurrence of an “Event of Default,”

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

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

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

As of December 31, 2023 and 2022, $ 1,923,868 and $ 2,000,000 remains outstanding.

As of December 31, 2023, the GS Note is in default.

The Company’s

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

loans, lines of credit and other advances.

Notes Payable

On August 27, 2024, the Company entered into

a promissory note for a principal of $ 67,200 , which was funded on August 30, 2024.

The note bears interest at a rate of 12 % per annum

and matures after nine months.

On November 20, 2024, the Company entered

into a promissory note for a principal of $ 67,860 , which was funded on December 2, 2024.

The note bears interest at a rate of 15 % per

annum and matures after nine months.

Loans Payable

The Company’s RI and WS subsidiaries have

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

of credit and other advances.

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

The following is a summary

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

Schedule of loans payable

The following is a summary of the loans

payable at December 31, 2024 and 2023:

Schedule of loans

RI - line of credit

2 unchanged sentences

WS - Short-term loans

OPT – Optilan Communications & Security Ltd

Loans payable, current

4 unchanged sentences

Loans payable, non-current

11 – SECURED DEBENTURE

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

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

On April 24, 2017 DPTI issued a replacement secured term

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

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

1% per annum.

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

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

NOTE 12 – SECURED DEBENTURE

DPTI issued a convertible Debenture

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

on December 16, 2010, the date of the Debenture.

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

amount as the original Debenture.

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

The Debenture had an

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

costs, and this has been paid.

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

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

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

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

The Company has raised funds in excess of the

amount required for 2020, 2019 and 2018.

Beginning in 2023, The principal repayment amounts

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

Based on the exchange rate between the Canadian

Dollar and the U.S.

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

The Debenture is secured

by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010.

DPTI has pledged the Patents, and granted

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

The Debenture

was initially recorded at the $1,491,923 equivalent US Dollar amount of Canadian 1,500,000 as of December 16, 2010, the date of the original

The liability is being adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the

end of each quarter.

The adjustment is recorded as unrealized gain or loss in the change of the value of the two currencies during the

The Debenture also includes a provision requiring DPTI to pay the University a 2% royalty on sales of any and all products or

services which incorporate the Patents for a period of five years from April 24, 2018.

Payment of the principal

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

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

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

The Company has raised funds in excess of the amount required for 2020,

2019 and 2018.

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

Dollars 62,500.

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

Dollar on December 31, 2018, the quarterly principal

repayment amounts will be US$48,447.

The Debenture is secured by the Patents assigned by the University to DPTI by an Assignment Agreement

on December 16, 2010.

DPTI has pledged the Patents, and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between

DPTI and the University.

The Debenture was initially recorded

at the $1,491,923 equivalent US Dollar amount of Canadian 1,500,000 as of December 16, 2010, the date of the original Debenture.

The liability

is being adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the end of each quarter.

adjustment is recorded as unrealized gain or loss in the change of the value of the two currencies during the quarter.

The Debenture also

includes a provision requiring DPTI to pay the University a 2% royalty on sales of any and all products or services which incorporate

the Patents for a period of five years from April 24, 2018.

To date, no royalties have been paid.

For the years ended December 31, 2023 and 2022, the Company recorded

interest expense of $ 66,813 and $ 36,307 , respectively.

of December 31, 2023, and December 31, 2022, the outstanding balance of the debenture liability

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

For the years ended December 31, 2024 and 2023,

the Company recorded interest expense of $ 26,955 and $ 66,813 , respectively.

As of December 31, 2024, and December

31, 2023, the outstanding balance of the debenture liability totaled $ 1,041,644 and $ 1,099,250 , respectively.

minimum required payments over the next five years and thereafter are as follows:

2 unchanged sentences

Period ending December 31,

The following

was included in our balance sheet as of December 31, 2023 and 2022:

Schedule of operating leases

NOTE 13 – LEASES

The following was included in our balance sheet

as of December 31, 2024 and 2023:

Schedule of operating lease

Operating leases

3 unchanged sentences

Total operating lease liabilities

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

Schedule of weighted

average remaining lease term and weighted average discount rate

The weighted average remaining lease term and

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

Schedule of weighted average remaining lease term and discount rate

Operating leases

1 unchanged sentence

Weighted average discount rate

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

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

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

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

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

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

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.

Operating Leases

On June 28, 2023, the Company recognized a gain

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

The following

table reconciles future minimum operating lease payments to the discounted lease liability as of December 31, 2023:

The following table reconciles future minimum

operating lease payments to the discounted lease liability as of December 31, 2024:

Schedule of future minimum operating lease payments

6 unchanged sentences

Long-term lease obligations

13 – STOCKHOLDERS’ EQUITY (DEFICIT)

In accordance

with the Company’s bylaws, the Company has authorized a total of 2,000,000 shares of preferred stock, par value $ 0.01 per share,

for all classes.

As of December 31, 2023 and 2022 respectively, there were 88,335 and 88,335 total preferred shares issued and outstanding

for all classes.

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 December 31, 2023 and

2022, there were 8,100,117,720 and 6,427,395,360 common shares issued, respectively.

As of December 31, 2023 and 2022, there were 8,100,117,720

and 6,427,395,360 common shares outstanding, respectively.

On May 27, 2022 we entered an Equity Financing

Agreement (the “ EFA ”) and Registration Rights Agreement (the “ RRA ”) with GHS, pursuant to which

GHS agreed to purchase up to $70,000,000 in shares of our Common Stock, from time to time over the course of 24 months after effectiveness

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

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

efforts to file with the SEC a Registration Statement within 45 days of the date of the GHS Registration Rights Agreement;

and (ii) have

the Registration Statement declared effective by the SEC within 30 days after the date the GHS Registration Statement is filed with the

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

On April 28, 2023 the

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

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

On June 13, 2023 the

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

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

On July 10,2023 the Company

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

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

On September 5, 2023,

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

The RRA provides that

we shall (i) use our best efforts to file with the SEC a Registration Statement within 45 days of the date of the GHS Registration Rights

and (ii) have the Registration Statement declared effective by the SEC within 30 days after the date the GHS Registration Statement

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

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

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

NOTE 14 – STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

In accordance with the Company’s

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

As of December

31, 2024 and 2023 respectively, there were 88,335 and 88,335 total preferred shares issued and outstanding for all classes.

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 December 31, 2024

and 2023, there were 10,551,957,534 and 8,100,117,720 common shares issued, respectively.

2023 Transactions

On April 28, 2023 the Company entered

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

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

On June 13, 2023 the Company entered

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

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

On July 10,2023 the Company entered

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

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

On September 5, 2023, we entered into

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

The below table of puts from 1/12/2023

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

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

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

The 7/10/2023 put was made by the

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

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

The 7/10/2023 put was made by

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

Schedule of equity financing agreement

Number of Common Shares Issued

Total Proceeds, Net of Discounts

Effective Price per Share

Number of Common

Shares Issued

Total Proceeds, Net of

Effective Price

1,662,012,341

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

1,666,019,121

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 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 for the year ended December

The fair value

of $ 1,989,900 , or $ 0.0067 per share, was included in professional fees in the consolidated statements of operations for the year ended

December 31, 2023.

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

As of December

31, 2023 and 2022, the Company had no outstanding stock options.

14 – INCOME TAXES

and foreign components of loss before (benefit) provision for income taxes were as follows:

2024 Transactions

On November 6, 2024 the Company entered

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

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

The RRA provides that we shall (i) use

our best efforts to file with the SEC a Registration Statement within 45 days of the date of the GHS Registration Rights Agreement;

(ii) have the Registration Statement declared effective by the SEC within 30 days after the date the GHS Registration Statement is filed

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

Stock Options

As of December 31, 2024 and 2023, the Company had no outstanding stock options.

NOTE 15 – INCOME TAXES

The domestic and foreign components of loss

before (benefit) provision for income taxes were as follows:

Schedule of provision for income taxes

6 unchanged sentences

$ ( 18,810,136 )

The provision

for income taxes for the years ended December 31, 2023 and 2022 differs from the amount which would be expected as a result of applying

the statutory tax rates to the losses before income taxes due primarily to the valuation allowance to fully reserve net deferred tax assets.

The following

table summarizes the significant differences between statutory rates for the years ended December 31, 2023 and 2022:

The provision for income taxes for the years ended

December 31, 2024 and 2023 differs from the amount which would be expected as a result of applying the statutory tax rates to the losses

before income taxes due primarily to the valuation allowance to fully reserve net deferred tax assets.

The following table summarizes the significant differences

between statutory rates for the years ended December 31, 2024 and 2023:

Schedule of statutory rate

4 unchanged sentences

Change in valuation allowance:

The Company’s deferred

tax assets and liabilities as of December 31, 2023 and 2022 are as follows:

The Company’s deferred tax assets and liabilities

as of December 31, 2024 and 2023 are as follows:

Schedule of deferred

10 unchanged sentences

Deferred tax assets (liabilities)

has approximately $ 26,485,942

of federal and state net operating loss carryforwards as of December 31, 2023.

Of the $26.4 million of NOL's, $ 4.8

million will begin to expire in 2023 while $ 15.9 million will not expire but will be limited to 80% utilization.

company also has net operating losses in the UK of $ 22,085,338

and $ 636,852

of net operating loss carryforwards in Canada which will begin to expire in 2038.

records a tax valuation allowance when it is more likely than not that it will not be able to recover the value of its deferred tax assets.

For the years ended December 31, 2023 and 2022, the Company calculated its estimated annualized effective tax rate at 0 % and 0 %, respectively,

for both the United States, Canada and the UK.

The Company had no income tax expense on its losses for the years ended December 31, 2023

and 2022, respectively.

recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely

than not sustain the position following an audit.

For tax positions meeting the more-likely-than-not threshold, the amount recognized

in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with

the relevant tax authority.

The Company recognizes interest accrued on uncertain tax positions as well as interest received from favorable

tax settlements within interest expense.

The Company recognizes penalties accrued on unrecognized tax benefits within selling, general

and administrative expenses.

As of December 31, 2023 and 2022, the Company had no uncertain tax positions.

does not anticipate any significant changes to the total amounts of unrecognized tax benefits in the next twelve months.

The Company files

income tax returns in New Brunswick, Canada, and the U.S.

federal, New York, and Delaware and the UK jurisdictions.

Tax years 2012 to

current remain open to examination by Canadian authorities;

the tax year 2020 remains open to examination by U.S.

15 – COMMITMENTS AND CONTINGENCIES

Royalty Payments

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

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

The Company has approximately $ 26,485,942 of federal

and state net operating loss carryforwards as of December 31, 2024.

Of the $26.4 million of NOL's, $ 4.8 million will begin to expire in

2023 while $ 15.9 million will not expire but will be limited to 80% utilization.

The company also has net operating losses in the UK of

$ 22,085,338 and $ 636,852 of net operating loss carryforwards in Canada which will begin to expire in 2038.

The Company records a tax valuation allowance when

it is more likely than not that it will not be able to recover the value of its deferred tax assets.

For the years ended December 31,

2024 and 2023, the Company calculated its estimated annualized effective tax rate at 0 % and 0 %, respectively, for both the United States,

Canada and the UK.

The Company had no income tax expense on its losses for the years ended December 31, 2024 and 2023, respectively.

The Company recognizes the financial statement benefit

of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an

For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest

benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

recognizes interest accrued on uncertain tax positions as well as interest received from favorable tax settlements within interest expense.

The Company recognizes penalties accrued on unrecognized tax benefits within selling, general and administrative expenses.

As of December

31, 2024 and 2023, the Company had no uncertain tax positions.

The Company does not anticipate any significant changes to the total amounts

of unrecognized tax benefits in the next twelve months.

The Company files income tax returns in New Brunswick, Canada, and the U.S.

New York, and Delaware and the UK jurisdictions.

Tax years 2012 to current remain open to examination by Canadian authorities;

year 2020 remains open to examination by U.S.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

Legal Matters

Carebourn Capital, L.P.

3 unchanged sentences

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.

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

6 unchanged sentences

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

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 26, 2024;

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

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.

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).

As of the date hereof, the final judgment remains

unsatisfied 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

11 unchanged sentences

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

On or about March 23, 2024, More appealed the

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

On or about March 25, 2024, the Minnesota Appellate

Court entered an Order, noting that Minn.

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

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

The Appellate Court requested the parties submit

informal briefing in response to two questions:

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

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

On or about April 4, 2024, DarkPulse filed

its informal briefing in response with the Appellate Court.

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

As of April 1, 2024, the final judgment had not

yet been satisfied by More, nor had a judgment been entered that stayed enforcement of that judgment.

Accordingly, the Company took actions

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

As of the date hereof, More has refused to voluntarily

satisfy the final judgement.

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

amounts awarded.

As of the date hereof, the final judgment remains

unsatisfied 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.

1 unchanged sentence

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 (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

2 unchanged sentences

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

On or about November 23, 2022, the Company and

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

On or about February 21, 2023, the Court granted

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

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

On or about November 1, 2023, the Noteholders

7 unchanged sentences

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.

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 Court has not yet rendered

its decision on the amount sanctions that will be imposed against the Noteholders and their counsel of record and awarded to the Company.

DarkPulse, Inc.

11 unchanged sentences

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 the same day, the Company appealed the Court’s

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

On March 28, 2024, the Second Circuit issued its

4 unchanged sentences

States District Court for the District of Delaware.

As of the date hereof, this action has not yet

transferred to the Delaware Court.

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

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.

11 unchanged sentences

On October 23, 2023, the plaintiffs appealed the

Court’s decision to the Second Circuit.

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

The Company remains committed to actively litigating

its claims for relief under RICO.

NOTE 16 – RELATED

PARTY TRANSACTIONS

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

party transactions.

Court’s decision to the United States Court of Appeals for the Second Circuit (“ 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 is actively litigating its claims

for relief against the Crown Bridge Defendants.

GS Capital Partners, LLC v.

DarkPulse, Inc.

On June 2, 2023, GS Capital Partners, LLC (“ GS

Capital ”) commenced an action in the Supreme Court for New York County against the Company through the filing of motion for

summary judgment in lieu of a complaint.

The motion claims that the Company is in breach of a convertible promissory note, dated July

14, 2021, and accompanying securities purchase agreement, dated the same.

The motion claims that GS Capital is entitled

to an award of $ 2,407,671 , plus prejudgment interest and attorney’s fees, costs and disbursements.

On July 27, 2023, the Company moved to set aside

the default judgment entered in favor of GS Capital and against the Company on July 25, 2023.

GS Capital’s opposition thereto is

due on or before August 31, 2023.

Thereafter, DarkPulse’s reply is due on or before September 6, 2023.

Oral arguments are currently

not scheduled on the Company’s motion.

On or about September 27, 2023, the Company and

GS Capital confidentially settled the dispute.

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

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

On or about October 9, 2023, the court vacated

the judgment and the action was dismissed.

The Company defaulted upon the settlement and,

on July 24, 2024, the Company and GS Capital 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.

TJM West, Inc v Thomas J McCarthy Family

Limited Partnership

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 the date hereof, 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 rights 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 17 – RELATED PARTY TRANSACTIONS

The Company follows subtopic 850-10

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

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

b) Entities for which

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

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

c) trusts for the benefit of employees, such as

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

b) Entities for which investments in their equity

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

to be accounted for by the equity method by the investing entity;

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

sharing trusts that are managed by or under the trusteeship of management;

d) principal owners of the Company;

e) management

of the Company;

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

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

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

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

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

The financial statements shall include disclosures

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

course of business.

e) management of the Company;

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

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

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

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

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

The financial statements shall include disclosures of material

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

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

9 unchanged sentences

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

the year ended December 31, 2023 and 2022, certain executives of the Company received $ 120,000 and

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

Intelligence and Wildlife Specialists Loan Payables

loan payable with the former majority shareholder, who is a shareholder in the Company after the acquisition of 60% of RI’s membership

The loan is unsecured, non-interest bearing and due on demand.

As of both year ended 2023 and 2022, the outstanding balance

was $ 226,247 .

loan payable with the former majority shareholder, who is a shareholder in the Company after the acquisition of 60% of WS’s membership

The loan is unsecured, non-interest bearing and due on demand.

As of both year ended 2023 and 2022, the outstanding balance

was $ 135,500 .

During the years ended December 31,

2024 and 2023, certain executives of the Company received $ 0 and $ 120,000 respectively, in Directors fees from Optilan for being members

of Optilan’s Board of Directors.

Remote Intelligence and Wildlife Specialists

Loan Payables

RI has a loan payable with the former

majority shareholder, who is a shareholder in the Company after the acquisition of 60% of RI’s membership interests.

unsecured, non-interest bearing and due on demand.

As of both years ended 2024 and 2023, the outstanding balance was $ 226,247 .

WS has a loan payable with the former

majority shareholder, who is a shareholder in the Company after the acquisition of 60% of WS’s membership interests.

unsecured, non-interest bearing and due on demand.

As of both years ended 2024 and 2023, the outstanding balance was $ 135,500 .

SPAC Transaction

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”)

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:

2 unchanged sentences

The SPAC subsequently changed its name to Global Systems Dynamics,

As of December

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

In addition to the payment of the Purchase Price,

the Company also assumed the following obligations:

As of December 31, 2023 and December 31, 2022, the Company’s $ 1,500,000 investment in GSD was accounted

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,

3 unchanged sentences

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

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

up of GSD is effective.

(i) the date on which

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

is effective.

The note does not bear interest.

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

note in the aggregate principal amount of $ 167,894

($83,947 per month) to the Company in connection with the extension of the termination date for the GSD’s initial business

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

the outstanding note receivable was $ 0 and $ 1,049,248 , respectively.

On January 24,2024 the SPAC was terminated and the outstanding

note receivable was determined to be uncollectible, therefore, written off as bad debt as of December 31, 2023.

As of December 31, 2023 and 2022, the Company

has $ 0 and $ 318,025 ,

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.

17 – SUBSEQUENT EVENTS

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

and $ 0 , respectively.

As of December 31, 2024 and 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, 2024

NOTE 18 – SUBSEQUENT EVENTS

On January 3, 2025 the Company issued 36,640,375

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

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 of the issued

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

On February 12, 2024, February 13, 2024 and February

14, 2024 the Company executed a convertible note from a third party, into 36,363,636, 32,786,885 and 42,117,347 shares respectively,

in accordance with its Securities Purchase Agreement.

On February 28, 2024,

we entered into a Stock Purchase Agreement with an investor for the purchase of 178,571,428 shares of Common Stock for a total consideration

shares of common stock for a total consideration of $23,449.84

On January 13, 2025 the Company issued 51,215,454

shares of common stock for a total consideration of $32,777.89

On January 22, 2025 the Company issued 79,061,625

shares of common stock for a total consideration of $50,618.64

On January 30, 2025 the Company issued 139,008,500

shares of common stock for a total consideration of $55,603.40

On February 7, 2025 the Company issued 124,464,575

shares of common stock for a total consideration of $49,785.83

On February 27, 2025, the Company issued 142,074,500

shares of common stock for a total consideration of $34,097.88

On March 10, 2025, the Company issued 132,699,709

shares to a third party of in accordance with the Securities Purchase Agreement Dated November 30, 2023.

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

On May 20, 2024 the

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

On May 23, 2024 the

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

On June 9, 2024 the

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

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

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

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

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.

shares of common stock for a total consideration of $31,847,93

On March 18, 2025, the Company issued 224,563,917

shares of common stock for a total consideration of $53,895.34

On March 27, 2025, the Company issued 203,844,344

shares of common stock for a total consideration of $65,230.19

On April 4, 2025, the Company issued 130,615,137

shares of common stock for a total consideration of $41,796.85

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 9A. Controls and Procedures