What changed in this filing

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Item 1. Financial Statements

2025-11-13 compared with 2025-08-14 · 899 added, 849 removed, 495 unchanged (78% of the section changed)

5 unchanged sentences

Accounts receivable, net

Prepaid expenses and other current assets

Prepaid expenses and other current

TOTAL CURRENT ASSETS

25 unchanged sentences

Operating lease liabilities - non-current

Non-current liabilities - discontinued operations

Non-current liabilities - discontinued

TOTAL NON-CURRENT LIABILITIES

3 unchanged sentences

Series A Super Voting preferred stock - par value

100 shares designated, 100 shares issued and outstanding at both June 30, 2025 and December 31, 2024

shares designated, 100

shares issued and outstanding at both September 30, 2025 and September 30, 2024

Convertible preferred stock - Series D, par value

shares designated, 88,235

shares issued and outstanding as of both June 30, 2025 and December 31, 2024

Common stock, par value $ 0.0001 , 20,000,000,000 shares authorized, 14,666,648,287 and 10,551,957,534 shares issued as of June 30, 2025 and December 31, 2024, respectively,

Treasury stock at cost, 100,000 shares at June 30, 2025 and December 31, 2024

shares issued and outstanding as of both September 30, 2025 and December 31, 2024

Common stock, par value $ 0.0001 ,

30,000,000,000 shares

authorized, 81,630,799 and

52,892,512 shares

issued as of September 30, 2025 and December 31, 2024, respectively,

Treasury stock at cost, 500,000

shares at September 30, 2025 and December 31, 2024

Additional paid-in capital

10 unchanged sentences

( 16,996,834 )

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

TOTAL LIABILITIES AND STOCKHOLDERS'

See the accompanying notes to the unaudited condensed

consolidated financial statement

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

consolidated financial statements

DARKPULSE, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

COST OF REVENUES

3 unchanged sentences

Salaries, wages and payroll taxes

Bad debt expense

Professional fees

Depreciation and amortization

Bad debt expense

Impairment expense

Gain on forgiveness of payables

TOTAL OPERATING EXPENSES

1 unchanged sentence

( 1,426,930 )

( 1,563,089 )

OTHER INCOME (EXPENSE):

Interest expense

Loss on deconsolidation

Gain (Loss) on convertible notes

Change in fair market of derivative liabilities

1 unchanged sentence

( 1,500,000 )

Gain on the forgiveness of debt

Exceptional Costs Gain

Foreign currency exchange rate variance

Gain/(Loss) on Legal Settlement

Gain/(Loss) on exceptional costs

Gain/(Loss) on Disposal of Asset

Foreign currency exchange rate variance

TOTAL OTHER INCOME (EXPENSE)

( 1,977,059 )

( 1,948,779 )

( 2,416,706 )

Net income (loss)

( 1,504,701 )

12 unchanged sentences

$ ( 3,540,148 )

Three Months Ended

Six Months Ended

$ ( 763,073 )

$ ( 2,416,706 )

$ ( 1,033,417 )

$ ( 2,953,104 )

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation

( 1,222,453 )

( 1,222,454 )

COMPREHENSIVE LOSS

7 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

For the Three Months Ended June 30, 2025 and

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025

Preferred stock

1 unchanged sentence

Balance at December 31, 2023

8,100,117,720

Common stock issued for cash, net of fees

2 unchanged sentences

Foreign currency adjustment

Common stock issued for cash

Balance at March 31, 2024

8,152,280,717

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Conversion of convertible debt into common stock

Common Stock to be issued

Foreign currency adjustment

Common stock issued for cash

Balance at June 30, 2024

8,928,508,901

Preferred Stock

Common stock issued for cash, net of fees

Conversion of convertible debt into common stock

Common Stock to be issued

Foreign currency adjustment

Common stock issued for cash

Net Income (loss)

Balance at September 30, 2024

Balance at December 31, 2024

10,551,957,534

$ 1,055,196.00

2,545,555,556

Common stock issued for cash, net of fees

1,265,018,666

Conversion of convertible debt into common stock

2 unchanged sentences

Common Stock to be issued

( 120,000,000 )

Foreign currency adjustment

Common stock issued for cash

Net Income (loss)

Balance at March 31, 2025

12,186,976,200

2,175,555,556

Common stock issued for cash, net of fees

1,729,672,017

Conversion of convertible debt into common stock

3 unchanged sentences

Foreign currency adjustment

Common stock issued for cash

Net Income (loss)

Balance at June 30, 2025

14,666,648,217

Common stock issued for cash, net of fees

Conversion of convertible debt into common stock

Issuance of common stock for legal settlement

( 2,767,857 )

the accompanying notes to the unaudited condensed consolidated financial statements

Common Stock to be issued

Foreign currency adjustment

Common stock issued corrections

Net Income (loss)

Balance at September 30, 2025

DARKPULSE, INC.

Consolidated Statement of Stockholders'

Deficit (Continued)

For the Three Months Ended June 30, 2025 and

CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025

Treasury stock

Additional paid-in

Non- controlling

Accumulated other comprehensive

stockholders’ deficit

Accumulated other compre-

Total stockholders’ deficit

Balance at December 31, 2023

6 unchanged sentences

Foreign currency adjustment

Common stock issued for cash

Balance at March 31, 2024

3 unchanged sentences

Common stock issued for cash, net of fees

Issuance of common stock for legal settlement

Conversion of convertible debt into common stock

Common Stock to be issued

Foreign currency adjustment

Common stock issued for cash

( 2,410,261 )

4 unchanged sentences

( 19,156,321 )

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

Conversion of convertible debt into common stock

Common Stock to be issued

Foreign currency adjustment

( 1,222,455 )

Common stock issued for cash

Net Income (loss)

Balance at September 30, 2024

$ ( 2,475,811 )

$ ( 70,910,769 )

( 20,285,272 )

Balance at December 31, 2024

$ ( 1,627,086 )

$ ( 71,259,677 )

$ ( 16,996,834 )

Common stock issued for cash, net of fees

3 unchanged sentences

Foreign currency adjustment

Common stock issued for cash

Net Income (loss)

8 unchanged sentences

Foreign currency adjustment

Common stock issued for cash

Net Income (loss)

3 unchanged sentences

$ ( 18,241,451 )

See the accompanying

notes to the unaudited condensed consolidated financial statements

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

Common stock issued corrections

Net Income (loss)

Balance at September 30, 2025

$ ( 2,375,806 )

$ ( 72,752,633 )

$ ( 18,228,754 )

See the accompanying notes to the unaudited condensed

consolidated financial statements

DARKPULSE, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED

Six Months Ended June 30,

CONSOLIDATED STATEMENT OF CASH FLOWS

Nine Months Ended

Cash flows from operating activities:

6 unchanged sentences

Loss on equity investment

Issuance of common stock for legal settlement

Amortization of debt discount

Impairment of goodwill and intangible assets

Bad debt expense

1 unchanged sentence

Operating lease expense

(Gain)/Loss on Disposal of Asset

Loss on converible notes

Discontinued operations

Changes in operating assets and liabilities:

Accounts receivable

Contract assets

Prepaid expenses and other assets

Contract liabilities

Loss provision for contracts in progress

Accounts payable and accrued expenses

2 unchanged sentences

Other liabilities

Net cash provided by (used in) operating

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

Issuance of note receivable, related party

Advances to related party

Net cash provided by (used in) investing

Net cash provided (used) in investing activities

Cash flows from financing activities:

Issuance of common stock, net of fees

Proceeds from convertible notes

Proceeds from notes payable

Net repayments of loan payable

Net cash provided by (used in) financing

Net cash provided (used) by financing activities

Net change in cash

11 unchanged sentences

DARKPULSE, INC.

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS UNAUDITED

NOTE 1 – BASIS OF FINANCIAL

STATEMENT PRESENTATION

Organization and Description of Business

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION

Organization and Description

DarkPulse, Inc.

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

wholly- owned subsidiary, DarkPulse Technologies Inc.

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

of New Brunswick, Fredericton, Canada.

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

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

Current uses of fiber optic distributed sensor technology have

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

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

resolution and accuracy.

The Company’s subsidiaries consist

Terradata Unmanned PLLC, based in Florida;

(“DPI” or “Company”) is a technology-security

company incorporated in 1989 as Klever Marketing, Inc.

Its’ wholly- owned subsidiary, DarkPulse Technologies

(“DPTI”), originally started as a technology spinout from the University of New Brunswick, Fredericton, Canada.

The Company’s

security and monitoring systems will initially be delivered in applications for border security, pipelines, the oil and gas industry and

Current uses of fiber optic distributed sensor technology have been limited to quasi-static, long-term structural health

monitoring due to the time required to obtain the data and its poor precision.

The Company’s patented BOTDA dark-pulse sensor technology

allows for the monitoring of highly dynamic environments due to its greater resolution and accuracy.

The Company’s subsidiaries consist of:

Terradata Unmanned PLLC,

based in Florida;

DarkPulse UK Ltd, based in the United Kingdom;

Optilan India Pvt Ltd, based in Navi-Mumbai;

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

and DarkPulse Technologies – FZCO based in Dubai, UAE.

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 Technologies – FZCO will provide Science & Technology Consultancy, Building Maquette & Model Makers and

Security Systems Ltd, based in Ankara Turkey;

and DarkPulse Technologies – FZCO, based in Dubai, UAE.

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 Europe.

Technologies – FZCO will provide science and technology consultancy, building maintenance and model makers and information technology

(“IT”) infrastructure.

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

A summary of the significant accounting

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

Basis of Presentation and Principles of

Consolidation

The Company’s consolidated financial

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

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

All material intercompany balances

and transactions have been eliminated in consolidation.

The Company evaluates its relationships

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

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

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

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

then that entity is consolidated.

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 Company’s consolidated financial statements are prepared

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

The consolidated financial statements

of the Company include the Company and its wholly-owned subsidiaries.

All material intercompany balances and transactions have been eliminated

in consolidation.

The Company evaluates its relationships with other entities to identify

whether they are variable interest entities (“VIE”) as defined by Financial Accounting Standards Board (“FASB”)

Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“ASC 810”), and to assess whether it is the

primary beneficiary of such entities.

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

Use of Estimates

The preparation of the Company’s

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

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

amounts of revenues and expenses during the reporting period.

Significant estimates and assumptions reflected in these financial statements

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

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

it believes to be reasonable under the circumstances.

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

circumstances, facts and experience.

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

Actual results could

differ from those estimates.

The Company considers all highly liquid

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

The Company places its cash with high credit

quality financial institutions.

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

(“FDIC”) up to $250,000.

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

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

The preparation of the Company’s financial statements in conformity

with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure

of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during

the reporting period.

Significant estimates and assumptions reflected in these financial statements include, but are not limited to, assumptions

used to calculate derivative liabilities, revenue recognition and impairment of long-lived assets.

The Company bases its estimates on

historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience.

Changes in estimates

are recorded in the period in which they become known.

Actual results could differ from those estimates.

The Company considers all highly liquid investments with a maturity

of three months or less when acquired to be cash equivalents.

The Company places its cash with high credit quality financial institutions.

The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.

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

the financial institution in which it holds deposits.

Accounts Receivable

Accounts receivable and contract assets

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

Most billings are determined based on contractual

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

as current assets.

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

on those contracts may extend beyond one year.

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

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

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

Billings for such retention

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

Generally, unbilled amounts will be billed and

collected within one year.

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

but not expected to be collected within one year.

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

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

Each month, the Company reviews its

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

perceived collection issues.

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

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

As of June 30, 2025 and 2024, the Company determined

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

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 assets.

The contracting

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

beyond one year.

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

Such provisions

are standard in the Company’s industry and usually allow for a portion of progress billings on the contract price, typically 5-10%,

to be withheld by the customer until after the Company has completed work on the project.

Billings for such retention balances at each

balance sheet date are finalized and collected after project completion.

Generally, unbilled amounts will be billed and collected within

The Company determined that there are no material amounts due past one year and no material amounts billed but not expected

to be collected within one year.

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

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

Each month, the Company reviews its receivables on a customer-by-customer

basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or perceived collection issues.

that are eventually deemed uncollectible are written off against the allowance after all means of collection have been exhausted and the

potential for recovery is considered remote.

As of September 30, 2025 and 2024, the Company determined that the allowance for doubtful

accounts was $ 0 and $ 0 , respectively.

Foreign Currency Translation

The Company’s reporting currency

is US Dollars.

The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, British Pound

(“GBP”) as the functional currency, as well as the Turkish lira, (“TL”), United Arab Emirates Dirham (“AED”),

and Indian Rupee (“INR”).

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

currency, Canadian Dollar (“CAD”) as the functional currency.

The Company’s reporting currency is US Dollars.

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, (“TL”), United Arab Emirates Dirham (“AED”), 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.

All assets and liabilities are translated into U.S.

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

for the six months ended June 30, 2025 a closing rate at 1.3735 US$:

GBP, average rate at 1.3565 US$:GBP, a closing rate of 1.3607

US$:CAD a closing rate of .01167 INR:USD, a closing rate of TRY:USD .0251 and a closing rate of .2723 UAE :USD.

The relevant translation rates are as

for the six months ended June 30, 2024 a closing rate at 1.2649 US$:

GBP, average rate at 1.2716 US$:GBP and closing rate at

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, 2025 a closing rate at 1.3447 US$:

GBP, average rate at 1.2064 US$:GBP, a closing rate of .7185 US$:CAD a closing

rate of .01126 INR:USD, a closing rate of TRY:USD .02405 and a closing rate of .2723 UAE :USD.

The relevant translation rates are as follows:

for the nine months

ended September 30, 2024 a closing rate at 1.35229 US$:

GBP, a closing rate at CAD$:USD, $ 0.7395 , $ 0.01193 INR$:USD and $ 0.02936 TL$:USD.

Long-Lived Assets and Goodwill

The Company accounts for long-lived

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

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

that the carrying amount may not be recoverable.

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

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

If the carrying amount of an asset exceeds

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

fair value of the asset.

Indefinite-lived intangible assets established

in connection with business combinations consist of the tradename.

The impairment test for identifiable indefinite-lived intangible assets

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

If the carrying value exceeds its

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

The Company accounts for goodwill and

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

Goodwill represents the excess of the purchase price

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

ASC 350 requires that goodwill and other intangibles

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

of an asset has decreased below its carrying value.

This guidance simplifies the accounting for goodwill impairment by removing Step 2

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

The quantitative impairment test calculates

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

amount of goodwill.

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

quarter every year.

The Company accounts for long-lived assets in accordance with the provisions

of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived Assets.

This accounting standard requires that long-lived

assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net

cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds its estimated future cash flows, an impairment

charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Indefinite-lived intangible assets established in connection with business

combinations consist of the tradename.

The impairment test for identifiable indefinite-lived intangible assets consists of a comparison

of the estimated fair value of the intangible asset with its carrying value.

If the carrying value exceeds its fair value, an impairment

loss is recognized in an amount equal to that excess.

The Company accounts for goodwill and intangible assets in accordance

with ASC 350, Intangibles – Goodwill and Other.

Goodwill represents the excess of the purchase price of an entity over the estimated

fair value of the assets acquired and liabilities assumed.

ASC 350 requires that goodwill and other intangibles with indefinite lives

be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased

below its carrying value.

This guidance simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment

test, which requires a hypothetical purchase price allocation.

The quantitative impairment test calculates any goodwill impairment as

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

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

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

Property and Equipment

Property and equipment are carried at

historical cost less accumulated depreciation.

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

calculated using the straight-line method.

Property and equipment are carried at historical cost less accumulated

depreciation.

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

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

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

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

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

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.

6 unchanged sentences

Revenue Recognition

The Company’s revenues are generated

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

systems, as well as habitat management.

The Company’s revenues are generated primarily from the sale

of our services, which consist primarily of advanced technology solutions for integrated communications and security systems, as well

as habitat management.

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

of products and services are separate from one another.

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

with customers and identify a performance obligation for each.

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

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

Sales of products and

services are separate from one another.

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

and identify a performance obligation for each.

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

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

The timing of satisfaction

6 unchanged sentences

other revenue recognition criteria have been met.

The Company recognizes revenue when

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

exchange for those goods or services.

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

of ASC 606, we perform the following five steps:

The Company recognizes revenue when its customer obtains control of

promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, we perform the following

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

(ii) identify the performance obligations

in the contract;

(iii) determine the transaction price;

(ii) identify the performance obligations in the contract;

(iii) determine the

transaction price;

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

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

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

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

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

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

We then recognize revenue

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

is satisfied.

The Company considers each individual

sale of service contract to be its own performance obligation.

Services in the contract are highly interdependent and interrelated, and

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

Therefore, each milestone is not separately

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

The Company records revenue over time

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

the goods and services transferred to the customer.

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

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

These milestones include Construction Phase Plan, Start of the construction

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

There are specified payments associated with these

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

In the event that there are advances such as upfront

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

and (v) recognize revenue when

(or as) we satisfy a performance obligation.

The five-step model is applied to contracts when it is probable that we will collect the

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

At contract inception, once the contract

is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that

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

We then recognize revenue in the amount of the

transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company considers each individual sale of service contract to be

its own performance obligation.

Services in the contract are highly interdependent and interrelated, and the successful completion of

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

Therefore, each milestone is not separately identifiable from other

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

The Company records revenue over time using the input measure as it

is the most faithful depiction of an entity’s performance because it directly measures the value of the goods and services transferred

to the customer.

The Company utilizes the Right to Invoice for these contracts, as the pricing structure is based on various milestones

that are specified in the contract.

These milestones include Construction Phase Plan, Start of the construction phase, installation phase,

site surveys, fiber splicing, recoveries, and closeouts.

There are specified payments associated with these milestones in the contract,

and the value allocated is commensurate with work done.

In the event that there are advances such as upfront retainers and not based on

the value, those are recorded as contract liabilities.

In accordance with ASU No.

Revenue from Contracts with Customers (Topic 606):

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

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

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

2016-12, Revenue from Contracts with Customers

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

for applying paragraph 606-10-25-7;

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

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

Cost of Revenues

Cost of revenues consists primarily

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

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

equipment manufacturer costs to provide continuing support to our customers.

Cost of revenues also includes direct labor attributable

to revenue service arrangements.

Cost of revenues consists primarily of materials and overhead costs

incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other implementation costs incurred

to install our products and train customer personnel, and customer service and third- party original equipment manufacturer costs to provide

continuing support to our customers.

Cost of revenues also includes direct labor attributable to revenue service arrangements.

Concentration of Credit Risk

Financial instruments that potentially

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

The Company has not experienced

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

with commercial banking relationships.

As of June 30, 2025, one customer accounted for 39 % of gross accounts receivable.

The Company accounts for its leases

under ASC 842, Leases.

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

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

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

Lease liabilities are

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

For operating

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

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

over the lease term.

Variable lease expenses are recorded when incurred.

In calculating the right of use asset

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

The Company excludes short-term leases having

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

basis over the lease term.

Financial instruments 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 September 30, 2025, one customer accounted for 39 % of gross accounts receivable.

The Company accounts for its leases under ASC 842, Leases.

guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the consolidated

balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at

the rate implicit in the lease or the Company’s incremental borrowing rate.

Lease liabilities are increased by interest and reduced

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

For operating leases, interest on the lease liability

and the amortization of the right of use asset result in straight-line rent expense over the lease term.

For finance leases, interest

on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term.

Variable lease

expenses are recorded when incurred.

In calculating the right of use asset and lease liability, the Company

has elected to combine lease and non-lease components.

The Company excludes short-term leases having initial terms of 12 months or less

from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term.

Derivative Financial Instruments

The Company evaluates the embedded conversion

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

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

For derivative

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

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

For stock-based derivative

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

instruments at inception and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments

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

Derivative instrument liabilities are

classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required

within 12 months after the balance sheet date.

The Company evaluates the embedded conversion feature within its convertible

debt instruments under ASC 815-15 and ASC 815-40 to determine if the conversion feature meets the definition of a liability and, if so,

whether to bifurcate the conversion feature and account for it as a separate derivative liability.

For derivative financial instruments

that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each

reporting date, with changes in the fair value reported in the statements of operations.

For stock-based derivative financial instruments,

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

and on subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded

as liabilities or as equity, is evaluated at the end of each reporting period.

Derivative instrument liabilities are classified in the

balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12

months after the balance sheet date.

Fair Value of Financial Instruments

The Company measures its financial assets

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

As defined in FASB ASC 820,

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

market participants at the measurement date (exit price).

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

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

in the inputs to the valuation technique.

The Company measures its financial assets and liabilities in accordance

with the requirements of FASB ASC 820, Fair Value Measurements and Disclosures.

As defined in FASB ASC 820, the fair value is the price

that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement

date (exit price).

The Company utilized the market data of similar entities in its industry or assumptions that market participants would

use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique.

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

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

FASB ASC 820 established a fair value hierarchy that

prioritizes the inputs used to measure fair value.

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

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

Level 1 – Quoted prices are available

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

Active markets are those in which transactions for the

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

Level 1 primarily consists

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

Level 2 – Pricing inputs are other

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

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

These models are primarily industry-standard

models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current

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

Substantially all of these

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

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

Instruments in this category generally include non- exchange-traded

derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include

significant inputs that are generally less observable from objective sources.

These inputs may be used with internally developed methodologies

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

The Company’s derivative liability

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

The Company classifies fair value balances based

on the observability of those inputs.

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level

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

Level 1 – Quoted prices are available in active markets for identical

assets or liabilities as of the reporting date.

Active markets are those in which transactions for the asset or liability occur in sufficient

frequency and volume to provide pricing information on an ongoing basis.

Level 1 primarily consists of financial instruments such as exchange-traded

derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active

markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments

that are valued using models or other valuation methodologies.

These models are primarily industry-standard models that consider various

assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices

for the underlying instruments, as well as other relevant economic measures.

Substantially all of these assumptions are observable in

the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels

at which transactions are executed in the marketplace.

Instruments in this category generally include non- exchange-traded derivatives

such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include significant inputs that are

generally less observable from objective sources.

These inputs may be used with internally developed methodologies that result in management’s

best estimate of fair value.

The Company’s derivative liability is a Level 3 liability measured

at fair value on a recurring basis.

Equity Investments

The Company uses the equity method to

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

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

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

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

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

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

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

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

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

Gain (loss) on equity investment

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

of operations and comprehensive (loss).

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

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

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

as a single amount.

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

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

The Company accounts for income taxes

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

to calculating deferred income taxes.

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

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

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

the net deferred asset will not be realized.

The Company follows the provision of

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

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

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

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

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

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

processes, if any.

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

Tax positions that meet the more likely

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

upon settlement with the applicable taxing authority.

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

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

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

The Company believes its tax positions

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

The Company uses the equity method to account for investments in which

it has the ability to exercise significant influence over the investee’s operating and financial policies, or in which it holds

a partnership or limited liability company interest in an entity with specific ownership accounts, unless it has virtually no influence

over the investee’s operating and financial policies.

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

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

Equity method investments

are recorded at cost and are adjusted to recognize (1) the Company’s share, based on percentage ownership or other contractual basis,

of the investee’s net income or loss after the date of investment, (2) amortization of the recorded investment that exceeds the

Company’s share of the book value of the investee’s net assets, (3) additional contributions made and dividends received,

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

Gain (loss) on equity investment includes realized gains

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

comprehensive (loss).

Per ASC 323-10-30-2, Joint Ventures are accounted for using the equity

method, in which the Company initially records its investment at cost, including transaction costs.

Under the equity method, an investment

in common stock and in-substance common stock is presented on the balance sheet of an investor as a single amount.

However, any difference

between the cost of the investment and the underlying equity in net assets of an investee — commonly referred to as a basis difference

— should be accounted for as if the investee were a consolidated subsidiary.

The Company accounts for income taxes pursuant to the provision of

ASC 740-10, (“ASC 740-10”) which requires, among other things, an asset and liability approach to calculating deferred income

The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences

of temporary differences between the carrying amounts and the tax bases of assets and liabilities.

A valuation allowance is provided to

offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of ASC 740-10 related to Accounting

for Uncertain Income Tax Positions.

When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount

of the position that would be ultimately sustained.

In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized

in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not

that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

Tax positions

taken are not offset or aggregated with other positions.

Tax positions that meet the more likely than not recognition threshold

are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable

taxing authority.

The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should

be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties

that would be payable to the taxing authorities upon examination.

The Company believes its tax positions are all more likely than not

to be upheld upon examination.

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

The Company has adopted ASC 740-10-25,

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

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

and examination by a taxing authority without being legally extinguished.

For tax positions considered effectively settled, an entity

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

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

The federal and state income tax returns of the

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

The Company's U.S.

subsidiaries were

incorporated in 2017.

The Company does not anticipate a tax liability for the years 2025 and 2024, 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 has adopted ASC 740-10-25, Definition of Settlement which

provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously

unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing

authority without being legally extinguished.

For tax positions considered effectively settled, an entity would recognize the full amount

of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical

merits and the statute of limitations remains open.

The federal and state income tax returns of the Company are subject to examination

by the IRS and state taxing authorities, generally for three years after they are filed.

The Company does not anticipate a tax liability for the years 2025

and 2024, however may be subject to certain penalties.

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

and they are still subject to audit.

Non-controlling Interests

Non-controlling interests are classified

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

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

net income (loss) and comprehensive income (loss) in the consolidated statements of comprehensive income (loss) and statements of changes

in stockholders’ equity.

Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted

for as an equity transaction between the controlling and non-controlling interests.

In addition, when a subsidiary is deconsolidated,

any retained non- controlling equity investment in the former subsidiary will be initially measured at fair value and the difference between

the carrying value and fair value of the retained interest will be recorded as a gain or loss.

The Company has non-controlling interests

via its subsidiaries TerraData, Remote Intelligence and Wildlife Specialists.

During the six months ended June 30,

2025 and 2024, the Company recorded a loss of $ 7,749 and $ 9,453 respectively, attributable to non- controlling interests.

Non-controlling interests are classified as a separate component of

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

Net income (loss) and comprehensive

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

income (loss) in the consolidated statements of comprehensive income (loss) and statements of changes in stockholders’ equity.

change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between

the controlling and non-controlling interests.

In addition, when a subsidiary is deconsolidated, any retained non- controlling equity

investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value

of the retained interest will be recorded as a gain or loss.

The Company has non-controlling interests via its subsidiaries TerraData,

Remote Intelligence and Wildlife Specialists.

During the nine months ended September 30, 2025 and 2024, the Company

recorded a loss of $ 11,747 and $ 5,598 respectively, attributable to non- controlling interests.

Comprehensive Loss

Comprehensive loss includes net loss

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

During the six months ended June 30, 2025 and 2024, the Company’s only element of other comprehensive loss was foreign currency

Comprehensive loss includes net loss well as other changes in stockholders’

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

During the nine months ended September 30,

2025 and 2024, the Company’s only element of other comprehensive loss was foreign currency translation.

Stock-based Compensation

Stock-based compensation is accounted

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

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

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

The ASC also requires measurement

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

Pursuant to ASC Topic 718, for share-based

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

is recognized over the vesting period of the award.

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

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

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

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

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

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

Stock-based compensation is accounted for based on the requirements

of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee

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

perform the services in exchange for the award (presumptively, the vesting period).

The ASC also requires measurement of the cost of employee

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

Pursuant to ASC Topic 718, for share-based payments to consultants

and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the

vesting period of the award.

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

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

Further, ASC Topic 718, provides guidance

about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718, such as the repricing of share options, which would revalue those options and the accounting for the cancellation of an equity award

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

If not, the cancellation is

viewed as a replacement and not a modification, with a repurchase price of $ 0 .

Loss Per Common Share

The Company accounts for earnings per

share pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements of “basic” and “diluted”

earnings (loss) per share.

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

of common shares outstanding for the year.

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

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

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

Potentially dilutive items outstanding as of

June 30, 2025 and 2024 are as follows:

The Company accounts for earnings per share pursuant to ASC 260, Earnings

per Share, which requires disclosure on the financial statements of “basic” and “diluted” earnings (loss) per

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

for the year.

Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares

outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.

In periods where the Company

has a net loss, all dilutive securities are excluded.

Potentially dilutive items outstanding as of September 30, 2025 and 2024 are as

Schedule of anti-dilutive securities

1 unchanged sentence

Series D preferred stock

Recently Issued Accounting Pronouncements

On January 1, 2023, the Company adopted

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

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

– Credit Losses (Topic 326):

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

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

loss (“CECL”) methodology.

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

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

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

unfunded commitments to extend credit.

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

collected by using an allowance for credit losses.

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

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

Management does not believe that any

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

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

NOTE 3 – LIQUIDITY AND GOING

The Company generated net losses of

$ 1,033,417 and $ 2,953,104 during the six months ended June 30, 2025 and 2024, respectively, and net cash provided (used) in operating

activities of $ 494,513 and $( 313,725 ), respectively.

As of June 30, 2025, the Company’s current liabilities exceeded its current

assets by $ 18,484,093 and had an accumulated deficit of $ 72,285,347 .

As of June 30, 2025, the Company had $ 102,134 of cash.

The Company will require additional

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

These factors,

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

Company’s ability to continue as a going concern.

The Company is seeking to raise additional capital principally through private

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

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

financing arrangements or expansion of its operations.

The accompanying consolidated financial statements do not include any adjustments

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

Management is actively pursuing additional sources

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

financial statements.

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

This standard replaced

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

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

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

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

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

for credit losses.

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

consolidated financial statements and related disclosures.

Management does not believe that any other recently issued, but not

yet effective, accounting standards could have a material effect on the accompanying financial statements.

As new accounting pronouncements

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

NOTE 3 – LIQUIDITY AND GOING CONCERN

The Company generated net losses of $ 1,504,701 and $ 3,540,148 during

the nine months ended September 30, 2025 and 2024, respectively, and net cash provided/(used) in operating activities of $ 102,869

and $ 29,782 , respectively.

As of September 30, 2025, the Company’s current liabilities exceeded its current assets by $ 18,517,073

and had an accumulated deficit of $ 72,752,633 .

As of September 30, 2025, the Company had $ 44,499 of cash.

The Company will require additional funding during the next twelve

months to finance the growth of its current operations and achieve its strategic objectives.

These factors, as well as the uncertain conditions

that the Company faces relative to capital raising activities, create substantial doubt as to the Company’s ability to continue

as a going concern.

The Company is seeking to raise additional capital principally through private placement offerings and is targeting

strategic partners in an effort to finalize the development of its products and begin generating revenues.

The ability of the Company

to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements or expansion

of its operations.

The accompanying consolidated financial statements do not include any adjustments that might be necessary should the

Company be unable to continue as a going concern.

Management is actively pursuing additional sources of financing sufficient to generate

enough cash flow to fund its operations for twelve months from the issuance date of these consolidated financial statements.

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

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 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 the acquisition method of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated

to the underlying assets and liabilities in proportion to their respective actual values as of the purchase date.

The excess of the consideration

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

The following table summarizes

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

Optilan India PVT Ltd and Optilan Communication & Security

Systems, Ltd.

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.

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

The Company has accounted for the purchase using the acquisition method

of accounting for business combinations under ASC 805.

Accordingly, the purchase price has been allocated to the underlying assets and

liabilities in proportion to their respective actual values as of the purchase date.

The excess of the consideration transferred over

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

The following table summarizes the acquired assets

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

Schedule of acquired assets and assumed liabilities

2 unchanged sentences

Purchase price

The allocation of the total purchase

price to the tangible and intangible assets acquired and liabilities assumed by DarkPulse based on actual values as of September 11,

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

completed in December 2024 are as follows:

The allocation of the total purchase price to

the tangible and intangible assets acquired and liabilities assumed by DarkPulse based on actual values as of September 11, 2024, and

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

in December 2024 are as follows:

Schedule of fair value assets acquired and liabilities

2 unchanged sentences

Acquisition Date

Measurement Period

Measurement Period Adjustments

Accounts receivable

5 unchanged sentences

NOTE 5 – REVENUE

The following table is a summary of the

Company’s timing of revenue recognition for the six months ended June 30, 2025 and 2024:

The following table is a summary of the Company’s

timing of revenue recognition for the nine months ended September 30, 2025 and 2024:

Schedule of timing of revenue recognition

2 unchanged sentences

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

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 six months ended June 30, 2025 and 2024:

for the nine months ended September 30, 2025 and 2024:

Schedule of revenue by source

Total revenue

Revenue by geographic destination consisted

of the following for the six months ended June 30, 2025 and 2024:

Revenue by geographic destination consisted of

the following for the nine months ended September 30, 2025 and 2024:

Schedule of revenue by geographic destination

3 unchanged sentences

Total revenue

Contract revenue is recognized over

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

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

transfer of control of goods or services to the customer.

The contractual terms provide that the customer compensates the Company for

services rendered.

Contract costs include all direct materials,

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

and the costs of capital equipment.

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

is based on the professional knowledge and experience of the Company’s project managers, engineers and financial professionals.

Management reviews estimates of total contract transaction price and total project costs on an ongoing basis.

Changes in job performance,

job conditions and management’s assessment of expected variable consideration are factors that influence estimates of the total

contract transaction price, total costs to complete those contracts and profit recognition.

Changes in these factors could result in revisions

to revenue and costs of revenue in the period in which the revisions are determined on a prospective basis, which could materially affect

the Company’s consolidated results of operations for that period.

Provisions for losses on uncompleted contracts are recorded in

the period in which such losses are determined.

Contract revenue is recognized over time using the cost-to-cost measure

of progress for fixed price contracts.

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

services to the customer.

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

Contract costs include all direct materials, labor and subcontracted

costs, as well as indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and the costs of capital

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

knowledge and experience of the Company’s project managers, engineers and financial professionals.

Management reviews estimates

of total contract transaction price and total project costs on an ongoing basis.

Changes in job performance, job conditions and management’s

assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs

to complete those contracts and profit recognition.

Changes in these factors could result in revisions to revenue and costs of revenue

in the period in which the revisions are determined on a prospective basis, which could materially affect the Company’s consolidated

results of operations for that period.

Provisions for losses on uncompleted contracts are recorded in the period in which such losses

are determined.

Performance Obligations

A performance obligation is a contractual

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

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

performance obligations are satisfied.

The Company’s contracts often require significant integrated services and, even when delivering

multiple distinct services, are generally accounted for as a single performance obligation.

Contract amendments and change orders are

generally not distinct from the existing contract due to the significant integrated service provided in the context of the contract and

are accounted for as a modification of the existing contract and performance obligation.

The majority of the Company’s performance

obligations are completed within one year.

When more than one contract is entered

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

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

This evaluation

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

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

A performance obligation is a contractual promise to transfer a distinct

good or service to the customer and is the unit of account under Accounting Standards Codification (“ASC”) Topic 606.

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

obligations are satisfied.

The Company’s contracts often require significant integrated services and, even when delivering multiple

distinct services, are generally accounted for as a single performance obligation.

Contract amendments and change orders are generally

not distinct from the existing contract due to the significant integrated service provided in the context of the contract and are accounted

for as a modification of the existing contract and performance obligation.

The majority of the Company’s performance obligations

are completed within one year.

When more than one contract is entered into with a customer on or close

to the same date, the Company evaluates whether those contracts should be combined and accounted for as a single contract as well as whether

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

This evaluation requires significant judgment and is

based on the facts and circumstances of the various contracts, which could change the amount of revenue and profit recognition in a given

period depending upon the outcome of the evaluation.

Contract Assets and Liabilities

The Company bill its customers based

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

Sometimes, billing occurs after

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

Sometimes the Company receives advances

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

Contract assets in the consolidated

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

has not been billed.

Contract assets and liabilities on June

30, 2025 are $ 0 .

The Company bill its customers based on contractual terms, including,

milestone billings based on the completion of certain phases of the work.

Sometimes, billing occurs after revenue recognition, resulting

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

Sometimes the Company receives advances payments from our customers before

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

Contract assets in the consolidated balance sheets represents costs

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

Contract assets and liabilities on September 30, 2025 are $ 0 .

Variable Consideration

Transaction pricing for the Company’s

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

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

to which the Company will be entitled.

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

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

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

price are based on past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer,

legal evaluations and all other relevant information that is reasonably available.

The effect of a change in variable consideration on

the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis.

To the extent unapproved change orders, claims and liquidated damages reflected in transaction price are not resolved in the Company’s

favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously

recognized revenue.

Transaction pricing for the Company’s contracts may include variable

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

Management estimates variable consideration

for a performance obligation utilizing estimation methods that best predict the amount of consideration to which the Company will be entitled.

Variable consideration is included in the estimated transaction price to the extent it is probable that a significant reversal of cumulative

revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Management’s estimates

of variable consideration and determination of whether to include estimated amounts in transaction price are based on past practices with

the customer, specific discussions, correspondence or preliminary negotiations with the customer, legal evaluations and all other relevant

information that is reasonably available.

The effect of a change in variable consideration on the transaction price of a performance obligation

is typically recognized as an adjustment to revenue on a cumulative catch-up basis.

To the extent unapproved change orders, claims and

liquidated damages reflected in transaction price are not resolved in the Company’s favor, or to the extent incentives reflected

in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue.

NOTE 6 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the

Accounts receivable consisted of the following:

Schedule of accounts receivable

September 30,

Accounts receivable

4 unchanged sentences

Schedule of property and equipment

September 30,

Property and equipment

3 unchanged sentences

Property and equipment, net

Depreciation expenses was $ 49,558 and

$ 63,872 for the six months ended June 30, 2025 and 2024, respectively.

NOTE 8 - GOODWILL AND INTANGIBLE

The following is a summary of activity

of goodwill for the three months ended June 30, 2025:

Depreciation expenses was $ 64,199 and $ 95,709 for the nine months ended

September 30, 2025 and 2024, respectively.

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

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

ended September 30, 2025:

Schedule of goodwill activity

1 unchanged sentence

Foreign exchange translation

Balances at June 30, 2025

Patents - Intrusion Detection

Intellectual Property

The Company relies on patent laws and

restrictions on disclosure to protect its intellectual property rights.

As of June 30, 2025 and 2024, the Company held three U.S.

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

The DPTI issued patents cover a System

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

Deformation System Sensor and Method.

Balances at September 30, 2025

Patents - Intrusion Detection Intellectual Property

The Company relies on patent laws and restrictions on disclosure to

protect its intellectual property rights.

As of September 30, 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 for Brillouin Analysis,

a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber Optic Deformation System Sensor and Method.

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

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

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

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

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

Further, the Company may be required

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

costs and diversion of management's attention.

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

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

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

For the six months ended June 30, 2025

and 2024, the Company had patent amortization costs on its intrusion detection technology totaling $ 25,514 and $ 25,514 , respectively.

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

The DPTI issued patents cover a System

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

Deformation System Sensor and Method.

Any patents that may be issued may

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

Other parties may independently

develop similar or competing technology or design around any patents that may be issued to the Company.

The Company cannot be certain

that the steps it has taken will prevent the misappropriation of its intellectual property, particularly in foreign countries where the

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

Further, the Company may be required to enforce its intellectual

property or other proprietary rights through litigation, which, regardless of success, could result in substantial costs and diversion

of management's attention.

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

business, and it is not possible to know whether there are patent applications pending that the Company's products might infringe upon,

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

For the nine months ended September 30, 2025 and 2024, the Company

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

Patents costs are being

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

The DPTI issued patents cover a System and Method for Brillouin Analysis,

a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber Optic Deformation System Sensor and Method.

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

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

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

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

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

Further, the Company may be required

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

costs and diversion of management's attention.

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

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

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

The following is a summary of the DPTI

patents as of June 30, 2025 and 2024:

Any patents that may be issued may

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

Other parties may independently

develop similar or competing technology or design around any patents that may be issued to the Company.

The Company cannot be certain

that the steps it has taken will prevent the misappropriation of its intellectual property, particularly in foreign countries where the

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

Further, the Company may be required to enforce its intellectual

property or other proprietary rights through litigation, which, regardless of success, could result in substantial costs and diversion

of management's attention.

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

business, and it is not possible to know whether there are patent applications pending that the Company's products might infringe upon,

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

The following is a summary of the DPTI patents as of September 30,

2025 and 2024:

Schedule of patents

accumulated amortization

Future expected amortization of patents is as follows:

Future expected amortization

of patents is as follows:

As of December 31,

1 unchanged sentence

Total patents

NOTE 9 – ACCOUNTS PAYABLE

AND ACCRUED EXPENSES

Accounts payable and accrued expenses

consist of the following as of June 30, 2025 and June 30, 2024:

NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following as

of September 30, 2025 and September 30, 2024:

Schedule of accounts payable and accrued expenses

September 30,

Accounts payable

3 unchanged sentences

Convertible Notes

The Company uses the Black-Scholes Model

to calculate the derivative value of its convertible debt.

The valuation result generated by this pricing model is necessarily driven

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

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

the date of issue of the debt security as of June 30, 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.

Management made the determination

to use an expected life rather than contractual life for the calculations for the matured debt as of June 30, 2025 and 2024.

As of June, 2025 and, 2024, there was

$ 0 and $ 91,971 of convertible debt principal outstanding, respectively.

During the six months ended June 30, 2025 and 2024, $ 0 and $ 0

of the debt discount was amortized.

The Company uses the Black-Scholes Model to calculate the derivative

value of its convertible debt.

The valuation result generated by this pricing model is necessarily driven by the value of the underlying

common stock incorporated into the model.

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

security as of September 30, 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.

Management made the determination to use an expected life

rather than contractual life for the calculations for the matured debt as of September 30, 2025 and 2024.

As of September, 2025 and, 2024, there was $ 0 and $ 0 of convertible

debt principal outstanding, respectively.

During the nine months ended September 30, 2025 and 2024, $ 0 and $ 0 of the debt discount was

The summary of convertible notes are:

Schedule of convertible notes

September 30,

Principal Outstanding

1 unchanged sentence

Convertible notes, net

During the three months ended June 30, 2025 and

2024, change in fair value of the derivative liability was $ 90,103 and $ 94,759 , respectively.

The following is a summary of the derivative

During the three months ended September 30, 2025 and 2024, change in

fair value of the derivative liability was ($ 91,495 ) and ($ 117,526 ), respectively.

The following

is a summary of the derivative liability:

Schedule of derivative liability

Balances at December 31, 2024

Loss on issuance of debt

Gain on issuance of debt

Issuance of convertible note - 1800 Diagonal Lending

1 unchanged sentence

EMA settlement

Balances at June 30, 2025

Balances at September 30, 2025

Notes Payable

On August 27, 2024, the Company entered

into a promissory note for a principal of $ 67,200 , which was funded on August 30, 2024.

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

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

On September 5, 2025, the Company entered into

a promissory note for a principal of $ 57,000 , which was funded on September 10, 2025.

The note bears interest at a rate of 15 % per annum

and matures after nine months.

On November 20, 2024, the Company entered

into a promissory note for a principal of $ 67,860 , which was funded on December 2, 2024.

The note bears interest at a rate of 15 % per

annum and matures after nine months.

Loans Payable

The Company’s RI and WS subsidiaries

have various loans including Small Business Association (“SBA”) Economic Injury Disaster Loan (“EIDL’) loans,

lines of credit and other advances.

The Company’s RI and WS subsidiaries have

various loans including Small Business Association (“SBA”) Economic Injury Disaster Loan (“EIDL’) loans, lines

of credit and other advances.

The loans bear interest with varying rates up to 9.25% per annum.

The following is a summary of the

loans payable at June 30, 2025 and December 31, 2024:

The following is a summary of the loans

payable at September 30, 2025 and December 31, 2024:

Schedule of loans payable

September 30, 2025

December 31, 2024

RI - line of credit

10 unchanged sentences

NOTE 11 – SECURED DEBENTURE

DPTI issued a convertible Debenture to the University

(see Note 1) in exchange for the Patents assigned to the Company, in the amount of Canadian $1,500,000, or US $1,491,923 on December 16,

2010, the date of the Debenture.

On April 24, 2017 DPTI issued a replacement secured term Debenture in the same CAD 1,500,000 amount as

the original Debenture.

DPTI issued a convertible Debenture to the University (see Note 1)

in exchange for the Patents assigned to the Company, in the amount of Canadian $1,500,000, or US $1,491,923 on December 16, 2010, the

date of the Debenture.

On April 24, 2017 DPTI issued a replacement secured term Debenture in the same CAD 1,500,000 amount as the original

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

Interest-only maintenance payments are due annually starting after April 24, 2018.

Payment of the principal begins

on the earlier of (a) three years following two consecutive quarters of positive earnings before interest, taxes, depreciation and amortization,

(b) six years from April 24, 2017, or (c) in the event DPTI fails to raise defined capital amounts or secure defined contract amounts

by April 24 in the years 2018, 2019, and 2020.

Payment of the principal begins on the earlier

of (a) three years following two consecutive quarters of positive earnings before interest, taxes, depreciation and amortization, (b)

six years from April 24, 2017, or (c) in the event DPTI fails to raise defined capital amounts or secure defined contract amounts by April

24 in the years 2018, 2019, and 2020.

The Company has raised funds in excess of the amount required for 2020, 2019 and 2018.

Beginning in 2023, The principal repayment amounts will be due quarterly over a six-year period in the amount of Canadian Dollars 62,500.

Beginning in 2023, The principal repayment amounts will be due quarterly

over a six-year period in the amount of Canadian Dollars 62,500.

Based on the exchange rate between the Canadian Dollar and the U.S.

Dollar on December 31, 2018, the quarterly principal repayment amounts

will be US$48,447.

The Debenture is secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16,

DPTI has pledged the Patents and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the

The Debenture was initially recorded

at the $1,491,923 equivalent US Dollar amount of Canadian 1,500,000 as of December 16, 2010, the date of the original Debenture.

The liability

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

adjustment is recorded as unrealized gain or loss in the change of the value of the two currencies during the quarter.

The Debenture also

includes a provision requiring DPTI to pay the University a 2% royalty on sales of any and all products or services which incorporate

the Patents for a period of five years from April 24, 2018.

on December 31, 2018, the quarterly principal repayment amounts will be US$48,447.

The Debenture is secured by the Patents assigned by

the University to DPTI by an Assignment Agreement on December 16, 2010.

DPTI has pledged the Patents and granted a lien on them pursuant

to an Escrow Agreement dated April 24, 2017, between DPTI and the University.

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

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

The liability is being adjusted quarterly

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

The adjustment is recorded as

unrealized gain or loss in the change of the value of the two currencies during the quarter.

The Debenture also includes a provision requiring

DPTI to pay the University a 2% royalty on sales of any and all products or services which incorporate the Patents for a period of five

years from April 24, 2018.

To date, no royalties have been paid.

For the six months ended June 30, 2025

and 2024, the Company recorded interest expense of $ 6,699 and $ 77,644 , respectively.

As of June 30, 2025 and 2024, the outstanding balance

of the debenture liability totaled $ 757,866 and 1,099,250 , respectively.

Future minimum required payments over

the next five years and thereafter are as follows:

For the nine months ended September 30, 2025 and 2024, the Company

recorded interest expense of $ 22,648 and $ 12,008 , respectively.

As of September 30, 2025 and 2024, the outstanding balance of the debenture

liability totaled $ 673,594 and 1,110,300 , respectively.

Future minimum required

payments over the next five years and thereafter are as follows:

Schedule of future minimum required payments

Period ending June 31,

Period ending September 30,

NOTE 12 – LEASES

The following was included in our balance sheet as of June 30, 2025 and 2024:

The following was included

in our balance sheet as of September 30, 2025 and 2024:

Schedule of operating lease

4 unchanged sentences

Total operating lease liabilities

The weighted average remaining lease

term and weighted average discount rate at June 30, 2025 and 2024 were as follows:

Schedule of weighted average remaining lease term and discount rate

Operating Leases

Weighted average remaining lease term (years)

Weighted average discount rate

Operating Leases

On January 15, 2025 SVEA Cameron Esperson

filed its Motion for Nonsuit without Prejudice.

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.

NOTE 13 – STOCKHOLDERS’

EQUITY (DEFICIT)

NOTE 13 – STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

In accordance with the Company’s

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

30, 2025 and December 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 June 30 30, 2025

and December 2024, there were 14,666,648,287 and 10,551,957,534 common shares issued, respectively.

In accordance with the Company’s bylaws, the Company has authorized

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

As of September 30, 2025 and December 2024

respectively, there were 88,335 and 88,335 total preferred shares issued and outstanding for all classes.

On October 13, 2025 the Company effected a

1:200 reverse stock split of its issued and outstanding shares of common stock.

As a result of the reverse stock split, every 200 shares

of the Company’s common stock issued and outstanding immediately prior to the effective time were automatically combined into (1)

issued and outstanding share, without any change in the par value of the common stock.

No fractional shares were issued in connection

with the reverse stock split.

Any fractional shares resulting from the reverse stock split were rounded up to the nearest whole share

and paid in cash at fair value.

All share and per-share amounts, including

those related to earnings per share, stock options, and any warrants for all periods presented in these consolidated financial statements

have been retroactively adjusted to reflect the reverse stock split.

The reverse stock split did not affect the total par value of common

stock, additional paid-in capital, accumulated deficit, or total stockholders’ equity as presented in these financial statements.

The reverse stock split was implemented primarily

to revise the share structure and qualify for OTCQB.

In accordance with the Company’s bylaws,

the Company has authorized a total of 30,000,000,000 shares of common stock, par value $ 0.0001 per share.

As of September 30, 2025 and

December 2024, there were 81,630,799 and 52,759,788 common shares issued, respectively.

2024 Transactions

On November 6, 2024 the Company entered

into an Amendment to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to Purchase $ 30,000,000 in shares of our Common

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

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 January 1, 2025

1, 2025 to June 20, 2025 were made by the Company under the 2024 EFA during 2025:

to September 30, 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

2,998,024,750

The RRA provides that we shall (i) use

our best efforts to file with the SEC a Registration Statement within 45 days of the date of the GHS Registration Rights Agreement;

(ii) have the Registration Statement declared effective by the SEC within 30 days after the date the GHS Registration Statement is filed

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

Number of Common

Shares Issued

Total Proceeds, Net

of Discounts (4)

Effective Price per

Net Proceeds (4)

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.

Stock Options

As of June 30, 2025 and 2024, the Company

had no outstanding stock options.

As of September 30, 2025 and 2024, the Company had no outstanding stock

NOTE 14 – INCOME TAXES

The provision for income taxes for the

three months ended June 30, 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 provision for income taxes for the three months ended September

30, 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 June 30, 2025 and 2024:

differences between statutory rates for the three months ended September 30, 2025 and 2024:

Schedule of statutory rates

4 unchanged sentences

Change in valuation allowance:

The Company’s deferred tax assets and liabilities as of June 30, 2025 and 2024

are as follows:

The Company’s deferred

tax assets and liabilities as of September 30, 2025 and 2024 are as follows:

Schedule of deferred tax assets and liabilities

9 unchanged sentences

Deferred tax assets (liabilities)

The Company has approximately $ 26,485,942

of federal and state net operating loss carryforwards as of June 30, 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 June 30, 2025 and 2024, the Company calculated its estimated annualized effective tax rate at 0 % and 0 %, respectively, for both

the United States, Canada and the UK.

The Company had no income tax expense on its losses for the three months ended June 30, 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 an audit.

For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is

the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company recognizes interest accrued on uncertain tax positions as well as interest received from favorable tax settlements within

interest expense.

The Company recognizes penalties accrued on unrecognized tax benefits within selling, general and administrative expenses.

As of June 30, 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 12 months.

The Company files income tax returns in New

Brunswick, Canada, and the U.S.

The Company has approximately $ 26,485,942 of federal and state net

operating loss carryforwards as of September 30, 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 September 30, 2025 and 2024,

the Company calculated its estimated annualized effective tax rate at 0 % and 0 %, respectively, for both the United States, Canada and

The Company had no income tax expense on its losses for the three months ended September 30, 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 an audit.

For tax positions

meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater

than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company recognizes interest accrued

on uncertain tax positions as well as interest received from favorable tax settlements within interest expense.

The Company recognizes

penalties accrued on unrecognized tax benefits within selling, general and administrative expenses.

As of September 30, 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 12 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;

Tax years 2012 to current remain open to examination by Canadian authorities;

the tax year 2020 remains open to examination by U.S.

NOTE 15 – COMMITMENTS AND

CONTINGENCIES

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Legal Matters

8 unchanged sentences

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

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.

2 unchanged sentences

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

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

under the Exchange Act in violation of the mandatory registration requirement imposed thereby, and (ii) all contracts between the parties

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

1 unchanged sentence

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).

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.

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

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

As of the date hereof, the final judgment remains

unsatisfied by Carebourn.

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

awarded should Carebourn fail to voluntarily pay the same.

More Capital, LLC v.

11 unchanged sentences

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

§ 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).

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.

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).

As of the date hereof, the final judgment remains

unsatisfied by More.

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

should More fail to voluntarily pay the same.

Carebourn Capital et al v.

19 unchanged sentences

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

As of the date hereof, the Court has not yet rendered

its decision on the amount sanctions that will be imposed against the Noteholders and their counsel of record and awarded to the Company.

On July 15, 2025, the Court entered an order ordering

the Noteholders and their counsel to pay the sum of $70,840 to the Company.

On September 30, 2025, the Court entered Final

Judgment in this matter.

As of the date hereof, the Noteholders and their

counsel have not paid the awarded amount to the Company.

DarkPulse intends to continue to exercise all legal rights and remedies available

to it to collect the amounts awarded.

DarkPulse, Inc.

9 unchanged sentences

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”).

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”).

On March 28, 2024, the Second Circuit issued its

1 unchanged sentence

(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.

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 30, 2025, the Delaware Court granted

the FirstFire Defendants’ Motion to Dismiss.

On October 14, 2025, the Company filed a Motion

for Reconsideration of the Delaware Court’s September 30th decision.

As of the date hereof, the Delaware Court has

not ruled on DarkPulse’s Motion for Reconsideration.

The Company remains committed to actively litigating its claims for relief

against the FirstFire Defendants.

DarkPulse, Inc., et al v.

16 unchanged sentences

consistent with its decision.

On September 30, 2024, the District Court entered

a scheduling order, setting forth deadlines for discovery and dispositive motion practice.

Pursuant to the scheduling in effect as of the

date hereof, the Company’s Motion for Summary Judgment and the Crown Bridge Defendants’ Motion to Dismiss will both be fully

submitted to the Court on July 16, 2025.

On July 16, 2024, the parties submitted final

briefing on their respective motions for summary judgment and/or dismissal to the Court.

As of the date hereof, the Court has not issued a ruling on the parties

respective motions.

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

In addition to the foregoing Legal Proceedings,

9 unchanged sentences

financial condition and operating results.

NOTE 16 – RELATED PARTY

The Company follows subtopic 850-10

of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include a) affiliates of the Company;

b) Entities for which investments in their equity

securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15,

to be accounted for by the equity method by the investing entity;

c) trusts for the benefit of employees, such as pension and profit-

sharing trusts that are managed by or under the trusteeship of management;

16 – RELATED PARTY TRANSACTIONS

The Company follows subtopic 850-10 of the FASB Accounting Standards

Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the

related parties include a) affiliates of the Company;

b) Entities for which investments in their equity securities would be required,

absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity

method by the investing entity;

c) trusts for the benefit of employees, such as pension and profit- sharing trusts that are managed by

or under the trusteeship of management;

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;

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

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

parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material

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

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

is not required in those statements.

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.

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

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,

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;

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

1 unchanged sentence

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.

unsecured, non-interest bearing and due on demand.

As of both six months ended June 30 2025 and 2024, the outstanding balance was $ 226,247 .

WS has a loan payable with the former

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

unsecured, non-interest bearing and due on demand.

As of both six months ended June 30, 2025 and 2024, the outstanding balance was $ 135,500 .

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 nine months ended September 30 2025 and 2024, 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 nine months ended September 30, 2025 and 2024, the outstanding balance was $ 135,500 .

NOTE 17 – SUBSEQUENT EVENTS

On July 2, 2025, the Company issued

231,597,125 shares of common stock for a total consideration of $37,055.54.

On July 21, 2025, the Company issued

273,712,125 shares of common stock for a total consideration of $43,793.94.

On July 14, 2025, the company issued 211,638,462 shares of

common stock for conversion of a promissory note dated November 20, 2024.

On October 1, 2025, the Company issued 572,892 shares of common stock

for a total consideration of $18,332.54.

On October 9, 2025, the Company issued 576,946 shares of common stock

for a total consideration of $18,462.28.

On October 28, 2025, the company issued 959,040 shares of common stock

for a total consideration of $17,569.60.

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