DarkPulse, Inc. 10-Q

Item 1. Financial Statements DARKPULSE, INC. CONSOLIDATED BALANCE SHEETS Unaudited Audited September 30 December 31 2025 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 44,499 $ 86,531 Accounts receivable, net 873,091 915,044 Prepaid expenses and other current assets 131,429 102,782 TOTAL CURRENT ASSETS 1,049,019 1,104,357 NON-CURRENT ASSETS: Property and equipment, net $ 554,341 $ 698,982 Operating lease right-of-use assets – 449,556 Patents, net 164,364 202,635 Notes receivable, related party – – Investment in related party – – Joint venture – – Goodwill 23,965 23,965 Other assets, net 241,772 308,804 Intangible assets, net – – TOTAL NON-CURRENT ASSETS 984,442 1,683,942 TOTAL ASSETS $ 2,033,461 $ 2,788,299 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 18,226,876 $ 16,863,559 Contract liabilities – – Loss provision for contracts in progress – – Convertible notes, net – – Notes payable, current 57,000 114,000 Derivative liability – ( 57,235 ) Loan payable, current 571,374 571,530 Loan payable, related party 369,271 361,747 Secured debenture, current 269,438 260,550 Operating lease liabilities - current – 80,400 Other current liabilities 72,133 70,513 TOTAL CURRENT LIABILITIES 19,566,092 18,265,063 NON-CURRENT LIABILITIES: Secured debenture 404,156 781,094 Loan payable 291,967 291,967 Operating lease liabilities - non-current – 447,009 Non-current liabilities - discontinued operations – – TOTAL NON-CURRENT LIABILITIES 696,123 1,520,070 TOTAL LIABILITIES 20,262,215 19,785,133 Commitments and contingencies – STOCKHOLDERS' DEFICIT: Series A Super Voting preferred stock - par value $ 0.01 ; 100 shares designated, 100 shares issued and outstanding at both September 30, 2025 and September 30, 2024 1 1 Convertible preferred stock - Series D, par value $ 0.01 , 100,000 shares designated, 88,235 shares issued and outstanding as of both September 30, 2025 and December 31, 2024 883 883 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, 8,163 5,276 Treasury stock at cost, 500,000 shares at September 30, 2025 and December 31, 2024 ( 1,000 ) ( 1,000 ) Additional paid-in capital 53,707,471 52,213,244 Common Stock to be issued 1,988,908 2,464,519 Non-controlling interests 1,195,259 1,207,006 Accumulated other comprehensive income (loss) ( 2,375,806 ) ( 1,627,086 ) Accumulated deficit ( 72,752,633 ) ( 71,259,677 ) TOTAL STOCKHOLDERS' DEFICIT ( 18,228,754 ) ( 16,996,834 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 2,033,461 $ 2,788,299 See the accompanying notes to the unaudited condensed consolidated financial statements 3 DARKPULSE, INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS UNAUDITED Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 REVENUES $ 32,206 $ 30,671 $ 224,137 $ 55,839 COST OF REVENUES ( 658 ) – 112,530 870 GROSS PROFIT (LOSS) 32,864 30,671 111,607 54,969 OPERATING EXPENSES: Selling, general and administrative 170,020 146,575 604,688 474,001 Salaries, wages and payroll taxes 233,627 185,000 706,827 581,877 Professional fees 55,595 226,023 162,823 406,654 Depreciation and amortization 14,641 31,837 64,199 95,709 Bad debt expense – – – 59,817 Impairment expense – – – – Gain on forgiveness of payables – – – – TOTAL OPERATING EXPENSES 473,883 589,434 1,538,537 1,618,058 OPERATING LOSS ( 441,019 ) ( 558,763 ) ( 1,426,930 ) ( 1,563,089 ) OTHER INCOME (EXPENSE): Interest expense ( 15,298 ) 61,209 ( 46,726 ) ( 356,113 ) Gain (Loss) on convertible notes 11,381 – 11,381 – Change in fair market of derivative liabilities ( 1,392 ) ( 86,069 ) ( 91,495 ) ( 117,526 ) Loss on equity investment – – – ( 1,500,000 ) Gain/(Loss) on Legal Settlement – – 181,055 – Gain/(Loss) on exceptional costs – ( 3,420 ) ( 18,772 ) ( 3,420 ) Gain/(Loss) on Disposal of Asset ( 24,191 ) – ( 110,573 ) – Foreign currency exchange rate variance ( 765 ) – ( 2,641 ) – TOTAL OTHER INCOME (EXPENSE) ( 30,265 ) ( 28,280 ) ( 77,771 ) ( 1,977,059 ) – Net income (loss) ( 471,284 ) ( 587,043 ) ( 1,504,701 ) ( 3,540,148 ) Net loss attributable to non-controlling interests 3,998 ( 3,855 ) 11,747 5,598 Net loss attributable to Darkpulse, Inc. $ ( 467,286 ) $ ( 590,898 ) $ ( 1,492,954 ) $ ( 3,534,550 ) Net loss per share - basic and diluted $ ( 0.01 ) $ ( 0.01 ) $ ( 0.02 ) $ 0.02 Weighted average common shares outstanding - basic and diluted 77,088,295 40,957,677 62,290,585 41,068,260 NET LOSS $ ( 471,284 ) $ ( 587,043 ) $ ( 1,504,701 ) $ ( 3,540,148 ) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation ( 766,577 ) ( 1,222,453 ) ( 766,576 ) ( 1,222,454 ) COMPREHENSIVE LOSS $ ( 1,237,861 ) $ ( 1,809,496 ) $ ( 2,271,277 ) $ ( 4,762,602 ) See the accompanying notes to the unaudited condensed consolidated financial statements 4 DARKPULSE, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 UNAUDITED Preferred stock Series A Series D Common stock Common stock to be issued Shares Amount Shares Amount Shares Amount Shares Amount Balance at December 31, 2023 100 1 88,235 883 40,500,589 3,992 – 205,000 Common stock issued for cash, net of fees – – – – 260,815 26 – – Issuance of common stock for legal settlement – – – – – – – – Common Stock to be issued – – – – – – – – Foreign currency adjustment – – – – – – – – Common stock issued for cash – – – – – – – – Net loss – – – – – – – – Balance at March 31, 2024 100 $ 1 88,235 883 40,761,404 4,018 – 205,000 Common stock issued for cash, net of fees – – – – 3,874,193 243 – – Conversion of convertible debt into common stock – – – – 556,339 56 – – Common Stock to be issued – – – – 833,333 – – – Foreign currency adjustment – – – – – – – – Common stock issued for cash – – – – – – – – Net loss – – – – – – – – Balance at June 30, 2024 100 $ 1 88,235 $ 883 46,025,269 $ 4,317 – $ 205,000 Common stock issued for cash, net of fees – – – – 6,867,243 834 – – Conversion of convertible debt into common stock – – – – – – – – Common Stock to be issued – – – – – – – ( 205,000 ) Foreign currency adjustment – – – – – – – – Common stock issued for cash – – – – – – 277,778 28 Net Income (loss) – – – – – – – – Balance at September 30, 2024 100 $ 1 88,235 $ 883 52,892,512 $ 5,151 277,778 $ 28 Balance at December 31, 2024 100 $ 1 88,235 $ 883 52,759,788 $ 5,276 12,727,778 $ 2,464,519 Common stock issued for cash, net of fees – – – – 6,325,093 633 Conversion of convertible debt into common stock – – – – Issuance of common stock for legal settlement 1,250,000 ( 1,250,000 ) Common Stock to be issued – – – – 1,096,350 110 ( 600,000 ) ( 110 ) Foreign currency adjustment – – – – Common stock issued for cash – – – – Net Income (loss) – – – – Balance at March 31, 2025 100 $ 1 88,235 $ 883 61,431,231 $ 6,018 10,877,778 $ 2,464,410 Common stock issued for cash, net of fees – – – – 8,648,360 865 Conversion of convertible debt into common stock Issuance of common stock for legal settlement 3,750,000 ( 3,750,000 ) ( 351,108 ) Common Stock to be issued Foreign currency adjustment Common stock issued for cash Net Income (loss) Balance at June 30, 2025 100 $ 1 88,235 $ 883 73,829,591 $ 6,883 7,127,778 $ 2,113,302 Common stock issued for cash, net of fees – – – – 4,471,508 447 Conversion of convertible debt into common stock 1,058,192 106 Issuance of common stock for legal settlement 2,767,857 273 ( 2,767,857 ) ( 124,394 ) Common Stock to be issued Foreign currency adjustment Common stock issued corrections ( 496,349 ) 450 Net Income (loss) Balance at September 30, 2025 100 $ 1 88,235 $ 883 81,630,799 $ 8,163 4,359,921 $ 1,988,908 (continued) 5 DARKPULSE, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 UNAUDITED Treasury stock Additional paid-in Non- controlling Accumulated other compre- hensive Accumulated Total stockholders’ deficit Shares Amount capital interests loss deficit (equity) Balance at December 31, 2023 500 ( 1,000 ) 50,527,972 1,217,410 ( 1,253,356 ) ( 67,376,221 ) ( 16,675,319 ) Common stock issued for cash, net of fees – – 40,555 – – – 40,581 Issuance of common stock for legal settlement – – 100,000 – – – 100,000 Common Stock to be issued – – – – – – – Foreign currency adjustment – – – – – – – Common stock issued for cash – – – – – – – Net loss – – – ( 3,009 ) – ( 533,389 ) ( 536,398 ) Balance at March 31, 2024 500 ( 1,000 ) 50,668,527 1,214,401 ( 1,253,356 ) ( 67,909,610 ) ( 17,071,136 ) Common stock issued for cash, net of fees – – 221,757 – – – 222,000 Conversion of convertible debt into common stock – – 109,464 – – – 109,520 Common Stock to be issued – – – – – – – Foreign currency adjustment – – – – – – – Common stock issued for cash – – – – – – – Net loss – – – ( 6,444 ) – ( 2,410,261 ) ( 2,416,705 ) Balance at June 30, 2024 500 $ ( 1,000 ) $ 50,999,748 $ 1,207,957 $ ( 1,253,356 ) $ ( 70,319,871 ) ( 19,156,321 ) Common stock issued for cash, net of fees – – 643,540 – – – 644,374 Conversion of convertible debt into common stock – – – – – – – Common Stock to be issued – – 205,000 – – – – Foreign currency adjustment – – – – ( 1,222,455 ) – ( 1,222,455 ) Common stock issued for cash – – 36,145 – – – 36,173 Net Income (loss) – – – 3,855 – ( 590,898 ) ( 587,043 ) Balance at September 30, 2024 500 $ ( 1,000 ) $ 51,884,433 $ 1,211,812 $ ( 2,475,811 ) $ ( 70,910,769 ) ( 20,285,272 ) Balance at December 31, 2024 500 $ ( 1,000 ) $ 52,213,244 $ 1,207,006 $ ( 1,627,086 ) $ ( 71,259,677 ) $ ( 16,996,834 ) Common stock issued for cash, net of fees – – 438,737 – – – 439,370 Conversion of convertible debt into common stock – – – – – – – Issuance of common stock for legal settlement – – – – – – – Common Stock to be issued – – – – – – – Foreign currency adjustment – – – – ( 395,675 ) – ( 395,675 ) Common stock issued for cash – – – – – – – Net Income (loss) – – – ( 3,554 ) – ( 266,790 ) ( 270,344 ) Balance at March 31, 2025 500 $ ( 1,000 ) $ 52,651,982 $ 1,203,452 $ ( 2,022,761 ) $ ( 71,526,469 ) $ ( 17,223,484 ) Common stock issued for cash, net of fees – – 396,809 – – – 397,674 Conversion of convertible debt into common stock – – – – – – – Issuance of common stock for legal settlement – – 351,108 – – – – Common Stock to be issued – – – – – – – Foreign currency adjustment – – – – ( 652,567 ) – ( 652,567 ) Common stock issued for cash – – – – – – – Net Income (loss) – – – ( 4,195 ) – ( 758,878 ) ( 763,073 ) Balance at June 30, 2025 500 $ ( 1,000 ) $ 53,399,899 $ 1,199,257 $ ( 2,675,328 ) $ ( 72,285,347 ) $ ( 18,241,451 ) Common stock issued for cash, net of fees – – 141,685 – – – 142,132 Conversion of convertible debt into common stock – – 42,221 – – – 42,327 Issuance of common stock for legal settlement – – 124,121 – – – – Common Stock to be issued – – – – – – – Foreign currency adjustment – – – – 299,522 – 299,522 Common stock issued corrections – – ( 451 ) – – – ( 1 ) Net Income (loss) – – – ( 3,998 ) – ( 467,286 ) ( 471,284 ) Balance at September 30, 2025 500 $ ( 1,000 ) $ 53,707,471 $ 1,195,259 $ ( 2,375,806 ) $ ( 72,752,633 ) $ ( 18,228,754 ) See the accompanying notes to the unaudited condensed consolidated financial statements 6 DARKPULSE, INC. CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED Nine Months Ended September, 2025 2024 Cash flows from operating activities: Net loss $ ( 1504,701 ) $ ( 3,540,148 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 64,199 95,709 Gain on forgiveness of payables and liabilities 146,795 – Change in fair market of derivative liabilities 91,495 117,526 Loss on equity investment – 1,500,000 Bad debt expense – 59,817 Exceptional Costs gain 33,400 – Operating lease expense – 35,068 (Gain)/Loss on Disposal of Asset 110,573 – Loss on converible notes – – Discontinued operations Changes in operating assets and liabilities: Accounts receivable 41,953 ( 58,434 ) Prepaid expenses and other assets 38,385 ( 77,103 ) Accounts payable and accrued expenses 1,157,005 2,182,553 Operating lease liabilities, net ( 527,409 ) ( 36,626 ) Other current liabilities 1,620 ( 225,978 ) Other assets 449,555 – Other liabilities – ( 22,604 ) Net cash provided (used) in operating activities 102,869 29,782 Cash flows from investing activities: Purchases of property and equipment – ( 60,431 ) Issuance of note receivable, related party – ( 29,817 ) Advances to related party – ( 30,000 ) Net cash provided (used) in investing activities – ( 120,248 ) Cash flows from financing activities: Issuance of common stock, net of fees 979,176 1,043,130 Proceeds from notes payable 50,000 – Net repayments of loan payable ( 328930 ) 579,950 Net cash provided (used) by financing activities 700,246 1,623,081 Net change in cash 803,116 1,532,615 Effect of exchange rate on cash ( 845,148 ) ( 1,379,338 ) Cash at beginning of year 86,531 11,912 Cash at end of year $ 44,499 $ 165,186 Supplemental disclosure of cash flow information: Cash paid for interest $ 15,605 $ 18,971 Cash paid for income taxes $ – $ – Non-cash financing and investing activities: Conversion of convertible debt $ 42,328 $ 109,521 See the accompanying notes to the unaudited condensed consolidated financial statements 7 DARKPULSE, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION Organization and Description of Business DarkPulse, Inc. (“DPI” or “Company”) is a technology-security company incorporated in 1989 as Klever Marketing, Inc. (“Klever”). Its’ wholly- owned subsidiary, DarkPulse Technologies Inc. (“DPTI”), originally started as a technology spinout from the University of New Brunswick, Fredericton, Canada. The Company’s security and monitoring systems will initially be delivered in applications for border security, pipelines, the oil and gas industry and mine safety. Current uses of fiber optic distributed sensor technology have been limited to quasi-static, long-term structural health monitoring due to the time required to obtain the data and its poor precision. The Company’s patented BOTDA dark-pulse sensor technology allows for the monitoring of highly dynamic environments due to its greater resolution and accuracy. 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 Europe. DarkPulse 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 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. 8 Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, assumptions used to calculate derivative liabilities, revenue recognition and impairment of long-lived assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Cash 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 terms. As is common practice in the industry, the Company classifies all accounts receivable and contract assets, including retainage, as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on those contracts may extend beyond one year. Contract assets include amounts billed to customers under retention provisions in construction contracts. Such provisions are standard in the Company’s industry and usually allow for a portion of progress billings on the contract price, typically 5-10%, to be withheld by the customer until after the Company has completed work on the project. Billings for such retention balances at each balance sheet date are finalized and collected after project completion. Generally, unbilled amounts will be billed and collected within one year. The Company determined that there are no material amounts due past one year and no material amounts billed but not expected to be collected within one year. Also, the Company adopted ASU 2016-13 in January 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures for the year ended December 31, 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 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 are maintained using the appropriate local currency, Canadian Dollar (“CAD”) as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders' equity is translated at historical rates and revenue, and expense accounts are translated at the average exchange rate for the year or the reporting 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. 9 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 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. Expenditures that increase the value or productive capacity of assets are capitalized. Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they are removed from service. When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Repairs and maintenance are expensed as incurred. Schedule of estimated useful lives of property and equipment The estimated useful lives of property and equipment are generally as follows: Years Office furniture and fixtures 4 Plant and equipment 4 - 8 Leasehold Improvements 10 Motor vehicles 3 Revenue Recognition The Company’s revenues are generated primarily from the sale of our services, which consist primarily of advanced technology solutions for integrated communications and security systems, as well as habitat management. The Company’s sales of products are primarily generated from our TJM subsidiaries. Sales of products and services are separate from one another. At contract inception, we assess the goods and services promised in the contract with customers and identify a performance obligation for each. To determine the performance obligation, we consider all products and services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices. The timing of satisfaction of the performance obligation is not subject to significant judgment. We measure revenue as the amount of consideration expected to be received in exchange for transferring goods and services. We recognize service revenues as the performance obligations are met, which is generally as milestones are satisfied over time. We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met. 10 The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (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. 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. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedient, which is to (1) clarify the objective of the collectability criterion for applying paragraph 606-10-25-7; (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 contract. Cost of Revenues Cost of revenues consists primarily of materials and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer service and third- party original equipment manufacturer costs to provide continuing support to our customers. Cost of revenues also includes direct labor attributable to revenue service arrangements. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company has not experienced any losses related to its cash and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As of September 30, 2025, one customer accounted for 39 % of gross accounts receivable. 11 Leases 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 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. 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. These inputs can be readily observable, market corroborated, or generally unobservable. 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 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. 12 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. See Note 10. 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. Income Taxes 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. 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 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. 13 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 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 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 uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. Further, ASC Topic 718, provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718, such as the repricing of share options, which would revalue those options and the accounting for the cancellation of an equity award whether a replacement award or other valuable consideration is issued in conjunction with the cancellation. 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 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 follows: Schedule of anti-dilutive securities 2025 2024 Convertible notes – 210,081,967 Series D preferred stock 176,470 176,470 176,470 210,258,470 14 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 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. However, 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: Schedule of acquired assets and assumed liabilities Consideration Property, Plant & Equipment $ 22,100 Shares 42,900 Purchase price $ 65,000 15 The allocation of the total purchase price to the tangible and intangible assets acquired and liabilities assumed by DarkPulse based on actual values as of September 11, 2024, and measurement period adjustments resulting from the Optilan India fiscal audit period April 2023 – March 2024 which was completed in December 2024 are as follows: Schedule of fair value assets acquired and liabilities (Amounts in US$’s) Amounts Recognized as of Acquisition Date Measurement Period Adjustments Fair Value Cash $ 1,637 $ 199 $ 1,836 Accounts receivable 128,392 61,376 189,732 Other current assets 89,082 56,455 145,536 Property & equipment 35,595 ( 2,246 ) 33,349 Goodwill 181,478 ( 156,563 ) 24,770 Total assets 436,184 ( 40,779 ) 395,223 Assumed liabilities 371,184 56,755 314,247 Gain on acquisition – ( 15,976 ) ( 15,976 ) Total Consideration for 100% of equity interests $ 65,000 $ – $ 65,000 NOTE 5 – REVENUE 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 2025 2024 Services and products transferred at a point in time $ 224,137 $ 21,777 Services and products transferred over time – 34,062 Total revenue $ 224,137 $ 55,839 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 nine months ended September 30, 2025 and 2024: Schedule of revenue by source 2025 2024 Products – $ – Services 224,137 55,839 Total revenue $ 224,137 $ 55,839 Revenue by geographic destination consisted of the following for the nine months ended September 30, 2025 and 2024: Schedule of revenue by geographic destination 2025 2024 North America $ 38,303 $ 52,868 United Kingdom – – Rest of world 185,834 2,971 Total revenue $ 224,137 $ 55,839 Contracts 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. 16 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. 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”) Topic 606. 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. 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 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. 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. 17 NOTE 6 – ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: Schedule of accounts receivable September 30, 2025 2024 Accounts receivable $ 878,549 $ 915,044 Less: Allowance for doubtful accounts ( 5,458 ) – Accounts receivable, net $ 873,091 $ 915,044 NOTE 7 – PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following: Schedule of property and equipment September 30, 2025 2024 Property and equipment $ 563,521 $ 1,092,870 Leasehold improvements 0 46,934 Property and equipment at cost 563,521 1,139,804 Less - accumulated depreciation ( 9,180 ) ( 396,522 ) Property and equipment, net $ 554,341 $ 743,282 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 Goodwill The following is a summary of activity of goodwill for the three months ended September 30, 2025: Schedule of goodwill activity Balances at December 31, 2024 $ 23,965 Acquisition – Foreign exchange translation – Balances at September 30, 2025 $ 23,965 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 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. 18 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 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 2025 2024 Patents $ 904,269 $ 904,269 Less: accumulated amortization ( 739,905 ) ( 701,634 ) Patents, net $ 164,364 $ 202,635 Future expected amortization of patents is as follows: As of December 31, Schedule of future expected amortization of patents 2025 $ 51,028 2026 51,028 2027 51,028 Thereafter 11,280 Total patents $ 164,364 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, 2025 2024 Accounts payable $ 15,063,069 $ 17,389,000 Accrued liabilities 3,163,807 6,825 Total accounts payable and accrued expenses $ 18,226,876 $ 17,845,825 NOTE 10 – DEBT Convertible Notes The Company uses the Black-Scholes Model to calculate the derivative value of its convertible debt. The valuation result generated by this pricing model is necessarily driven by the value of the underlying common stock incorporated into the model. The values of the common stock used were based on the price at the date of issue of the debt security as of 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 amortized. 19 The summary of convertible notes are: Schedule of convertible notes September 30, December 31, 2025 2024 Principal Outstanding $ – $ – Less: unamortized debt discount – – Convertible notes, net $ – $ – 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 $ ( 57,235 ) Gain on issuance of debt 11,381 Issuance of convertible note - 1800 Diagonal Lending – Change in fair value ( 45,485 ) EMA settlement – 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. The note bears interest at a rate of 12 % per annum and matures after nine months. On November 20, 2024, the Company entered into a promissory note for a principal of $ 67,860 , which was funded on December 2, 2024. The note bears interest at a rate of 15 % per annum and matures after nine months. 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. Loans Payable The Company’s RI and WS subsidiaries have various loans including Small Business Association (“SBA”) Economic Injury Disaster Loan (“EIDL’) loans, lines of credit and other advances. The loans bear interest with varying rates up to 9.25% per annum. The following is a summary of the loans payable at September 30, 2025 and December 31, 2024: Schedule of loans payable September 30, 2025 December 31, 2024 RI - line of credit $ 153,358 $ 153,358 RI - Short-term loans 46,544 46,544 WS - line of credit 218,616 218,616 WS - Short-term loans 151,970 151,970 OPT – Optilan Communications & Security Ltd 886 1,042 Loans payable, current $ 571,374 $ 571,530 RI - SBA EIDL $ 102,597 $ 102,597 RI - long-term loans 65,532 63,532 WS - SBA EIDL 26,307 26,307 WS - long-term loans 97,531 97,532 Loans payable, non-current $ 291,967 $ 291,967 20 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. The interest rate is the Bank of Canada Prime overnight rate plus 1% per annum. The Debenture had an initial required payment of CAD 42,000 (US$33,385) due on April 24, 2018 for reimbursement to the University of its research and development costs, and this has been paid. Interest-only maintenance payments are due annually starting after April 24, 2018. Payment of the principal begins on the earlier of (a) three years following two consecutive quarters of positive earnings before interest, taxes, depreciation and amortization, (b) six years from April 24, 2017, or (c) in the event DPTI fails to raise defined capital amounts or secure defined contract amounts by April 24 in the years 2018, 2019, and 2020. The Company has raised funds in excess of the amount required for 2020, 2019 and 2018. Beginning in 2023, The principal repayment amounts will be due quarterly over a six-year period in the amount of Canadian Dollars 62,500. Based on the exchange rate between the Canadian Dollar and the U.S. Dollar on December 31, 2018, the quarterly principal repayment amounts will be US$48,447. The Debenture is secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010. DPTI has pledged the Patents and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University. The Debenture was initially recorded at the $1,491,923 equivalent US Dollar amount of Canadian 1,500,000 as of December 16, 2010, the date of the original 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 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 September 30, 2025 $ 67,359 2026 269,438 2027 269,438 2028 67,359 Total $ 673,594 NOTE 12 – LEASES The following was included in our balance sheet as of September 30, 2025 and 2024: Schedule of operating lease Operating leases 2025 2024 Assets ROU operating lease assets $ – $ 461,618 – – Liabilities – – Current portion of operating lease – 80,400 Operating lease, net of current portion – 459,709 Total operating lease liabilities $ – $ 540,109 21 Operating Leases On January 15, 2025, SVEA Cameron Esperson filed its Motion for Nonsuit without Prejudice. The dismissal was accepted by the court on January 16, 2025. 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. 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. Common Stock 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. 22 The below table of puts from January 1, 2025 to September 30, 2025 were made by the Company under the 2024 EFA during 2025: Schedule of equity financing agreement Date of Put Number of Common Shares Issued Total Proceeds, Net of Discounts (4) Effective Price per Share Net Proceeds (4) 1/3/2025 183,203 23,450 $ 0.000640 20,783 1/13/2025 256,077 32,778 $ 0.000640 29,458 1/22/2025 395,308 50,619 $ 0.000640 46,050 1/30/2025 695,043 55,603 $ 0.000400 50,686 2/7/2025 623,989 49,786 $ 0.000399 45,276 2/18/2025 657,228 42,063 $ 0.000320 38,093 2/27/2025 710,373 34,098 $ 0.000240 30,686 3/10/2025 663,499 31,848 $ 0.000240 28,594 3/18/2025 1,122,820 53,895 $ 0.000240 40,098 3/27/2025 1,019,222 65,230 $ 0.000320 59,639 4/4/2025 653,076 41,797 $ 0.000320 37,846 4/14/2025 895,072 42,963 $ 0.000240 38,931 4/23/2025 906,672 58,027 $ 0.000320 52,940 5/1/2025 941,402 46,844 $ 0.000249 42,540 5/9/2025 1,126,922 43,274 $ 0.000192 39,220 5/21/2025 949,987 30,400 $ 0.000160 27,247 5/30/2025 1,127,583 36,083 $ 0.000160 32,532 6/10/2025 1,130,458 54,262 $ 0.000240 49,439 6/20/2025 932,189 44,025 $ 0.000236 36,912 7/2/2025 1,157,986 37,056 $ 0.000160 70,744 7/21/2025 1,368,561 43,794 $ 0.000160 37,733 8/22/2025 426,994 13,644 $ 0.000160 11,067 9/3/2025 536,271 17,204 $ 0.000160 14,200 9/12/2025 428,311 13,706 $ 0.000160 9,939 9/23/2025 57,036 17,665 $ 0.001549 13,106 Total 12,638,518 $ 980,133 $ 903,760 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 September 30, 2025 and 2024, the Company had no outstanding stock options. NOTE 14 – INCOME TAXES 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. 23 The following table summarizes the significant differences between statutory rates for the three months ended September 30, 2025 and 2024: Schedule of statutory rates 2025 2024 Statutory tax rate: U.S. 21.00 % 21.00 % State taxes 1.36 % 1.36 % Foreign rate differential 1.26 % 1.26 % Goodwill impairment - 7.33 % - 7.33 % NOLs carryforward adjustment 3.61 % 3.61 % Other - 0.22 % - 0.22 % Change in valuation allowance: - 19.67 % - 19.67 % – % – % 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 2025 2024 Deferred Tax (Liabilities): Net operating losses $ 8,964,470 $ 8,964,470 Intangible assets ( 736,905 ) ( 736,905 ) Right of use asset 84,170 84,170 Stock based compensation 424,681 424,681 Property and equipment 497,037 497,681 Other 11,077 11,077 Less: Valuation allowance ( 9,244,530 ) ( 9,244,530 ) Deferred tax assets (liabilities) $ – $ – 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 UK. 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; the tax year 2020 remains open to examination by U.S. authorities. 24 NOTE 15 – COMMITMENTS AND CONTINGENCIES Legal Matters Carebourn Capital, L.P. v. DarkPulse, Inc. On or about January 29, 2021, Carebourn Capital, L.P. (“Carebourn”) commenced an action against the Company in Minnesota State Court. Carebourn alleged that the Company was in breach of certain securities purchase agreements and convertible promissory notes sold to Carebourn on or about July 17, 2018 and July 24, 2018. On or about August 31, 2021, the Company answered Carebourn’s complaint and interposed affirmative defenses, including that Carebourn was an unregistered “dealer,” as such term is defined in the Securities Exchange Act of 1934 (“Exchange Act”) and, therefore, all contracts between the parties arising from or related to the securities purchase agreements and convertible promissory notes sold to Carebourn on or about July 17, 2018 and July 24, 2018 were void pursuant to the Exchange Act. The Company also asserted counterclaims against Carebourn under the Minnesota Securities Act. On or about April 21, 2023, the State Court ruled in the Company’s favor on its motion for partial summary judgment on its Exchange Act defense, holding that (i) Carebourn is a “dealer” under the Exchange Act in violation of the mandatory registration requirement imposed thereby, and (ii) all contracts between the parties are void. On or about November 17, 2023, the State Court ruled in the Company’s favor on its motion for summary judgment on its Minnesota Securities Act counterclaims against Carebourn and awarded damages for Carebourn’s violation of Minn. Stat. § 80A.76(d) in the amount of $124,012.91, attorney’s fees in the amount of $239,923.33 and costs in the amount of $23,757.24 (or a total award in the amount of $387,693.48). As of the date hereof, the final judgment remains unsatisfied by Carebourn. DarkPulse intends to continue to exercise all legal rights and remedies available to it to collect the amounts awarded should Carebourn fail to voluntarily pay the same. More Capital, LLC v. DarkPulse, Inc. et al On or about June 29, 2021, More Capital, LLC (“More”) commenced an action against the Company in Minnesota State Court. More alleged that the Company was in breach of a certain securities purchase agreement and convertible promissory note sold to More on or about August 20, 2018. On or about September 3, 2021, the Company answered More’s complaint and interposed affirmative defenses, including that More was an unregistered “dealer,” as such term is defined in the Securities Exchange Act of 1934 (“Exchange Act”) and, therefore, all contracts between the parties arising from or related to the securities purchase agreement and convertible promissory note sold to More on or about August 20, 2018 were void pursuant to the Exchange Act. The Company also asserted counterclaims against More under the Minnesota Securities Act. On or about December 11, 2023, the Minnesota State Court ruled in the Company’s favor on its motion for summary judgment on its (a) Exchange Act defense, holding that (1) More is a “dealer” under the Exchange Act in violation of the mandatory registration requirement imposed thereby, and (ii) all contracts between the parties are void, and (b) Minnesota Securities Act counterclaims against More and awarded damages for More’s violation of Minn. Stat. § 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). 25 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. Standard Registrar and Transfer et al On or about May 20, 2022, the Carebourn Capital, L.P. (“Carebourn”) and More Capital, LLC (“More,” and together with Carebourn, the “Noteholders”) commenced an action against the Company, certain members of the Company’s executive team and board of directors and Standard Registrar and Transfer Company, Inc., the Company’s transfer agent, in the United States District Court for the District of Utah. The Noteholders’ complaint alleged various causes of action arising from certain securities purchase agreements and convertible promissory notes the Company sold to the Noteholders. On or about November 1, 2023, the Noteholders moved to dismiss the action. On or about November 2, 2023, the Company moved for sanctions against the Noteholders and their counsel of record. On or about December 4, 2023, the Court entered an order granting dismissal of the Noteholders’ claims with prejudice. The Court acknowledged that notwithstanding its dismissal of the Noteholders’ claims, the Court continues to retain jurisdiction over the Noteholders because of DarkPulse’s pending motion for sanctions against the Noteholders and their attorneys. On September 10, 2024, the Court entered an order granting in part the Company’s motion for sanctions against the Noteholders and their counsel of record. 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. v. FirstFire Global Opportunities Fund, LLC, and Eli Fireman On or about December 31, 2021, the Company commenced an action against FirstFire Global Opportunities Fund, LLC (“FirstFire”) and its control person, Eli Fireman (“Fireman,” and together with FirstFire, the “FirstFire Defendants”), in the United States District Court for the Southern District of New York. On or about May 5, 2022, the Company amended its complaint against the FirstFire Defendants. The amended complaint alleges that the FirstFire Defendants were liable to the Company for rescission of certain convertible promissory notes and transitions effected thereunder and damages pursuant to the Racketeer Influenced and Corrupt Organizations Act (“RICO”). On or about January 17, 2023, the Court granted the FirstFire Defendants’ motion to dismiss the Company’s operative pleading. Later on the same day, the Company appealed the Court’s decision to the United States Court of Appeals for the Second Circuit (“Second Circuit”). On March 28, 2024, the Second Circuit issued its decision and found that the District Court (a) properly found that the Delaware forum-selection clause was enforceable but, thereafter, (b) improperly made a ruling on the merits of the Company’s claims for relief. As a result, the Second Circuit affirmed the District Court’s decision in part, vacated in part and remanded the case back to the District Court for transferring to the United States District Court for the District of Delaware. 26 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. Crown Bridge Partners, LLC, et al On or about September 23, 2022, the Company, Social Life Network, Inc. and Redhawk Holdings Corp. commenced an action against Crown Bridge Partners, LLC (“Crown Bridge”) and its control persons, Soheil Ahdoot and Sepas Ahdoot (collectively, the “Crown Bridge Defendants”) in the United States District Court for the Southern District of New York. The complaint alleges that the Crown Bridge Defendants are liable to each of the plaintiffs for damages pursuant to the Racketeer Influenced and Corrupt Organizations Act (“RICO”). On or about September 29, 2023, the Court granted the Crown Bridge Defendants’ motion to dismiss the plaintiffs’ complaint. On October 23, 2023, the plaintiffs appealed the Court’s decision to the United States Court of Appeals for the Second Circuit (“Second Circuit”). On August 19, 2024, the Second Circuit issued its decision and found that the District Court erred when granting the Crown Bridge Defendants’ motion to dismiss. As a result, the Second Circuit vacated the District Court’s decision and remanded the case back to the District Court for further proceedings consistent with its decision. 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, we are also actively investigating potential legal claims, including but not limited to stock fraud, market manipulation, and/or defamation, against certain Twitter accounts, websites, and social media channels. The investigation is ongoing and, should potential claims be identified, we will evaluate commencing formal litigation proceedings. From time to time, we may become involved in litigation relating to claims arising out of our operations in the normal course of business. We are not currently involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on our business, financial condition and operating results. 27 NOTE 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; 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 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 of two years. The loan is unsecured, and non-interest bearing with repayment being mutually agreed upon between Lender and Borrower. Remote Intelligence and Wildlife Specialists Loan Payables RI has a loan payable with the former majority shareholder, who is a shareholder in the Company after the acquisition of 60% of RI’s membership interests. 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 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. 28