What changed in this filing

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Item 1. Financial Statements

2025-05-20 compared with 2024-11-19 · 597 added, 874 removed, 745 unchanged (66% of the section changed)

1 unchanged sentence

DARKPULSE, INC.

Consolidated Balance Sheets

Consolidated Balance

CURRENT ASSETS:

1 unchanged sentence

Accounts receivable, net

Due from related party

Prepaid expenses and other current

Prepaid expenses and other current assets

TOTAL CURRENT ASSETS

2 unchanged sentences

Operating lease right-of-use assets

Notes receivable, related party

Investment in related party

Joint venture

Other assets, net

4 unchanged sentences

Accounts payable and accrued expenses

Contract liabilities

Loss provision for contracts in progress

Convertible notes, net

9 unchanged sentences

Secured debenture

Operating lease liabilities -

Operating lease liabilities - non-current

Non-current liabilities - discontinued operations

TOTAL NON-CURRENT LIABILITIES

2 unchanged sentences

STOCKHOLDERS' DEFICIT:

Series A Super Voting preferred

stock - par value $ 0.01 ;

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

Convertible preferred stock - Series

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

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

shares designated, 100

shares issued and outstanding at both March 31, 2025, 2024 and December 31, 2024

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

shares designated, 88,235

shares issued and outstanding as of both March 31, 2025 and December 31, 2024

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

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

2023, respectively.

shares authorized, 12,186,976,200

and 10,551,957,534

shares issued as of March 31, 2025 and December 31, 2024, respectively,

Treasury stock at cost, 100,000

shares at September 30, 2024 and December 31, 2023

shares at March 31, 2025 and December 31, 2024

Additional paid-in capital

1 unchanged sentence

Non-controlling interests

Accumulated other comprehensive

income (loss)

Accumulated other comprehensive income (loss)

( 2,022,761 )

6 unchanged sentences

( 16,996,834 )

TOTAL LIABILITIES AND STOCKHOLDERS'

See the accompanying notes to the unaudited condensed

consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

the accompanying notes to the unaudited condensed consolidated financial statements

DARKPULSE, INC.

CONDENSED CONSOLIDATED

STATEMENT OF OPERATIONS

Three Months Ended

September 30,

Nine Months Ended

September 30,

COST OF REVENUES

10 unchanged sentences

OPERATING LOSS

( 1,563,089 )

( 17,583,706 )

OTHER INCOME (EXPENSE):

1 unchanged sentence

Loss on deconsolidation

( 1,642,795 )

Change in fair market of derivative liabilities

Loss on equity investment

( 1,500,000 )

Gain on the forgiveness of debt

2 unchanged sentences

TOTAL OTHER INCOME (EXPENSE)

( 1,977,059 )

( 2,332,234 )

( 3,540,148 )

( 19,915,940 )

Net loss from continuing operations

Loss from discontinued operations, net of tax

Net income (loss)

Net loss attributable to non-controlling interests

2 unchanged sentences

$ ( 533,389 )

$ ( 3,534,550 )

$ ( 19,093,964 )

Net loss per share - basic and diluted

2 unchanged sentences

7,411,100,872

Three Months Ended

$ ( 270,344 )

$ ( 536,398 )

Three Months Ended

Nine Months Ended

September 30,

OTHER COMPREHENSIVE INCOME (LOSS)

1 unchanged sentence

COMPREHENSIVE LOSS

See the accompanying notes to the unaudited condensed

consolidated financial statements

$ ( 666,018 )

$ ( 536,397 )

the accompanying notes to the unaudited condensed consolidated financial statements

DARKPULSE, INC.

Consolidated Statement of Stockholders' Deficit

For the Nine Months Ended September 30, 2024

Consolidated Statement

of Stockholders' Deficit

For the Three Months

Ended March 31, 2025 and 2024

Preferred Stock

stock to be issued

Balance at December 31, 2023

8,100,117,720

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

Balance at March 31, 2024

8,152,280,717

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Balance at June

30, 2023 (audited)

Common stock to be issued

Balance at December 31, 2024

10,551,957,534

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Balance at September

30, 2023 (audited)

$ 1,055,196.00

Balance at December

2,545,555,556

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

Balance at March

Common stock issued for cash, net of fees

1,265,018,666

Common stock issued

for cash, net of fees

Issuance of common

stock for conversion of convertible debt

Common Stock to

Foreign currency

Balance at June

30, 2024 (unaudited)

Conversion of convertible debt into common stock

Issuance of common stock for legal settlement

( 250,000,000 )

Common stock issued

for cash, net of fees

Common Stock to be issued

( 120,000,000 )

Issuance of common

stock for conversion of convertible debt

Common Stock to

Foreign currency

Common stock to

be issued for cash

Balance at September

30, 2024 (unaudited)

Foreign currency adjustment

Net Income (loss)

Balance at March 31, 2025

12,186,976,200

2,175,555,556

the accompanying notes to the unaudited condensed consolidated financial statements

DARKPULSE, INC.

Consolidated Statement

of Stockholders' Deficit

For the Three Months

Ended March 31, 2025 and 2024

Treasury stock

4 unchanged sentences

Balance at December 31, 2023

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

at March 31, 2023

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

at June 30, 2023 (audited)

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Common Stock to

Foreign currency

at September 30, 2023 (audited)

( 1,253,356 )

( 67,376,221 )

( 16,675,319 )

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

Common stock issued for cash

Balance at March 31, 2024

$ ( 1,253,356 )

$ ( 67,909,611 )

$ ( 17,071,135 )

Treasury stock

Additional paid-in

Non- controlling

Accumulated other comprehensive

stockholders’ deficit

Balance at December 31, 2024

Common stock issued

for cash, net of fees

Issuance of common

stock for legal settlement

Foreign currency

at March 31, 2024

Common stock issued

Issuance of common

stock for conversion of convertible debt

Foreign currency

at June 30, 2024

Common stock issued

for cash, net of fees

Issuance of common

stock for conversion of convertible debt

Common Stock to

Foreign currency

Common stock issued

Balance at September

30, 2024 (unaudited)

See the accompanying notes to the unaudited condensed

consolidated financial statements

$ ( 1,000.00 )

$ ( 1,627,086 )

$ ( 71,259,677 )

$ ( 16,996,834 )

Common stock issued for cash, net of fees

Conversion of convertible debt into common stock

Issuance of common stock for legal settlement

Common Stock to be issued

Foreign currency adjustment

Net Income (loss)

Balance at March 31, 2025

$ ( 2,022,761 )

$ ( 71,526,469 )

$ ( 17,223,485 )

the accompanying notes to the unaudited condensed consolidated financial statements

DARKPULSE, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED

Nine Months Ended September 30,

CONSOLIDATED STATEMENT OF CASH FLOWS

Three Months Ended

Cash flows from operating activities:

5 unchanged sentences

Change in fair market of derivative liabilities

Impairment of goodwill and intangible assets

Loss on equity investment

1 unchanged sentence

Amortization of debt discount

Impairment of goodwill and intangible assets

Bad debt expense

Loss on deconsolidation

Exceptional Costs gain

Operating lease expense

9 unchanged sentences

Other liabilities

Net cash used in operating activities

( 4,066,096 )

Net cash provided (used) in operating activities

Cash flows from investing activities:

Purchases of property and equipment

Investment in related party

Investment in joint venture

1 unchanged sentence

Advances to related party

Net cash used in investing activities

( 1,409,128 )

Net cash provided (used) in investing activities

Cash flows from financing activities:

2 unchanged sentences

Net repayments of loan payable

Net cash provided by financing activities

Net cash provided (used) by financing activities

Net change in cash

( 2,384,507 )

Effect of exchange rate on cash

( 1,379,338 )

Cash at beginning of year

5 unchanged sentences

Conversion of convertible debt

See the accompanying notes to the unaudited condensed

consolidated financial statements

the accompanying notes to the unaudited condensed consolidated financial statements

DARKPULSE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS UNAUDITED

NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION

Organization and Description of Business

12 unchanged sentences

The Company’s subsidiaries consist of:

DarkPulse UK Ltd, a company headquartered in,

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

renewables and security;

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

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

Remote Intelligence, Limited Liability Company, a company headquartered in Pennsylvania who provides unmanned aerial drone and unmanned

ground crawler (UGC) services to a variety of clients from industrial mapping and ecosystem services, to search and rescue, to pipeline

Wildlife Specialists, Limited Liability Company, a company headquartered in Pennsylvania who provides clients with comprehensive

wildlife and environmental assessment, planning, and monitoring services;

TerraData Unmanned, PLLC, a company headquartered in Florida

who custom manufactures NDAA compliant drones and unmanned ground crawlers to meet the needs of its customers;

DarkPulse Electronics Manufacturing

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

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

advanced package and complex CCA and hardware.

Liquidation/winding up of Optilan (UK) Limited

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”).

In conjunction with the order, the court appointed the Official Receiver’s Office (“OR”) to take

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

At that time DarkPulse,

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

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.

Inc., based in New York;

Terradata Unmanned PLLC, based in Florida;

DarkPulse UK Ltd based in the United Kingdom, 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.

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 consolidated financial statements and accompanying

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

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

The condensed consolidated

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 intercompany transactions and balances

have been eliminated.

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

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

30, 2024 and 2023 have been included.

All material intercompany balances and transactions

have been eliminated in consolidation.

The Company evaluates its relationships with other

4 unchanged sentences

then that entity is consolidated.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated

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

September 30, 2024 and 2023 and of cash flows for the nine months ended September 20, 2024 and 2023 have been prepared by the Company,

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

Certain information and footnote disclosures normally

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

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

The unaudited interim consolidated

financial statements have been prepared on a basis consistent with the audited consolidated financial statements and in the opinion of

management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the consolidated

results for the interim periods presented and of the consolidated financial condition as of the date of the interim consolidated balance

The results of operations are not necessarily indicative of the results expected for the year ending December 31, 2024.

The accompanying unaudited interim condensed consolidated

financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto

for the year ended December 31, 2023 included in the Company’s Annual Form 10-K filed with SEC on July 15, 2024.

Use of Estimates

20 unchanged sentences

Accounts Receivable

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

Most billings are

determined based on contractual terms.

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

assets, including retainage, as current assets.

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

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

Contract assets include amounts billed to customers

under retention provisions in construction contracts.

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

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

completed work on the project.

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

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

The Company determined that there are no material

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

Also, the Company adopted

ASU 2016-13 in January 2023 and the adoption did not have a material impact on the Company’s condensed consolidated financial statements

and related disclosures for the year ended December 31, 2023.

Accounts receivable and contract assets include

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

Most billings are determined based on contractual terms.

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

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

those contracts may extend beyond one year.

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

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

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

Billings for such retention

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

Generally, unbilled amounts will be billed and

collected within one year.

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

but not expected to be collected within one year.

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

a material impact on the Company’s consolidated financial statements and related disclosures for the year ended December 31, 2024.

Each month, the Company reviews its receivables

3 unchanged sentences

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

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

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

Accounts receivable includes retainage amounts

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

we reach certain construction milestones or complete the project.

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

was $ 0 and $ 0 , respectively.

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

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.

Foreign Currency Translation

Company’s reporting currency is U.S.

The accounts of one of the Company’s subsidiaries is maintained using the appropriate

local currency, British Pound (“GBP”) as the functional currency, as well as the Turkish lira, Emiraes Dirham, Azerbajani

Manat and Indian Rupee.

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

Dollar (“CAD”) as the functional currency.

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.

The accounts of one of the

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

All assets and liabilities are translated into U.S.

Dollars at balance sheet date,

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

the year or the reporting period.

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

as accumulated other comprehensive (loss) gain.

Transaction gains and losses arising from exchange rate fluctuations on transactions

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

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

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

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

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

The translation

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

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

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

The relevant translation rates are as follows:

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

for the year ended March 31, 2025 a closing rate at 1.292 US$:

GBP, average rate at 1.2633 US$:GBP, and closing rate of 1.4391 US$:CAD.

The relevant translation rates are as follows:

for the year ended March 31, 2024 a closing rate at 1.2626

GBP, average rate at 1.2713

US$:GBP and closing rate at 1.3510

Long-Lived Assets and Goodwill

29 unchanged sentences

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

As a result of the Optilan Liquidation as described

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

reporting unit may not be recoverable.

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

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

As such, the Company compared

the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $ 2,037,670 pertaining to impairment and

goodwill in the consolidated statements of operations.

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

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

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

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

30, 2024 and December 31, 2023.

Property and Equipment

1 unchanged sentence

cost less accumulated depreciation.

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

the straight-line method.

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.

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.

52 unchanged sentences

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.

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

9 unchanged sentences

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

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

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

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

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

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

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

(5) clarify that a completed

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

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

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

The amendments of this

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

There was no impact

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

Based on the terms and conditions of the product

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

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

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

to each deliverable based on its relative fair value;

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

over the term of the customer contract.

Liquidation of Optilan (UK) Limited

On June 28, 2023, the High Court of Justice in

the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of Optilan (UK) Limited (“Optilan

Liquidation”).

In conjunction with the order, the court appointed the Official Receiver’s Office (“OR”) to take

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

At that time DarkPulse,

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

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

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

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

contract inception;

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

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

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

(5) clarify that

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

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

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

The amendments

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

no impact as a result of adopting this ASU on the financial statements and related disclosures.

Based on the terms and conditions of

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

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

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

is allocated to each deliverable based on its relative fair value;

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

are provided over the term of the customer contract.

Cost of Revenues

5 unchanged sentences

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.

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 March 31, 2025, one customer accounted for 39 %

of gross accounts receivable.

The Company accounts for its leases under ASC

28 unchanged sentences

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.

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

34 unchanged sentences

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.

The Company’s derivative liability is a

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

Equity Investments

53 unchanged sentences

subsidiaries were incorporated

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

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

may be subject to certain penalties.

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

subject to audit.

The Company does not anticipate a tax liability for the years 2024 and 2023, however may be subject to certain penalties.

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

Non-controlling Interests

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via its subsidiaries TerraData, Remote Intelligence and Wildlife Specialists.

During the nine months ended September 30, 2024

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

During the three months ended March 31, 2025

and 2024, the Company recorded a loss of $ 3,554

respectively, attributable to non- controlling interests.

Comprehensive Loss

Comprehensive

loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other

than those with stockholders.

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

element of other comprehensive loss was foreign currency translation.

Comprehensive loss includes net loss well as other

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

three months ended March 31, 2025 and 2024, the Company’s only element of other comprehensive loss was foreign currency translation.

Stock-based Compensation

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Potentially dilutive items outstanding as of

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

December March 31, 2025 and 2024 are as follows:

Schedule of anti dilutive securities

September 30,

Convertible notes

Series D preferred stock

Recent Accounting Pronouncements

In November 2021, the FASB issued ASU No.

Business Combinations (Topic 805):

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

by the Financial Accounting Standards Board.

This ASU requires entities to recognize and measure contract assets and contract liabilities

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

The update will

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

immediately before the acquisition date rather than at fair value.

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

condensed consolidated financial statements upon the adoption of this ASU.

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

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

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

As a result, entities will not separately

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

certain other conditions are met.

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

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

ASU 2020-06 is applicable for fiscal years

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

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

financial statements and related disclosures.

Recently Issued Accounting Pronouncements

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

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collected by using an allowance for credit losses.

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

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

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

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

Management does not believe that any other recently

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The Company generated net losses of $ 270,344

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

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

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

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

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

Lastly, the Optilan Liquidation

no longer raises serious concerns about the viability of the Optilan (UK) Limited entity and related operations of the Optilan subsidiaries.

and $ 536,398 during the three months ended

March 31, 2025 and 2024, respectively, and net cash provided (used) in operating activities of $ 78,774

and $ ( 91,687 ) ,

respectively.

As of March 31, 2025, the Company’s current liabilities exceeded its current assets by $ 17,368,854

and an accumulated deficit of $ 71,526,469 .

As of March 31, 2025, the Company had $ 107,785 of cash.

The Company will require additional funding during

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

4 – BUSINESS ACQUISITIONS

Optilan India PV,TLtd and Optilan Communication

NOTE 4 – BUSINESS ACQUISITIONS

Optilan India PVT Ltd and Optilan Communication

& Security Systems, Ltd.

On September 11, 2024, the Company closed a sale

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

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

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

the applicable intellectual property rights including the following software;

(a) the accounting systems ;

(b) customer resource management;

and (c) the user interface for sensor systems.

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

email accounts.

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

On September 11, 2024, the Company closed a sale agreement with 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 Ltd 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

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Accordingly, the purchase price has been allocated to the

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

The excess of the consideration transferred over the

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

The following table summarizes the acquired assets and assumed

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

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

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The allocation of the total purchase price to

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

2024 was as follows:

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

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Assumed liabilities

Non-controlling interest

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

The following table is a summary of the Company’s

timing of revenue recognition for the three months ended March 31, 2025 and 2024:

Schedule of timing of revenue

Three Months Ended

Nine Months Ended

September 30,

Services and products transferred at a point in time

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Total 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 factors.

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

months ended September 30, 2024 and 2023:

The Company disaggregates revenue by source and

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

Revenue by source consisted of the following for

the three months ended March 31, 2025 and 2024:

Schedule of revenue by source

Three Months Ended

Nine Months Ended

September 30,

Total revenue

Revenue by geographic destination consisted of the following for the

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

Revenue by geographic destination consisted of

the following for the three months ended March 31, 2025 and 2024:

Schedule of revenue by geographic destination

Three Months Ended

Nine Months Ended

September 30,

North America

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

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

related to the Optilan liquidation.

Contract assets and liabilities on March 31, 2025

are $ 0 upon the deconsolidation related to the Optilan liquidation.

Variable Consideration

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NOTE 6 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following as of September 30,

2024 and December 31, 2023:

Accounts receivable consisted of the following:

Schedule of accounts receivable

September 30,

Accounts receivable

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Accounts receivable, net

The Company performed an analysis of the trade

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

As of September 30, 2023, the Company recorded

a bad debt provision for this amount.

NOTE 7 – PROPERTY AND EQUIPMENT

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

2024 and December 31, 2023:

NOTE 7 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

Schedule of property and equipment

September 30,

Property and equipment

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Property and equipment, net

NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS

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

ended September 30, 2024:

Depreciation expenses was $ 17,254

and $ 18,871 for the three months ended March 31, 2025

and 2024, respectively.

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

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

months ended March 31, 2025:

Schedule of goodwill activity

Balances at December 31, 2024

Goodwill pertaining to new Acquisitions

Balances at September 30, 2024

Patents - Intrusion Detection Intellectual Property

Foreign exchange translation

Balances at March 31, 2025

Patents - Intrusion Detection Intellectual

The Company relies on patent laws and restrictions

on disclosure to protect its intellectual property rights.

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

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

As of March 31, 2025 and 2024, 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

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

For the nine months ended September 30, 2024 and

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

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

For the three months ended March 31, 2025 and

2024, the Company had patent amortization costs on its intrusion detection technology totaling $ 12,727

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

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The following is a summary of the DPTI patents

as of March 31, 2025 and 2024:

Schedule of patents

September 30,

accumulated amortization

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

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

Future expected amortization of patents is as follows:

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Total patents

– 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.

The parties established the Joint Venture, Neural Logistics Inc., under a separate entity

to conduct business.

The Company has 50 % ownership in NSI.

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

under ASC 323-10-30-2.

During the nine months ended September 30, 2024,

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

NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED

Accounts payable and accrued expenses consisted

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

Accounts payable and accrued expenses consists

of the following as of March 31, 2025 and March 31, 2024:

Schedule of accounts payable and accrued expenses

September 30,

Accounts payable

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

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

issue of the debt security as of March 31, 2025 and 2024.

In 2024 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 2024 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.

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 made the determination

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

On August 7, 2023, the Company entered into a

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 10 % per annum

and matures after one year.

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

The Company has reserved

a sufficient number of shares of common stock for issuance upon full conversion of the note in accordance with the terms (see Note 16).

On December 4, 2023, the Company entered into

a convertible note for a principal of $ 51,150 , which was funded on December 7, 2023.

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

and matures after one year.

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

The Company has reserved

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

As of both September 30, 2024 and December 31,

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

The summary of convertible notes is as follows:

to use an expected life rather than contractual life for the calculations for the matured debt as of March 31, 2025 and 2024.

As of March 31, 2025 and, 2024, there was

$ 0 and $ 166,650

of convertible debt principal outstanding.

During the three months ended March 31, 2025 and 2024, $ 0

of the debt discount was amortized.

The summary of convertible notes are:

Schedule of convertible notes

September 30,

Principal Outstanding

1 unchanged sentence

Convertible notes, net

The 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 three months ended March 31, 2025

and 2024, change in fair value of the derivative liability was $57,235 and $51,723, respectively.

The following is a summary of the

derivative liability:

Schedule of derivative liability

Derivative Liability

Balances at December 31, 2024

Loss on issuance of debt

Issuance of convertible note - 1800 Diagonal Lending

Change in fair value

EMA settlement

Balances at March 31, 2025

Notes Payable

July 24, 2024, we and GS Capital Partners,

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

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

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

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

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

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

the three lowest VWAPs for the five prior trading days.

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

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

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

Each drawdown will reduce the Balance.

The Company is required

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

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

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

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

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

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The following is a summary of the loans

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

Schedule of loans payable

September 30,

payable at March 31, 2025 and December 31, 2024:

Schedule of loans

RI - line of credit

2 unchanged sentences

WS - Short-term loans

Optilan Communication & Security Ltd – Short Term Loan

Loan payable, current

OPT – Optilan Communications & Security Ltd

Loans payable, current

RI - SBA EIDL

2 unchanged sentences

WS - long-term loans

Loan payable, non-current

Loans payable, non-current

NOTE 12 – SECURED DEBENTURE

2 unchanged sentences

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.

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.

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.

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

equivalent U.S.

Dollar amount of Canadian 1,500,000 as of December 16, 2010, the date of the original Debenture.

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 U.S.

dollar at the end of each quarter.

adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the end of each quarter.

The adjustment

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To date, no royalties have been paid.

On February 1, 2024, our board of directors approved

entering into the Amendment No.

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

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

to the following:

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

the Issue Date;

Section 3.1 of the Debenture is amended to the

3.1 Payback on the Principal Sum will commence

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

(a) three (3) years following the

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

or (b) the date

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

Section 3.2 of the Debenture is amended to the

“3.2 The Payor shall be required to pay

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

(a) Ninety-Three Thousand Seven Hundred and Fifty

Canadian Dollars ($93,750.00 CDN);

(b) interest accrued on the Principal Sum on a

declining balance;

For the nine months ended September 30, 2024,

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

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

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

For the three months ended March 31, 2025 and

2024, the Company recorded interest expense of $ 3,914

respectively.

As of March 31, 2025 and 2024, the

outstanding balance of the debenture liability totaled $ 767,865 and $ 916,042 , respectively.

Future minimum required payments over the next

five years and thereafter are as follows:

Schedule of future minimum required payments

Period ending March 31,

NOTE 13 – LEASES

The following was included in our balance sheet

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

as of March 31, 2025 and 2024:

Schedule of operating lease

Operating leases

September 30,

ROU operating lease assets

3 unchanged sentences

The weighted average remaining lease term and

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

weighted average discount rate at March 31, 2025 and 2024 were as follows:

Schedule of weighted average remaining lease term and discount rate

Operating leases

September 30,

Weighted average remaining lease term (years)

1 unchanged sentence

Operating Leases

On January 12, 2021, the Company’s newly

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

This three-year agreement commenced

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

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

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

This ten-year agreement commenced

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

On August 31, 2021, the Company’s newly

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

This five-year agreement commenced

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

On October 20, 2021, the Company’s newly

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

This ten-year agreement

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

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

This ten-year agreement commenced

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

On June 28, 2023, the Company recognized a gain

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

On January 15, 2025 SVEA Cameron Esperson filed

its Motion for Nonsuit without Prejudice.

The dismissal was accepted by the court on January 16, 2025.

The following table reconciles future minimum

operating lease payments to the discounted lease liability as of March 31, 2025:

Schedule of future minimum operating lease payments

Three Months Ended March 31,

2027 and later

Total lease payments

Less imputed interest

Total lease obligations

Less current lease obligations

Long-term lease obligations

NOTE 14 – STOCKHOLDERS’ EQUITY (DEFICIT)

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

As of September

30, 2024 and December 31, 2023, there were 88,335 and 88,335 total preferred shares issued and outstanding for all classes, respectively.

As of March 31,

2025 and 2024 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 September 30, 2024 and

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

2022 Transactions

On May 27, 2022 we entered an Equity Financing

Agreement (the “ 2022 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.

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

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 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.

As of March 31, 2025 and 2024,

there were 12,186,976,200 and 8,330,852,145 common shares issued, respectively.

2024 Transactions

On August 14, 2024, the Company entered into a

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

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

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 below table of puts from 1/03/2025 through

3/27/2025 were made by the Company under the 2024 EFA during 2025:

Schedule of equity financing agreement

Number of Common Shares Issued

Total Proceeds, Net of Discounts

Effective Price per Share

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

3 unchanged sentences

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

Below is a table of all puts made by the Company under the 2022 EFA

Schedule of equity financing agreement

Number of Common

Shares Issued

Total Proceeds, Net of

Effective Price

* Issued shares pursuant to an individual stock purchase agreement

with an unrelated investor (not under 2022 EFA)

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

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

In January 2023, the Company issued 297,000,000 shares of common

stock to the individuals.

The fair value of $ 1,989,900 , or $ 0.0067 per share, was included in professional fees in the consolidated statements

of operations in the nine months ended September 30, 2024.

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

Stock Options

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

outstanding stock options.

NOTE 15 – COMMITMENTS & CONTINGENCIES

Potential Royalty Payments

Our agreement with the University of New Brunswick

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

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

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

The Company has no further

requirement to pay royalties.

As of March 31, 2025 and 2024, the Company had no outstanding stock

NOTE 15 – INCOME TAXES

The provision for income taxes for the three

months ended March 31, 2025 and 2024 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 three months ended March 31, 2025 and 2024:

Schedule of statutory rates

Statutory tax rate:

Foreign rate differential

Goodwill impairment

NOLs carryforward adjustment

Change in valuation allowance:

The Company’s deferred tax assets and liabilities

as of March 31, 2025 and 2024 are as follows:

Schedule of deferred

tax assets and liabilities

Deferred Tax (Liabilities):

Net operating losses

Intangible assets

Right of use asset

Stock based compensation

Property and equipment

Valuation allowance

( 9,244,530 )

Deferred tax assets (liabilities)

The Company has approximately $ 26,485,942 of federal

and state net operating loss carryforwards as of March 31, 2025.

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 three

months ended March 31, 2025 and 2024, the Company calculated its estimated annualized effective tax rate at 0 %

respectively, for both the United States, Canada and the UK.

The Company had no

income tax expense on its losses for the three months ended March 31, 2025 and 2024, 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

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.

31, 2025 and 2024, 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.

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.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

Legal Matters

Carebourn Capital, L.P.

DarkPulse, Inc.

On or about January 29, 2021, Carebourn Capital,

(“Carebourn”) commenced an action against the Company in Minnesota State Court.

Carebourn alleged that the Company was

in breach of certain securities purchase agreements and convertible promissory notes sold to Carebourn on or about July 17, 2018 and

July 24, 2018.

On or about August 31, 2021, the Company answered

Carebourn’s complaint and interposed affirmative defenses, including that Carebourn was an unregistered “dealer,” as

such term is defined in the Securities Exchange Act of 1934 (“Exchange Act”) and, therefore, all contracts between the parties

arising from or related to the securities purchase agreements and convertible promissory notes sold to Carebourn on or about July 17,

2018 and July 24, 2018 were void pursuant to the Exchange Act.

The Company also asserted counterclaims against Carebourn under the Minnesota

Securities Act.

On or about April 21, 2023, the State Court ruled

in the Company’s favor on its motion for partial summary judgment on its Exchange Act defense, holding that (i) Carebourn is a

“dealer” under the Exchange Act in violation of the mandatory registration requirement imposed thereby, and (ii) all contracts

between the parties are void.

On or about November 17, 2023, the State Court

ruled in the Company’s favor on its motion for summary judgment on its Minnesota Securities Act counterclaims against Carebourn

and awarded damages for Carebourn’s violation of Minn.

§ 80A.76(d) in the amount of $124,012.91, attorney’s fees

in the amount of $239,923.33 and costs in the amount of $23,757.24 (or a total award in the amount of $387,693.48).

On or about March 23, 2024, Carebourn appealed the final judgment

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

On or about March 25, 2024, the Minnesota Appellate

Court entered an Order, noting that Minn.

104.01 provides that appeals must be taken within 60 days of the date of the

final judgment and, therefore, it appears that Carebourn failed to timely take its appeal.

The Appellate Court requested the parties

submit informal briefing in response to two questions:

(a) Did the time to appeal the December 27, 2024 amended judgment expire on February

and (b) If the answer to (a) is yes, must this appeal be dismissed as untimely.

On or about April 4, 2024, DarkPulse filed

its informal briefing in response with the Appellate Court.

The Company is currently awaiting a decision from the Appellate Court.

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

by Carebourn.

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

should Carebourn fail to voluntarily pay the same.

More Capital, LLC v.

Capital, L.P.

DarkPulse, Inc .

On or about June 29, 2021, More Capital, LLC

(“More”) commenced an action against the Company in Minnesota State Court.

More alleged that the Company was in breach of

a certain securities purchase agreement and convertible promissory note sold to More on or about August 20, 2018.

On or about September 3, 2021, the Company answered

More’s complaint and interposed affirmative defenses, including that More was an unregistered “dealer,” as such term

is defined in the Exchange Act and, therefore, all contracts between the parties arising from or related to the securities purchase agreement

and convertible promissory note sold to More on or about August 20, 2018 were void pursuant to the Exchange Act.

or about January 29, 2021, Carebourn Capital, L.P.

(“ Carebourn ”) commenced an action against the Company in Minnesota

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.

or about August 31, 2021, the Company answered Carebourn’s complaint and interposed affirmative defenses, including that Carebourn

was an unregistered “dealer,” as such term is defined in the Securities Exchange Act of 1934 (“ Exchange Act ”)

and, therefore, all contracts between the parties arising from or related to the securities purchase agreements and convertible promissory

notes sold to Carebourn on or about July 17, 2018 and July 24, 2018 were void pursuant to the Exchange Act.

The Company also asserted

counterclaims against More under the Minnesota Securities Act.

On or about December 11, 2023, the Minnesota

State Court ruled in the Company’s favor on its motion for summary judgment on its (a) Exchange Act defense, holding that (1) More

is a “dealer” under the Exchange Act in violation of the mandatory registration requirement imposed thereby, and (ii) all

contracts between the parties are void, and (b) Minnesota Securities Act counterclaims against More and awarded damages for More’s

violation of Minn.

§ 80A.76(d) in the amount of $300,809.39, attorney’s fees in the amount of $110,029.00 and costs

in the amount of $210.25 (or a total award in the amount of $412,048.64).

On or about March 23, 2024, More appealed the final judgment entered

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

On or about March 25, 2024, the Minnesota Appellate

Court entered an Order, noting that Minn.

104.01 provides that appeals must be taken within 60 days of the date of the

final judgment and, therefore, it appears that More failed to timely take its appeal.

The Appellate Court requested the parties submit

informal briefing in response to two questions:

(a) Did the time to appeal the December 27, 2024 amended judgment expire on February

and (b) If the answer to (a) is yes, must this appeal be dismissed as untimely.

On or about April 4, 2024, DarkPulse filed

its informal briefing in response with the Appellate Court.

The Company is currently awaiting a decision from the Appellate Court.

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

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.

counterclaims against Carebourn under the Minnesota Securities Act.

or about April 21, 2023, the State Court ruled in the Company’s favor on its motion for partial summary judgment on its Exchange

Act defense, holding that (i) Carebourn is a “dealer” under the Exchange Act in violation of the mandatory registration

requirement imposed thereby, and (ii) all contracts between the parties are void.

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).

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.

Capital, LLC v.

DarkPulse, Inc.

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.

or about September 3, 2021, the Company answered More’s complaint and interposed affirmative defenses, including that More was

an unregistered “dealer,” as such term is defined in the Exchange Act and, therefore, all contracts between the parties arising

from or related to the securities purchase agreement and convertible promissory note sold to More on or about August 20, 2018 were void

pursuant to the Exchange Act.

The Company also asserted counterclaims against More under the Minnesota Securities Act.

or about December 11, 2023, the Minnesota State Court ruled in the Company’s favor on its motion for summary judgment on its (a) Exchange

Act defense, holding that (1) More is a “dealer” under the Exchange Act in violation of the mandatory registration requirement

imposed thereby, and (ii) all contracts between the parties are void, and (b) Minnesota Securities Act counterclaims against

More and awarded damages for More’s violation of Minn.

§ 80A.76(d) in the amount of $300,809.39, attorney’s

fees in the amount of $110,029.00 and costs in the amount of $210.25 (or a total award in the amount of $412,048.64).

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.

Capital et al v.

Standard Registrar and Transfer et al

On or about May 20, 2022, Carebourn and More

(together with Carebourn, the “Noteholders”) commenced an action against the Company, certain members of the Company’s

executive team and board of directors and Standard Registrar and Transfer Company, Inc., the Company’s transfer agent, in the United

States District Court for the District of Utah.

The Noteholders’ complaint alleged various causes of action arising from certain

securities purchase agreements and convertible promissory notes the Company sold to the Noteholders.

On or about November 23, 2022, the Company and

the members of the Company’s executive team and board of directors named in this action moved to dismiss the Noteholders’

On or about February 21, 2023, the Court granted

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

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

On or about November 1, 2023, the Noteholders moved to dismiss the

On or about November 2, 2023, the Company moved for sanctions against

the Noteholders and their counsel of record.

December 4, 2023, the Court entered an order granting dismissal of the Noteholders’ claims with prejudice.

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 States District Court for the District of Utah.

The Noteholders’ complaint

alleged various causes of action arising from certain securities purchase agreements and convertible promissory notes the Company sold

to the Noteholders.

or about November 1, 2023, the Noteholders moved to dismiss the action.

or about November 2, 2023, the Company moved for sanctions against the Noteholders and their counsel of record.

or about December 4, 2023, the Court entered an order granting dismissal of the Noteholders’ claims with prejudice.

The Court acknowledged

that notwithstanding its dismissal of the Noteholders’ claims, the Court continues to retain jurisdiction over the Noteholders because

of DarkPulse’s pending motion for sanctions against the Noteholders and their attorneys.

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

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

As of the date hereof, the Company has submitted

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

counsel of record challenged.

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

and their counsel of record.

DarkPulse, Inc.

FirstFire Global Opportunities Fund, LLC, and

On or about December 31, 2021, the Company commenced

an action against FirstFire Global Opportunities Fund, LLC (“FirstFire”) and its control person, Eli Fireman (“Fireman,”

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

On or about May 5, 2022, the Company amended

its complaint against the FirstFire Defendants.

The amended complaint alleges that the FirstFire Defendants were liable to the Company

for rescission of certain convertible promissory notes and transitions effected thereunder and damages pursuant to the Racketeer Influenced

and Corrupt Organizations Act (“RICO”).

On or about January 17, 2023, the Court granted

the FirstFire Defendants’ motion to dismiss the Company’s operative pleading.

Later on the same day, the Company appealed

the Court’s decision to the United States Court of Appeals for the Second Circuit (“Second Circuit”).

Oral arguments were held before the Second Circuit on the Company’s

appeal on December 11, 2023.

On March 28, 2024, the Second Circuit issued

its decision and found that the District Court (a) properly found that the Delaware forum-selection clause was enforceable but, thereafter,

(b) improperly made a ruling on the merits of the Company’s claims for relief.

As a result, the Second Circuit affirmed the District

Court’s decision in part, vacated in part and remanded the case back to the District Court for transferring to the United States

District Court for the District of Delaware.

On September 9, 2024, the FirstFire Defendants

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

Shortly thereafter, the Company opposed the FirstFire Defendants’

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

As of the date hereof, the Court has not scheduled

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

The Company remains committed to

actively litigating its claims for relief against the FirstFire Defendants.

DarkPulse, Inc., et al v.

that notwithstanding its dismissal of the Noteholders’ claims, the Court continues to retain jurisdiction over the Noteholders

because of DarkPulse’s pending motion for sanctions against the Noteholders and their attorneys.

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.

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.

FirstFire Global Opportunities Fund, LLC, and Eli Fireman

or about December 31, 2021, the Company commenced an action against FirstFire Global Opportunities Fund, LLC (“ FirstFire ”)

and its control person, Eli Fireman (“ Fireman ,” and together with FirstFire, the “ FirstFire Defendants ”),

in the United States District Court for the Southern District of New York.

or about May 5, 2022, the Company amended its complaint against the FirstFire Defendants.

The amended complaint alleges that the FirstFire

Defendants were liable to the Company for rescission of certain convertible promissory notes and transitions effected thereunder and

damages pursuant to the Racketeer Influenced and Corrupt Organizations Act (“ RICO ”).

or about January 17, 2023, the Court granted the FirstFire Defendants’ motion to dismiss the Company’s operative pleading.

On the same day, the Company appealed the Court’s decision to the United States Court of Appeals for the Second Circuit (“ Second

March 28, 2024, the Second Circuit issued its decision and found that the District Court (a) properly found that the Delaware forum-selection

clause was enforceable but, thereafter, (b) improperly made a ruling on the merits of the Company’s claims for relief.

a result, the Second Circuit affirmed the District Court’s decision in part, vacated in part and remanded the case back to the

District Court for transferring to the United States District Court for the District of Delaware.

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.

of the date hereof, the Court has not scheduled oral arguments on the FirstFire Defendants’ motion to dismiss or rendered its decision

The Company remains committed to actively litigating its claims for relief against the FirstFire Defendants.

Inc., et al v.

Crown Bridge Partners, LLC, et al

On or about September 23, 2022, the Company,

Social Life Network, Inc.

or about September 23, 2022, the Company, Social Life Network, Inc.

and Redhawk Holdings Corp.

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

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

District Court for the Southern District of New York.

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

plaintiffs for damages pursuant to RICO.

On or about September 29, 2023, the Court granted

the Crown Bridge Defendants’ motion to dismiss the plaintiffs’ complaint.

On October 23, 2023, the plaintiffs appealed the

Court’s decision to the Second Circuit.

On August 19, 2024, the Second Circuit issued

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

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

consistent with its decision.

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

setting forth deadlines for discovery and dispositive motion practice.

The Company remains committed to actively litigating

its claims for relief against the Crown Bridge Defendants.

GS Capital Partners, LLC v.

On July 24, 2024 The Company resolved certain

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

Specifically,

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

between the parties.

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

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

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

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

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

of expensive and protracted litigation.

TJM West, Inc v Thomas J McCarthy Family Limited 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 new counsel.

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

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

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

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

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

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

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

counsel the feasibility of recovering its damages utilizing the courts.

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

recoverable amount should the Company be successful in its litigation.

TJM West is awaiting updates from the court in Maricopa County

as to the status of the case.

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

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

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

new lease signed with the landlord.

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

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

Twitter accounts, websites, and social media channels.

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

evaluate commencing formal litigation proceedings.

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

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

We are not currently involved in any pending legal proceeding or

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

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

condition and operating results.

commenced an action against Crown Bridge

Partners, LLC (“ Crown Bridge ”) and its control persons, Soheil Ahdoot and Sepas Ahdoot (collectively, the “ Crown

Bridge Defendants ”) in the United States District Court for the Southern District of New York.

The complaint alleges that the

Crown Bridge Defendants are liable to each of the plaintiffs for damages pursuant to RICO.

or about September 29, 2023, the Court granted the Crown Bridge Defendants’ motion to dismiss the plaintiffs’ complaint.

October 23, 2023, the plaintiffs appealed the Court’s decision to the United States Court of Appeals for the Second Circuit (“ Second

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.

As a result, 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.

September 30, 2024, the District Court entered a scheduling order, setting forth deadlines for discovery and dispositive motion practice.

Company is actively litigating its claims for relief against the Crown Bridge Defendants.

Capital Partners, LLC v.

DarkPulse, Inc.

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.

motion claims that GS Capital is entitled to an award of $2,407,671, plus prejudgment interest and attorney’s fees, costs and disbursements.

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,

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.

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.

or about October 9, 2023, the court vacated the judgment and the action was dismissed.

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.

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.

West, Inc v Thomas J McCarthy Family Limited Partnership

or about July 25, 2023, TJM West filed an action in Maricopa court against its landlord for illegal lockout from the company’s

or about August 18, 2023, TJM West’s motion for Temporary Restraining Order was granted.

27, 2023, TJM West counsel motion to withdraw was accepted.

or about October 6, 2923, TJM West hired new counsel to assist with a short deadline to file answers to landlords motion.

or about November 6, 2023, TJM West and its counsel mutually agreed to a withdrawal.

or about November 6, 2023, TJM West engaged new counsel.

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

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

or about May 24, 2024, TJM West’s counsel left the firm handling the litigation it was determined in the best interest of the company

to terminate its relationship with the law firm.

As of 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.

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.

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.

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.

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

5 unchanged sentences

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;

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 interests;

and g) Other parties

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

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

be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party

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

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

those statements.

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

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

is not required in those statements.

The disclosures shall include:

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

b) a description of the transactions,

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

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

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

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

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

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

During the nine months ended September 30, 2024

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

Board of Directors.

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.

The loan is unsecured,

non-interest bearing and due on demand.

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

WS has a loan payable with the former majority

shareholder, who is a shareholder in the Company after the acquisition of 60% of WS’s membership interests.

The loan is unsecured,

non-interest bearing and due on demand.

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

SPAC Transaction

On October 12, 2022, the Company entered into

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

Stock (the “Class B Common Stock”) and 4,298,496 Private Placement Warrants, each of which is exercisable to purchase one

share of Class A Common Stock (the “Warrants,” together, with the Class B Common Stock, the “Securities”) of Gladstone

Acquisition Corp., a Delaware corporation (NASDAQ:

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

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

The SPAC subsequently changed its name to Global Systems Dynamics, Inc.

In addition to the payment of the Purchase Price,

the Company also assumed the following obligations:

(i) responsibility for all of SPAC’s public company reporting obligations, (ii)

the right to provide an extension payment and extend the deadline of the SPAC to complete an initial business combination from 15 months

from August 9, 2021 to 18 months for an additional $1,150,000, and (iii) all other obligations and liabilities of the Original Sponsor

related to the SPAC.

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

(i) the date on which GSD

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

The note does not bear interest.

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

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

the GSD’s initial business combination.

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

$ 1,702,014 , respectively.

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

the Company has $ 0 and $ 0 respectively, owed from GSD and included as due from related party on the consolidated balance sheet.

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

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

On January 24,2024 the SPAC was terminated and the outstanding due from related

party was determined to be uncollectible, therefore, written off as bad debt as of December 31, 2023 and the remaining as of September

– SUBSEQUENT EVENTS

b) a description of

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

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

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

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

and d) amounts due from or to related parties

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

On January 20, 2025 Optilan India Pvt, Ltd.entered

into a director’s loan agreement to lend funds whenever the company requires money for working capital over the period of two years.

The loan is unsecured, and non-interest bearing with repayment being mutually agreed upon between Lender and Borrower.

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.

is unsecured, non-interest bearing and due on demand.

As of both three months ended March 2025 and 2024, the outstanding balance was

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.

is unsecured, non-interest bearing and due on demand.

As of both three months ended March 2025 and 2024, the outstanding balance was

NOTE 18 – SUBSEQUENT EVENTS

On April 4, 2025, the Company issued 130,615,137

shares of common stock for a total consideration of $41,796.85

On April 14, 2025, the Company issued 179,014,375

shares of common stock for a total consideration of $42,963.45

On April 23, 2025, the Company issued 181,334,313

shares of common stock for a total consideration of $58,026.98

On May 1, 2025, the Company issued 188,280386

shares of common stock for a total consideration of $46,844,16

On May 9, 2025, the Company issued 225,384,480

shares of common stock for a total consideration of $43,273.82

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

What changed 10-Q

Item 1. Financial Statements