What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-20 · 125 added, 82 removed, 378 unchanged (35% of the section changed)

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The Company calculated the carrying

amounts of the reporting unit by utilizing the entities’ assets and liabilities at March 31, 2025, including the carrying value

of the identifiable intangible assets and goodwill assigned to the respective reporting unit.

amounts of the reporting unit by utilizing the entities’ assets and liabilities at June 30, 2025, including the carrying value of

the identifiable intangible assets and goodwill assigned to the respective reporting unit.

Revenue Recognition

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provisioning and contract bid services globally and throughout Europe.

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.

DP Technologies – FZCO in Dubai UAE focusing on Science and

Technology Consultancy, Building Maquette & Model Makers and IT Infrastructure.

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.

Current Operations

As a result of the liquidation

of Optilan,UK Ltd our current operations now include:

Our current operations

DarkPulse, Inc., based in New York City, New York;

Terradata Unmanned PLLC, based

Optilan India Pvt Ltd based in Navi-Mumbai and Optilan Communications & Security Systems Ltd, based in Ankara Turkey.

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.

DarkPulse Manufacturing Inc.

(formerly TJM Electronics West, Inc.) is no longer providing

products or services as a result of those products and services now being contracted through Sanmina Corp (NASDAQ:SANM).

Terradata Unmanned PLLC, based in Florida;

Optilan India Pvt Ltd based

in Navi-Mumbai and Optilan Communications & Security Systems Ltd, based in Ankara Turkey.

DP Technologies – FZCO located in

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.

DarkPulse Electronics Manufacturing Inc.

(formerly TJM Electronics West, Inc.) is no

longer providing products or services as a result of those products and services now being contracted through Sanmina Corp (NASDAQ:SANM).

We have recently completed

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via IEEE and available online.

The system components include:

patented hardware containing various electronic components and lasers, proprietary

The system components include patented hardware containing various electronic components and lasers, proprietary

software utilized to collect analog data and convert that data to digital data, and a user interface utilizing proprietary software as

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

the quarter ended March 31, 2025:

the quarter ended June 30, 2025:

Number of Common

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Effective Price

1,732,672.017

Going Concern Uncertainty

As shown in the accompanying financial statements,

we generated net losses of $(270,344) and $(539,398) for the three-months ended March 31, 2025 and 2024, respectively, and net cash provided

we generated net losses of $(1,033,417) and $(2,953,104) for the six-months ended June 30, 2025 and 2024, respectively, and net cash provided

in operating activities of $494,513 and used in operating activities of $313,725, respectively.

As of March 31, 2025, the Company’s

As of June 30, 2025, the Company’s

current liabilities exceeded its current assets by $18,484,093 and has an accumulated deficit of $(72,285,347 ).

As of March 31, 2025,

As of June 30, 2025,

the Company had $102,134 of cash.

Lastly, the Optilan Liquidation no longer raises serious concerns about the viability of the Optilan

(UK) Limited entities.

Optilan (UK) Limited and its subsidiaries have been deconsolidated and are no longer under the control of DarkPulse,

We will require additional

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For the Three-Months

Ended March 31, 2025 and 2024

Ended June 30, 2025 and 2024

The Company’s revenues

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cross-selling existing customer with products from other subsidiaries;

· provide a wide array of diverse services, including enhanced or additional services that may become available

in the future due to, among other things, advances in technology or improvements in our infrastructure;

provide a wide array of diverse services, including enhanced or additional services that may become available in the future due to, among other things, advances in technology or improvements in our infrastructure;

pursue acquisitions of additional assets, in each case if available at attractive prices;

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For the three-months

ended March 31, 2025, total revenues were $141,018 compared to $10,850 for the three-months ended March 31, 2024, an increase of $130,168.

ended June 30, 2025, total revenues were $50,913 compared to $14,318 for the three-months ended June 30, 2024, an increase of $36,595.

The increase was primarily due to revenues generated by Optilan India Pvt, Ltd.

The breakdown of revenues by entity for the three-months

ended March 31, 2025 and 2024 is as follows:

Three-Months Ended March 31

ended June 30, 2025 and 2024 is as follows:

Three-Months Ended June 30

Remote Intelligence

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For the three-months

ended March 31, 2025, cost of revenues was $103,917 compared to $199 for the three-months ended March 31, 2024, an increase of $103,718.

The increase was attributable to higher revenues from Optilan India Pvt, Ltd.

ended June 30, 2025, cost of revenues was $9,271 compared to $671 for the three-months ended June 30, 2024, an increase of $8,600.

increase was attributable to higher revenues from Optilan India Pvt, Ltd.

Gross (loss) / profit

for the three-months ended March 31, 2025 was $37,101 with a gross (loss) profit of 26% compared to $10,651 for the three-months ended

March 31, 2024 with a gross (loss) profit of 98%.

for the three-months ended June 30, 2025 was $41,642 with a gross (loss) profit of 82% compared to $13,647 for the three-months ended

June 30, 2024 with a gross (loss) profit of 95%.

Operating Expenses

Selling, general and

administrative expenses for three-months ended March 31, 2025 decreased by $12,286 to $144,825 from $157,111 for the three-months ended

March 31, 2024.

administrative expenses for three-months ended June 30, 2025 increased by $119,528 to $289,843 from $170,315 for the three-months ended

June 30, 2024.

Salaries, wages and payroll

taxes for three-months ended March 31, 2025 increased to $237,005 from $211,877 for the three-months ended March 31, 2024.

is primarily consisted of increased headcount at Optilan India Pvt, Ltd.

taxes for three-months ended June 30, 2025 increased to $236,195 from $185,000 for the three-months ended June 30, 2024.

primarily consisted of increased headcount at Optilan India Pvt, Ltd.

Professional fees for

the three-months ended March 31, 2025 decreased by $110,098 to $47,237 from $157,371 for

the three-months ended March 31, 2024 due to decrease in audit and legal fees.

the three-months ended June 30, 2025 increased by $36,695 to $59,955 from $23,260 for the three-months ended June 30, 2024 due to increased

consulting fees.

Depreciation and amortization

for three-months ended March 31, 2025 increased to $30,011 from $19,288 for the three-months ended March 31, 2024.

This increase is primarily

due to an adjustment to the patent amortization.

for three-months ended June 30, 2025 decreased to $19,547 from $44,585 for the three-months ended June 30, 2024.

This decrease is attributable

to the lease terminations at DarkPulse Inc and DarkPulse Electronics Manufacturing Inc.

During the three-months

ended March 31, 2025 and 2024, the Company recorded $0 and $0, respectively, in impairment on the Company’s goodwill and intangible

ended June 30, 2025 and 2024, the Company recorded $0 and $0, respectively, in impairment on the Company’s goodwill and intangible

Other Income (Expense)

For the three-months

ended March 31, 2025, we had other expense of $151,669 compared to other expense of ($1,402) during three months ended March 31, 2024.

The increase is due to a gain on forgiveness of debt.

ended June 30, 2025, we had other expense of $(199,175 ) compared to other expense of ($1,947,377) during the three months ended June

This decrease is due to a reduction in Loss on equity investment.

Net Loss from Continuing

As a result of the above,

we reported a net loss of continuing operations of $270,344 and $536,398 for the three-months ended March 31, 2025 and 2024, respectively.

we reported a net loss of continuing operations of $763,073 and $2,416,706 for the three-months ended June 30, 2025 and 2024, respectively.

For the Six-Months

Ended June 30, 2025 and 2024

For the six-months ended

June 30, 2025, total revenues were $191,931 compared to $ 25,168 for the six-months ended June 30, 2024, an increase of $166,763.

increase was primarily due to revenues generated by Optilan India Pvt, Ltd.

The breakdown of revenues by entity for the six -months ended

June 30, 2025 and 2024 is as follows:

Six-Months Ended June 30

Remote Intelligence

Optilan India

Cost of Revenues and

For the six-months ended

June 30, 2025, cost of revenues was $113,188 compared to $870 for the six-months ended June 30, 2024, an increase of $112,318.

was attributable to higher revenues from Optilan India Pvt, Ltd.

Gross (loss) / profit

for the six-months ended June 30, 2025 was $78,743 with a gross (loss) profit of 41% compared to $24,298 for the six-months ended June

30, 2024 with a gross (loss) profit of 97%.

Operating Expenses

Selling, general and

administrative expenses for six-months ended June 30, 2025 increased by $107,242 to $434,668 from $327,426 for the six-months ended June

Salaries, wages and payroll

taxes for six-months ended June 30, 2025 increased to $473,200 from $396,877 for the six-months ended June 30, 2024.

The increase primarily

consisted of increased headcount at Optilan India Pvt, Ltd.

Professional fees for

the six-months ended June 30, 2025 decreased by $73,323 to $107,228 from $180,631 for the six-months ended June 30, 2024 due to decrease

in legal fees.

Depreciation and amortization

for six-months ended June 30, 2025 decreased to $49,558 from $63,873 for the six-months ended June 30, 2024.

This decrease is attributable

to the lease termination for DarkPulse Inc and DarkPulse Electronics Manufacturing Inc.

During the six-months

ended June 30, 2025 and 2024, the Company recorded $0 and $0, respectively, in impairment on the Company’s goodwill and intangible

Other Income (Expense)

For the six-months ended

June 30, 2025, we had other expense of ($47,506) compared to other expense of ($1,948,779) during the six months ended June 30, 2024.

This decrease is due to a reduction in the loss on equity investment.

Net Loss from Continuing

As a result of the above,

we reported a net loss of continuing operations of $1,033,417 and $2,953,104 for the six-months ended June 30, 2025 and 2024, respectively.

Liquidity and Capital

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to fund the continued development and commercialization of our proprietary fiber optic sensing devices, and for operating expenses.

the three-months ended March 31, 2025, we had $439,370 in cash proceeds from our equity financings compared to $140,580 in 2024.

As of March 31, 2025,

we had cash of $107,785 compared to $990 as of March 31, 2024.

During the three-months

ended June 30, 2025, we had $397,674 in cash proceeds from our equity financings compared to $222,004 in 2024.

During the six-months

ended June 30, 2025, we had $837,044 in cash proceeds from our equity financings compared to $362,582 in 2024.

As of June 30, 2025,

we had cash of $102,134 compared to $953 as of June 30, 2024.

We currently do not have sufficient cash to fund our operations for the

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working capital to fund operations through the issuances of convertible notes or obtained through the issuance of our restricted common

As of March 31, 2025, our current liabilities exceeded our current assets by $17,368,854.

As of June 30, 2025, our current liabilities exceeded our current assets by $18,484,093.

Several of our significant operating subsidiaries

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Operating Activities

During the three-months ended March 31, 2025,

net cash provided in operating activities was $78,774 resulting from our net loss of $270,344, partially offset by non-cash charges of

During the six-months ended June 30, 2025, net

cash provided in operating activities was $494,513 resulting from our net loss of $1,090,652, partially offset by non-cash charges of

$337,912 primarily driven by our gain on forgiveness of debt and termination of lease.

In 2024, we had net cash used in operating activities

was $91,687 resulting from our net loss of $536,398, partially offset by non-cash charges of $ 30,795 resulting from depreciation and

amortization and operating lease expense.

During the six-months

ended June 30, 2024, net cash used in operating activities was $313,725 resulting from our net loss of $2,953,104 partially offset by

non-cash charges of $1,707,137 primarily driven by our loss on equity investment resulting from the “SPAC” termination.

Cash Flows from

Investing Activities

During the three-months

ended March 31, 2025, we had net cash provided in investing activities of $19,675.

During the three-months

ended March 31, 2024, we had net cash used in investing activities of $59,817.

During the six-months

ended June 30, 2025, we had net cash provided in investing activities of $106,071.

During the six-months ended June 30, 2024, we

had net cash used in investing activities of $(59,817).

Cash Flows from

Financing Activities

During the three-months

ended March 31, 2025, net cash provided by financing activities was $318,481 which was primarily

comprised of proceeds from the issuance of common stock of $439,370 offset by repayments of loans payable.

During the three-months

ended March 31, 2024, net cash provided by financing activities was $ 140,580 which was primarily comprised of proceeds from the issuance

of common stock of $ 140,580.

During the six-months

ended June 30, 2025, net cash provided by financing activities was $463,262, which was primarily comprised of proceeds from the issuance

of common stock of $837,044 offset by repayments of loans payable.

During the six-months ended June 30, 2024, net

cash provided by financing activities was $362,582 of which $362,585 was comprised of proceeds from the issuance of common stock.

Factors That May

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Recent Accounting Pronouncements

2024 the FASB issued ASU 2024-03 Income Statement — Reporting Comprehensive Income (Subtopic 2220-40) which intends to improve the

disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the

types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented

expense captions (such as cost of sales, SG&A, and research and development).

2024 the FASB issued ASU 2024-04 Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments

to improve and clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted

for as an induced conversion.

2024 the FASB issued ASU 2024-01, Compensation – Stock Compensation Topic (718) contains amendments by adding an illustrative example

to demonstrate how an entity should apply the scope guidance in paragraph 718- 10-15-3 to determine whether profits interest and similar

awards improve the understandability of paragraph 718-10-15-3 apply to all entities that enter into share-based payment transactions.

2024 the FASB issued ASU 2024-02 Codification Improvements which contains amendments to the Codification that remove references to various

FASB Concepts Statements.

The Board has a standing project on its agenda to address suggestions received from stakeholders on the Accounting

Standards Codification and other incremental improvements to generally accepted accounting principles (GAAP).

This effort facilitates

Codification updates for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or

the structure of guidance, and other minor improvements.

In November 2024 the FASB issued ASU 2024-03 Income

Statement — Reporting Comprehensive Income (Subtopic 2220-40) which intends to improve the disclosures about a public business entity’s

expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory,

employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A,

and research and development).

In November 2024 the FASB issued ASU 2024-04 Debt

with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments to improve and clarify the requirements

for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

In March 2024 the FASB issued ASU 2024-01, Compensation

– Stock Compensation Topic (718) contains amendments by adding an illustrative example to demonstrate how an entity should apply

the scope guidance in paragraph 718- 10-15-3 to determine whether profits interest and similar awards improve the understandability of

paragraph 718-10-15-3 apply to all entities that enter into share-based payment transactions.

In March 2024 the FASB issued ASU 2024-02 Codification

Improvements which contains amendments to the Codification that remove references to various FASB Concepts Statements.

The Board has a

standing project on its agenda to address suggestions received from stakeholders on the Accounting Standards Codification and other incremental

improvements to generally accepted accounting principles (GAAP).

This effort facilitates Codification updates for technical corrections

such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance, and other minor improvements.

The resulting amendments are referred to as Codification improvements.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis