Form S-1/A - General form for registration of securities under the Securities Act of 1933: [Amend]

Table of Contents

As filed with the Securities and Exchange Commission on September 12, 2024

Registration No. 333-276114

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

PRE-EFFECTIVE AMENDMENT

NO. 2 TO THE

FORM S-1

S-1/A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

DARKPULSE, INC.

(Exact name of registrant as specified in its charter)

Delaware

7372

87-0472109

(State or Other Jurisdiction

of Incorporation)

(Primary Standard

Classification Code)

(IRS Employer

Identification No.)

815 Walker Street

Suite 1155

Houston, TX 77002

(800) 436-1436

(Address, including zip code, and telephone number, including area code of registrant’s principal executive offices)

The Corporation Trust Company

Corporation Trust Center

1209 Orange St.

Wilmington, DE 19801

(302) 658-7581

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Brian Higley, Esq.

Business Legal Advisors, LLC

14888 Auburn Sky Drive

Draper, UT 84020

(801) 634-1984

Approximate date of commencement of proposed sale to the public:

As soon as practicable after the effective date of this Registration Statement.

Approximate date of commencement of proposed sale to the public: As soon as practicable and from time to time after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(A) of the Securities Act or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(A), may determine.

EXPLANATORY NOTE

On December 18, 2023, DarkPulse, Inc., a Delaware corporation (the “Company”), filed a registration statement with the Securities and Exchange Commission (the “SEC”) on Form S-1 (File No. 333-276114), as amended on February 9, 2024 (the “Registration Statement”), covering the resales of up to 3,500,000,000 shares of the Company’s common stock, par value $0.0001 (the “Common Stock”).

This Pre-Effective Amendment No. 2 is being filed in order to add additional shares to be registered, include required financial statements, include additional information about the Company’s business, and to provide general updates since the filing of the Registration Statement.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION

DATED SEPTEMBER 12, 2024

Text

Description automatically generated with medium confidence

Up to 3,500,000,000 Shares of Common Stock to be Issued Under Equity Financing Agreement

271,971,823 Shares of Common Stock

This prospectus relates to the offer and resale of up to 3,500,000,000 shares of our common stock, par value $0.0001 per share (the “Shares”), that may be purchased by GHS Investments LLC, a Nevada limited liability company (“GHS”), pursuant to the Third Amended Equity Financing Agreement dated August 14, 2024 between the Company and GHS (the “EFA”). GHS is also referred to herein as the “Selling Security Holder.”

The prospectus also relates to the offer and resale of up to 271,971,823 shares of Common Stock which have previously been purchased by GHS as restricted securities pursuant to the EFA.

The Selling Security Holder identified in this prospectus may offer the shares of Common Stock from time to time through public or private transactions at prevailing market prices or at privately negotiated prices. The Selling Security Holder can offer all, some or none of its shares of Common Stock, thus we have no way of determining the number of shares of Common Stock it will hold after this offering. See “Plan of Distribution.”

The Selling Security Holder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act with respect to the shares which may be sold pursuant to the EFA.

Our Common Stock is currently quoted on the OTC Markets under the symbol “DPLS.” On September 10, 2024, the last reported sale price of our Common Stock on the OTC Markets was $0.0009.

Investing in our Common Stock involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 6 of this prospectus, and under similar headings in any amendments or supplements to this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is September 12, 2024

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS	1
PROSPECTUS SUMMARY	2
THE OFFERING	5
RISK FACTORS	6
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	30
PRIVATE PLACEMENT	31
USE OF PROCEEDS	31
SELLING SECURITY HOLDER	32
MARKET PRICE OF COMMON STOCK AND OTHER STOCKHOLDER MATTERS	33
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	35
BUSINESS	51
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS	65
EXECUTIVE COMPENSATION	67
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	68
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	69
DESCRIPTION OF SECURITIES	69
PLAN OF DISTRIBUTION	72
SHARES ELIGIBLE FOR FUTURE SALE	74
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS	74
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS	74
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES	76
LEGAL MATTERS	77
EXPERTS	77
WHERE YOU CAN FIND MORE INFORMATION	77
INDEX TO FINANCIAL STATEMENTS	F-1

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that which is contained in this prospectus. This prospectus may be used only where it is legal to sell these securities. The information in this prospectus may only be accurate on the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of securities.

ABOUT THIS PROSPECTUS

The registration statement of which this prospectus forms a part that we have filed with the U.S. Securities and Exchange Commission (the “SEC”) and includes exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC, together with the additional information described under the heading “Where You Can Find More Information” before making your investment decision.

You should rely only on the information provided in this prospectus or in any prospectus supplement or any free writing prospectuses or amendments thereto. Neither we, nor the Selling Security Holder, have authorized anyone else to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information in this prospectus is accurate only as of the date hereof. Our business, financial condition, results of operations and prospects may have changed since that date.

Neither we, nor the Selling Security Holder, are offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer or sale is not permitted. Neither we, nor the Selling Security Holder, have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities as to distribution of the prospectus outside of the United States.

Information contained in, and that can be accessed through, our web site, www.darkpulse.com, does not constitute part of this prospectus.

This prospectus includes market and industry data that has been obtained from third party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management’s knowledge of such industries has been developed through its experience and participation in these industries. While our management believes the third-party sources referred to in this prospectus are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this prospectus or ascertained the underlying economic assumptions relied upon by such sources. Internally prepared and third-party market forecasts in particular are estimates only and may be inaccurate, especially over long periods of time. In addition, the underwriters have not independently verified any of the industry data prepared by management or ascertained the underlying estimates and assumptions relied upon by management. Furthermore, references in this prospectus to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this prospectus.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus; it does not contain all the information you should consider before investing in our Common Stock. You should read the entire prospectus before making an investment decision. Throughout this prospectus, the terms the “Company”, “DarkPulse”, “we,” “us,” “our,” and “our company” refer to DarkPulse, Inc., a Delaware corporation.

Company Overview

DarkPulse, Inc., a Delaware corporation (the “Company” or “DarkPulse”), is a technology and research and development company focused on the manufacture, sale, installation, and monitoring of laser sensing systems based on its patented BOTDA dark-pulse sensor technology. The Company develops, markets, and distributes a full suite of engineering, monitoring, installation and security management solutions for critical infrastructure/key resources to both industries and governments. Coupled with our patented BOTDA technology, DarkPulse provides its customers a comprehensive data stream of critical metrics for assessing the health and security of their infrastructure. Our systems provide rapid, precise analysis and responsive activities predetermined by the end-user customer. The Company’s activities since inception have consisted of developing various solutions, obtaining patents and trademarks related to its technology, raising capital, acquisition of companies deemed to expand global operations and/or capabilities, creating key partnerships to expand our suite of products and services. Our activities have evolved to a sales-focused mission since the successful completion of our BOTDA system in December 2020.

Headquartered in Houston, DarkPulse is a globally-based technology company with presence through its subsidiaries in the United Kingdom, United States and Canada. In addition to the Company’s BOTDA systems, through a series of strategic acquisitions the Company offers the manufacture, sale, installation, and monitoring of laser sensing systems, oil and gas pipeline leak detection, physical security services, telecommunications and satellite communications services, artificial intelligence-based camera systems, railway monitoring services, drone and rover systems, and Big Data as a Service (“BDaaS”). The Company is focused on expanding services through acquisitions and partnerships to address global infrastructure and critical environmental resource challenges.

DarkPulse offers a full suite of engineering and environmental solutions that provide safety and security infrastructure projects. The sensing and monitoring capabilities offered by DarkPulse and our subsidiary companies operate in the air, land, sea. Our patented technology provides rapid, precise analysis to protect and safeguard oil and gas pipelines above or below ground, physical security countermeasures, mining operations, and other critical infrastructure/key resources subject to vulnerability or risk. Our patented brillouin scattering distributed fiber sensing system is best in class. The Company is able to monitor areas in around critical infrastructure buried or above ground including pipelines 100km or more in length and/ or localized pipes as small as eight CM DIA, detecting internal anomalies before catastrophic failure. We are developing an intelligent rock bolt to prevent causalities and fatalities in mining operations and include a real time sensor system that can detect the location and movement of personnel and equipment throughout a mining operation. We monitor airflow, air quality, temperature, seismic events, etc. Our sensors cover extended areas, protecting an area from intrusion by detecting events at any location along the sensing cable. Working safely every day is our first core value and employees at DarkPulse and our subsidiary companies are recognized experts in their fields, providing comprehensive services for all our clients' needs.

Our Business

We offer a full suite of engineering, installation and security management solutions to industries and governments. Coupled with our patented BOTDA technology, we provide our customers a comprehensive data stream of critical metrics for assessing the health and security of their infrastructure. Our comprehensive system provides for rapid, precise analysis and responsive activities predetermined by the end-user customer. These responses include the use of “smart” AI platformed cameras, facial recognition technologies and multiple drone platforms. Our User Interface (UI) is cloud based which offers end-users access to their systems on any device located anywhere in the world. Additional programming of the UI is being completed within a game engine that will also offer access via Virtual Reality headsets, allowing end-users to virtually inspection their assets.

Historically, distributed sensor systems have been too costly, slow and limited in their capabilities to attain widespread use. In addition, Brillouin-based sensors have been plagued with temperature and strain cross-sensitivity, i.e. the inability to distinguish between temperature and strain change along the same fiber. The loss of spatial resolution with an increase in fiber length has also limited the use of distributed sensor systems. Due to these shortcomings, existing technologies are unable to succeed within today’s dynamic environments, and needs for more advanced sensor technologies have remained unsatisfied.

By contrast to existing technologies, our BOTDA technology is a distributed-fiber sensing system, based on dark-pulse Brillouin scattering, which reports in real-time on conditions such as temperature, stress, strain corrosion and structural health monitoring of Critical Infrastructure/Key Resources including Bridges, Buildings, Roadways pipelines and mining installations.

Our BOTDA technology’s differentiators from and advantages over existing technologies:

	·	Real-time Reporting: Higher data acquisition speeds allowing for structural monitoring of dynamic systems;

	·	Cost to Customer: Significantly lower acquisition and operating costs;

	·	Precision: A greater magnitude of precision and spatial resolution than other systems currently available;

	·	Applications: Wider range of capabilities than other systems currently available;

	·	Power Consumption: Lower power consumption than existing systems allowing for off-grid installations;

	·	Integration: Capable of integrating with existing systems; and

	·	Central station monitoring/cloud based GUI.

We believe that these key advantages should allow us not only to enter existing markets, but more importantly, to open new market opportunities with new applications. We intend to leverage new applications to target clients that have been unable to make use of distributed fiber optic technology to date.

Liquidation/winding up of Optilan (UK) Limited

On May 3, 2023, Eversheds Sutherland (International) LLP, a creditor of Optilan (UK) Limited, filed a petition to wind up (the “Winding up Petition”) Optilan (UK) Limited, a wholly owned subsidiary of the Company’s Subsidiary, Optilan HoldCo 3 Limited, and the matter was due to be heard in the Portsmouth Combined Court Centre on June 28, 2023.

On June 28, 2023, the High Court of Justice in the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of Optilan (UK) Limited (the “Optilan Liquidation”). In conjunction with the order, the court appointed the Offical Receiver’s Office (the “OR”) to take the appointment as liquidator of Optilan (UK) Limited and take control of Optilan (UK) Limited’s assets.

At the same time the court appointed the OR to take the appointment as liquidator of Optilan (UK) Limited. The OR has taken control of Optilan (UK) Limited’s assets. To date the ORs Office has initiated contact with Optilan but we still wait to receive details of the individual who will be taking the role of OR.

On July 3, 2023, Optilan (UK) Limited received a letter from The Insolvency Service, an executive agency sponsored by the Department for Business and Trade located in the U.K. Pursuant to the letter of The Insolvency Services, the Company was required to provide information relating to Optilan (UK) Limited to the Official Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official Receiver’s Office to review the prospect of recovering the assets of Optilan (UK) Limited for the benefit of creditors. The interview was scheduled for July 18, 2023.

On July 18, 2023, the interview was held between the Official Receiver’s Office (“OR”) and the CEO at time of dissolution. The OR office requested a list of assets, bank account information and amounts along with any contracts held by Optilan (UK) Limited to begin the liquidation process.

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

There are no new claims as of September 12, 2024 against Optilan (UK) Limited and Evelyn Partners continue to liquidate the company’s assets.

The Company is an Unsecured creditor of Optilan (UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known for several months. The Company has approximately $19.4 million intercompany payables due from Optilan (UK), which will increase the Company liabilities for any obligations not repaid. The Company expects the remaining assets held by Optilan (UK) Limited to be fully impaired and reported as discontinued operations during the second quarter of 2023 as a result of the winding-up order for liquidation. At the time of this filing the Company is still evaluating the full effects of the winding-up order for liquidation and the material adverse effects it will have on the Company’s continued operations and ability to meet future obligations.

Current Operations

As a result of the liquidation of Optilan, our current operations now include: DarkPulse, Inc., based in Houston, Texas; Terradata Unmanned PLLC, based in Florida; and DarkPulse Manufacturing Inc., based in Arizona (formerly TJM Electronics West, Inc.). 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.

We have recently completed development activities of our Gen. 3 dark-pulse BOTDA system and are pending a Purchase Order issuance to our contract manufacturer Sanmina Corp (NASDAQ: SANM) for full manufacturing of our patented BOTDA sensor system hardware. Once we have obtained funding, we will be submitting a Purchase Order to Sanmina Corp. We are currently in discussions with a lender who may fund the Purchase Order. We also may rely on proceeds of this offering to fund the Purchase Order. Depending on the level of funding we receive, we estimate the initial Purchase Order will be for 10 to 30 units. Our business model, as it relates to hardware sales, is “Just in Time” and maintaining a very low inventory. Projects require several weeks of installation, design, and engineering followed by the installation of fiber optic cables. The average time required to build hardware units is less than the time needed for the engineering and fiber installation process. To date, we have yet to sell our patented BOTDA dark-pulse sensor system and we have built two units for demonstration of the system to potential customers. We are now able to sell our patented technology and related services. We currently have no commitments to buy our units.

Our agreement with the University of New Brunswick requires a royalty of 2% beginning April 24, 2018; however, no royalties have been paid to the University of New Brunswick as sales of the patented technology have not yet begun.

Available Information

All reports of the Company filed with the SEC are available free of charge through the SEC’s website at www.sec.gov. In addition, the public may read and copy materials filed by the Company at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. The public may also obtain additional information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.

Where You Can Find Us

Our executive offices are located at 815 Walker Street, Suite 1155, Houston, TX 77002, and our telephone number is (800) 436-1436. Our website address is www.darkpulse.com. Information contained on our website does not form part of this prospectus and is intended for informational purposes only.

THE OFFERING

Common Stock outstanding before the offering (includes 271,971,823 shares of Common Stock previously sold under the EFA)		9,580,068,647 shares of Common Stock.

Common Stock to be outstanding after giving effect to the issuance of 3,500,000,000 shares of Common Stock under the EFA		13,080,068,647 shares of Common Stock.

Use of Proceeds		We will not receive any of the proceeds from any sale of the shares of Common Stock by the Selling Security Holder. We will receive proceeds from the purchase of the Common Stock under the EFA from the Selling Security Holder. See “Use of Proceeds.”

Risk Factors		The Common Stock offered hereby involves a high degree of risk and should not be purchased by investors who cannot afford the loss of their entire investment. See “Risk Factors” beginning on page 6.

Trading Symbol		The Company’s Common Stock is quoted on the OTC Markets under the symbol “DPLS.”

The number of shares of Common Stock outstanding is based on an aggregate of 9,580,068,647 shares outstanding as of September 12, 2024, includes 271,971,823 shares of Common Stock previously sold as restricted securities under the EFA, and excludes 3,500,000,000 shares of Common Stock issuable upon purchase of the Shares under the EFA.

Equity Financing Agreement Summary

Following the execution of the Equity Financing Agreement dated April, 28, 2023 (which was superseded by subsequent agreements up to the EFA), GHS purchased an aggregate of 271,971,823 shares of Common Stock as restricted securities which represented gross proceeds of $794,500.

The EFA grants us the right, from time to time at our sole discretion (subject to certain conditions) during the Contract Period, to direct GHS to purchase shares of Common Stock on any business day (a “Put”), provided that at least five Trading Days (as defined in the EFA) have passed since the most recent Put. The purchase price of the shares of Common Stock contained in a Put shall be 92% of the Market Price with “Market Price” defined as the lowest VWAP of the Common Stock during the five consecutive Trading Days (as defined in the EFA) preceding the relevant Put Notice Date (as defined in the EFA) (the “Pricing Period”). In addition, we are required to issue to GHS shares in the amount of 115% of each Put. No Put will be made in an amount less than $10,000 or greater than $1,000,000. As a result, we may not have access to the full remaining $29,205,500 amount available under the EFA. For example, if we made a Put in the amount of $100,000 and the Market Price was $0.001, the purchase price would be $0.00092 and 125,000,000 shares would be issued to GHS ($100,000 / $0.00092 X 115%). Due to the fact that 115% of shares are required to be issued to GHS with each Put, the effective discount is 20%.

The Market Price as of September 10, 2024 was $0.0009. At that price we would be able to sell shares to GHS under the EFA at the discounted price of $0.000828. In addition, we are required to issue to GHS shares in the amount of 115% of each Put. At that discounted price, 3,500,000,000 shares would only represent $2,520,000, which is below the full amount of the EFA. In addition, any single drawdown must be at least $10,000 and cannot exceed $1,000,000 and any single drawdown may not exceed 100% of the average daily trading dollar volume of our Common Stock during the ten trading days preceding the Put.

Based on the Market Price as of September 10, 2024, we would have to issue 40,563,194,444 shares in order to use the full remaining $29,205,500 under the EFA.

For a more detailed description of the Shares and the EFA, see “Private Placement”.

RISK FACTORS

Readers of this Prospectus should carefully consider the risks and uncertainties described below.

Our failure to successfully address the risks and uncertainties described below would have a material adverse effect on our business, financial condition and/or results of operations, and the trading price of our common stock may decline and investors may lose all or part of their investment. We cannot assure you that we will successfully address these risks or other unknown risks that may affect our business.

As an enterprise engaged in the commercialization of new technology, our business is inherently risky. Our common shares are considered speculative during the development of our business operations. Prospective investors should consider carefully the risk factors set out below.

Summary Risk Factors

The following summarizes certain principal factors that make an investment in our Company speculative or risky, all of which are more fully described in the “Risk Factors” section herein. This summary should be read in conjunction with the “Risk Factors” section and should not be relied upon as an exhaustive summary of the material risks facing the Company.

If we default on the Secured Debenture, the secured holder could take possession of our assets, including our patents and other intellectual property.

Several of the convertible notes issued by us are in litigation with uncertain outcomes.

Our stockholders have limited voting power compared to the holder of our Series A Preferred Stock.

We have a limited operating history in an evolving and highly volatile industry, which makes it difficult to evaluate future prospects and may increase the risk that we will not be successful.

We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed.

Our operating results may fluctuate due to market forces out of our control that impact demand for our products and services.

Cyberattacks and security breaches of our systems, or those impacting customers or third parties, could adversely impact our brand and reputation and our business, operating results and financial condition.

Any significant disruption in our technology could adversely impact our brand and reputation and our business, operating results, and financial condition.

Certain large customers provide a significant share of our revenue and the termination of such agreements or reduction in business with such customers could harm our business. If we were to lose or were unable to renew these and other client contracts at favorable terms, our results of operations and financial condition may be adversely affected.

There is no assurance that we will achieve profitability or that our revenue and business models will be successful.

We will require additional capital to support business growth, and this capital might not be available or may require stockholder approval to obtain.

You may experience dilution of your ownership interests because of the future issuance of additional shares of our common or preferred stock or other securities that are convertible into or exercisable for our common or preferred stock.

The future development and growth of our technology and product offerings are subject to a variety of factors that are difficult to predict and evaluate and may be in the hands of third parties to a substantial extent. If our product offerings do not grow as expected, our business, operating results, and financial condition could be adversely affected.

Our intellectual property rights are valuable, and any inability to protect them could adversely impact our business, operating results, and financial condition.

Risks Related to Our Business

Our former wholly-owned subsidiary, Optilan (UK) Limited, is in liquidation. As an unsecured creditor, we are at risk of losing significant repayment obligations due from Optilan (UK) Limited.

On May 3, 2023, Eversheds Sutherland (International) LLP, a creditor of Optilan (UK) Limited, filed a petition to wind up (“Winding up Petition”) Optilan (UK) Limited, a wholly owned subsidiary of the Company’s Subsidiary, Optilan HoldCo 3 Limited, and the matter was due to be heard in the Portsmouth Combined Court Centre on June 28, 2023.

On June 28, 2023, the High Court of Justice in the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of Optilan (UK) Limited (“Optilan Liquidation”). In conjunction with the order, the court appointed the Official Receiver’s Office (“OR”) to take the appointment as liquidator of Optilan (UK) Limited and take control of Optilan (UK) Limited’s assets.

On July 18, 2023, the interview was held between the OR and the CEO at time of dissolution. The OR office requested a list of assets, bank account information and amounts along with any contracts held by Optilan (UK) Limited to begin the liquidation process.

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

There are no new claims as of September 12, 2024 against Optilan (UK) Limited and Evelyn Partners continue to liquidate the company’s assets.

We are an unsecured creditor of Optilan (UK) Limited and are at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known for several months. We have approximately $19.4 million intercompany payables due from Optilan (UK), which will increase our liabilities for any obligations not repaid. We expect the remaining assets held by Optilan (UK) Limited to be fully impaired and reported as Loss on Deconsolidation during the second quarter of 2023 as a result of the winding-up order for liquidation. We are still evaluating the full effects of the winding-up order for liquidation and the material adverse effects it will have on our continued operations and ability to meet future obligations. In the event we lose the repayment obligations of Optilan (UK) Limited, our financial condition could be materially adversely effected.

Due to the failure of GSD to consummate a business combination with DarkPulse by February 9, 2024, GSD will be forced to liquidate, which may make the shares of GSD owned by DarkPulse worthless and DarkPulse may be unable to recoup any expenses spent on acquiring securities of GSD and loans to GSD.

GSD is a blank check company with limited resources. Since there are limits on use of the Trust Funds for GSD’s working capital in connection with a business combination, GSD must rely on DarkPulse, its Sponsor, management or outside sources to pay for the various expenses associated with completing a business combination. For this purpose, DarkPulse has advanced to GSD non-interest bearing working capital loans. As of January 23, 2024, GSD had issued to DarkPulse non-interest bearing non-convertible promissory notes for working capital loans in the principal amount of $679,582. In addition, on October 12, 2022, DarkPulse paid Gladstone Sponsor, LLC (GSD’s original sponsor) $1,500,000 for 2,623,120 shares of Class B Common and 4,298,496 Private Placement Warrants issued by GSD to Gladstone Sponsor, LLC in order to become GSD’s Sponsor. DarkPulse has also expended an additional estimated $1,142,241 to third-party service providers in connection with the attempted business combination with GSD. Together, DarkPulse expended an estimated aggregate of $1,821,823 in connection with the attempted business combination with GSD.

All funds loaned to GSD by DarkPulse can only be repaid only from funds held outside of GSD’s Trust Account and GSD does not have material funds held outside of its Trust Account. Due to the fact that GSD failed to complete a business combination by February 9, 2024, it will now be forced to liquidate. DarkPulse, as the Sponsor of GSD and owner of an aggregate of 2,623,120 shares of Class B Common Stock and 4,298,496 GSD Private Placement Warrants, each of which is exercisable to purchase one share of Class A Common Stock of GSD, will not be able to participate in the liquidation as a holder of Class B Common Stock of GSD due to DarkPulse having agreed to waive its rights to any liquidation distributions, which means the shares of Class B Common Stock of GSD owned by DarkPulse are worthless. As a result of GSD’s liquidation, DarkPulse’s investment in GSD will be worthless and DarkPulse will be unable to recoup its expenses.

We may be adversely affected by natural disasters, pandemics, and other catastrophic events, and by man-made problems such as war or terrorism, that could disrupt our business operations, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Natural disasters or other catastrophic events may also cause damage or disruption to our operations, international commerce, and the global economy, and could have an adverse effect on our business, operating results, and financial condition. Our business operations are subject to interruption by natural disasters, fire, power shortages, and other events beyond our control.

In addition, our global operations expose us to risks associated with public health crises, such as pandemics and epidemics, which could harm our business and cause its operating results to suffer.

Further, war, acts of terrorism, labor activism and other geopolitical unrest could cause disruptions in our business or the businesses of its partners or the economy as a whole. In the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as a fire, power loss, or telecommunications failure, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in development of our products and services, lengthy interruptions in service, breaches of data security, and loss of critical data, all of which could have an adverse effect on our future operating results.

Escalating global tensions, including the conflict between Russia and Ukraine, could negatively impact us.

The ongoing conflict between Russia and Ukraine could led to disruption, instability and volatility in global markets and industries that could negatively impact our operations. The U.S. government and other governments in jurisdictions in which we operate have imposed severe sanctions and export controls against Russia and Russian interests and threatened additional sanctions and controls. The impact of these measures, as well as potential responses to them by Russia, is currently unknown and they could adversely affect our business, partners or customers.

If we default on the Secured Debenture, the secured holder could take possession of our assets, including our patents and other intellectual property.

The Secured Debenture issued April 24, 2017, is secured by our assets, which includes our patents and other intellectual property. In the event that we default on the obligations in the Debenture, the secured holder could take possession of our assets, including our patents and other intellectual property. If this were to occur, investors would likely lose all of their investment.

Several of the convertible notes issued by us are in litigation with uncertain outcomes.

We have issued several convertible notes which are currently the subject of litigation (See “Legal Proceedings”). The outcomes of each of these matters is uncertain and we may be required to both expend large sums of resources on both defending against and pursuing our causes of action in each of these proceedings. In addition, there is no certainty that any outcome will be in favor of us and we may be required to pay settlements or judgments the amounts of which may be material to us. In the event that we do not achieve favorable outcomes to each of the outstanding legal proceedings with convertible note holders, it could have a material adverse effect on us and our operations may fail.

Our future growth depends significantly on our marketing efforts, and if our marketing efforts are not successful, our business and results of operations will be harmed.

We have dedicated some, and intend to significantly increase, resources to marketing efforts. Our ability to attract and retain customers depends in large part on the success of these marketing efforts and the success of the marketing channels we use to promote our products and services. Our marketing channels include, but are not limited to, social media, traditional media such as the press, online affiliations, search engine optimization, search engine marketing, and offline partnerships.

While our goal remains to increase the strength, recognition and trust in our brand by increasing our customer base and expanding our products and services, if any of our current marketing channels becomes less effective, if we are unable to continue to use any of these channels, if the cost of using these channels was to significantly increase or if we are not successful in generating new channels, we may not be able to attract new customers in a cost-effective manner or increase the use of our products and services. If we are unable to recover our marketing costs through increases in the size, value or other product selection and utilization, it could have a material adverse effect on our business, financial condition, results of operations, cash flows and future prospects.

Our stockholders have limited voting power compared to the holder of our Series A Preferred Stock.

Our CEO, Dennis O’Leary, is the sole holder of our Series A Preferred Stock, will control a majority of the voting power of our Company. For so long as Mr. O’Leary holds all of the shares of Series A Preferred Stock, he is expected to hold a majority of our outstanding voting power and he will control the outcome of matters submitted to a stockholder vote, including the appointment of all directors of the Company.

Our management controls all corporate activities and can approve all transactions, including mergers, without the approval of other stockholders.

Our CEO, Dennis O’Leary, owns 100 shares of our Series A Preferred Stock that gives him the right to a majority of the voting power of the Company. Therefore, our management effectively controls all corporate activities and can approve transactions, including possible mergers, issuance of shares and compensation levels, without the approval of other stockholders. The decisions of our management may not be consistent with or in the best interests of other stockholders.

This capital structure may have anti-takeover effects preventing a change in control transaction that the minority owners of our Common Stock might consider in their best interest.

The ability of our management to control our business may limit or eliminate minority stockholders’ ability to influence corporate affairs.

Our CEO, Dennis O’Leary, owns 100 shares of Series A Preferred Stock that gives him the right to a majority of the voting power of our Company. Because of this beneficial stock ownership, Mr. O’Leary is in a position to continue to elect our entire board of directors, decide all matters requiring stockholder approval, including potential mergers or business changes, and determine our policies. The interests of our management may differ from the interests of our minority stockholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of officers and directors and other business decisions. Our minority stockholders have no way of overriding decisions made by our management. This level of control may also have an adverse impact on the market value of our shares because our management may institute or undertake transactions, policies or programs that may result in losses, may not take any steps to increase our visibility in the financial community and/or may sell sufficient numbers of shares to significantly decrease our price per share.

We have made and expect to continue to make acquisitions that could disrupt our operations and harm our operating results.

Our growth depends upon market growth, our ability to enhance our existing products, and our ability to introduce new products on a timely basis. We intend to continue to address the need to develop new products and enhance existing products through acquisitions of other companies, product lines, technologies, and personnel. Acquisitions involve numerous risks, including the following:

	·	Difficulties in integrating the operations, systems, technologies, products, and personnel of the acquired companies, particularly companies with large and widespread operations and/or complex products;

	·	Diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from acquisitions;

	·	Potential difficulties in completing projects associated with in-process research and development intangibles;

	·	Difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions;

	·	Initial dependence on unfamiliar supply chains;

	·	Insufficient revenue to offset increased expenses associated with acquisitions; and

	·	The potential loss of key employees, customers, distributors, vendors and other business partners of the companies we acquire following and continuing after announcement of acquisition plans.

Acquisitions may also cause us to:

	·	Issue common stock that would dilute our current shareholders’ percentage ownership;

	·	Use a substantial portion of our cash resources or incur debt;

	·	Significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition;

	·	Assume liabilities;

	·	Record goodwill and nonamortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges;

	·	Incur amortization expenses related to certain intangible assets;

	·	Incur tax expenses related to the effect of acquisitions on our intercompany research and development cost sharing arrangement and legal structure;

	·	Incur large and immediate write-offs and restructuring and other related expenses; and

	·	Become subject to intellectual property or other litigation.

Mergers and acquisitions are inherently risky and subject to many factors outside of our control, and no assurance can be given that our previous or future acquisitions will be successful and will not materially adversely affect our business, operating results, or financial condition. Failure to manage and successfully integrate acquisitions could materially harm our business and operating results. Prior acquisitions could result in a wide range of outcomes, from successful introduction of new products and technologies to a failure to do so. Even when an acquired company has already developed and marketed products, there can be no assurance that product enhancements will be made in a timely fashion or that pre-acquisition due diligence will have identified all possible issues that might arise with respect to such products.

From time to time, we have made acquisitions that resulted in charges in an individual quarter. These charges may occur in any particular quarter, resulting in variability in our quarterly earnings. In addition, our effective tax rate for future periods is uncertain and could be impacted by mergers and acquisitions. Risks related to new product development also apply to acquisitions.

Acquisitions, joint ventures or other strategic transactions create certain risks and may adversely affect our business, financial condition or results of operations.

Acquisitions, partnerships and joint ventures are part of our growth strategy. We evaluate and expect in the future to evaluate potential strategic acquisitions of, and partnerships or joint ventures with, complementary businesses, services or technologies. We may not be successful in identifying acquisition, partnership and joint venture targets. In addition, we may not be able to successfully finance or integrate any businesses, services or technologies that we acquire or with which we form a partnership or joint venture.

We may not be able to identify suitable acquisition candidates or complete acquisitions in the future, which could adversely affect our future growth; or businesses that we acquire may not perform as well as expected or may be more difficult or expensive to integrate and manage than expected, which could adversely affect our business and results of operations. In addition, the process of integrating these acquisitions may disrupt our business and divert our resources.

In addition, acquisitions outside our current operating jurisdictions often involve additional or increased risks including, for example:

	·	managing geographically separated organizations, systems and facilities;

	·	integrating personnel with diverse business backgrounds and organizational cultures;

	·	complying with foreign regulatory requirements;

	·	fluctuations in exchange rates;

	·	enforcement and protection of intellectual property in some foreign countries;

	·	difficulty entering new foreign markets due to, among other things, customer acceptance and business knowledge of these new markets; and

	·	general economic and political conditions.

These risks may arise for a number of reasons: we may not be able to find suitable businesses to acquire at affordable valuations or on other acceptable terms; we may face competition for acquisitions from other potential acquirers; we may need to borrow money or sell equity or debt securities to the public to finance acquisitions and the terms of these financings may be adverse to us; changes in accounting, tax, securities or other regulations could increase the difficulty or cost for us to complete acquisitions; we may incur unforeseen obligations or liabilities in connection with acquisitions; we may need to devote unanticipated financial and management resources to an acquired business; we may not realize expected operating efficiencies or product integration benefits from an acquisition; we could enter markets where we have minimal prior experience; and we may experience decreases in earnings as a result of non-cash impairment charges.

We cannot ensure that any acquisition, partnership or joint venture we make will not have a material adverse effect on our business, financial condition and results of operations.

Because of the unique difficulties and uncertainties inherent in technology development, we face a risk of business failure.

Potential investors should be aware of the difficulties normally encountered by companies developing new technology and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the development of new technology with limited personnel and financial means. These potential problems include, but are not limited to, unanticipated technical problems that extend the time and cost of product development, or unanticipated problems with the operation of our technology or that with which we are licensing that also extend the time and cost of product development.

Successful technical development of our products does not guarantee successful commercialization.

We may successfully complete the technical development for one or all of our product development programs, but still fail to develop a commercially successful product for a number of reasons, including among others the following:

	·	Competing products;

	·	Ineffective distribution and marketing;

	·	Lack of sufficient cooperation from our partners; and

	·	Demonstrations of the products not aligning with or meeting customer needs.

Our success in the market for the products we develop will depend largely on our ability to prove our products’ capabilities. Upon demonstration, our products and/or technology may not have the capabilities they were designed to have or that we believed they would have. Furthermore, even if we do successfully demonstrate our products’ capabilities, potential customers may be more comfortable doing business with a larger, more established, more proven company than us. Moreover, competing products may prevent us from gaining wide market acceptance of our products. Significant revenue from new product investments may not be achieved for a number of years, if at all.

If we do not effectively manage our growth and the associated demands on our operational, risk management, sales and marketing, technology, compliance and finance and accounting resources, our business may be adversely impacted.

To effectively manage and capitalize on our growth, we must continue to expand our information technology and financial, operating, and administrative systems and controls, and continue to manage headcount, capital, and processes efficiently. Our continued growth could strain our existing resources, and we could experience ongoing operating difficulties in managing our business as we expand across numerous jurisdictions, including difficulties in hiring, training, and managing an employee base. Failure to scale and preserve our company culture with growth could harm our future success, including our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives. If we do not adapt to meet these evolving challenges, or if our management team does not effectively scale with our growth, we may experience erosion to our brand, the quality of our products and services may suffer, and our company culture may be harmed. Moreover, the failure of our systems and processes could undermine our ability to provide accurate, timely, and reliable reports on our financial and operating results, including the financial statements provided herein, and could impact the effectiveness of our internal controls over financial reporting. In addition, our systems and processes may not prevent or detect all errors, omissions, or fraud, though we have experienced no such material errors, omissions or fraud in the past. For example, our employees may fail to identify transaction errors or fraudulent information provided by our customers. Any of the foregoing operational failures could lead to noncompliance with laws, loss of operating licenses or other authorizations, or loss of relationships that could substantially impair or even suspend company operations.

We intend to continue to develop our technology. Successful implementation of this strategy may require significant expenditure before any substantial associated revenue is generated and we cannot guarantee that these increased investments will result in corresponding and offsetting revenue growth. Our growth may not be sustainable and depends on our ability to retain existing customers, attract new customers, expand product offerings, and increase processed volumes and revenue from both new and existing customers.

A customer’s use of our services may decrease for a variety of reasons, including the customer’s level of satisfaction with our products and services, the expansion of business to offer new products and services, the effectiveness of our support services, the pricing of our products and services, the pricing, range and quality of competing products or services, the effects of global economic conditions, regulatory limitations, trust, or perception and interest in our products and services. Furthermore, the complexity and costs associated with switching to a competitor may not be significant enough to prevent a customer from switching service providers, especially for larger customers.

Any failure by us to retain existing customers, attract new customers, and increase revenue from both new and existing customers could materially and adversely affect our business, financial condition, results of operations and prospects. These efforts may require substantial financial expenditures, commitments of resources, developments of our processes, and other investments and innovations.

We face intense and increasing competition and, if we do not compete effectively, our competitive positioning and our operating results will be harmed.

We operate in a rapidly changing and highly competitive industry, and our results of operations and future prospects depend on, among other things:

	·	the growth of our customer base;

	·	our ability to acquire customers at a lower cost, and

	·	our ability to increase our overall value to each of our customers while they use our products and services.

Despite the barriers to enter the markets we serve, we expect our competition to continue to increase. In addition to established enterprises, we may also face competition from early-stage companies attempting to capitalize on the same, or similar, opportunities as we are. Some of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing and other resources, and a larger customer base than we do. This allows them, among others, to potentially offer more competitive pricing or other terms or features, a broader range of products, or a more specialized set of specific products or services, as well as respond more quickly than we can to new or emerging technologies and changes in customer preferences.

Our existing or future competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services. This could attract new customers away from our services and reduce our market share in the future. Additionally, when new competitors seek to enter our markets, or when existing market participants seek to increase their market share, these competitors sometimes undercut, or otherwise exert pressure on, the pricing terms prevalent in that market, which could adversely affect our market share and/or ability to capitalize on new market opportunities.

Cyberattacks and security breaches of our systems, or those impacting our customers or third parties, could adversely impact our brand and reputation and our business, operating results and financial condition.

Our business involves the collection, storage, processing and transmission of confidential information, customer, employee, service provider and other personal data, as well as information required to access customer assets. Any actual or perceived security breach of our or our third-party partners may:

	·	harm our reputation and brand;

	·	result in our systems or services being unavailable and interrupt our operations;

	·	result in improper disclosure of data and violations of applicable privacy and other laws;

	·	result in significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory and financial exposure;

	·	cause us to incur significant remediation costs;

	·	lead to theft or irretrievable loss of our or our customers’ assets;

	·	reduce customer confidence in, or decreased use of, our products and services;

	·	divert the attention of management from the operation of our business;

	·	result in significant compensation or contractual penalties from us to our customers or third parties as a result of losses to them or claims by them; and

	·	adversely affect our business and operating results.

Further, any actual or perceived breach or cybersecurity attack directed at other similar institutions, whether or not we are directly impacted, could lead to a general loss of customer confidence in the use of our technology, which could negatively impact us including the market perception of the effectiveness of our security measures and technology infrastructure.

An increasing number of organizations, including large businesses, technology companies and financial institutions, as well as government institutions, have disclosed breaches of their information security systems, some of which have involved sophisticated and highly targeted attacks, including on their websites, mobile applications, and infrastructure. Attacks upon systems across a variety of industries are increasing in their frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded, and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper, or illegal access to systems and information (including customers’ personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of its third-party service providers or partners. Certain types of cyberattacks could harm us even if our systems are left undisturbed. For example, attacks may be designed to deceive employees and service providers into releasing control of our systems to a hacker, while others may aim to introduce computer viruses or malware into our systems with a view to stealing confidential or proprietary data. Additionally, certain threats are designed to remain dormant or undetectable until launched against a target and we may not be able to implement adequate preventative measures.

Although we do not have a past history of material security breaches or cyberattacks, and do not believe we are a target of such breaches or attacks, we have developed systems and processes designed to protect the data we manage, prevent data loss and other security breaches, and effectively respond to known and potential risks. We expect to continue to expend significant resources to bolster these protections, but there can be no assurance that these security measures will provide absolute security or prevent breaches or attacks. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. Certain threat actors may be supported by significant financial and technological resources, making them even more sophisticated and difficult to detect. As a result, our costs and the resources it devotes to protecting against these advanced threats and their consequences may increase over time.

Although we maintain insurance coverage that we believe is adequate for our business, it may be insufficient to protect us against all losses and costs stemming from security breaches, cyberattacks, and other types of unlawful activity, or any resulting disruptions from such events. Outages and disruptions of our systems, including any caused by cyberattacks, may harm our reputation and our business, operating results, and financial condition.

We may incur significant liability as a result of ongoing disputes.

We are a party to multiple legal disputes the resolutions of which may adversely affect our business and results of operations.

We may be subject to various other legal proceedings, arbitrations, and regulatory investigation matters as further described in “Legal Proceedings”. If any of these matters are resolved unfavorably to us, our business and results of operations may be adversely affected.

We have a limited operating history in an evolving and highly volatile industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

Because we have a limited history operating our business at our current scale and scope, it is difficult to evaluate our current business and future prospects, including our ability to plan for and model future growth. For example, recently launched services require substantial resources and there is no guarantee that such expenditures will result in profit or growth of our business. The rapidly evolving nature of the market in which we operate, substantial uncertainty concerning how these markets may develop, and other economic factors beyond our control, reduces our ability to accurately forecast quarterly or annual revenue. Failure to manage our current and future growth effectively could have an adverse effect on our business, operating results, and financial condition.

Adverse economic conditions may adversely affect our business.

Our performance is subject to general economic conditions, and their impact on the industries in which we operate, as well as our customers. The United States and other key European and other international economies have experienced cyclical downturns from time to time in which economic activity declined resulting in lower consumption rates, restricted credit, reduced profitability, weaknesses in financial markets, bankruptcies, and overall uncertainty with respect to the economy. The impact of general economic conditions on our business is highly uncertain and dependent on a variety of factors, including market activity, global economic trends, and other events beyond our control. Geopolitical developments, such as trade wars and foreign exchange limitations can also increase the severity and levels of unpredictability globally and increase the volatility of global financial markets. To the extent that conditions in the general economic markets materially deteriorate, our ability to attract and retain customers may suffer.

The nature of our business involves significant risks and uncertainties that may not be covered by insurance or indemnity.

We develop and sell products where insurance or indemnification may not be available, including:

	·	Designing and developing products using advanced technologies in intelligence and homeland security applications that are intended to operate in high demand, high risk situations; and

	·	Designing and developing products to collect, distribute and analyze various types of information.

Certain products may raise questions with respect to issues of privacy rights, civil liberties, intellectual property, trespass, conversion and similar concepts, which may raise new legal issues. Indemnification to cover potential claims or liabilities resulting from a failure of technologies developed or deployed may be available in certain circumstances but not in others. We are not able to maintain insurance to protect against all operational risks and uncertainties. Substantial claims resulting from an accident, failure of our product, or liability arising from our products in excess of any indemnity or insurance coverage (or for which indemnity or insurance is not available or was not obtained) could harm our financial condition, cash flows, and operating results. Any accident, even if fully covered or insured, could negatively affect our reputation among our customers and the public, and make it more difficult for us to compete effectively.

Material weaknesses in our internal control over financial reporting may, until remedied, cause errors in our financial statements or cause our filings with the SEC to not be timely.

We believe that material weaknesses exist in our internal control over financial reporting as of December 31, 2023, including those related to (i) our internal audit functions and (ii) a lack of segregation of duties within accounting functions. If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our financial statements that could require a restatement or our filings may not be timely made with the Securities and Exchange Commission (the “SEC”). We intend to implement additional corporate governance and control measures to strengthen our control environment as we are able, but we may not achieve our desired objectives. Moreover, no control environment, no matter how well designed and operated, can prevent or detect all errors or fraud. We may identify material weaknesses and control deficiencies in our internal control over financial reporting in the future that may require remediation and could lead investors losing confidence in our reported financial information, which could lead to a decline in our stock price.

Being a public company is expensive and administratively burdensome.

As a public reporting company, we are subject to the information and reporting requirements of the Securities Act, the Exchange Act and other federal securities laws, rules and regulations related thereto, including compliance with the Sarbanes-Oxley Act. Complying with these laws and regulations requires the time and attention of our Board of Directors and management team, and increases our expenses.

Among other things, we are required to:

	·	Maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;

	·	Prepare and distribute periodic reports in compliance with our obligations under federal securities laws;

	·	Institute a more comprehensive compliance function, including with respect to corporate governance; and

	·	Involve, to a greater degree, our outside legal counsel and accountants in the above activities.

The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited reports to stockholders are expensive and much greater than that of a privately-held company, and compliance with these rules and regulations may require us to hire additional financial reporting, internal controls and other finance personnel, and will involve a material increase in regulatory, legal and accounting expenses and the attention of management. There can be no assurance that we will be able to comply with the applicable regulations in a timely manner, if at all. In addition, being a public company makes it more expensive for us to obtain director and officer liability insurance. In the future, we may be required to accept reduced coverage or incur substantially higher costs to obtain this coverage.

If we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud. Any inability to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our common stock.

Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operation and access to capital. We have not performed an in-depth analysis to determine if historical un-discovered failures of internal controls exist, and may in the future discover areas of our internal control that need improvement.

Public company compliance may make it more difficult to attract and retain officers and directors.

The Sarbanes-Oxley Act and new rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies. As a public company, we expect these new rules and regulations to increase our compliance costs in 2024 and beyond and to make certain activities more time consuming and costly. As a public company, we also expect that these new rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance in the future and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board of Directors or as executive officers.

Delaware law and our Certificate of Incorporation and Bylaws will contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

Our Certificate of Incorporation and bylaws contains provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board and therefore depress the trading price of our Common Stock. In addition, as a Delaware corporation, we will generally be subject to provisions of Delaware law, including the DGCL. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board or taking other corporate actions, including effecting changes in management.

Such provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board or management.

Any provision of our Certificate of Incorporation or bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium for their shares of our stock and could also affect the price that some investors are willing to pay for our Common Stock.

Risks Related to Our Financial Condition

If we do not obtain additional financing or sufficient revenues, our business will fail.

Our current operating funds are less than necessary to fulfill our operating costs and we will need to obtain additional financing in order to continue our business operations. Although we are generating revenues, we are not generating net income.

We will require additional financing to execute our business plan through raising additional capital and/or generating greater revenues.

Obtaining additional financing is subject to a number of factors, including acceptance of our BOTDA technology and current financial condition as well as general market conditions.

These factors affect the timing, amount, terms or conditions of additional financing unavailable to us. If additional financing is not arranged, we will face the risk of going out of business. Our management is currently engaged in actively pursuing multiple financing options in order to obtain the capital necessary to execute our business plan.

The most likely source of future funds presently available to us is through the additional sales of equity or through convertible debt instruments. Any sales of share capital or conversion of convertible debt will most likely result in dilution to existing shareholders.

There is no history upon which to base any assumption as to the likelihood we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

We might require additional capital to support business growth, and this capital might not be available or may require stockholder approval to obtain.

We have funded our operations since inception primarily through equity financings, convertible notes, and revenue generated by our products and services. We intend to continue to make investments in our business to respond to business challenges, including developing new products and services, enhancing our operating infrastructure, expanding our international operations, and acquiring complementary businesses and technologies, all of which may require us to secure additional funds.

Additional financing may not be available on terms favorable to us, if at all. If we incur additional debt, the debt holders may have rights senior to holders of our common stock to make claims on our assets, and the terms of any debt could restrict our operations.

Our only existing commitment for financing is pursuant to Equity Financing Agreement with GHS Investments LLC but our ability to make puts is subject to certain conditions which may limit our ability to make puts or the amount of each put. In the event we are unable to make puts or obtain other commitments for financing, our business will fail.

On August 14, 2024, we entered into the EFA with GHS, pursuant to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock, from time to time over the course of 12 months (the “Contract Period”) after effectiveness of a registration statement on Form S-1 of the underlying shares of Common Stock.

The EFA grants us the right, from time to time at our sole discretion (subject to certain conditions) during the Contract Period (as defined in the EFA), to direct GHS to purchase shares of Common Stock on any business day (a “Put”), provided that at least five Trading Days (as defined in the EFA) have passed since the most recent Put. No Put will be made in an amount less than $10,000 or greater than $1,000,000. In no event is the Company entitled to make a Put or is GHS entitled to purchase that number of shares of Common Stock of the Company, which when added to the sum of the number of shares of Common Stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the Securities Exchange Act 1934, as amended (the “Exchange Act”)), by GHS, would exceed 4.99% of the number of shares of Common Stock outstanding on such date, as determined in accordance with Rule 13d-1(j) of the Exchange Act. The purpose of the limitation is to prevent GHS from controlling the Company so that is it not an “affiliate,” as defined in Rule 405 promulgated under the Securities Act of 1933, as amended. The beneficial ownership limitation does not prevent GHS from selling some or all of the shares it acquires and then acquiring additional shares so that it is able to sell shares in excess of the 4.99% beneficial ownership limitation while never holding more than 4.99% of our outstanding shares. From August 2021 until September 12, 2024, GHS has purchased and sold 2,327,562,779 and 2,055,590,956 shares of our Common Stock, respectively.

Due to these limitations, we may be unable to make Puts sufficient to finance our business operations. In the event we are unable to make Puts or obtain other commitments for financing, our business will fail.

We need to continue as a going concern if our business is to succeed.

Our independent registered public accounting firm reports (from two separate independent registered public accounting firms) on our audited financial statements for the years ended December 31, 2023 and 2022, each indicate that there are a number of factors that raise substantial risks about our ability to continue as a going concern. Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations, the excess of liabilities over assets, and our dependence upon obtaining adequate additional financing to pay our liabilities. If we are not able to continue as a going concern, investors could lose their investments.

There is no assurance that we will achieve or maintain profitability or that our revenue and business models will be successful.

Our ability to achieve and maintain profitability is based on numerous factors, many of which are beyond our control. We may not be able to generate sufficient revenue to maintain profitability in the short or long-term. Our revenue growth may slow, or our revenue may decline for a number of other reasons, including reduced demand for our offerings, increased competition, a decrease in the growth or size of the industries in which we operate, in the usage our technologies generally, or any failure to capitalize on growth opportunities.

We are continually refining our revenue and business model and have shifted our focus to the development and commercialization of our products and services. There is no assurance that these efforts will be successful or that we will generate revenues commensurate with our efforts and expectations or become or stay profitable. We may be forced to make significant changes to our revenue and business model to compete with our competitors’ offerings, and even if such changes are undertaken, there is no guarantee that they will be successful or profitable. Additionally, we will need to hire, train, and integrate qualified personnel to meet and further such changes to our business objectives at potentially significant additional expense. Failure to successfully implement revenue and business models or manage related expenses could cause us to be unprofitable and have an adverse effect on pour business, operating results and financial condition.

We may be affected by fluctuations in currency exchange rates

We are potentially exposed to adverse as well as beneficial movements in currency exchange rates. An increase in the value of the dollar could increase the real cost to our customers of our products in those markets outside the U.S. where we sell in dollars, and a weakened dollar could increase the cost of local operating expenses from sources outside the United States, and overseas capital expenditures. We also conduct certain investing and financing activities in local currencies. Therefore, changes in exchange rates could harm our financial condition and results of operations.

We may experience fluctuations in our quarterly operating results.

We could experience significant fluctuations in our quarterly operating results due to a number of factors, many of which are beyond our control. You should not rely on period-to-period comparisons of our operating results as an indication of our future performance. Factors that may cause fluctuations in our quarterly operating results include, but are not limited to, the following:

	·	a change in the volume of our customers use of our products and services and generally;

	·	planned and unplanned increases in marketing, sales and other operating expenses that we may incur to grow and expand our customer base and operations, and to remain competitive;

	·	the success, or lack of success, in new marketing approaches we have recently undertaken or plan to undertake, which have not been previously or fully tested;

	·	the continued market acceptance of our products and services in a highly competitive environment;

	·	system disruptions, outages and other performance problems or interruptions on our products and technology, or breaches of data or system security, including ransomware or other major cyber-attacks, which, if extended or severe, may harm our credibility and reputation in the market;

	·	our failure to provide adequate customer service;

	·	our ability to successfully, and in a timely manner, continue development, improvement and feature-enhancement of our products and services, including our intellectual property, data analytics, proprietary technology and customer support functions;

	·	the timing and success of new product and service introductions, and new product and service features or enhancements, by us and our subsidiaries, or our competitors, or other changes in the competitive landscape of the markets in which we operate;

	·	the success of our expansion into new markets, products and services, or ones in which we are in the early stages;

	·	changes in the adoption and use of our technologies and the public perception of them;


	·	changes in the legislative or regulatory environment, scope or focus of regulatory investigations and inquiries, or interpretations of regulatory requirements, or outright prohibition of certain activities;

	·	disputes with our customers, adverse litigation and regulatory judgments, enforcement actions, settlements or other related costs and the reputational impact and public perception of such occurrences, including in emerging industries, or emerging components of industries;

	·	the timing and amount of non-cash expenses, such as stock-based compensation and asset impairment;

	·	changes in accounting standards, policies, guidance, interpretations or principles; and

	·	general economic conditions in either domestic or international markets, including the impact of the ongoing COVID-19 pandemic.

Our operating results may fall below the expectations of market analysts and investors in some future periods, which could cause the market price of our Common Stock to decline substantially.

Changes in U.S. and foreign tax laws, as well as the application of such laws, could adversely impact our financial position and operating results.

We are subject to complex income and non-income tax laws and regulations in the United States and a variety of foreign jurisdictions. Both the United States and foreign jurisdictions may revise corporate income tax and other non-income tax laws which could impact the amount of tax due in such jurisdiction.

Our determination of our corporate income tax liability is subject to review and may be challenged by applicable U.S. and foreign tax authorities. Any adverse outcome of such challenge could harm our operating results and financial condition. The determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment and, in the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is complex and uncertain. Moreover, as a multinational business, we have subsidiaries that engage in many intercompany transactions in a variety of tax jurisdictions where the ultimate tax determination is complex and uncertain. Our existing corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current prevailing tax laws. Furthermore, as we operate in multiple taxing jurisdictions, the application of tax laws can be subject to diverging and sometimes conflicting interpretations by tax authorities of these jurisdictions. It is not uncommon for taxing authorities in different countries to have conflicting views with respect to, among other things, the characterization and source of income or other tax items, the manner in which the arm’s-length standard is applied for transfer pricing purposes, or with respect to the valuation of intellectual property. The taxing authorities of the jurisdictions in which we operate may challenge our tax treatment of certain items or the methodologies we use for valuing developed technology or intercompany arrangements, which could impact our worldwide effective tax rate and harm our financial position and operating results.

We are also subject to non-income taxes, such as payroll, sales, use, value-added, net worth, property, and goods and services taxes in the United States and various foreign jurisdictions. A change in the tax law could impact tax positions which could result in an increased exposure related to such tax liabilities. Such changes could have an adverse effect on our operating results and financial condition.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (as defined under Sections 382 and 383 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs and certain other tax attributes to offset post-change taxable income or taxes.

We have not performed a study to determine whether its NOLs are currently subject to Section 382 limitations. We may also experience a future ownership change under Section 382 of the Code that could affect our ability to utilize its NOLs to offset our income.

If our estimates or judgment relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant estimates and judgments involve the identification of performance obligations in revenue recognition, evaluation of tax positions, inter-company transactions, and the valuation of stock-based awards and the fiat reserves we hold, among others. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of analysts and investors, resulting in a decline in the trading price of our Common Stock.

Business metrics and other estimates are subject to inherent challenges in measurement, and our business, operating results, and financial condition could be adversely affected by real or perceived inaccuracies in those metrics.

We regularly review business metrics and other measures to evaluate growth trends, measure our performance, and makes strategic decisions. These metrics are calculated using internal company data and have not been validated by an independent third party. While these numbers are based on what we currently believe to be reasonable estimates for the applicable period of measurement, there are inherent challenges in such measurements. If we fail to maintain an effective analytics platform, our calculations may be inaccurate, and we may not be able to identify those inaccuracies.

We are subject to changes in financial reporting standards or policies, including as a result of choices made by us, which could materially adversely affect our reported results of operations and financial condition and may have a corresponding material adverse impact on capital ratios.

Our consolidated financial statements are prepared in accordance with GAAP, which are periodically revised or expanded. Accordingly, from time to time we are required to adopt new or revised accounting standards issued by recognized bodies. It is possible that future accounting standards and financial reporting standards or policies, including as a result of choices made by us, which we are required to adopt, could change the current accounting treatment that applies to our consolidated financial statements and that such changes could have a material adverse effect on our reported results of operations and financial condition, and may have a corresponding material adverse effect on capital ratios.

Risks Related to Our Employees and Other Service Providers

We are heavily reliant on Dennis O’Leary, our Chairman and Chief Executive Officer, and the departure or loss of Dennis O’Leary could disrupt our business.

We depend heavily on the continued efforts of Dennis O’Leary, Chairman, Chief Executive Officer and director. Mr. O’Leary is essential to our strategic vision and day-to-day operations and would be difficult to replace. Although we have an employment agreement with Mr. O’Leary, we cannot be certain that he will desire to continue with us for the necessary time it will to complete the product development and initial sales channel development. The departure or loss of Mr. O’Leary, or the inability to hire and retain a qualified replacement, could negatively impact our ability to manage our business.

If we are unable to recruit and retain key management, technical and sales personnel, our business would be negatively affected.

For our business to be successful, we need to attract and retain highly qualified technical, management and sales personnel. The failure to recruit additional key personnel when needed with specific qualifications and on acceptable terms or to retain good relationships with our partners might impede our ability to continue to develop, commercialize and sell our products. To the extent the demand for skilled personnel exceeds supply, we could experience higher labor, recruiting and training costs in order to attract and retain such employees. We face competition for qualified personnel from other companies with significantly more resources available to them and thus may not be able to attract the level of personnel needed for our business to succeed.

In the event of employee or service provider misconduct or error, our business may be adversely impacted.

Employee or service provider misconduct or error could subject us to legal liability, financial losses, and regulatory sanctions, and could seriously harm our reputation and negatively affect our business. Such misconduct could include engaging in improper or unauthorized transactions or activities, misappropriation of customer funds, and misappropriation of information, failing to supervise other employees or service providers, or improperly using confidential information.

Employee or service provider errors could expose us to the risk of material losses even if the errors are detected. Although we have implemented processes and procedures and provide trainings to our employees and service providers to reduce the likelihood of misconduct and error, these efforts may not be successful. Moreover, the risk of employee or service provider error or misconduct may be even greater for novel products and services.

This can lead to high risk of confusion among employees and service providers, particularly in a fast growth company like ours, with respect to compliance obligations particularly including confidentiality, data access, and conflicts. It is not always possible to deter misconduct and the precautions we take to prevent and detect this activity may not be effective in all cases. If we were found not to have met our regulatory oversight and compliance and other obligations, we could be subject to regulatory sanctions, financial penalties and restrictions on our activities for failure to properly identify, monitor and respond to potentially problematic activity, which could seriously damage our reputation. Our employees, contractors, and agents could also commit errors that subject us to financial claims for negligence, as well as regulatory actions, or result in financial liability. Further, allegations by regulatory or criminal authorities of improper transactions could affect our brand and reputation.

Risks Related to Our Common Stock

We are authorized to issue an aggregate of 20,000,000,000 shares of common stock and 2,000,000 shares of “blank check” preferred stock. In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We may issue additional shares of our common stock or other securities that are convertible into or exercisable for our common stock in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock may create downward pressure on the trading price of the common stock. We will need to raise additional capital in the near future to meet our working capital needs, and there can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with these capital raising efforts, including at a price (or exercise or conversion prices) below the price an investor paid for stock.

Because the SEC imposes additional sales practice requirements on brokers who deal in our shares that are penny stocks, some brokers may be unwilling to trade them. This means that investors may have difficulty reselling their shares and may cause the price of the shares to decline.

Our shares qualify as penny stocks and are covered by Section 15(g) of the Exchange Act which imposes additional sales practice requirements on broker/dealers who sell our securities in this offering or in the aftermarket. In particular, prior to selling a penny stock, broker/dealers must give the prospective customer a risk disclosure document that: contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; contains a description of the broker/dealers’ duties to the customer and of the rights and remedies available to the customer with respect to violations of such duties or other requirements of Federal securities laws; contains a brief, clear, narrative description of a dealer market, including “bid” and “ask” prices for penny stocks and the significance of the spread between the bid and ask prices; contains the toll free telephone number for inquiries on disciplinary actions established pursuant to section 15(A)(i); defines significant terms used in the disclosure document or in the conduct of trading in penny stocks; and contains such other information, and is in such form (including language, type size, and format), as the SEC requires by rule or regulation. Further, for sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement before making a sale to you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent reselling of shares and may cause the price of the shares to decline.

We do not expect to declare or pay any dividends.

We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.

Volatility of Stock Price.

Our common shares are currently quoted on the OTC Markets under the symbol “DPLS.” In the future, the trading price of our common shares may be subject to wide fluctuations. Trading prices of the common shares may fluctuate in response to a number of factors, many of which will be beyond our control. In addition, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. Market and industry factors may adversely affect the market price of the common shares, regardless of our operating performance. Readers should carefully consider the risks and uncertainties described below before deciding whether to invest in shares of our common stock.

As an enterprise engaged in the development of new technology, our business is inherently risky. Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out herein. The market price of our common stock has fluctuated significantly.

Being a public company is expensive and administratively burdensome.

Among other things, we are required to:

Maintain and evaluate a system of internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC and the Public Company Accounting Oversight Board;

Prepare and distribute periodic reports in compliance with our obligations under federal securities laws;

Institute a more comprehensive compliance function, including with respect to corporate governance; and

Involve, to a greater degree, our outside legal counsel and accountants in the above activities.

You could lose all of your investment.

An investment in our securities is speculative and involves a high degree of risk. Potential investors should be aware that the value of an investment in the Company may go down as well as up. In addition, there can be no certainty that the market value of an investment in the Company will fully reflect its underlying value. You could lose your entire investment.

The ability of our Board of Directors to issue additional stock may prevent or make more difficult certain transactions, including a sale or merger of the Company.

Our Board of Directors is authorized to issue up to 2,000,000 shares of preferred stock with powers, rights and preferences designated by it. Shares of voting or convertible preferred stock could be issued, or rights to purchase such shares could be issued, to create voting impediments or to frustrate persons seeking to effect a takeover or otherwise gain control of the Company. The ability of the Board of Directors to issue such additional shares of preferred stock, with rights and preferences it deems advisable, could discourage an attempt by a party to acquire control of the Company by tender offer or other means. Such issuances could therefore deprive stockholders of benefits that could result from such an attempt, such as the realization of a premium over the market price for their shares in a tender offer or the temporary increase in market price that such an attempt could cause. Moreover, the issuance of such additional shares of preferred stock to persons friendly to the Board of Directors could make it more difficult to remove incumbent officers and directors from office even if such change were to be favorable to stockholders generally.

Our stock may be traded infrequently and in low volumes, so you may be unable to sell your shares at or near the quoted bid prices if you need to sell your shares.

Until our common stock is listed on a national securities exchange such as the New York Stock Exchange or the Nasdaq, we expect our common stock to remain eligible for quotation on the OTC Markets, or on another over-the-counter quotation system. In those venues, however, the shares of our common stock may trade infrequently and in low volumes, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. An investor may find it difficult to obtain accurate quotations as to the market value of our common stock or to sell his or her shares at or near bid prices or at all. In addition, if we fail to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our common stock, which may further affect the liquidity of our common stock. This would also make it more difficult for us to raise capital.

There currently is no active public market for our common stock and there can be no assurance that an active public market will ever develop. Failure to develop or maintain a trading market could negatively affect the value of our common stock and make it difficult or impossible for you to sell your shares.

There is currently no active public market for shares of our common stock and one may never develop. Our common stock is quoted on the OTC Markets. The OTC Markets is a thinly traded market and lacks the liquidity of certain other public markets with which some investors may have more experience. We may not ever be able to satisfy the listing requirements for our common stock to be listed on a national securities exchange, which is often a more widely-traded and liquid market. Some, but not all, of the factors which may delay or prevent the listing of our common stock on a more widely-traded and liquid market include the following: our stockholders’ equity may be insufficient; the market value of our outstanding securities may be too low; our net income from operations may be too low; our common stock may not be sufficiently widely held; we may not be able to secure market makers for our common stock; and we may fail to meet the rules and requirements mandated by the several exchanges and markets to have our common stock listed. Should we fail to satisfy the initial listing standards of the national exchanges, or our common stock is otherwise rejected for listing, and remains listed on the OTC Markets or is suspended from the OTC Markets, the trading price of our common stock could suffer and the trading market for our common stock may be less liquid and our common stock price may be subject to increased volatility, making it difficult or impossible to sell shares of our common stock.

Our common stock is subject to the “penny stock” rules of the SEC and the trading market in the securities is limited, which makes transactions in the stock cumbersome and may reduce the value of an investment in the stock.

Rule 15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’s account for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial information and investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination; and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our common stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Our stock price may be volatile.

The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

The impact of conflict between the Russian Federation and Ukraine on our operations;

Geo-political events, such as the crisis in Ukraine, government responses to such events and the related impact on the economy both nationally and internationally;

Changes in our industry;

Competitive pricing pressures;

Our ability to obtain working capital financing;

Additions or departures of key personnel;

Sales of our common stock;

Our ability to execute our business plan;

Operating results that fall below expectations;

Loss of any strategic relationship;

Regulatory developments; and

Economic and other external factors.

In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

If our stockholders sell substantial amounts of our common stock in the public market, including upon the expiration of any statutory holding period under Rule 144, or issued upon the conversion of preferred stock or exercise of warrants, it could create a circumstance commonly referred to as an "overhang" and in anticipation of which the market price of our common stock could fall. The existence of an overhang, whether or not sales have occurred or are occurring, also could make more difficult our ability to raise additional financing through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

Risks Related to Government Regulation

Legislative and regulatory actions taken now or in the future may increase our costs and impact our business, governance structure, financial condition or results of operations.

Federal, state and international regulatory agencies frequently adopt changes to their regulations or change the way existing regulations are applied. Regulatory or legislative changes to laws applicable to the industries in which we operate, if enacted or adopted, may impact the profitability of our business activities, require more oversight or change certain of our business practices, including the ability to offer new products and services and to continue offering our current products and services, and could expose us to additional costs, including increased compliance costs. These changes also may require us to invest significant management attention and resources to make any necessary changes to operations to comply and could have a material adverse effect on its business, financial condition and results of operations.

The regulatory environment to which we are subject gives rise to various licensing requirements, legal and financial compliance costs and management time, and non-compliance could result in monetary and reputational damages, all of which could have a material adverse effect on our business, financial position and results of operations.

There can be no assurance that we will be able to maintain our existing, or obtain additional, required regulatory licenses, certifications and regulatory approvals in the countries where we provide services or want to expand to. Furthermore, where we have obtained such regulatory licenses, certifications and regulatory approvals, there are costs and potential product changes involved in maintaining such regulatory licenses, certifications, and approvals, and we could be subject to fines or other enforcement action if we are found to violate disclosure, reporting, anti-money laundering, capitalization, corporate governance or other requirements of such licenses. These factors could impose substantial additional costs and involve considerable delay to the development or provision of our products or services, or could require significant and costly operational changes or prevent us from providing any products or services in a given market.

If we are unable to commit sufficient resources to regulatory compliance, this could lead to delays and errors and may force us to choose between prioritizing compliance matters over administrative support for business activities, or may ultimately force us to cease offering certain products or services globally or in certain jurisdictions. Any delays or errors in implementing regulatory compliance could lead to substantial monetary damages and fines, public reprimands, a material adverse effect on our reputation, regulatory measures in the form of cease and desists orders, increased regulatory compliance requirements or other potential regulatory restrictions on our business, enforced suspension of operations and in extreme cases, withdrawal of regulatory licenses or authorizations to operate particular businesses, or criminal prosecution in certain circumstances.

We are and may continue to be subject to litigation, including individual and class action lawsuits, as well as regulatory audits, disputes, inquiries, investigations and enforcement actions by regulators and governmental authorities.

We have been and may from time to time become subject to material claims, arbitrations, individual and class action lawsuits, government and regulatory investigations, inquiries, actions or requests and other proceedings alleging violations of laws, rules, and regulations, both foreign and domestic, involving competition and antitrust law, intellectual property, privacy, data protection, information security, anti-money laundering, counter terrorist financing, sanctions, anti-corruption, accessibility claims, securities, tax, labor and employment, payment network rules, commercial disputes, services, and other matters.

The laws, rules and regulations affecting our business are subject to ongoing interpretation by the courts and governmental and supervisory authorities, and the resulting uncertainty in the scope and application of these laws, rules and regulations increases the risk that we will be subject to private claims, governmental and regulatory actions alleging violations of those laws, rules, and regulations.

The scope, determination, and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are subject cannot be predicted with certainty, and may result in:

	·	substantial payments to satisfy judgments, fines, or penalties;

	·	substantial outside counsel legal fees and costs;

	·	additional compliance and licensure requirements;

	·	loss or non-renewal of existing licenses or authorizations, or prohibition from or delays in obtaining additional licenses or authorizations, required for our business;

	·	loss of productivity and high demands on employee time;

	·	civil or criminal sanctions or consent decrees;

	·	termination of certain employees, including members of our management team;

	·	barring of certain employees from participating in our business in whole or in part;

	·	orders that restrict our business or prevent us from offering certain products or services;

	·	changes to our business model and practices;

	·	delays to planned transactions, product launches or improvements; and

	·	damage to our brand and reputation.

Any such matters can have an adverse impact, which may be material, on our business, operating results, or financial condition because of legal costs, diversion of management resources, reputational damage, and other factors.

Risks Related to Our Intellectual Property

Our intellectual property rights are valuable, and any inability to protect them could adversely impact our business, operating results, and financial condition.

Our business depends in large part on our proprietary technology and our brand. We rely on, and expect to continue to rely on, a combination of trademark, trade dress, domain name, copyright, and trade secret and laws, as well as confidentiality and license agreements with our employees, contractors, consultants, and third parties with whom we have relationships, to establish and protect our brand and other intellectual property rights.

Our efforts to protect our intellectual property rights may not be sufficient or effective. Our proprietary technology and trade secrets could be lost through misappropriation or breach of our confidentiality and license agreements, and any of our intellectual property rights may be challenged, which could result in them being narrowed in scope or declared invalid or unenforceable. There can be no assurance that our intellectual property rights will be sufficient to protect against others offering products, services, or technologies that are substantially similar to ours and that compete with our business.

As we grow, we will seek to obtain and protect our intellectual property rights in an increasing number of countries, a process that can be expensive and may not always be successful. For example, the U.S. Patent and Trademark Office and various foreign governmental intellectual property agencies require compliance with a number of procedural requirements to complete the trademark application process and to maintain issued trademarks, and noncompliance or non-payment could result in abandonment or lapse of a trademark or trademark application, resulting in partial or complete loss of trademark rights in a relevant jurisdiction. Further, intellectual property protection may not be available to us in every country in which our products and services are available. We may also agree to license our intellectual property to third parties as part of various agreements. Those licenses may diminish our ability, though, to counter-assert our intellectual property rights against certain parties that may bring claims against us.

In the future we may be sued by third parties for alleged infringement of their proprietary rights.

In recent years, there has been considerable patent, copyright, trademark, domain name, trade secret and other intellectual property development activity, as well as litigation, based on allegations of infringement or other violations of intellectual property, including by large financial institutions. Furthermore, individuals and groups can purchase patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements from companies like ours. We use of third-party intellectual property rights also may be subject to claims of infringement or misappropriation.

We cannot guarantee that our internally developed or acquired/licensed technologies and content do not or will not infringe the intellectual property rights of others. From time to time, our competitors or other third parties may claim that we are infringing upon or misappropriating their intellectual property rights, and we may be found to be infringing upon such rights. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our products or services or using certain technologies, force us to implement expensive work-arounds, or impose other unfavorable terms. Our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources. Further, during the course of any litigation, we may make announcements regarding the results of hearings and motions, and other interim developments. If securities analysts and investors regard these announcements as negative, the market price of our Common Stock may decline. Even if intellectual property claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and require significant expenditures. Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, operating results, and financial condition.

Risks Related to the Offering

Our existing stockholders may experience significant dilution from the sale of our common stock pursuant to the GHS Equity Financing Agreement and our share price could decline.

Since August 2021, we have entered into several equity financing agreements (and similar securities purchase agreements) with GHS pursuant to which we sold to GHS an aggregate of 2,327,562,779 shares of our Common Stock at purchase prices of a range of $0.0696 to $0.00072 per share. The effective discount has been 20%.

The sale of our common stock to GHS in accordance with the EFA may have a dilutive impact on our shareholders. As a result, the market price of our common stock could decline. In addition, the lower our stock price is at the time we exercise Puts, the more shares of our common stock we will have to issue to GHS in order to exercise a Put under the EFA. If our stock price decreases, then our existing shareholders would experience greater dilution for any given dollar amount raised through the offering. On August 15, 2021, our share price closed at $0.112 and closed at $0.0009 on September 10, 2024.

The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our common stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors to engage in short sales of our common stock. By increasing the number of shares offered for sale, material amounts of short selling could further contribute to progressive price declines in our common stock.

The issuance of shares pursuant to the EFA may have a significant dilutive effect.

Depending on the number of shares we issue pursuant to the EFA, it could have a significant dilutive effect upon our existing shareholders. Although the number of shares that we may issue pursuant to the EFA will vary based on our stock price (the higher our stock price, the less shares we have to issue), there may be a potential dilutive effect to our shareholders, based on different potential future stock prices, if the full amount of the EFA is realized. Dilution is based upon common stock put to GHS and the stock price discounted to GHS’s purchase price.

GHS will pay less than the then-prevailing market price of our common stock which could cause the price of our common stock to decline.

Our common stock to be issued under the EFA will be purchased at an 8% discount, or 92% of the lowest volume weighted average price (“VWAP”) for the Company’s common stock during the five consecutive trading days immediately preceding each Put.

GHS has a financial incentive to sell our shares immediately upon receiving them to realize the profit between the discounted price and the market price. If GHS sells our shares, the price of our common stock may decrease. If our stock price decreases, GHS may have further incentive to sell such shares. Accordingly, the discounted sales price in the EFA may cause the price of our common stock to decline.

We may not have access to the full amount under the financing agreement.

In addition, any single drawdown must be at least $10,000 and cannot exceed $1,000,000 and any single drawdown may not exceed 100% of the average daily trading dollar volume of our Common Stock during the ten trading days preceding the Put.

There could be unidentified risks involved with an investment in our securities.

The foregoing risk factors are not a complete list or explanation of the risks involved with an investment in the securities. Additional risks will likely be experienced that are not presently foreseen by us. Prospective investors must not construe this the information provided herein as constituting investment, legal, tax or other professional advice. Before making any decision to invest in our securities, you should read this entire Prospectus and consult with your own investment, legal, tax and other professional advisors. An investment in our securities is suitable only for investors who can assume the financial risks of an investment in us for an indefinite period of time and who can afford to lose their entire investment. We make no representations or warranties of any kind with respect to the likelihood of the success or the business of our Company, the value of our securities, any financial returns that may be generated or any tax benefits or consequences that may result from an investment in us.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains various “forward-looking statements.” You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “would,” “could,” “should,” “seeks,” “approximately,” “intends,” “plans,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements may be impacted by a number of risks and uncertainties.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our securities. For a further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled “Risk Factors.”

PRIVATE PLACEMENT

Equity Financing Agreement

On July 10, 2023, we entered into the EFA and Registration Rights Agreement (the “Registration Rights Agreement”) with GHS.

In no event are we entitled to make a Put or is GHS entitled to purchase that number of shares of Common Stock of the Company, which when added to the sum of the number of shares of Common Stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the Exchange Act), by GHS, would exceed 4.99% of the number of shares of Common Stock outstanding on such date, as determined in accordance with Rule 13d-1(j) of the Exchange Act.

The EFA will terminate upon any of the following events: when GHS has purchased an aggregate of $30,000,000 in the Common Stock of the Company pursuant to the EFA; on the date that is 24 months from the date of the EFA; or by mutual written consent of the parties. Actual sales of shares of Common Stock to GHS under the EFA will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by us as to the appropriate sources of funding for the Company and its operations. The net proceeds under the EFA to us will depend on the frequency and prices at which we sell shares of our stock to GHS.

The Registration Rights Agreement provides that we shall (i) use our best efforts to file with the SEC the Registration Statement within 15 days of the date of the Registration Rights Agreement; and (ii) have the Registration Statement declared effective by the SEC within 30 days after the date the Registration Statement is filed with the SEC, but in no event more than calendar 90 days after the Registration Statement is filed.

We will use the proceeds from the Puts for global expansion and also potential acquisitions deemed beneficial to our operational capabilities.

See “Plan of Distribution” elsewhere in this prospectus for more information.

USE OF PROCEEDS

The Selling Security Holder will receive all the proceeds from the sales of the Shares under this prospectus. We will not receive any proceeds from these sales. To the extent we receive proceeds from the Puts to the Selling Security Holder, we will use those proceeds for global expansion and also potential acquisitions deemed beneficial to our operational capabilities. We have agreed to bear the certain expenses relating to the registration of the shares of Common Stock being registered herein for Selling Security Holder.

See “Plan of Distribution” elsewhere in this prospectus for more information.

SELLING SECURITY HOLDER

This prospectus covers the offering of up to 3,500,000,000 shares of Common Stock being offered by the Selling Security Holder, which includes shares of Common Stock acquirable upon the issuance of a Put to the Selling Security Holder, as described herein. We are registering the Shares in order to permit the Selling Security Holder to offer their shares of Common Stock for resale from time to time.

The table below lists the Selling Security Holder and other information regarding the “beneficial ownership” of the shares of Common Stock by the Selling Security Holder. In accordance with Rule 13d-3 of the Exchange Act, “beneficial ownership” includes any shares of Common Stock as to which the Selling Security Holder has sole or shared voting power or investment power and any shares of Common Stock the Selling Security Holder has the right to acquire within 60 days.

The Selling Security Holder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act with respect to the shares which may be sold pursuant to the EFA.

The second column indicates the number of shares of Common Stock beneficially owned by the Selling Security Holder, based on its ownership as of September 10, 2024. The second column also assumes purchase of all shares of stock to be acquired under the maximum amount of securities to be sold by the Company to the Selling Security Holder, without regard to any limitations on purchase described in this prospectus or in the EFA.

The third column lists the shares of Common Stock being offered by this prospectus by the Selling Security Holder. Such aggregate amount of Common Stock does not take into account any applicable limitations on purchase of the securities under the EFA.

This prospectus covers the resale of (i) all of the shares of Common Stock issued and issuable upon the Company issuing a Put, and (ii) any securities issued or then issuable upon any full anti-dilution protection, stock split, dividend or other distribution, recapitalization or similar event with respect to the common shares.

Because the issuance price of the common shares may be adjusted, the number of shares of Common Stock that will actually be issued upon issuance of the common shares may be more or less than the number of shares of Common Stock being offered by this prospectus. The Selling Security Holder can offer all, some or none of its shares of Common Stock, thus we have no way of determining the number of shares of Common Stock it will hold after this offering. Therefore, the fourth and fifth columns assume that the Selling Security Holder will sell all shares of Common Stock covered by this prospectus. See “Plan of Distribution.”

The Selling Security Holder identified below has confirmed to us that it is not a broker-dealer or an affiliate of a broker-dealer within the meaning of United States federal securities laws.

Number of

Shares of

Common Stock

Owned Prior to

Offering(1)

Maximum

Number of

Shares of

Common Stock

to be Sold

Pursuant to this

Prospectus

Number of

Shares of

Common Stock

Owned After

Offering

Percentage

Beneficially

Owned After

Offering

GHS Investments, LLC (1)

271,971,823

3,500,000,000

(2)

–

TOTAL

271,971,823

3,500,000,000

–

__________

(1)	GHS Investments, LLC is a limited liability company organized under the laws of Nevada. Mark Grober has dispositive power over the shares owned by GHS.
(2)	3,500,000,000 shares to be issued pursuant to the EFA.

Material Relationships with Selling Security Holder

On August 14, 2024, we, entered into the Waiver and Rights Agreement (the “Waiver Agreement”) with GHS. We had made several puts under the various equity financing agreements with GHS without having an effective registration statement in place. The inability to have a continuous registration statement in place constituted a default under the various equity financing agreements and registration rights agreements. Pursuant to the Waiver Agreement, as a waiver of defaults under the Registration Rights Agreement, we agreed to grant to GHS the right to receive up to 962,489,983 shares of Common Stock, subject to a 4.99% beneficial ownership limitation.

The Selling Security Holder has not at any time during the past three years acted as one of our employees, officers or directors or had a material relationship with us except (i) with respect to transactions described above in “Private Placement,” (ii) the Purchase Agreement dated August 19, 2021 with GHS, (iii) the Equity Financing Agreement dated November 9, 2021 with GHS, (iv) the Equity Financing Agreement dated April 28, 2023; (v) the Second Amended Equity Financing Agreement dated July 10, 2023, as amended; (vi) the EFA; and (vii) the Waiver Agreement.

MARKET PRICE OF COMMON STOCK AND OTHER STOCKHOLDER MATTERS

Our Common Stock is currently quoted on the OTC Markets, which is sponsored by OTC Markets Group, Inc. The OTC Markets is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks,” as well as volume information. Our shares are quoted on the OTC Markets under the symbol “DPLS.”

The table below sets forth for the periods indicated the quarterly high and low bid prices as reported by OTC Markets. Limited trading volume has occurred during these periods. These quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

2024	High		Low
First Quarter	$	0.0130	$	0.0008
Second Quarter	$	0.0053	$	0.0008

2023	High		Low
First Quarter	$	0.0108	$	0.0032
Second Quarter	$	0.0120	$	0.0030
Third Quarter	$	0.0054	$	0.0014
Fourth Quarter	$	0.0022	$	0.0008

2022	High		Low
First Quarter	$	0.0890	$	0.0252
Second Quarter	$	0.0589	$	0.0190
Third Quarter	$	0.0455	$	0.0189
Fourth Quarter	$	0.0230	$	0.0078

Our common stock is considered to be penny stock under rules promulgated by the SEC. Under these rules, broker-dealers participating in transactions in these securities must first deliver a risk disclosure document which describes risks associated with these stocks, broker-dealers’ duties, customers’ rights and remedies, market and other information, and make suitability determinations approving the customers for these stock transactions based on financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing, provide monthly account statements to customers, and obtain specific written consent of each customer. With these restrictions, the likely effect of designation as a penny stock is to decrease the willingness of broker-dealers to make a market for the stock, to decrease the liquidity of the stock and increase the transaction cost of sales and purchases of these stocks compared to other securities.

The high and low bid price for shares of our Common Stock on September 10, 2024, was $0.0011 and $0.0009, respectively, based upon bids that represent prices quoted by broker-dealers on the OTC Markets.

Approximate Number of Equity Security Holders

As of September 10, 2024, there were approximately 951 stockholders of record. Because shares of our Common Stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.

Dividends

We have not declared or paid a cash dividend to our stockholders since we were organized and does not intend to pay dividends in the foreseeable future. Our board of directors presently intends to retain any earnings to finance our operations and does not expect to authorize cash dividends in the foreseeable future. Any payment of cash dividends in the future will depend upon our earnings, capital requirements and other factors.

Section 15(g) of the Securities Exchange Act of 1934

Our shares are covered by section 15(g) of the Exchange Act that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one-page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as bid and offer quotes, a dealers spread and broker/dealer compensation; the broker/dealer compensation, the broker/dealers’ duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers’ rights and remedies in cases of fraud in penny stock transactions; and, the FINRA’s toll free telephone number and the central number of the North American Securities Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

Penny Stock

Our stock is considered a penny stock. The SEC has adopted rules that regulate broker-dealer practices in transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our Common Stock. Therefore, stockholders may have difficulty selling our securities.

Rule 10B-18 Transactions

During the year ended December 31, 2023, there were no repurchases of our common stock by the Company.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contain certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events; are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in the “Risk Factors” section. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements

Critical Accounting Policies

The following discussions are based upon our consolidated financial statements and accompanying notes, which have been prepared in accordance with accounting principles generally accepted in the United States.

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.

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.

In determining the fair value of the reporting unit, management estimated the price that would be received to sell the reporting unit as a whole in an orderly transaction between market participants at the measurement date. This includes reviewing market comparable such as revenue multipliers and assigning certain assets and liabilities to the reporting units, such as the respective working capital deficits of each entity and debt obligations that would need to be assumed by a market participant buyer in an orderly transaction. The Company calculated the carrying amounts of the reporting unit by utilizing the entities’ assets and liabilities at December 31, 2023, including the carrying value of the identifiable intangible assets and goodwill assigned to the respective reporting unit.

Refer to Note 1 for impairment records in 2023 upon the Optilan UK Liquidation.

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.

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 output 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.

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.

Business Overview

DarkPulse, Inc., a Delaware corporation (the “Company” or “DarkPulse”), is a technology focused on the manufacture, sale, installation, and monitoring of laser sensing systems based on its patented BOTDA dark-pulse sensor technology. The Company develops, markets, and distributes a full suite of engineering, monitoring, installation and security management solutions for critical infrastructure/key resources to both industries and governments. Coupled with our patented BOTDA technology, DarkPulse provides its customers a comprehensive data stream of critical metrics for assessing the health and security of their infrastructure. Our systems provide rapid, precise analysis and responsive activities predetermined by the end-user customer. The Company’s activities since inception have consisted of developing various solutions, obtaining patents and trademarks related to its technology, raising capital, acquisition of companies deemed to expand global operations and/or capabilities, creating key partnerships to expand our suite of products and services. Our activities have evolved to a sales-focused mission since the successful completion of our BOTDA system.

Headquartered in Houston, Texas, DarkPulse is a globally-based technology company with presence through its subsidiaries in the, United States and Canada. In addition to the Company’s BOTDA systems, through a series of strategic acquisitions the Company offers the manufacture, sale, installation, and monitoring of laser sensing systems, oil and gas pipeline leak detection, physical security services, telecommunications and satellite communications services, artificial intelligence-based camera systems, railway monitoring services, drone and rover systems, and Big Data as a Service (“BDaaS”). The Company is focused on expanding services through acquisitions and partnerships to address global infrastructure and critical environmental resource challenges.

DarkPulse offers a full suite of engineering and environmental solutions that provide safety and security infrastructure projects. The sensing and monitoring capabilities offered by DarkPulse operate in the air, land, sea. Our patented technology provides rapid, precise analysis to protect and safeguard oil and gas pipelines above or below ground, physical security countermeasures, mining operations, and other critical infrastructure/key resources subject to vulnerability or risk. Our patented dark-pulse based BOTDA distributed fiber sensing system is best in class. The Company is able to monitor areas in around critical infrastructure buried or above ground including pipelines 100km or more in length and/ or localized pipes as small as eight CM DIA, detecting internal anomalies before catastrophic failure. We are developing an intelligent rock bolt to prevent causalities and fatalities in mining operations and include a real time sensor system that can detect the location and movement of personnel and equipment throughout a mining operation. We monitor airflow, air quality, temperature, seismic events, etc. Our sensors cover extended areas, protecting an area from intrusion by detecting events at any location along the sensing cable. Working safely every day is our first core value and employees at DarkPulse and our subsidiary companies are recognized experts in their fields, providing comprehensive services for all our clients' needs.

Our Subsidiaries

Our subsidiaries consist of DarkPulse UK Ltd,, a company headquartered in, United Kingdom whose focus is in engineering, telecommunications, energy, rail, critical network infrastructure, pipeline integrity systems, renewables and security; Remote Intelligence, Limited Liability Company, a company headquartered in Pennsylvania who provides unmanned aerial drone and unmanned ground crawler (UGC) services to a variety of clients from industrial mapping and ecosystem services, to search and rescue, to pipeline security; Wildlife Specialists, Limited Liability Company, a company headquartered in Pennsylvania who provides clients with comprehensive wildlife and environmental assessment, planning, and monitoring services; TerraData Unmanned, PLLC, a company headquartered in Florida who custom manufactures NDAA compliant drones and unmanned ground crawlers to meet the needs of its customers; DarkPulse Electronics Manufacturing Inc., a company headquartered in Arizona who is a U.S. manufacturer of advanced electronics, cables and sub-assemblies specializing in advanced package and complex CCA and hardware.

Current Operations

Change in Ownership in Previously Consolidated Subsidiary Results in Deconsolidation in the Current Period

On June 28, 2023, the county court at Portsmouth, England made a winding up order raised by a (non-related party) creditor against the Company's subsidiary Optilan (UK) Limited. The subsidiary on that date ceased conducting further business and the director’s powers terminated. The consolidation of subsidiaries owned by Optilan (UK) Limited was no longer under its control as defined by ASC 810 (Consolidation). This compulsory liquidation resulted in a combined “Loss on Deconsolidation” of Optilan (UK) Limited and its subsidiaries in the amount of $1,642,795.

The subsidiaries of Optilan (UK) Limited are solvent and continue to operate. The Company will retain no measurable residual value nor direct or indirect investment in Optilan, its subsidiaries or its assets. The Company will have no continuing involvement with Optilan (UK) Limited, including its subsidiaries, and will not be owned or controlled by any related party of the Company.

Recent Events

Liquidation/winding up of Optilan (UK) Limited

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

There are no new claims against Optilan (UK) Limited and Evelyn Partners continue to liquidate the company’s assets.

Six-Months Ended June 30, 2024 Accounting Analysis

The Company performed an analysis of the trade receivables related to Optilan (UK) Limited and determined that an additional $59,817 may not be collectible pursuant to Optilan Liquidation. The Company recorded a bad debt provision for this amount.

Optilan (UK) Limited became subject to the control of a government and was appointed an administrator. In this situation, when the parent ceases to have a financial interest in a subsidiary and does not retain an investment in that subsidiary, the parent should deconsolidate the subsidiary and recognize a gain or loss on deconsolidation in accordance with ASC 810-10-40-5.

In addition, ASC 810-10-40-3A states when a parent deconsolidates a subsidiary or derecognizes a group of assets, the parent no longer controls the subsidiary's assets and liabilities or the group of assets. The parent therefore shall derecognize the assets, liabilities, and equity components related to that subsidiary or group of assets. The equity components will include any noncontrolling interest as well as amounts previously recognized in accumulated other comprehensive income. If the subsidiary or group of assets being deconsolidated or derecognized is a foreign entity (or represents the complete or substantially complete liquidation of the foreign entity in which it resides), then the amount of accumulated other comprehensive income that is reclassified and included in the calculation of gain or loss shall include any foreign currency translation adjustment related to that foreign entity.

Upon the liquidation, on June 28, 2023, the Company derecognized Optilan UK’s assets and liabilities and recorded a loss on consolidation of $1,624,795, which was recognized in other income (expenses) in the consolidated statements of operations.

Included in the loss on consolidation of $1,642,795 are the gains on intercompany receivables and payables and currency translation adjustment $12,721,532 and $1,545,008 respectively, offset by the net loss on impairment of investments of $12,623.

Year Ended December 31, 2023 Accounting Analysis

The Company performed an analysis of the trade receivables related to Optilan (UK) Limited and determined that an additional $2,422,457 may not be collectible pursuant to Optilan Liquidation. The Company recorded a bad debt provision for this amount.

As a result of Optilan Liquidation as described in Note 1, management determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s reporting unit may not be recoverable. The qualitative assessment was primarily due to the customer contracts held by Optilan (UK) Limited and the associated revenue projections by the UK subsidiary that is subject to the potential winding up. As such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $2,037,670 pertaining to impairment and goodwill in the consolidated statements of operations. The Company recorded impairment of the indefinite-lived intangible asset of $356,260, and impairment of goodwill of $1,681,410. The Company has one reporting unit which was evaluated in the impairment test noted above. As a result of the impairment, the Company had a carrying value of $0 pertaining to goodwill and intangible assets as of December 31, 2023.

In addition, the allowance of $2,422,457 was recorded against receivables that have been deemed uncollectible.

Financings

On May 27, 2022 we entered an Equity Financing Agreement (the “2022 EFA”) and Registration Rights Agreement (the “RRA”) with GHS, pursuant to which GHS agreed to purchase up to $70,000,000 in shares of our Common Stock, from time to time over the course of 24 months after effectiveness of a registration statement on Form S-1 of the underlying shares of Common Stock.

The RRA provides that we shall (i) use our best efforts to file with the SEC a registration statement within 45 days of the date of the GHS Registration Rights Agreement; and (ii) have the registration statement declared effective by the SEC within 30 days after the date the GHS registration statement is filed with the SEC, but in no event more than 90 days after the registration statement is filed.

Below is a table of all puts made by the Company under the 2022 EFA during 2022, 2023 and 2024:

Date of Put	Number of Shares Sold	Total Proceeds, Net of Discounts	Effective Price per Share	Net Proceeds
6/24/22	38,391,106	$643,539	$0.01978	$578,160
7/1/22	33,525,465	$556,750	$0.019596	$500,050
7/11/22	32,756,532	$556,750	$0.01699661	$550,050
7/20/22	29,386,519	$556,750	$0.01894558	$550,050
7/28/22	35,884,040	$556,750	$0.018308	$500,050
8/10/22	44,505,857	$680,109	$0.015281	$611,073
8/18/22	54,574,909	$948,863	$0.017386441	$852,952
8/25/22	105,255,759	$2,264,961	$0.021518644	$2,128,038
9/2/22	140,073,757	$3,000,000	$0.021417288	$2,788,975
9/14/22	79,092,686	$1,757,466	$0.022220339	$1,757,466
9/30/22	30,538,303	$500,000	$0.0163729	$463,975
11/7/2022	22,022,709	$326,235	$0.014814	$302,373
11/18/2022	39,699,793	$325,000	$0.008186	$301,225
12/2/2022	42,148,416	$325,000	$0.007711	$301,225
12/20/2022	78,705,534	$540,000	$0.006861	$501,175
12/30/2022	63,338,702	$400,000	$0.006315	$370,975
10/14/2022	35,628,020	$500,000	$0.014034	$463,975
1/12/2023	64,130,435	$400,000	$0.006237	$370,975
1/24/2023	77,733,861	$400,000	$0.005146	$370,975
2/3/2023	61,173,706	$300,000	$0.004904	$277,975
2/17/2023	75,447,571	$300,000	$0.003976	$277,975
3/1/2023	83,113,044	$324,000	$0.003898	$300,295
3/16/2023	93,165,852	$254,232	$0.002729	$235,410
3/30/2023	65,465,384	$166,903	$0.002549	$154,195
4/11/2023	67,462,162	$203,552	$0.0030173	$188,279
11/14/23	18,997,442	$25,179	$0.0013254	$22,392
11/22/23	29,685,620	$34,717	$0.0011695	$31,261
12/1/23	51,275,586	$47,973	$0.0009356	$43,589
12/11/23	87,136,216	$108,019	$0.0012397	$99,433
12/27/23	67,522,014	$57,908	$0.0008576	$52,830
1/8/24	52,162,997	$44,736	$0.0008576	$40,579
	1,799,999,997	$17,105,392		$15,987,950

On January 17, 2023, we entered into a Stock Purchase Agreement with an investor for the purchase of 11,441,647 shares of Common Stock in exchange for $100,000.

On April 28, 2023 we entered an Equity Financing Agreement, which was superseded by the Amended Equity Financing Agreement dated June 13, 2023, which was then superseded by the Second Amended Equity Financing Agreement dated July 10, 2023, as amended, which was then superseded by the Third Amended Equity Financing Agreement dated August 14, 2024 (the “EFA”), and, on July 10, 2023, we entered into the Registration Rights Agreement (the “Registration Rights Agreement”) with GHS, pursuant to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock, from time to time over the course of 24 months after effectiveness of a registration statement on Form S-1 of the underlying shares of Common Stock.

The Registration Rights Agreement provides that we shall (i) use our best efforts to file with the SEC a registration statement within 15 days of the date of the Registration Rights Agreement; and (ii) have the registration statement declared effective by the SEC within 30 days after the date the registration statement is filed with the SEC, but in no event more than 90 days after the registration statement is filed.

Below is a table of all puts made by the Company under the EFA during 2023:

Date of Put	Number of Common Shares Issued	Total Proceeds, Net of Discounts		Effective Price per Share		Net Proceeds
4/28/2023	91,796,875	$	235,000	$	0.002560	$	208,550
6/26/2023	44,583,334		214,000	$	0.004800		141,020
7/3/2023	51,442,308		274,058	$	0.004200		257,020
7/10/2023	28,593,750		91,500	$	0.003200		85,094
11/14/2023	18,997,442		25,180	$	0.001325		22,392
11/22/2023	29,685,620		34,717	$	0.001169		31,262
12/1/2023	51,275,586		47,973	$	0.000936		43,590
12/11/2023	87,136,216		108,019	$	0.001240		99,433
12/27/2023	67,522,014		57,909	$	0.000858		52,830
	471,033,145	$	1,088,356			$	941,191

Prior to the sales being made, GHS agreed to purchase the shares without an effective registration statement in place, and, as such, the shares were restricted.

Going Concern Uncertainty

As shown in the accompanying consolidated financial statements, we generated net losses of $2,953,104 and $18,917,360 for the six-months ended June 30, 2024 and 2023, respectively, and net cash used in operating activities of $313,725 and $2,483,389, respectively. As of June 30, 2024, the Company’s current liabilities exceeded its current assets by $19,044,331 and has an accumulated deficit of $70,319,873. As of June 30, 2024, the Company had $953 of cash. Lastly, the Optilan Liquidation no longer raises serious concerns about the viability of the Optilan (UK) Limited entities. Optilan (UK) Limited and its subsidiaries have been deconsolidated and are no longer under the control of DarkPulse, Inc.

As shown in the accompanying consolidated financial statements, we generated net losses of $21,723,043 and $35,517,505 during the years ended December 31, 2023 and 2022, respectively, and net cash used in operating activities of $(5,653,215) and $(21,738,542), respectively. As of December 31, 2023, the Company’s current liabilities exceeded its current assets by $18,126,281 and has an accumulated deficit of $67,376,221. As of December 31, 2023, the Company had $11,912 of cash. Lastly, the Optilan Liquidation no longer raises serious concerns about the viability of the Optilan (UK) Limited entities. Optilan (UK) Limited and its subsidiaries have been deconsolidated and are no longer under the control of DarkPulse, Inc.

Foreign Currency Risk

In general, the Company is a net receiver of currencies other than the U.S. dollar. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, will negatively affect the Company’s net sales and gross margins as expressed in U.S. dollars. There is a risk that the Company will have to adjust local currency product pricing due to competitive pressures when there has been significant volatility in foreign currency exchange rates.

Results of Operations

For the Three and Six-months Ended June 30, 2024 and 2023

Revenues

The Company’s future revenues will be derived from the following, among other things.

	·	promote adoption if our patented technology through agency and distribution agreements;

	·	cross-selling existing customer with products from other subsidiaries;

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

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

	·	market our products and services to new customers.

While 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, the Company also maintains multiple contracts for future material revenues, including part of framework contracts that will be recognized during future reporting periods.

For the three-months ended June 30, 2024, total revenues were $14,318 compared to $412,769 for the three-months ended June 30, 2023, a decrease of $398,451. The decrease was primarily due to no revenues achieved by Wildlife, Optilan and TJM Electronics West, Inc given capital and resources restraints.

For the six-months ended June 30, 2024, total revenues were $25,168 compared to $1,950,602 for the six-months ended June 30, 2023, a decrease of $1,925,434. The decrease was primarily due to no revenues from Optilan as a result of the de-consolidation and TJM Electronics West, Inc given capital and resources restraints.

Cost of Revenues and Gross Margin

For the three-months ended June 30, 2024, cost of revenues was $671 compared to $1,184,848 for the three-months ended June 30, 2023, a decrease of $1,184,177. The decrease was mainly attributable to lower cost of revenues from Optilan and TJM Electronics West, Inc.

For the six-months ended June 30, 2024, cost of revenues was $870 compared to $2,411,640 for the six-months ended June 30, 2023, a decrease of $2,411,640. The decrease was mainly attributable to lower cost of revenues from Optilan and TJM Electronics West, Inc.

Gross (loss) profit for the three-months ended June 30, 2024 was $13,647 with a gross (loss) profit of 95% compared to ($772,079) for the three- months ended June 30, 2023 with a (187%) gross margin.

Gross (loss) profit for the six-months ended June 30, 2024 was $24,298 with a gross (loss) profit of 97% compared to ($461,038) for the six- months ended June 30, 2023 with a (24%) gross margin.

Operating Expenses

Selling, general and administrative expenses for three-months ended June 30, 2024 decreased by $329,222 to $170,315 from $499,537 for the three-months ended June 30, 2023. The decrease primarily consisted of decrease in advertising costs, insurance and information technology expenses.

Selling, general and administrative expenses for six-months ended June 30, 2024 decreased by $1,185,944 to $327,426 from $1,513,370 for the six-months ended June 30, 2023. The decrease primarily consisted of decrease in advertising costs, insurance and information technology expenses.

Salaries, wages and payroll taxes for three-months ended June 30, 2024 decreased to $185,000 from $578,900 for the three-months ended June 30, 2023. The decrease primarily consisted of reduced headcount at each subsidiary. Furthermore, the Company reduced accrued payroll which it was determined was no longer payable.

Salaries, wages and payroll taxes for six-months ended June 30, 2024 decreased to $396,877 from $2.126,108 for the six-months ended June 30, 2023. The decrease primarily consisted of reduced headcount at each subsidiary. Furthermore, the Company reduced accrued payroll which it was determined was no longer payable.

Professional fees for the three-months ended June 30, 2024 decreased to $23,260 from $255,690 for the three-months ended June 30, 2023 due to decrease in revenue.

Professional fees for the six-months ended June 30, 2024 decreased to $108,631 from $3,206,388 for the six-months ended June 30, 2023 due to reduced legal and auditor fees.

Depreciation and amortization for three-months ended June 30, 2024 decreased to $44,585 from $220,749 for the three-months ended June 30, 2023. This decrease is primarily due to the Optilan deconsolidation and sale of some subsidiary property, plant and equipment.

Depreciation and amortization for six-months ended June 30, 2024 decreased to $63,873 from $451,983 for the six-months ended June 30, 2023. This decrease is primarily due to the Optilan deconsolidation and sale of some subsidiary property, plant and equipment.

Bad Debt expense for the three-months ended June 20, 2024 increased $2,337 from $57,480 for the six-months ended June 30, 2023.

Bad Debt expense for the six-months ended June 20, 2024 decreased $2,362,640 from $2,422,457 for the six-months ended June 30, 2023. This was the result of the Optilan deconsolidation.

During the three-months ended June 30, 2024 and 2023, the Company recorded $0 and $115,971, respectively, in impairment on the Company’s goodwill and intangible assets

During the six-months ended June 30, 2024 and 2023, the Company recorded $0 and $6,925,137, respectively, in impairment on the Company’s goodwill and intangible assets.

Other Income (Expense)

For the three-months ended June 30, 2024, we had other expense of ($1,947,377) compared to other expense of ($1,617,692) during three months ended June 30, 2023. The increase is due to an increase in interest expense.

For the six-months ended June 30, 2024, we had other expense of ($1,948,779) compared to other expense of ($1,810,882) during six months ended June 30, 2023. The increase is due to an increase in interest expense.

Net Loss from Continuing Operations

As a result of the above, we reported a net loss of continuing operations of $2,416,706 and $4,118,097 for the three-months ended June 30, 2024 and 2023, respectively.

As a result of the above, we reported a net loss of continuing operations of $2,953,104 and $18,917,361 for the six-months ended June 30, 2024 and 2023, respectively.

For the Years Ended December 31, 2023 and 2022

Revenues

The Company’s future revenues will be derived from the following, among other things.

	·	promote adoption if our patented technology through agency and distribution agreements;

	·	cross-selling existing customer with products from other subsidiaries;

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

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

	·	market our products and services to new customers.

For the year ended December 31, 2023, total revenues were $2,020,971 compared to $9,100,255 for the year ended December 31, 2022, a decrease of $7,079,284. The decrease was primarily due to lower revenues achieved by Optilan, Wildlife, Remote and TJM Electronics West, Inc given capital and resources restraints. The breakdown of revenues by entity for the years ended December 31, 2023 and 2022 is as follows:

	Years Ended
	2023		2022
Optilan	$	1,583,435	$	7,514,687
Wildlife		–		842,811
TJM		329,400		560,406
Remote Intelligence		–		140,490
TerraData		82,639		41,861
DarkPulse		25,497		–
	$	2,020,971	$	9,100,255

Cost of Revenues and Gross Margin

For the year ended December 31, 2023, cost of revenues was $2,446,756 compared to $14,543,529 for the year ended December 31, 2022, a decrease of $12,096,773. The decrease was attributable to lower revenues from Optilan, Remote Intelligence, Wildlife Specialists, and TJM Electronics West, Inc.

Gross (loss) profit for the year ended December 31, 2023 was $(425,785) with a gross profit of (21)% compared to $(5,443,274) for the year ended December 31, 2022 with a (60)% gross margin.

Operating Expenses

Selling, general and administrative expenses for year ended December 31, 2023 decreased by $2,932,841, or 59%, to $2,033,861 from $4,966,702 for the year ended December 31, 2022. The decrease primarily consisted of decreases in advertising costs, insurance and information technology expenses of operations that have been shuttered.

Salaries, wages and payroll taxes for year ended December 31, 2023 decreased by $4,827,266, or 65%, to $2,630,225 from $7,457,491 for the year ended December 31, 2022. The decrease primarily consisted of reduced headcount at each subsidiary. Furthermore, the Company reduced accrued payroll which it was determined was no longer payable.

Professional fees for the year ended December 31, 2023 decreased by $608,454, or 16%, to $3,109,717 from $3,718,171 for the year ended December 31, 2022 due to decreased audit and legal fees in 2023.

Depreciation and amortization for year ended December 31, 2023 decreased by $1,045,258, or 67%, to $523,147 from $1,568,405 for the year ended December 31, 2022. This decrease is primarily due to the sale of some subsidiary property, plant and equipment.

During the year ended December 31, 2023 and 2022, the Company recorded $6,948,350 and $12,222,598, respectively, in impairment on the Company’s goodwill and intangible assets.

During the year ended December 31, 2023 and 2022, the Company recorded $5,248,218 and $0, respectively, in bad debt expense.

During the year ended December 31, 2022, the Company recorded a gain on forgiveness of payables of ($312,685).

Other Income (Expense)

For the year ended December 31, 2023, we had other expense of ($803,740) compared to other expense of ($453,549) in 2022. The increase is due to the loss on deconsolidation of ($1,642,146) partially offset by a $1,484,799 gain on forgiveness of debt.

Net Loss

As a result of the above, we reported a net loss of $21,723,043 and $35,517,505 for the years ended December 31, 2023 and 2022, respectively.

Liquidity and Capital Resources

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

During the three-months ended June 30, 2024, we had $222,004 in cash proceeds from our equity financings compared to $537,849 in 2023.

During the six-months ended June 30, 2024, we had $262,585 in cash proceeds from our equity financings compared to $2,625,650 in 2023.

As of June 30, 2024, we had cash of $953 compared to $11,912 as of December 31, 2023. We currently do not have sufficient cash to fund our operations for the next 12 months and we will require working capital to complete development, testing and marketing of our products and to pay for ongoing operating expenses. We anticipate adding consultants for technology development and the corresponding operations of the Company, but this will not occur prior to obtaining additional capital. Management is currently in the process of looking for additional investors. Currently, loans from banks or other lending sources for lines of credit or similar short-term borrowings are not available to us. We have been able to raise working capital to fund operations through the issuances of convertible notes or obtained through the issuance of our restricted common stock. As of June 30, 2024, our current liabilities exceeded our current assets by $19,044,331.

As of December 31, 2023, we had cash of $11,912 compared to $2,060,332 as of December 31, 2022. We currently do not have sufficient cash to fund our operations for the next 12 months and we will require working capital to complete development, testing and marketing of our products and to pay for ongoing operating expenses. We anticipate adding consultants for technology development and the corresponding operations of the Company, but this will not occur prior to obtaining additional capital. Management is currently in the process of looking for additional investors. Currently, loans from banks or other lending sources for lines of credit or similar short-term borrowings are not available to us. We have been able to raise working capital to fund operations through the issuances of convertible notes or obtained through the issuance of our restricted common stock. As of December 31, 2023, our current liabilities exceeded our current assets by $18,126,281.

The Company’s current outstanding debt is $5,990,110, of which $0 is currently in default. The Benner vs DarkPulse litigation has been dismissed, and the company is not listed as a responsible party. The 12 month future cash required is $2,718,828, which includes a sales team based in the Middle East and an engineering team based in India. Additionally, the execution of a purchase order to complete the manufacturing of the company’s patented hardware as well as logistics related to global delivery capabilities of its products to customers via the company’s partnership with Sanmina Corp. Currently, the company is operating with third party loans and from management, private sales of Common Stock, and convertible notes, which will continue through the next several months with anticipated revenues to begin in Q1 2025.

Several of our significant operating subsidiaries have borrowed funds from DarkPulse. The terms of the instruments governing the indebtedness of these borrowers or borrowing groups may restrict our ability to access their accumulated cash. In addition, our ability to access the liquidity of these and other subsidiaries may be limited by tax, legal and other considerations.

Our executive officers and our Board of Directors review our sources and potential uses of cash in connection with our annual budgeting process and whenever circumstances warrant. Generally speaking, our principal funding source is cash from financing activities, and our principal cash requirements include loans to our operating subsidiaries, operating expenses, and capital expenditures.

Cash Flows from Operating Activities

During the six-months ended June 30, 2024, net cash used in operating activities was $313,725 resulting from our net loss of $2,953,104 partially offset by non-cash charges of $1,707,137 primarily driven by our loss on equity investment resulting from the “SPAC” termination. In 2023, we had cash used in operating activities of $2,483,389 resulting from our net loss of $18,917,364, partially offset by non-cash charges of $13,479,314 primarily driven by impairment charges, bad debt expense and the issuance of common stock for a legal settlement.

During the year ended December 31, 2023, net cash used in operating activities was $5,653,214 resulting from our net loss of $21,723,043, partially offset by non-cash charges of $15,517,077 primarily driven by our bad debt expense and goodwill impairment. In 2022, we had cash used in operating activities of $21,738,542 resulting from our net loss of $35,517,505, partially offset by non-cash charges of $13,307,813, including our goodwill impairment.

Cash Flows from Investing Activities

During the six-months ended June 30, 2024, we had net cash used in investing activities of $(59,817).

During the six-months ended June 30, 2023, we had net cash used in investing activities of $1,154,848, including $419,737 in notes and $519,637 in advances to GSD, as well as our joint venture investment of $113,124 and purchase of property and equipment of $102,350.

During the year ended December 31, 2023, we had net cash used in investing activities of $215,475, including a joint venture investment of $113,125, and purchase of property and equipment of $102,350.

During the year ended December 31, 2022, we had net cash used in investing activities of $5,045,405, including the issuance of our note receivable and investment with the SPAC totaling $2,549,248, joint venture investment of $103,505 and purchase of property and equipment of $2,074,627.

Cash Flows from Financing Activities

During the six-months ended June 30, 2024, net cash provided by financing activities was $362,582 of which $362,585 was comprised of proceeds from the issuance of common stock.

During the six-months ended June 30, 2023, net cash provided by financing activities was $2,598,603 which was primarily comprised of proceeds from the sale of common stock of $2,625,650, less repayments of loans $27,047.

During the year ended December 31, 2023, net cash provided by financing activities was $3,632,387 which was primarily comprised of proceeds from the sale of common stock of $3,502,272 and proceeds from convertible notes of $145,000 less net repayments of loans of $14,885.

During the year ended December 31, 2022, net cash provided by financing activities was $24,165,801 which was primarily comprised of proceeds from the sale of common stock of $24,276,308, net of costs of $1,934,200, less net repayments of loans of $110,507.

Factors That May Affect Future Results

Management’s Discussion and Analysis contains information based on management’s beliefs and forward-looking statements that involve a number of risks, uncertainties, and assumptions. There can be no assurance that actual results will not differ materially from the forward-looking statements as a result of various factors, including but not limited to, our ability to obtain the equity funding or borrowings necessary to market and launch our products, our ability to successfully serially produce and market our products; our success establishing and maintaining collaborative licensing and supplier arrangements; the acceptance of our products by customers; our continued ability to pay operating costs; our ability to meet demand for our products; the amount and nature of competition from our competitors; the effects of technological changes on products and product demand; and our ability to successfully adapt to market forces and technological demands of our customers.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity capital expenditures or capital resources.

Recent Accounting Pronouncements

In November 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, issued by the Financial Accounting Standards Board. This ASU requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in the recognition of contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The Company expects that there would be no material impact on the Company’s condensed consolidated financial statements upon the adoption of this ASU.

In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company adopted ASU 2020-06 on January 1, 2022 and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements and related disclosures.

BUSINESS

Organization

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.

Current Operations

University of New Brunswick

In December 2010, DPTI entered into an Assignment Agreement with the University, pursuant to which the University sold, transferred, and assigned to us Patents in exchange for the issuance of a debenture to the University in the amount of C$1,500,000 (Canadian dollars). In April 2017, DPTI issued the Debenture. The Patents and the Debenture were initially recorded in our accounts at $1,491,923, based upon the exchange rate between the U.S. dollar and the Canadian dollar on December 16, 2010, the date of the original debenture. In addition to the repayment of principal and interest, the Debenture requires 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 commencing on April 24, 2018, as well as to reimburse the University for its patent-related costs.

On February 1, 2024, our board of directors approved entering into the Amendment No. 01 to Convertible Debenture (Secured) Term Debenture with the University pursuant to which, effective January 17, 2024, section (c) of the recitals of the Convertible Debenture (Secured) Term Debenture effective April 24, 2017 was amended to the following:

“(c) the date that is seven (7) years from the Issue Date; or”

Section 3.1 of the Debenture is amended to the following:

3.1 Payback on the Principal Sum will commence over a four (4) year period upon the earlier of the following (each a “Payback Period”): (a) three (3) years following the Payor achieving a positive earnings before interest, taxes, depreciation and amortization for two (2) consecutive quarters; or (b) the date that is seven (7) years from the Issue Date.

Section 3.2 of the Debenture is amended to the following:

“3.2 The Payor shall be required to pay the Payee, in quarterly installments over a four (4) year period commencing from the start of the Payback Period, the following:

(a) Ninety-Three Thousand Seven Hundred and Fifty Canadian Dollars ($93,750.00 CDN); and

(b) interest accrued on the Principal Sum on a declining balance; and

Our Operating Units

The Company’s subsidiaries consist of Remote Intelligence, LLC, a company headquartered in Pennsylvania who provides unmanned aerial drone and unmanned ground crawler (UGC) services to a variety of clients from industrial mapping and ecosystem services, to search and rescue, to pipeline security; Wildlife Specialists, LLC, a company headquartered in Pennsylvania who provides clients with comprehensive wildlife and environmental assessment, planning, and monitoring services; TerraData Unmanned, PLLC, a company headquartered in Florida who custom manufactures NDAA compliant drones and unmanned ground crawlers to meet the needs of its customers; and TJM Electronics West, Inc., a company headquartered in Arizona who is a U.S. manufacturer and tester of advanced electronics, cables and sub-assemblies specializing in advanced package and complex CCA and hardware.

TerraData Unmanned

Comprised of a team with more than 30 years cumulative experience in the unmanned industry, TerraData Unmanned (“TerraData”) custom manufactures National Defense Authorization Act (“NDAA”) compliant drones and unmanned ground crawlers to meet the needs of its customers. TerraData has successfully delivered a custom drone platform per a customer’s specifications which exceeds current industry offering by more than 30 minutes. The team has manufactured, and successfully flight tested a Quad Copter drone with 1.5KG payload capabilities that delivers more than 60 minutes of continuous flight. This cutting-edge design is a combination of proprietary software and hardware. The custom platform offers NDAA compliant autopilot, communications links, Technical Standard Orders (“TSO”) certified GPS unit and ground control station. Future designs include integrating Real-Time Kinematic (“RTK”) for mapping, methane detectors, and true terrain following capabilities. There are also improvements scheduled that are intended to further extend the endurance and provide over 4KG of payload capacity, not including batteries. TerraData has also announced the research, development and successful testing of an autonomous crawler soon to be released to the market with methane and multi gas detection capabilities. Working seamlessly with its partners at DarkPulse and its subsidiary companies, TerraData can custom design, build and operate a system to meet our customers' needs 24 hours a day 365 days a year around the globe.

Acquisitions

On August 9, 2021, we entered into a Share Purchase Agreement with Optilan Guernsey Limited and Optilan Holdco 2 Limited, pursuant to which we purchased from the sellers all of the issued and outstanding equity interests of Optilan HoldCo 3 Limited, a private company incorporated in England and Wales (“Optilan”), for £1.00. In connection with the acquisition, the Company acquired $14,828,459 in assets and assumed liabilities totaling $25,179,320. As a result of the transaction, Optilan became a wholly-owned subsidiary of the Company.

On August 30, 2021, we closed two separate Membership Interest Purchase Agreements with RI and WS pursuant to which we agreed to pay to the majority stockholder of each of RI and WS an aggregate of 15,000,000 shares of our Common Stock, $500,000 to be paid on the closing date, and an additional $500,000 to be paid 12 weeks from closing date in exchange for 60% ownership of each of RI and WS. As a result of the transactions, RI and WS each became subsidiaries of the Company with the respective non-controlling interests recoded on the consolidated balance sheets.

On September 8, 2021, we entered into and closed the Stock Purchase Agreement with TJM and TJM’s stockholders, pursuant to which we agreed to purchase all of the equity interests in TJM in exchange for $450,000, subject to adjustments as defined in the Stock Purchase Agreement. As a result of the transaction, TJM became a wholly-owned subsidiary of the Company.

Effective October 1, 2021, we entered into and closed the Membership Purchase Agreement with TerraData and Justin Dee, the sole stockholder of TerraData, pursuant to which we agreed to purchase 60% of the equity interests in TerraData in exchange for 3,725,386 shares of our Common Stock and $400,000, subject to adjustments as defined in the Membership Purchase Agreement, to be paid within 12 weeks of closing. As a result of the transaction, TerraData became a subsidiary of the Company.

On December 1, 2023, we entered into the Sale Agreement with Optilan (UK) Limited (in liquidation) incorporated and registered in England and Wales with company number 02715788, and Colin Hardman, Christopher Allen and Gregory Andrew Palfrey, as joint liquidators of the Optilan all of Evelyn Partners LLP. Under thea, we intended to purchase from Optilan for $65,000 all right, title, and interest in the following: (1) shares in Optilan India PVT (India), (2) shares in Optilan Communications & Security Systems Ltd (Turkey), and (3) the “Applicable Intellectual Property Rights,” as defined in the agreement. The closing of this agreement never occurred and Optilan India PVT (India) and Optilan Communications & Security Systems Ltd (Turkey) were never acquired by us.

Liquidation/winding up of Optilan (UK) Limited

On May 3, 2023, Eversheds Sutherland (International) LLP, a creditor of Optilan (UK) Limited, filed a petition to wind up (“Winding up Petition”) Optilan (UK) Limited, a wholly owned subsidiary of the Company’s Subsidiary, Optilan HoldCo 3 Limited, and the matter was due to be heard in the Portsmouth Combined Court Centre on June 28, 2023.

On June 28, 2023, the High Court of Justice in the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of Optilan (UK) Limited (“Optilan Liquidation”). In conjunction with the order, the court appointed the Official Receiver’s Office (“OR”) to take the appointment as liquidator of Optilan (UK) Limited and take control of Optilan (UK) Limited’s assets.

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

There are no new claims against Optilan (UK) Limited as of July 15, 2024 and Evelyn Partners continue to liquidate the company’s assets.

The Company is an Unsecured creditor of Optilan (UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known for several months. The Company has approximately $19.4 million intercompany payables due from Optilan (UK), which will increase the Company liabilities for any obligations not repaid. The Company expects the remaining assets held by Optilan (UK) Limited to be fully impaired and reported as Loss on Deconsolidation during the second quarter of 2023 as a result of the winding-up order for liquidation. At the time of this filing the Company is still evaluating the full effects of the winding-up order for liquidation and the material adverse effects it will have on the Company’s continued operations and ability to meet future obligations.

Global System Dynamics, Inc.

On December 14, 2022, we entered into a Business Combination Agreement (the “BCA”) by, between, and among our company, Global System Dynamics, Inc., a Delaware corporation (“GSD”), and Zilla Acquisition Corp, a Delaware corporation and wholly owned subsidiary of GSD (the “Merger Sub”). Pursuant to the terms of the BCA, a business combination between us and GSD will be effected through the merger of Merger Sub with and into DarkPulse, with DarkPulse surviving the merger as a wholly owned subsidiary of GSD (the “Merger”). Our board of directors has (i) approved and declared advisable the BCA, the Merger and the other transactions contemplated thereby and (ii) resolved to recommend approval of the BCA and related transactions by our stockholders. The total consideration to be paid at closing (the “Merger Consideration”) by GSD to DarkPulse security holders will be valued at $116,518,357.65. The Merger Consideration will be payable in shares of GSD Common Stock, valued at $10.00 per share.

On August 8, 2023, we entered into Amendment No. 1 to the BCA pursuant to which the “Termination Date,” as defined in the BCA was amended from “August 9, 2023” to “February 9, 2024.” No other changes were made to the BCA.

The transactions contemplated by the BCA, and the other transactions contemplated by the other transaction documents contemplated by the BCA (collectively, the “Proposed Business Combination”) will constitute a “Business Combination.” The Business Combination and the transactions contemplated thereby were unanimously approved by the board of directors of the Company on December 14, 2022.

The Business Combination

The BCA provides, among other things, that Merger Sub will merge with and into DarkPulse, with DarkPulse as the surviving company in the merger and, after giving effect to such merger, DarkPulse shall be a wholly-owned subsidiary of GSD. GSD will continue to be named “Global System Dynamics, Inc.” and the combined entity will trade under the symbol “DARK.”

In accordance with the terms and subject to the conditions of the BCA, at the Effective Time, among other things: (i) each GSD Class A Share and each GSD Class B Share that is issued and outstanding immediately prior to the Merger will become one share of common stock, par value $0.0001 per share, of GSD; (ii) by virtue of the Merger and without any action on the part of any Party or any other Person, each share of DarkPulse Common Stock (other than shares of DarkPulse Common Stock cancelled and extinguished pursuant to Section 2.1(a)(viii) of the BCA) issued and outstanding as of immediately prior to the Effective Time shall be automatically canceled and extinguished and converted into the right to receive that number of GSD Class A Shares equal to the Merger Consideration; provided, however, that any DarkPulse shares that are Restricted Shares shall be converted into restricted GSD Class A Shares, subject to the same vesting, transfer and other restrictions as the applicable Restricted Shares; (iii) by virtue of the Merger and without any action on the part of any Party or any other Person, each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically cancelled and extinguished and converted into one share of common stock, par value $0.0001, of DarkPulse; (vi) Dennis O’Leary, Joseph Catalino, George Pappas, Geoff Mullins, Wayne Bale and John Bartrum shall become the directors of GSD, Dennis O’Leary shall become the Chief Executive Officer of GSD and of the surviving company, and J. Richard Iler shall become the Chief Financial Officer of GSD, each to hold office in accordance with the governing documents of GSD until such director’s or officer’s successor is duly elected or appointed and qualified, or until the earlier of their death, resignation or removal; (v) by virtue of the Merger and without any action on the part of any Party or any other Person, each DarkPulse share held immediately prior to the Effective Time by DarkPulse as treasury stock shall be automatically canceled and extinguished, and no consideration shall be paid with respect thereto.

Representations and Warranties; Covenants

The parties to the BCA have agreed to customary representations and warranties for transactions of this type. In addition, the parties to the BCA agreed to be bound by certain customary covenants for transactions of this type, including, among others, covenants with respect to the conduct of the Company and its subsidiaries during the period between execution of the BCA and the Closing. Each of the parties to the BCA has agreed to use its reasonable best efforts to cause all actions and things necessary to consummate and expeditiously implement the Business Combination.

Conditions to Each Party’s Obligations

Under the BCA, the obligations of the parties to consummate the Merger are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (i) the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder relating to the Business Combination having expired or been terminated and any other required regulatory approvals applicable to the transactions contemplated by the BCA having been obtained and remaining in full force and effect; (ii) all the DarkPulse Preferred Stock being converted to DarkPulse Common Stock prior to the Effective Time; (iii) no order or law issued by any court of competent jurisdiction or other governmental entity or other legal restraint or prohibition preventing the consummation of the transactions contemplated by the Business Combination being in effect; (iv) the registration statement on Form S-4 containing the joint proxy statement/prospectus filed by DarkPulse and GSD relating to the BCA and the Merger (the “Registration Statement”) becoming effective in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), no stop order being issued by the SEC and remaining in effect with respect to the Registration Statement, and no proceeding seeking such a stop order being threatened or initiated by the SEC and remaining pending; (v) GSD’s initial listing application with Nasdaq in connection with the Business Combination having been approved; (vi) GSD’s Board consisting of the number of directors, and comprising the individuals, determined pursuant to the BCA; (vii) the approval and adoption of the BCA and the transactions contemplated thereby by the requisite vote of the DarkPulse’s stockholders; (viii) the approval and adoption of the BCA and the transactions contemplated thereby by the requisite vote of GSD’s stockholders; (ix) after giving effect to the transactions contemplated (including the PIPE Financing), GSD has at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act of 1934, as amended (the “Exchange Act”)) immediately after the Effective Time; (x) the absence of a DarkPulse Material Adverse Effect since the date of the BCA that is continuing, and (xi) the absence of a GSD Material Adverse Effect since the date of the BCA that is continuing.

Termination

The BCA may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, without limitation, (i) by the mutual written consent of GSD and DarkPulse; (ii) by GSD, subject to certain exceptions, if any of the representations or warranties made by DarkPulse are not true and correct or if DarkPulse fails to perform any of its covenants or agreements under the BCA (including an obligation to consummate the Closing) such that certain conditions to the obligations of GSD could not be satisfied and the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier of (A) 30 days after written notice thereof, and (B) February 9, 2024 (the “Termination Date”); (iii) by DarkPulse, subject to certain exceptions, if any of the representations or warranties made by us are not true and correct or if GSD fails to perform any of GSD’s covenants or agreements under the BCA (including an obligation to consummate the Closing) such that the condition to the obligations of DarkPulse could not be satisfied and the breach (or breaches) of such representations or warranties or failure (or failures) to perform such covenants or agreements is (or are) not cured or cannot be cured within the earlier of (A) 30 days after written notice thereof, and (B) the Termination Date iv) by either GSD or DarkPulse, if the Closing does not occur on or prior to the Termination Date, unless the breach of any covenants or obligations under the BCA by the party seeking to terminate proximately caused the failure to consummate the transactions contemplated by the BCA; (v) by either GSD or DarkPulse, if (A) any governmental entity shall have issued an order or taken any other action permanently enjoining, restraining or otherwise prohibiting the transactions contemplated by the BCA and such order or other action shall have become final and non-appealable; or (B) if the required DarkPulse or GSD stockholder consent is not obtained; (vi) by GSD, if (A) DarkPulse does not deliver, or cause to be delivered to GSD a Transaction Support Agreement duly executed by certain DarkPulse stockholders or (B) the DarkPulse stockholders meeting has been held, has concluded, DarkPulse stockholders have duly voted, and DarkPulse stockholder approval was not obtained; (vii) by GSD should DarkPulse not deposit into the Trust Account in a timely manner the funds necessary to extend the period for us to complete an initial business combination for an additional period of six months from August 9, 2023, in accordance with, and as required pursuant to, the BCA; and (x) by GSD should: (A) Nasdaq not approve the initial listing application for the combined company with Nasdaq in connection with the Business Combination; (B) the combined company not have satisfied all applicable initial listing requirements of Nasdaq; or (C) the common stock of the combined company not have been approved for listing on Nasdaq prior to the Closing Date.

In the event of the termination of this BCA, the BCA will become void (and there will be no Liability or obligation on the part of the Parties and their respective Non-Party Affiliates) with the exception of Section 5.3(a), this Section 7.2, Article VIII and Article I (to the extent related to the termination), each of which will survive such termination and remain valid and binding obligations of the Parties.

The Stockholder Transaction Support Agreement

Concurrently with, or with respect to a certain stockholder holding all of the shares of Series A Preferred Stock of DarkPulse, within a specified time after the signing of the BCA, the “DarkPulse Stockholder” (collectively, the “Supporting Company Stockholder”) shall duly execute and deliver to GSD a transaction support agreement pursuant to which, among other things, such Supporting DarkPulse Stockholder will agree to, support and vote in favor of the BCA, the Ancillary Documents which DarkPulse is or will be a party and the transactions contemplated thereby (including the Merger).

Trust Funds and Public Shares

As of January 23, 2024, GSD had approximately $5,233,823 left in trust and 477,066 public shares outstanding.

Termination of the BCA

On January 23, 2024, the BCA was terminated by mutual consent of the parties thereto. Although, as the Sponsor of GSD, the Company still owns all of the issued and outstanding shares of Class B Common Stock of GSD, all legal rights the Company had under the BCA have been terminated. GSD had until February 9, 2024 to consummate a business combination. Due the fact that GSD did not consummate a business combination by February 9, 2024, there will be a mandatory liquidation and subsequent dissolution. For more information about the GSD liquidation, please see “Due to the failure of GSD to consummate a business combination with DarkPulse by February 9, 2024, GSD will be forced to liquidate, which may make the shares of GSD owned by DarkPulse worthless and DarkPulse may be unable to recoup any expenses spent on acquiring securities of GSD and loans to GSD.” in the section titled “Risk Factors.”

Our Business

Our BOTDA technology’s differentiators from and advantages over existing technologies:

	·	Real-time Reporting: Higher data acquisition speeds allowing for structural monitoring of dynamic systems;

	·	Cost to Customer: Significantly lower acquisition and operating costs;

	·	Precision: A greater magnitude of precision and spatial resolution than other systems currently available;

	·	Applications: Wider range of capabilities than other systems currently available;

	·	Power Consumption: Lower power consumption than existing systems allowing for off-grid installations;

	·	Integration: Capable of integrating with existing systems; and

	·	Central station monitoring/cloud based GUI.

Revenue

The Company’s revenues are generated primarily from the sales 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.

Our Market

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. Our BOTDA technology allows for the monitoring of highly dynamic environments due to its magnitude of increased resolution and greater accuracy. The resulting high speed, real-time monitoring capabilities of our BOTDA technology should satisfy a broad range of existing and emerging requirements. Use of our BOTDA technology by our customers should result in lower production costs with increased sensing capabilities that can integrate with existing technology and be upgraded cost effectively.

Due to the characteristics of the fiber used in fiber optic sensing, the uses of our BOTDA technology are wide ranging. Optical fiber is hard-wearing, which allows it to be used in environments where other technologies fail (for example, at temperatures ranging from -40°C to 300°C and 1000psi). Additionally, our BOTDA sensors allow for live sensing due to the speed at which the analysis takes place.

Our management team is continually identifying markets in which our BOTDA technology may be readily applied. Once these markets (as described below) have been addressed, our technology may be adapted and applied to new markets.

Structural Monitoring

	·	Buildings and Skyscrapers;

	·	Bridges, Tunnels and Dams; and

	·	Roads and Railway tracks.

Temperature Sensing

	·	Fire Alarm and Environment control;

	·	Low cost and maintenance;

	·	Long life span; and

	·	Ability to withstand harsh working environment.

Security & Defense

	·	National Border Protection; and

	·	Protection of Military and other sensitive installations.

Consulting Services:

	·	Consulting (as stand-alone or presales);

	·	Post sales deployment and Support; and

	·	Managed services (monitoring, etc.).

Additional Potential Markets:

	·	Monitoring of composite structures in aircraft;

	·	Dynamic stress monitoring of runways;

	·	Dynamic ship hull stress monitoring, especially with a view to double-hull oil tankers;

	·	Smart grid and power conservation applications based on cooling and/or heat proximity – for instance, computer rooms, cell towers for heat soak;

	·	Monitor low temperatures as part of control systems;

	·	Monitoring of temperatures in extreme refrigeration environments;

	·	Avalanche early warning systems; and

	·	Sea defense monitoring.

Marketing

We utilize our BOTDA technology as the foundation of our ongoing marketing initiatives. Most notably, the greater magnitude of increased capabilities of our BOTDA technology versus existing bright-pulsing technologies. Existing bright-pulse Brillouin-based sensors have historically been plagued with temperature and strain cross-sensitivity, i.e. the inability to distinguish between temperature and strain change along the same fiber. The loss of spatial resolution with an increase in fiber length is also a limiting factor for the use of distributed sensor systems. Because of these shortcomings, existing bright-pulse Brillouin-based technologies are unable to succeed within today’s dynamic environments, which coincides with our BOTDA technology’s increased capabilities over bright-pulse systems. Our marketing initiatives include daily, broad-based social media engagement, management of our website, email campaigns, national television commercials, magazine ads, and other ongoing initiatives designed to increase awareness of our products and services and drive conversion and adoption rates.

Competition

The overall optical sensing market is projected to reach USD $3.47 billion by 2023 from USD $1.13 billion in 2016, at a CAGR of 15.47% between 2017 and 2023.¹We are active in the optical sensing market, including Oil & Gas pipeline health monitoring, Infrastructure, National Border Security applications, and the mining industry. We believe that fiber sensing applications which incorporate our BOTDA technology may provide significant competitive advantages over structural health monitoring applications offered by the long-term leaders in the field, such as Schlumberger, Hewlett-Packard, and Yokogawa, which collectively account for a significant portion of industry sales. These companies, as well as others, have numerous differences in feature sets and functionality, but all share certain basic attributes: a bright-pulse technology as the core of their systems architecture. An architecture designed using bright-pulsing technology has limited sensing capabilities and resolutions of one meter allowing for mostly long-term quasi-static deployments.

However, we utilize our BOTDA technology allowing for multiple applications into those markets unavailable to companies using bright-pulse technology. While many of the companies using bright-pulse technology have attempted to incorporate various sensing techniques into a legacy technology, none have been able to offer the order of magnitude resolutions offered by our patented dark-pulse based BOTDA technology. This magnitude in resolution coupled with our BOTDA technology’s increased data collection speeds allows our technology to be installed into areas of the market that our competitors cannot. Our future financial condition and operating results depend on our ability to provide a high-quality solution as well as increased distribution of the solutions in each of the markets in which we compete or intend to compete within.

The markets for our products and services are highly competitive and we are confronted by aggressive competition. These markets are characterized by frequent product introductions and rapid technological advances. Our financial condition and operating results can be adversely affected by these and other industry-wide downward pressures on gross margins. Principal competitive factors important to us include price, product features, relative price and performance, product quality and reliability, marketing and distribution capability, service and support and corporate reputation.

___________________

¹https://www.marketsandmarkets.com/Market-Reports/optical-sensing-market-197592599.html

Intellectual Property

Our policy is to protect our technology by, among other things, patents, trade secret protection and copyrights. We have taken security measures to protect our trade secrets and proprietary know-how, to the greatest extent possible. Our means of protecting our proprietary rights may not prove to be adequate and our competitors may independently develop technology or products that are similar to ours or that compete with ours. Trade secret, patent and copyright laws afford only certain protections for our technology and products. The laws of many countries do not protect our proprietary rights to as great an extent as do the laws of the United States. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to obtain and use information that we regard as proprietary. Third parties may also design around our proprietary rights, which may render our protected technology and products less valuable, if the design around is favorably received in the marketplace.

In addition, any of our products or technology covered by patents or other intellectual property rights, could cause us to be subject to various legal actions. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement, invalidity, misappropriation, or other claims.

Through DPTI’s April 2017 Intellectual Property agreement with the University, DPTI was sold, transferred, and assigned U.S. Patent Nos. 7,245,790 (Canadian Patent No. 2,502,275 and active until March 24, 2025), 8,643,829 (active until September 7, 2030), and 9,534,965 (active until April 26, 2031), each of which are related to our BOTDA dark-pulse technology.

Suppliers

We currently rely on a full-time, dedicated, external team of experienced professionals for the coding and maintenance of our products. We believe we have mitigated the associated risks of managing an external team of software and engineering development professionals by incorporating internal management and oversight, as well as appropriate systems, protocols, controls, and procedures and ensuring that we have access to additional qualified professionals to provide like or complementary services.

Government Regulation

Government regulation is not of significant concern for our business nor is government regulation expected to become an impediment to the business in the near- or mid-term as management is currently unaware of any planned or anticipated government regulation that would have a material impact on our business. Our management believes it currently possesses all requisite authority to conduct our business as described in this report.

Employees

As of September 12, 2024, we had three full-time employees and no part-time employees.

Legal Proceedings

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).

On or about March 23, 2024, Carebourn appealed the final judgment entered by the State Court against Carebourn and in favor of the Company.

On or about March 25, 2024, the Minnesota Appellate Court entered an Order, noting that Minn. R. Civ. App. P. 104.01 provides that appeals must be taken within 60 days of the date of the final judgment and, therefore, it appears that Carebourn failed to timely take its appeal. The Appellate Court requested the parties submit informal briefing in response to two questions: (a) Did the time to appeal the December 27, 2024 amended judgment expire on February 26, 2024; and (b) If the answer to (a) is yes, must this appeal be dismissed as untimely. On or about April 4, 2024, DarkPulse filed its informal briefing in response with the Appellate Court. The Company is currently awaiting a decision from the Appellate Court.

As of the date hereof, Carebourn has refused to voluntarily satisfy the final judgment. Accordingly, the Company intends to exercise all legal rights and remedies available to it to collect the amounts awarded.

DarkPulse intends to continue to exercise all legal rights and remedies available to it to collect the amounts awarded should Carebourn fail to voluntarily pay the same.

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 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).

On or about March 23, 2024, More appealed the final judgment entered by the State Court against More and in favor of the Company.

On or about March 25, 2024, the Minnesota Appellate Court entered an Order, noting that Minn. R. Civ. App. P. 104.01 provides that appeals must be taken within 60 days of the date of the final judgment and, therefore, it appears that More failed to timely take its appeal. The Appellate Court requested the parties submit informal briefing in response to two questions: (a) Did the time to appeal the December 27, 2024 amended judgment expire on February 26, 2024; and (b) If the answer to (a) is yes, must this appeal be dismissed as untimely. On or about April 4, 2024, DarkPulse filed its informal briefing in response with the Appellate Court. The Company is currently awaiting a decision from the Appellate Court.

As of April 1, 2024, the final judgment had not yet been satisfied by More, nor had a judgment been entered that stayed enforcement of that judgment. Accordingly, the Company took actions to enforce and collect the judgment including, inter alia, serving garnishment summons on More’s banks.

As of the date hereof, More has refused to voluntarily satisfy the final judgement. Accordingly, the Company intends to exercise all legal rights and remedies available to it to collect the amounts awarded.

Carebourn Capital et al v. Standard Registrar and Transfer et al

On or about May 20, 2022, Carebourn and More (together with Carebourn, the “Noteholders”) commenced an action against the Company, certain members of the Company’s executive team and board of directors and Standard Registrar and Transfer Company, Inc., the Company’s transfer agent, in the United States District Court for the District of Utah. The Noteholders’ complaint alleged various causes of action arising from certain securities purchase agreements and convertible promissory notes the Company sold to the Noteholders.

On or about November 23, 2022, the Company and the members of the Company’s executive team and board of directors named in this action moved to dismiss the Noteholders’ complaint.

On or about February 21, 2023, the Court granted the Company’s motion to dismiss in part and stayed the action pending resolution of the motion for summary judgment brought by the U.S. Securities and Exchange Commission against Carebourn in the United States District Court for the District of Minnesota.

On or about November 1, 2023, the Noteholders moved to dismiss the 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 May 22, 2024, the Court scheduled oral arguments on the Company’s sanction motion on July 2, 2024.

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”).

Oral arguments were held before the Second Circuit on the Company’s appeal on December 11, 2023.

On March 28, 2024, the Second Circuit issued its decision and found that the District Court (a) properly found that the Delaware forum-selection clause was enforceable but, thereafter, (b) improperly made a ruling on the merits of the Company’s claims for relief. As a result, the Second Circuit affirmed the District Court’s decision in part, vacated in part and remanded the case back to the District Court for transferring to the United States District Court for the District of Delaware.

As of the date hereof, this action has not yet transferred to the Delaware Court. The Company remains committed to actively litigating its claims for relief under RICO.

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 RICO.

On or about September 29, 2023, the Court granted the Crown Bridge Defendants’ motion to dismiss the plaintiffs’ complaint. On October 23, 2023, the plaintiffs appealed the Court’s decision to the Second Circuit.

As of the date hereof, the appeal is fully briefed.

The Company remains committed to actively litigating its claims for relief under RICO.

On July 24, 2024 The Company resolved certain disputes with one of its lenders, GS Capital Partners LLC (“GS”), on terms mutually agreeable to both Darkpulse and GS. Specifically, DarkPulse and GS compromised over $2,600,000 of debt owed to GS in return for issuing shares to GS, as provided by the settlement agreement between the parties. This settlement is expected to be approved by the District Court for Clark County, Nevada,on or about August 15, 2024, and such approval will also resolve the collaborative proceeding initiated in such court to obtain approval of the settlement under Section 3(A)(10) of the Securities Act. Importantly, through this settlement, DarkPulse was able to negotiate a strict leak-out clause concerning the shares issued to GS, which DarkPulse believes will allow it to maintain its going concern value without the distraction of expensive and protracted litigation.

TJM West, Inc v Thomas J McCarthy Family Limited Partnership

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

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

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

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

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

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

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

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

On or about May 24,2024 TJM West’s counsel left the firm handling the litigation it was determined in the best interest of the company to terminate its relationship with the law firm. As of today the company is interviewing new counsel and evaluating its claims against landlord to determine if it’s financially responsible to incur additional fees related to exercising TJM’s right against the landlord for terminating the lease.

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.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Executive Officers and Directors

The following table sets forth the name, age, and position of each executive officer and director of the Company:

Director's Name	Age	Position
Dennis O’Leary	61	Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Secretary & Treasurer

Dr. Anthony Brown	50	Director

Craig Atkin	41	Director and Chief Commercial Officer of Optilan

Dennis M. O’Leary, Chairman, CEO, President, CFO. Mr. O’Leary was appointed as the DarkPulse’s Chief Executive Officer, President, Chief Financial Officer and Chairman of the Board in April 2018. Mr. O’Leary is a serial entrepreneur with significant international experience having founded Sulu Electric Power and Light Corp (Philippines), a firm with expertise in utility scale power generation and solar energy. In 2010, Mr. O’Leary co-founded DarkPulse Technologies Inc., a wholly-owned subsidiary of DarkPulse, which is developing specialized devices that monitor activities along national borders and provide structural health and safety monitoring of oil and gas pipelines. He holds extensive start-up experience including multiple exit strategies. Mr. O’Leary is an Ambassador for the Province of New Brunswick, Canada, and a Research Member of the NATO Science and Technology Organization. He served as a member of the Board at Arizona State University’s School of Engineering, Global Resolve as Chair of the Impact Committee. His previous employment includes the NYPD where he worked as a member of the Manhattan North Tactical Narcotics Team, which prosecuted establishments involved in the illegal distribution of narcotics. He was a member of a joint taskforce working with the DEA and USINS in the execution of warrants related to narcotics trafficking. While at the NYPD, he was assigned to the Department of Justice as a member of the FBI’s investigative team with internal designation C14. He is a licensed private pilot with turbine experience. Mr. O’Leary was appointed as a Director due to his extensive experience in the industries in which DarkPulse operates. Mr. O’Leary is not, and has not been during the past five years, the director of any other public companies.

Dr. Anthony Brown, Director. Dr. Brown has served as a Director of DarkPulse since April 2019. He is a physicist and scientist with extensive experience in the development of Brillouin scattering-based distributed fiber optic sensing. In 2010, Dr. Brown co-founded DarkPulse Technologies, Inc., a wholly-owned subsidiary of DarkPulse. Dr. Brown has more than 25 years of research and lecturing experience gained at the University of New Brunswick (“UNB”), focusing primarily on the development of Brillouin scattering-based distributed fiber optic sensor technology. From 2001 to 2012, Dr. Brown served as an assistant professor and research associate at UNB. During Dr. Brown’s tenure at UNB, he was instrumental in developing numerous patents in the field of fiber optic sensing. From 2012 to 2015, Dr. Brown served as an Adjunct Professor at UNB. From 2013 through the present, Dr. Brown has served as a data scientist for Xplornet Communications, Inc. From 2018 through the present, Dr. Brown has served as a consultant for DarkPulse. Dr. Brown received a Bachelor of Science degree in Physics from UNB in 1995, and a PhD in Physics from UNB in 2001. Dr. Brown was appointed as a Director due to his extensive experience in the development of Brillouin scattering-based distributed fiber optic sensing. Dr. Brown is not, and has not been during the past five years, the director of any other public companies.

Craig Atkin, Director. Mr. Atkin has served as a Director of DarkPulse since June 2023. He is also the Chief Commercial Officer of Optilan. Mr. Atkin has an engineering background with a first class honours degree in Electrical/Electronic Engineering and a Master’s Degree in Project Management. With over 20 years’ experience across energy, security, communications and technology sectors in both operational and leadership roles. His previous role was the management of two power stations within the UK for a multinational energy company. Mr. Atkin has also worked in conventional, renewable and offshore wind environments. He is experienced working and leading international teams and large scale projects. Mr. Atkin is commercially-experienced across contract setup and negotiation, M&A and operational works. Mr. Atkin was appointed as a Director due to his experience with Optilan. Mr. Atkin is not, and has not been during the past five years, the director of any other public companies.

Jason Keith, Former CEO, Optilan – On July 4, 2023, Optilan (UK) received an official letter that all employees’ contracts were terminated as of June 28, 2023. At that time Mr. Keith’s tenure as CEO of Optilan expired.

Legal Proceedings

Besides the disclosure below, during the past ten years there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any of our directors or executive officers, and none of these persons has been involved in any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity, any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws or regulations, or any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.

Liquidation/winding up of Optilan (UK) Limited

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

There are no new claims against Optilan UK Ltd as of September 12, 2024 and Evelyn partners continue to liquidate the company’s assets.

Family Relationships

There are no family relationships between any of our directors and executive officers.

Audit Committee

We currently do not have a functioning Audit Committee. Our management is currently reviewing our SEC filings and relying on outside experts to assist with this process.

EXECUTIVE COMPENSATION

Summary Compensation for Named Executive Officers

The following table shows the executive compensation paid to our named executive officers for the years ended December 31, 2023 and 2022.

Name and Principal Position

Year Ended

Dec 31,

Salary

Total

Dennis O’Leary

2023

165,000

⁽¹⁾

137,500

Chairman/CEO and Director

2022

270,000

⁽¹⁾

All of this amount was accrued and unpaid.

O’Leary Employment Agreement

On June 22, 2022, our Board of Directors, with Dennis O’Leary abstaining, approved the Employment Agreement dated effective April 1, 2022 with Mr. O’Leary, our Chief Executive Officer. The term of the agreement is three years from the April 1, 2022, subject to termination. The agreement may be terminated upon the death or disability of Mr. O’Leary or for “Cause,” as defined in the agreement. Pursuant to the agreement, Mr. O’Leary is entitled to an annual salary of $300,000, which may accrue and be paid once we have available funds. Any accrued and unpaid base salary may also be converted subject to mutual agreement of the Company and Mr. O’Leary. Also, pursuant to the agreement, Mr. O’Leary was issued 100 shares of Series A Super Voting Preferred Stock.

Summary Compensation for Directors

The following table shows the executive compensation paid to our directors (excluding named executive officers) for the year ended December 31, 2023.

Name and Principal Position	Salary			Total
Dr. Anthony Brown, Director	$	–		$	–
Craig Atkin, Director	$	–		$	–
Carl Eckel, Director	$	10,000	⁽¹⁾	$	10,000

⁽¹⁾

All of this amount was accrued and unpaid.

Equity Awards

As of December 31, 2022, there were no outstanding equity awards.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Principal Shareholders

The table below sets forth information as to our directors, named executive officers, and executive officers and each person owning of record or was known by the Company to own beneficially shares of stock greater than 5% of the 9,580,156,882 (9,580,068,647 common plus 88,235 preferred) shares as of September 12, 2024. The table includes preferred stock that is convertible into common stock and information as to the ownership of the Company's Stock by each of its directors, named executive officers, and executive officers and by the directors and executive officers as a group. There were no stock options outstanding as of September 12, 2024. Except as otherwise indicated, all shares are owned directly, and the persons named in the table have sole voting and investment power with respect to shares shown as beneficially owned by them. The address for each of our directors, named executive officers, and executive officers is 815 Walker Street, Suite 1155, Houston, Texas 77002.

Name and Position	Shares of Common Stock Owned	Shares of Series D Preferred Stock Owned⁽¹⁾	Amount and Nature of Beneficial Ownership⁽²⁾	Percentage of Beneficial Ownership
Dennis O’Leary, CEO and Director	–	67,647	135,294	*
Dr. Anthony Brown, Director	–	5,882	11,764	*
Craig Atkin, Director	–	–	–	–
Total named executive officers, executive officers, and directors (three persons)	–	73,529	147,058	*

*Less than 1%

	⁽¹⁾	Each share of Series D Preferred Stock is convertible, at the option of the holder, into two shares of our Common Stock.

	⁽²⁾	Under Rule 13d-3 of the Exchange Act, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the above table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on the date of this prospectus.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

Except as disclosed below, for transactions with our executive officers and directors, please see the disclosure under “EXECUTIVE COMPENSATION” above.

Director Independence

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.”

We currently have not established any committees of the Board of Directors. Our Board of Directors may designate from among its members an executive committee and one or more other committees in the future. We do not have a nominating committee or a nominating committee charter. Further, we do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, other than as described above, no security holders have made any such recommendations. The entire Board of Directors performs all functions that would otherwise be performed by committees. Given the present size of our board it is not practical for us to have committees. If we are able to grow our business and increase our operations, we intend to expand the size of our board and allocate responsibilities accordingly.

DESCRIPTION OF SECURITIES

We have authorized capital stock consisting of the following. The total number of shares of capital stock which the Company has the authority to issue is: 20,002,000,000. These shares shall be divided into two classes with 20,000,000,000 shares designated as common stock at $0.0001 par value (the “Common Stock”) and 2,000,000 shares designated as preferred stock at $0.01 par value (the “Preferred Stock”).The Preferred Stock of the Company is issuable by authority of the Board of Director(s) of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as our Board of Directors may determine, from time to time. We have 9,580,068,647 common shares and 88,235 preferred shares outstanding as of the date of this prospectus.

Common Stock

Our Certificate of Incorporation authorize us to issue 20,000,000,000 shares of common stock, par value $0.0001 per share. The holders of outstanding common shares are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. There is no cumulative voting of the election of directors then standing for election. The common shares are not entitled to pre-emptive rights and are not subject to conversion or redemption. Upon liquidation, dissolution or winding up of the Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the common shares after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors. Each outstanding common share is duly and validly issued, fully paid and non-assessable.

Preferred Stock

Our Certificate of Incorporation authorize us to issue 2,000,000 shares of preferred stock, par value $0.01 per share. Our Board of Directors has the authority to issue additional shares of preferred stock in one or more series, and fix for each series, the designation of and number of shares to be included in each such series. Our Board of Directors is also authorized to set the powers, privileges, preferences, and relative participating, optional or other rights, if any, of the shares of each such series and the qualifications, limitations or restrictions of the shares of each such series.

Unless our Board of Directors provides otherwise, the shares of all series of preferred stock will rank on parity with respect to the payment of dividends and to the distribution of assets upon liquidation. Any issuance by us of shares of our preferred stock may have the effect of delaying, deferring or preventing a change of our control or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings and assets available for distribution to the holders of common stock or could adversely affect the rights and powers, including voting rights, of the holders of common stock.

On July 12, 2018, we filed a Certificate of Designation with the State of Delaware amending the designation of its previously designated “Class D Voting Preferred Stock,” designating 100,000 shares of the Company’s preferred stock as “Series D Preferred Stock.” As of July 18, 2018, all shares of the Company’s Class A Voting Preferred Stock, Class B Voting Preferred Stock, and Class C Voting Preferred Stock had been returned to the Company and cancelled. There are presently 88,235 shares of Series D Preferred Stock outstanding.

On December 23, 2021, we amended the Certificate of Designation for the Series D Preferred Stock. Pursuant to the amendment, Section 4 was changed to the following:

Conversion. Each share of Series D Stock shall be convertible, at the sole and exclusive election of the holder of such share of Series D Preferred Stock, into two (2) shares of Common Stock of the Corporation.

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

Stock Options

We currently have no outstanding stock options.

Dividend Policy

We have never declared a cash dividend on our common stock and our Board of Directors does not anticipate that we will pay cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our board of directors and will depend upon our financial condition, operating results, capital requirements, restrictions contained in our agreements and other factors which our Board of Directors deems relevant.

Transfer Agent

We have appointed Standard Registrar and Transfer Company, 440 East 400 South, Suite 200, Salt Lake City, UT 84111, to act as transfer agent for the common stock.

Anti-Takeover Effects of Delaware Law, Our Certificate of Incorporation and Bylaws

Certain provisions of our charter documents and Delaware law could have an anti-takeover effect and could delay, discourage or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might otherwise result in a premium being paid over the market price of our common stock.

Charter and Bylaws

Our Certificate of Incorporation and Bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors, including, among other things:

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

the requirement that a special meeting of stockholders may be called only by a majority vote of our board of directors or by stockholders holding shares of our common stock representing in the aggregate a majority of votes then outstanding, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

the ability of our board of directors, by majority vote, to amend our bylaws, which may allow our board of directors to take additional actions to prevent a hostile acquisition and inhibit the ability of an acquirer to amend our by-laws to facilitate a hostile acquisition.

Delaware Anti-Takeover Statute

Under Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”), a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or (i) our board of directors approves the transaction prior to the stockholder acquiring the 15% ownership position, (ii) upon consummation of the transaction that resulted in the stockholder acquiring the 15% ownership position, the stockholder owns at least 85% of the outstanding voting stock (excluding shares owned by directors or officers and shares owned by certain employee stock plans) or (iii) the transaction is approved by the board of directors and by the stockholders at an annual or special meeting by a vote of 66 2/3% of the outstanding voting stock (excluding shares held or controlled by the interested stockholder). In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any such entity or person.

A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or by-laws approved by its stockholders. We have opted out of Section 203.

Authorized but Unissued Shares

Our authorized but unissued shares of Common Stock and Preferred Stock will be available for future issuance without stockholder approval, except as may be required under the listing rules of any stock exchange on which our Common Stock is then listed. We may use additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of Common Stock and Preferred Stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Limitations on Liability and Indemnification of Officers and Directors

Under our Certificate of Incorporation, our directors have no personal liability to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except (i) for any breach of the duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL as it may from time to time be amended or any successor provision thereto, or (iv) for any transaction from which a director derives an improper personal benefit.

PLAN OF DISTRIBUTION

The common stock offered by this prospectus is being offering by the Selling Security Holder. The common stock may be sold or distributed from time to time by the Selling Share Holder directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market price prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. The Selling Security Holder may use any one or more of the following methods when selling securities:

ordinary brokers’ transactions;

transactions involving cross or block trades;

through brokers, dealers, or underwriters may act solely as agents;

“at the market” into an existing market for the common stock;

in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;

in privately negotiated transactions; or

any combination of the foregoing.

In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from the state’s registration or qualification requirement is available and complied with.

The Selling Security Holder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act with respect to the shares which may be sold pursuant to the EFA.

GHS has informed us that it intends to use a broker-dealer to effectuate all sales, if any, of the common stock that it may purchase from us pursuant to the EFA. Such sales will be made at prices and at terms then prevailing or at prices related to the then current market price. Each such broker-dealer will be an underwriter within the meaning of Section 2(a)(11) of the Securities Act. GHS has informed us that each such broker-dealer will receive commissions from GHS that will not exceed customary brokerage commissions.

Brokers, dealers, underwriters or agents participating in the distribution of the shares as agents may receive compensation in the form of commissions, discounts, or concessions from the Selling Security Holder and/or purchasers of the common stock for whom the broker-dealers may act as agent. The compensation paid to a particular broker-dealer may be less than or in excess of customary commissions. Neither we nor GHS can presently estimate the amount of compensation that any agent will receive.

We know of no existing arrangements between GHS or any other stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares offered by this prospectus. At the time a particular offer of shares is made, a prospectus supplement, if required, will be distributed that will set forth the names of any agents, underwriters or dealers and any compensation from the Selling Security Holder, and any other required information.

We will pay the expenses incident to the registration, offering, and sale of the shares to GHS. We have agreed to indemnify GHS and certain other persons against certain liabilities in connection with the offering of shares of common stock offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. GHS has agreed to indemnify us against liabilities under the Securities Act that may arise from certain written information furnished to us by GHS specifically for use in this prospectus or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities.

GHS has represented to us that at no time prior to the EFA has GHS or its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our common stock or any hedging transaction, which establishes a net short position with respect to our common stock. GHS agreed that during the term of the EFA, it, its agents, representatives or affiliates will not enter into or effect, directly or indirectly, any of the foregoing transactions.

We have advised GHS that it is required to comply with Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the securities offered by this prospectus.

This offering will terminate on the date that all shares offered by this prospectus have been sold by GHS or August 14, 2026, whichever occurs sooner.

Our common stock is quoted on the OTC Markets under the symbol “DPLS.”

The Selling Security Holder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act with respect to the shares which may be sold pursuant to the EFA.

The Selling Security Holder and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Selling Security Holder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

Because the Selling Security Holder is deemed to be an “underwriter” within the meaning of the Securities Act with respect to the shares which may be sold pursuant to the EFA, it will be subject to the prospectus delivery requirements of the Securities Act, including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The Selling Security Holder has advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the Selling Security Holder.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Security Holder without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for us to be in compliance with the current public information requirement under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Security Holder will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the Common Stock by the Selling Security Holder or any other person. We will make copies of this prospectus available to the Selling Security Holder and have informed the Selling Security Holder of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

SHARES ELIGIBLE FOR FUTURE SALE

The sale of a substantial number of shares of our Common Stock, or the perception that such sales could occur, could adversely affect prevailing market prices for our Common Stock. In addition, any such sale or perception could make it more difficult for us to sell equity, or equity related, securities in the future at a time and price that we deem appropriate. If and when this Registration Statement becomes effective, we might elect to adopt a stock option plan and file a Registration Statement under the Securities Act registering the shares of Common Stock reserved for issuance thereunder. Following the effectiveness of any such Registration Statement, the shares of Common Stock issued under such plan, other than shares held by affiliates, if any, would be immediately eligible for resale in the public market without restriction.

The sale of shares of our Common Stock which are not registered under the Securities Act, known as “restricted” shares, typically are effected under Rule 144. As of September 12, 2024, we had outstanding an aggregate of 9,580,068,647 shares of Common Stock of which approximately 1,734,926,653 shares are restricted Common Stock. All our shares of Common Stock might be sold under Rule 144 after having been held for six months. No prediction can be made as to the effect, if any, that future sales of “restricted” shares of our Common Stock, or the availability of such shares for future sale, will have on the market price of our Common Stock or our ability to raise capital through an offering of our equity securities.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

As of December 31, 2023, the Company had no securities authorized for issuance under equity compensation plans either approved or not approved by the Company’s shareholders.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

Dismissal/Resignation of Principal Independent Accountants

Boyle CPA

On January 24, 2022, we informed Boyle CPA, the Company’s independent registered public accounting firm (“Boyle”), of our decision (approved by the Board of Directors) to dismiss Boyle as our independent registered public accounting firm effective as of January 24, 2022. Boyle was not dismissed for any cause.

None of the reports of Boyle on our financial statements for the year ended December 31, 2020 contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles, other than all such reports contained statements indicating there is substantial doubt about our ability to continue as a going concern.

There were no disagreements between the Company and Boyle, for the fiscal year ended December 31, 2020 and any subsequent interim period through January 24, 2022 (date of dismissal) on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Boyle, would have caused them to make reference to the subject matter of the disagreement in connection with its report.

Urish Popeck & Co., LLC

On December 28, 2022, Urish Popeck & Co., LLC (“Urish”), informed the Company, that it would be terminating its engagement with the Company as of December 28, 2022.

None of the reports of Urish, on the Company's financial statements for the past year or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles, except that Urish’s report dated April 15, 2022 included an emphasis of matter for going concern.

There were no disagreements between the Company and Urish, for the most recent fiscal year ended December 31, 2021 and any subsequent interim period through the Effective Date on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Urish, would have caused them to make reference to the subject matter of the disagreement in connection with its report. Further, Urish has not advised the Company that:

information has come to the attention of Urish which made it unwilling to rely upon management's representations, or made it unwilling to be associated with the financial statements prepared by management; or

the scope of the audit should be expanded significantly, or information has come to the attention of Urish that they have concluded will, or if further investigated, might materially impact the fairness or reliability of a previously issued audit report or the underlying financial statements, or the financial statements issued or to be issued covering the fiscal year ended December 31, 2021.

Mazars USA LLP

On July 28, 2023, we dismissed Mazars USA LLP (“Mazars”) as the Company’s independent registered public accounting firm. The dismissal was approved by the Company’s board of directors.

None of the reports of Mazars, on the Company's financial statements for the past year contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles, except that Mazars’ report dated June 23, 2023 included an emphasis of matter for substantial doubt about the Company’s ability to continue as a going concern.

There were no disagreements between the Company and Mazars, for the most recent fiscal year ended December 31, 2022 and any subsequent interim period through the Effective Date on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Mazars, would have caused them to make reference to the subject matter of the disagreement in connection with its report. Further, Mazars has not advised the Company that:

information has come to the attention of Mazars which made it unwilling to rely upon management's representations, or made it unwilling to be associated with the financial statements prepared by management; or

the scope of the audit should be expanded significantly, or information has come to the attention of Mazars that they have concluded will, or if further investigated, might materially impact the fairness or reliability of a previously issued audit report or the underlying financial statements, or the financial statements issued or to be issued covering the fiscal year ended December 31, 2022.

Fruci & Associates II, PLLC

On June 26, 2024, the Company dismissed Fruci & Associates II, PLLC (“Fruci”) as the Company’s independent registered public accounting firm. The dismissal was approved by the Company’s board of directors.

None of the reports of Fruci on the Company's financial statements contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles.

There were no disagreements between the Company and Fruci for the most recent fiscal year ended December 31, 2023 and any subsequent interim period through the Effective Date on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Fruci, would have caused them to make reference to the subject matter of the disagreement in connection with its report. Further, Fruci has not advised the Company that:

	1)	information has come to the attention of Fruci which made it unwilling to rely upon management's representations, or made it unwilling to be associated with the financial statements prepared by management; or

	2)	the scope of the audit should be expanded significantly, or information has come to the attention of Fruci that they have concluded will, or if further investigated, might materially impact the fairness or reliability of a previously issued audit report or the underlying financial statements, or the financial statements issued or to be issued covering the fiscal year ended December 31, 2023.

Engagement of New Principal Independent Accountant

Urish Popeck & Co., LLC

On January 24, 2022, we engaged Urish as our independent registered public accounting firm for the year ended December 31, 2021.

During our two most recent fiscal years, and any subsequent interim period prior to engaging Urish, neither we nor anyone on our behalf consulted Urish regarding either: (i) the application of accounting principles to a specified transaction regarding the Company, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements; or (ii) any matter regarding the Company that was either the subject of a disagreement or a reportable event.

Mazars USA LLP

On February 6, 2023, we engaged Mazars to serve as the Company’s independent registered public accounting firm for the year ended December 31, 2022. During the past two fiscal years ended December 31, 2022 and 2021, and from December 31, 2022 to February 6, 2023, the Company did not consult with Mazars regarding the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company’s financial statements. The decision to engage Mazars was approved by the Company’s board of directors on February 6, 2023.

Fruci & Associates II, PLLC

On July 31, 2023, the Company engaged Fruci & Associates II, PLLC (“Fruci”) to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2023. During the past two fiscal years ended December 31, 2022 and 2021, and from December 31, 2022 to July 31, 2023, the Company did not consult with Fruci regarding the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company’s financial statements. The decision to engage Fruci was approved by the Company’s board of directors on July 31, 2023.

Boladale Lawal & Co.

On June 26, 2024, the Company engaged Boladale Lawal & Co. (“BLC”) to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2023. During the past two fiscal years ended December 31, 2023 and 2022, and from December 31, 2023 to June 26, 2024, the Company did not consult with BLC regarding the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company’s financial statements. The decision to engage BLC was approved by the Company’s board of directors on June 27, 2024.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES

We have entered into indemnification agreements with each of our directors, executive officers and other key employees. The indemnification agreements will require us to indemnify our directors to the fullest extent permitted by Delaware law. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

LEGAL MATTERS

The legality of the issuance of the shares of Common Stock offered by this Prospectus will be passed upon for us by Business Legal Advisors, LLC of Draper, Utah.

EXPERTS

No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the Common Stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.

The financial statements of DarkPulse, Inc. as of December 31, 2022, which include an explanatory paragraph relating to our ability to continue as a going concern, included in this Prospectus have been audited by Mazars, an independent auditor, as stated in their report appearing herein. Such financial statements have been so included in reliance upon the reports of such firm given its authority as experts in accounting and auditing.

The financial statements of DarkPulse, Inc. as of December 31, 2023, which include an explanatory paragraph relating to our ability to continue as a going concern, included in this Prospectus have been audited by BLC, an independent auditor, as stated in their report appearing herein. Such financial statements have been so included in reliance upon the reports of such firm given its authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1 under the Securities Act (SEC File No. 333-276114) relating to the shares of common stock being offered by this prospectus, and reference is made to such registration statement. This prospectus constitutes the prospectus of DarkPulse, Inc., filed as part of the registration statement, and it does not contain all information in the registration statement, as certain portions have been omitted in accordance with the rules and regulations of the SEC.

Upon the effective date of the registration statement of which this prospectus is a part, we will be required to file reports and other documents with the SEC. We do not presently intend to voluntarily furnish you with a copy of our Prospectus. You may read and copy any materials we file with the SEC at the public reference room of the SEC at 100 F Street, NE., Washington, DC 20549, between the hours of 10:00 a.m. and 3:00 p.m., except federal holidays and official closings, at the Public Reference Room. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to you on the Internet website for the SEC at http://www.sec.gov.

INDEX TO FINANCIAL STATEMENTS

As of June 30, 2024 and 2023

and for the Three- and Six-Months Ended June 30, 2024 and 2023

(Unaudited)

Consolidated Balance Sheets	F-2

Consolidated Statements of Operations and Comprehensive Loss	F-3

Consolidated Statements of Stockholders’ Deficit	F-4

Consolidated Statements of Cash Flows	F-5

Notes to the Financial Statements	F-6

As of December 31, 2023 and 2022

and for the Years Ended December 31, 2023 and 2022

Report of Independent Registered Public Accounting Firm (Boladale Lawal & Co., Lagos, Nigeria, PCAOB ID 6993) 2023	F-31- F-32

Report of Independent Registered Public Accounting Firm (Mazars USA LLP, Fort Washington, PA., PCAOB ID 339) 2022	F-33 - F-35

Consolidated Balance Sheets	F-36

Consolidated Statements of Operations	F-37

Consolidated Statements of Comprehensive Loss	F-38

Consolidated Statements of Stockholders’ (Deficit) Equity	F-39

Consolidated Statements of Cash Flows	F-40

Notes to the Consolidated Financial Statements	F-41

F-1

DARKPULSE, INC.

CONSOLIDATED BALANCE SHEETS


	June 30			December 31
	2024			2023
	Unaudited			Audited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	953		$	11,912
Accounts receivable, net		897,399			868,948
Due from related party		–			–
Prepaid expenses and other current assets		75,196			76,185
TOTAL CURRENT ASSETS		973,548			957,045

NON-CURRENT ASSETS:
Property and equipment, net		704,923			743,282
Operating lease right-of-use assets		473,491			496,685
Patents, net		228,149			253,663
Notes receivable, related party		–			–
Investment in related party		–			1,500,000
Other assets, net		161,677			161,677
TOTAL NON-CURRENT ASSETS		1,568,240			3,155,307
TOTAL ASSETS	$	2,541,788		$	4,112,353

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	16,128,871		$	15,663,273
Convertible notes, net		91,971			120,925
Notes payable, current		2,435,691			1,923,868
Derivative liability		94,759			108,958
Loan payable, current		570,487			570,487
Loan payable, related party		361,747			361,747
Secured debenture, current		183,208			183,208
Operating lease liabilities - current		80,400			80,400
Other current liabilities		70,745			70,461
TOTAL CURRENT LIABILITIES		20,017,879			19,083,326

NON-CURRENT LIABILITIES:
Secured debenture		916,042			916,042
Loan payable		291,968			291,968
Operating lease liabilities - non-current		472,220			496,335
TOTAL NON-CURRENT LIABILITIES		1,680,230			1,704,345
TOTAL LIABILITIES		21,698,110			20,787,671

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 June 30, 2024 and December 31, 2023		1			1
Convertible preferred stock - Series D, par value $0.01, 100,000 shares designated, 88,235 shares issued and outstanding as of both June 30, 2024 and December 31, 2023		883			883
Common stock, par value $0.0001, 20,000,000,000 shares authorized, 8,928,508,901 and 8,100,117,720 shares issued as of June 30, 2024 and December 31, 2023, respectively.		863,328			798,346
Treasury stock at cost, 100,000 shares at June 30, 2024 and December 31, 2023		(1,000	)		(1,000	)
Additional paid-in capital		50,140,739			49,733,618
Common Stock to be issued		205,000			205,000
Non-controlling interests		1,207,957			1,217,410
Accumulated other comprehensive income (loss)		(1,253,356	)		(1,253,356	)
Accumulated deficit		(70,319,873	)		(67,376,221	)
TOTAL STOCKHOLDERS' DEFICIT		(19,156,322	)		(16,675,319	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,541,788		$	4,112,353

See the accompanying notes to the unaudited condensed consolidated financial statements

F-2

DARKPULSE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	Unaudited						Unaudited
	2024			2023			2024			2023
REVENUES	$	14,318		$	412,769		$	25,168		$	1,950,602
COST OF REVENUES		671			1,184,848			870			2,411,640
GROSS PROFIT (LOSS)		13,647			(772,079	)		24,298			(461,038	)

OPERATING EXPENSES:
Selling, general and administrative		170,315			615,508			327,426			1,513,368
Salaries, wages and payroll taxes		185,000			578,900			396,877			2,126,108
Bad debt expense		59,817			57,480			59,817			2,422,457
Professional fees		23,260			255,690			180,631			3,206,388
Depreciation and amortization		44,584			220,749			63,872			451,983
Impairment expense		–			–			–			6,925,137
TOTAL OPERATING EXPENSES		482,976			1,728,326			1,028,623			16,645,441

OPERATING LOSS		(469,329	)		(2,500,405	)		(1,004,325	)		(17,106,482	)

OTHER INCOME (EXPENSE):
Interest expense		(415,920	)		(39,647	)		(417,322	)		(157,062	)
Loss on deconsolidation		–			(1,642,795	)		–			(1,642,795	)
Change in fair market of derivative liabilities		(31,457	)		16,334			(31,457	)		16,334
Loss on equity investment		(1,500,000	)		(74,028	)		(1,500,000	)		(139,084	)
Gain on the forgiveness of debt		–			106,794			–			106,794
Restructuring costs		–						–			–
Foreign currency exchange rate variance		–			15,651			–			4,932
TOTAL OTHER INCOME (EXPENSE)		(1,947,377	)		(1,617,691	)		(1,948,779	)		(1,810,881	)

Net loss		(2,416,706	)		(4,118,096	)		(2,953,104	)		(18,917,360	)
Net loss attributable to non-controlling interests		6,444			30,997			9,453			810,693
Net loss attributable to DarkPulse, Inc.	$	(2,410,261	)	$	(4,087,099	)	$	(2,943,650	)	$	(18,106,669	)

Net loss per share - basic and diluted	$	(0.00	)	$	0.00		$	(0.00	)	$	0.00

Weighted average common shares outstanding - basic and diluted		8,191,535,359			7,445,611,222			8,213,651,977			7,202,813,171


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	Unaudited						Unaudited
	2024			2023			2024			2023
NET LOSS		(2,416,706	)		(4,118,096	)		(2,953,104	)		(18,917,360	)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation		1			(395,508	)		1			(857,853	)
COMPREHENSIVE LOSS	$	(2,416,705	)	$	(4,513,604	)	$	(2,953,103	)	$	(19,775,213	)

See the accompanying notes to the unaudited condensed consolidated financial statements

F-3

DARKPULSE, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

For the Six Months Ended June 30, 2024 and 2023

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, 2022

100

88,235

883

6,427,395,360

642,740

–

Common stock issued for cash, net of fees

–

531,671,500

53,167

–

Issuance of common stock for legal settlement

–

297,000,000

29,700

–

Common Stock to be issued

–

Foreign currency adjustment

–

Net loss

–

Balance at March 31, 2023

100

88,235

883

7,256,066,860

725,608

–

Common stock issued for cash, net of fees

–

203,842,371

20,384

–

Issuance of common stock for legal settlement

–

Common Stock to be issued

–

Foreign currency adjustment

–

Net loss

–

Balance at June 30, 2023 (audited)

100

88,235

883

7,459,909,231

745,992

–

Balance at December 31, 2023

100

88,235

883

8,100,117,720

798,346

–

205,000

Common stock issued for cash, net of fees

–

52,162,997

5,218

–

Issuance of common stock for legal settlement

–

Common Stock to be issued

–

Foreign currency adjustment

–

Net loss

–

Balance at March 31, 2024

100

88,235

883

8,152,280,717

803,564

–

205,000

Common stock issued for cash, net of fees

–

498,293,650

48,638

–

Issuance of common stock for conversion of convertible debt

–

111,267,868

11,127

–

Common Stock to be issued

–

166,666,666

–

Foreign currency adjustment

–

Net loss

–

Balance at June 30, 2024 (unaudited)

100

88,235

883

8,928,508,901

863,328

–

205,000


	Treasury stock					Additional paid-in		Non- controlling			Accumulated other comprehensive			Accumulated			Total stockholders’ deficit
	Shares		Amount			capital		interests			loss			deficit			(equity)
Balance at December 31, 2022		100,000	$	(1,000	)	$	44,602,052	$	2,119,566		$	(1,137,902	)	$	(46,555,334	)	$	(328,994	)
Common stock issued for cash, net of fees		–		–			2,034,634		–			–			–			2,087,801
Issuance of common stock for legal settlement		–		–			1,960,200		–			–			–			1,989,900
Common Stock to be issued		–		–			–		–			–			–			–
Foreign currency adjustment		–		–			–		–			(462,345	)		–			(462,345	)
Net loss		–		–			–		(779,696	)		–			(14,019,568	)		(14,799,264	)
Balance at March 31, 2023		100,000	$	(1,000	)	$	48,596,886	$	1,339,870		$	(1,600,247	)	$	(60,574,902	)	$	(11,512,902	)
Common stock issued for cash, net of fees		–		–			517,465		–			–			–			537,849
Issuance of common stock for legal settlement		–		–			–		–			–			–			–
Common Stock to be issued		–		–			–		–			–			–			–
Foreign currency adjustment		–		–			–		–			(395,508	)		–			(395,508	)
Net loss		–		–			–		(30,997	)		–			(4,087,099	)		(4,118,096	)
Balance at June 30, 2023 (audited)		100,000	$	1,000		$	49,114,351	$	1,308,873		$	(1,995,755	)	$	(64,662,001	)	$	(15,488,656	)


Balance at December 31, 2023		100,000	$	(1,000	)	$	49,733,618	$	1,217,410		$	(1,253,356	)	$	(67,376,221	)	$	(16,675,319	)
Common stock issued for cash, net of fees		–		–			35,364		–			–			–			40,580
Issuance of common stock for legal settlement		–		–			100,000		–			–			–			100,000
Foreign currency adjustment		–		–			–		–			–			–			–
Net loss		–		–			–		(3,009	)		–			(533,389	)		(536,398	)
Balance at March 31, 2024		100,000	$	(1,000	)	$	49,868,982	$	1,214,401		$	(1,253,356	)	$	(67,909,610	)	$	(17,071,136	)
Common stock issued for cash		–		–			173,363		–			–			–			222,001
Issuance of common stock for conversion of convertible debt		–		–			98,394		–			–			–			109,521
Foreign currency adjustment		–		–			–		–			–			–			–
Net loss		–		–			–		(6,444	)		–			(2,410,261	)		(2,416,706	)
Balance at June 30, 2024		100,000	$	(1,000	)	$	50,140,739	$	1,207,957		$	(1,253,356	)	$	(70,319,873	)	$	(19,156,322	)

See the accompanying notes to the unaudited condensed consolidated financial statements

F-4

DARKPULSE, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED

Six Months Ended June 30,


	2024			2023
Cash flows from operating activities:
Net loss	$	(2,953,104	)	$	(18,917,360	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		63,872			451,983
Gain on forgiveness of payables and liabilities		–			(53,397	)
Change in fair market of derivative liabilities		31,457			(69,731	)
Loss on equity investment		1,500,000			139,084
Issuance of common stock for legal settlement		–			1,989,900
Amortization of debt discount		28,796
Impairment of goodwill and intangible assets		–			6,925,137
Bad debt expense		59,817			2,422,457
Loss on deconsolidation		–			1,642,795
Operating lease expense		23,195			31,087
Changes in operating assets and liabilities:
Accounts receivable		(28,452	)		80,303
Inventory		–			(8,252	)
Contract assets		–			(73,048	)
Prepaid expenses and other assets		989			20,715
Contract liabilities		–			323,471
Loss provision for contracts in progress		–			15,968
Accounts payable and accrued expenses		983,536			2,699,960
Operating lease liabilities, net		(24,115	)		(30,372	)
Other current liabilities		284			(74,087	)
Other assets		–			–
Other liabilities		–			–
Net cash used in operating activities		(313,725	)		(2,483,389	)
Cash flows from investing activities:
Purchases of property and equipment		–			(102,350	)
Investment in related party		–			–
Investment in joint venture		–			(113,124	)
Issuance of note receivable, related party		(29,817	)		(419,737	)
Advances to related party		(30,000	)		(519,637	)
Net cash used in investing activities		(59,817	)		(1,154,848	)
Cash flows from financing activities:
Issuance of common stock, net of fees		362,582			2,625,650
Proceeds from convertible notes		–			(27,043	)
Net repayments of loan payable		–			–
Net cash provided by financing activities		362,582			2,598,607
Net change in cash		(10,960	)		(1,039,630	)
Effect of exchange rate on cash		–			(972,129	)
Cash at beginning of year		11,912			2,060,332
Cash at end of year		952			48,573

Supplemental disclosure of cash flow information:
Cash paid for interest		77,644			47,948
Cash paid for income taxes	$	–		$	–

Non-cash financing and investing activities:
Conversion of convertible debt		109,521		$	–

See the accompanying notes to the unaudited condensed consolidated financial statements

F-5

DARKPULSE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 consisted of Optilan HoldCo 3 Limited, a company headquartered in Coventry, United Kingdom (“Optilan”) whose focus is in telecommunications, energy, rail, critical network infrastructure, pipeline integrity systems, renewables and security; Remote Intelligence, LLC, a company headquartered in Pennsylvania who provides unmanned aerial drone and unmanned ground crawler (UGC) services to a variety of clients from industrial mapping and ecosystem services, to search and rescue, to pipeline security; Wildlife Specialists, LLC, a company headquartered in Pennsylvania who provides clients with comprehensive wildlife and environmental assessment, planning, and monitoring services; TerraData Unmanned, PLLC, a company headquartered in Florida who custom manufactures NDAA compliant drones and unmanned ground crawlers to meet the needs of its customers; and TJM Electronics West, Inc., a company headquartered in Arizona who is a U.S. manufacturer and tester of advanced electronics, cables and sub-assemblies specializing in advanced package and complex CCA and hardware.

Liquidation/winding up of Optilan (UK) Limited

F-6

The Company is an Unsecured creditor of Optilan (UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known for several months. The Company has approximately $19.4 million intercompany payables due from Optilan (UK), which will increase the Company liabilities for any obligations not repaid. At the time of this filing the Company is still evaluating the full effects of the winding-up order for liquidation and the material adverse effects it will have on the Company’s continued operations and ability to meet future obligations.

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

Liquidation of Optilan (UK) Limited

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S Securities and Exchange Commission for Interim Financial Information. The condensed consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of June 30, 2024, and the results of operations for three and six months and cash flows for the six months ended June 30, 2024 and 2023 have been included.

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.

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated balance sheet as of June 30, 2024, the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023 and of cash flows for the six months ended June 20, 2024 and 2023 have been prepared by the Company, pursuant to the rules and regulations of the SEC for the interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the consolidated results for the interim periods presented and of the consolidated financial condition as of the date of the interim consolidated balance sheet. The results of operations are not necessarily indicative of the results expected for the year ending December 31, 2024.

The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in the Company’s Annual Form 10-K filed with SEC on July 15, 2024.

F-7

Use of 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 condensed consolidated financial statements and related disclosures for the year ended June 3, 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 both June 30, 2024 and December 31, 2023, the Company determined that the allowance for doubtful accounts was $0 and $0, respectively.

Accounts receivable includes retainage amounts for the portion of the contract price earned by us for work performed but held for payment by the customer as a form of security until we reach certain construction milestones or complete the project. As of June 30, 2024 and December 31, 2023, retainage receivable was $0, respectively. The retainage pertaining to Optilan UK was derecognized upon the Optilan Liquidation.

Foreign Currency Translation

The Company’s reporting currency is U.S. Dollars. The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, British Pound (“GBP”) as the functional currency, as well as the Turkish lira, Emiraes Dirham, Azerbajani Manat and Indian Rupee. The accounts of one of the Company’s subsidiaries 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.

*Optilian has been deconsolidated, and as a result, no translation rates were applied for the six-months ending June 30, 2024.

The relevant translation rates are as follows: for the six months ended June, 2024 closing rate at 1.3740 US$:CAD.

F-8

Long-Lived Assets and Goodwill

As a result of the Optilan Liquidation as described in Note 1, management determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s reporting unit may not be recoverable. The qualitative assessment was primarily due to the customer contracts held by Optilan (UK) Limited and the associated revenue projections by the UK subsidiary that is subject to the potential winding up. As such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $2,037,670 pertaining to impairment and goodwill in the consolidated statements of operations. The Company recorded impairment of the indefinite-lived intangible asset of

$356,260, and impairment of goodwill of $1,681,410. The Company has one reporting unit which was evaluated in the impairment test noted above. As a result of the impairment, the Company had a carrying value of $0 pertaining to goodwill and intangible assets as of June 30, 2024 and December 31, 2023.

Property and Equipment

Property and equipment are carried at historical cost less accumulated depreciation. Depreciation is based on the estimated service lives of the depreciable assets and is calculated using the straight-line method. Expenditures that increase the value or productive capacity of assets are capitalized. 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.

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

F-9

Revenue Recognition

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.

F-10

Liquidation of Optilan (UK) Limited

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.

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

F-11

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.

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 11.

Equity Investments

The Company uses the equity method to account for investments in which it has the ability to exercise significant influence over the investee’s operating and financial policies, or in which its holds a partnership or limited liability company interest in an entity with specific ownership accounts, unless it has virtually no influence over the investee’s operating and financial policies. The Company follows the guidance in ASC 323-10-30-2, Joint Ventures, which prescribes the use of the equity method for investments in joint ventures where the Company has significant influence. Equity method investments are recorded at cost and are adjusted to recognize (1) the Company’s share, based on percentage ownership or other contractual basis, of the investee’s net income or loss after the date of investment, (2) amortization of the recorded investment that exceeds the Company’s share of the book value of the investee’s net assets, (3) additional contributions made and dividends received, and (4) impairments resulting from other-than- temporary declines in fair value. Gain (loss) on equity investment includes realized gains or losses upon the sale of the investment and are included as other income (expense) in the consolidated statements of operations and comprehensive (loss).

Per ASC 323-10-30-2, Joint Ventures are accounted for using the equity method, in which the Company initially records its investment at cost, including transaction costs. Under the equity method, an investment in common stock and in-substance common stock is presented on the balance sheet of an investor as a single amount. However, any difference between the cost of the investment and the underlying equity in net assets of an investee — commonly referred to as a basis difference — should be accounted for as if the investee were a consolidated subsidiary.

F-12

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's U.S. subsidiaries were incorporated in 2017, and tax returns have not yet been filed. The Company does not anticipate a tax liability for the years 2022 and 2021, however may be subject to certain penalties. The Company has filed tax returns in Canada for the year ended December 31, 2018, and they are still subject to audit.

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, 2024 and 2023, the Company recorded a loss of $9,453 and $810,693, respectively, attributable to non- controlling interests.

F-13

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, 2024 there was no comprehensive loss for foreign currency translation and 2023 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 June 30, 2024 and December 31, 2023 are as follows:

Schedule of anti dilutive securities
	June 30, 2024		December 31, 2023
Convertible notes		147,874,598		65,827,695
Series D preferred stock		176,470		176,470
		148,051,068		66,004,165

Recent Accounting Pronouncements

F-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 condensed 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 $2,953,104 and $18,917,360 during the six months ended June 30, 2024 and 2023, respectively, and net cash used in operating activities of $313,725 and ($2,483,389), respectively. As of June 30, 2024, the Company’s current liabilities exceeded its current assets by $19,044,331 and has an accumulated deficit of $70,319,873. As of June 30, 2024, the Company had $953 of cash. Lastly, the Optilan Liquidation no longer raises serious concerns about the viability of the Optilan (UK) Limited entity and related operations of the Optilan subsidiaries.

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

Wildlife Specialists, LLC and Remote Intelligence, LLC

On August 30, 2021, the Company closed two separate Membership Interest Purchase Agreements (the “MPAs”) with Remote Intelligence, Limited Liability Company, a Pennsylvania limited liability company (“RI”) and Wildlife Specialists, LLC, a Pennsylvania limited liability company (“WS”) pursuant to which the Company agreed to pay to the majority shareholder of each of RI and WS an aggregate of 15,000,000 shares of the Company’s common stock (at the fair value of $0.07 per share), $500,000 to be paid on the closing date, and an additional $500,000 to be paid 12 weeks from closing date in exchange for 60% ownership of each of RI and WS. RI and WS are now subsidiaries of the Company.

F-15

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 fair values. The excess of the consideration transferred over the estimated fair values of the net assets acquired was recorded as goodwill. The following table summarizes the acquired assets and assumed liabilities for the fair value of the assets and liabilities recognized at the date of acquisition:


	Consideration
Cash	$	500,000
Common stock		978,000
Purchase price	$	1,478,000

The allocation of the total purchase price to the tangible and intangible assets acquired and liabilities assumed by DarkPulse based on the estimated fair values as of August 29, 2021 was as follows:


(Amounts in US$’s)	Amounts Recognized as of Acquisition Date		Measurement Period Adjustments			Fair Value
Cash	$	33,910	$	(6,098	)	$	27,812
Accounts receivable		161,866		170,486			332,352
Other current assets		600		20,947			21,547
Property & equipment		99,490		(77,945	)		21,545
Goodwill		1,191,085		1,597,593			2,788,678
Total assets		1,486,951		1,704,983			3,191,934
Assumed liabilities		393,651		334,950			728,601
Non-controlling interest		–		985,333			985,333
Total Consideration for 60% of equity interests	$	1,478,000	$	–		$	1,478,000

TJM Electronics West, Inc.

On September 8, 2021, the Company entered into and closed the Stock Purchase Agreement with TJM Electronics West, Inc., an Arizona corporation (“TJM”), and TJM’s shareholders, pursuant to which we agreed to purchase all of the equity interests in TJM in exchange for $450,000. TJM is now a wholly-owned subsidiary of the Company.


	Fair Value
Accounts receivable	$	3,400
Property & equipment		91,051
Goodwill		355,549
Total assets		450,000
Total Consideration	$	450,000

F-16

TerraData Unmanned, PLLC

Effective October 1, 2021 the Company entered into and closed the Membership Purchase Agreement (the “TerraData MPA”) with TerraData Unmanned, PLLC, a Florida limited liability company (“TerraData”), and Justin Dee, the sole shareholder of TerraData, pursuant to which the Company agreed to purchase 60% of the equity interests in TerraData in exchange for 3,725,386 shares of the Company’s Common Stock (at the fair value of $0.05 per share) $400,000, subject to adjustments as defined in the TerraData MPA, to be paid within 12 weeks of closing. TerraData is now a subsidiary of the Company. The shares were issued to Justin Dee during 2022.


	Consideration
Cash	$	400,000
Common stock		200,000
Purchase price	$	600,000

The allocation of the total purchase price to the tangible and intangible assets acquired and liabilities assumed by the Company based on the fair values as of October 1, 2021 was as follows:


(Amounts in US$’s)	Fair Value
Cash	$	8,691
Goodwill		992,049
Total assets		1,000,740
Assumed liabilities		740
Non-controlling interest		400,000
Total Consideration for 60% of equity interests	$	600,000

NOTE 5 – REVENUE

The following table is a summary of the Company’s timing of revenue recognition for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Services and products transferred at a point in time	$	5,584	$	76,120	$	9,816	$	764,548
Services and products transferred over time		8,734		336,649		15,352		1,186,054
Total revenue	$	14,318	$	412,769	$	25,168	$	1,950,602

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

Revenue by source consisted of the following for the three and six months ended June 30, 2024 and 2023:

Schedule of revenue by source
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Products	$	–	$	137,342	$	–	$	257,514
Services		14,318		275,427		25,168		1,693,088
Total revenue	$	14,318	$	412,769	$	25,168	$	1,950,602

F-17

Revenue by geographic destination consisted of the following for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
North America	$	14,318	$	155,386	$	25,168	$	374,652
United Kingdom		–		207,404		–		1,389,667
Rest of world		–		49,979		–		186,283
Total revenue	$	14,318	$	412,769	$	25,168	$	1,950,602

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.

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 liabilities on June 30, 2024 are $0 upon the deconsolidation related to the Optilan liquidation.

F-18

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.

NOTE 6 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following as of June 30, 2024 and December 31, 2023:

Schedule of accounts receivable
	June 30, 2024			December 31, 2023
Accounts receivable	$	902,857		$	868,948
Less: Allowance for doubtful accounts		(5,458	)		–
Accounts receivable, net	$	897,399		$	868,948

The Company performed an analysis of the trade receivables related to Wildlife Specialists and determined that $5,458 is uncollectible. As of June 30, 2023, the Company recorded a bad debt provision for this amount.

NOTE 7 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of June 30, 2024 and December 31, 2023:

Schedule of property and equipment
	June 30, 2024			December 31, 2023
Property and equipment	$	1,092,870		$	1,092,870
Leasehold improvements		46,934			46,934
Property and equipment at cost		1,139,804			1,139,804
Less - accumulated depreciation		(434,881	)		(396,522	)
Property and equipment, net	$	704,923		$	743,282

NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following is a summary of activity of goodwill for the three months ended June 30, 2024:

Schedule of goodwill activity
		Goodwill
Balances at December 31, 2023	$	–
Impairment of goodwill pertaining to Optilan		–
Balances at June 30, 2024	$	–

F-19

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, 2024 and 2023, the Company held three U.S. and foreign patents on its intrusion detection technology, which expire in calendar years 2025 through 2034 (depending on the payment of maintenance fees).

The DPTI issued patents cover a System and Method for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber Optic Deformation System Sensor and Method. Maintenance of intellectual property rights and the protection thereof is important to our business. Any patents that may be issued may not sufficiently protect the Company's intellectual property and third parties may challenge any issued 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 six months ended June 30, 2024 and 2023, 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 following is a summary of the DPTI patents:

Schedule of patents
	June 30, 2024			December 31, 2023
Patents	$	904,269		$	904,269
Less: accumulated amortization		(676,120	)		(650,606	)
Patents, net	$	228,149		$	253,663

For the six months ended June 30, 2024 and 2023, the Company amortized $25,524 and $25,514, respectively.

Future expected amortization of patents is as follows:


As of December 31,
2024	$	51,028
2025		51,028
2026		51,028
2027		51,028
Thereafter		49,551
Total patents	$	253,663

F-20

NOTE 9 – JOINT VENTURE

On September 9, 2022, the Company entered into a Joint Venture Agreement with Neural Signals Inc, (“NSI”), for the purpose of developing, marketing and selling products and services based on the patents issued to NSI. The parties established the Joint Venture, Neural Logistics Inc., under a separate entity to conduct business. The Company has 50% ownership in NSI. The Company determined that the investment was accounted for as an equity investment under ASC 323-10-30-2.

During the six months ended June 30, 2024, the Company contributed $0 to the joint venture and recorded a loss on the equity investment of $0.

NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following as of June 30, 2024 and December 31, 2023:


	June 30, 2024		December 31, 2023
Accounts payable	$	13,973,471	$	13,721,562
Accrued liabilities		2,155,400		1,941,711
Total accounts payable and accrued expenses	$	16,128,871	$	15,663,273

NOTE 11 – DEBT

Convertible Notes

The Company uses the Black-Scholes Model to calculate the derivative value of its convertible debt. The valuation result generated by this pricing model is necessarily driven by the value of the underlying common stock incorporated into the model. The values of the common stock used were based on the price at the date of issue of the debt security as of June 30, 2024 and December 31, 2023. In 2024 management determined the expected volatility of 164.21%, a risk-free rate of interest of 5.48%, and contractual lives of the debt of three months. In 2023 management determined the expected volatility of 106.90%, a risk-free rate of interest of 5.48%, and contractual lives of the debt of three months. Management made the determination to use an expected life rather than contractual life for the calculations for the matured debt as of June 30, 2024 and December 31, 2023.

On August 7, 2023, the Company entered into a convertible note for a principal of $57,750. The note bears interest at a rate of 10% per annum and matures after one year. Following 180 days from the note, the noteholder may convert at a discount of 39%. The Company has reserved a sufficient number of shares of common stock for issuance upon full conversion of the note in accordance with the terms.

On September 29, 2023, the Company entered into a convertible note for a principal of $57,750, which was funded on October 4, 2023. The note bears interest at a rate of 10% per annum and matures after one year. Following 180 days from the note, the noteholder may convert at a discount of 39%. The Company has reserved a sufficient number of shares of common stock for issuance upon full conversion of the note in accordance with the terms (see Note 16).

On December 4, 2023, the Company entered into a convertible note for a principal of $51,150, which was funded on December 7, 2023. The note bears interest at a rate of 10% per annum and matures after one year. Following 180 days from the note, the noteholder may convert at a discount of 39%. The Company has reserved a sufficient number of shares of common stock for issuance upon full conversion of the note in accordance with the terms.

As of both June 30, 2024 and December 31, 2023, there was $91,971 and $120,925 of convertible debt outstanding respectively, and a derivative liability of $94,759 and $108,958 respectively.

The summary of convertible notes is as follows:

Schedule of convertible notes
	June 30, 2024			December 31, 2023
Principal Outstanding	$	108,900		$	166,650
Less: unamortized debt discount		(16,929	)		(45,725	)
Convertible notes, net	$	91,971		$	120,925

F-21

Notes Payable

On July 14, 2021, the Company entered a Securities Purchase Agreement (the “GS SPA”) with GS Capital Partners, LLC pursuant to which the Company issued to the Lender a 6% Redeemable Note in the principal amount of $2,000,000 (the “GS Note”). The purchase price of the GS Note is $1,980,000. The GS Note matures on July 14, 2022 upon which time all accrued and unpaid interest will be due and payable. Interest accrues on the GS Note at 6% per annum until the GS Note becomes due and payable. The GS Note is subject to various “Events of Default,” which are disclosed in the GS Note. Upon the occurrence of an “Event of Default,” the interest rate on the GS Note will be 18%. The GS Note is not convertible into shares of the Company’s Common Stock and is not dilutive to existing or future shareholders and the Company used a portion of the proceeds of the GS Note to retire convertible debt. As of June 30, 2024 and December 31, 2023, $2,435,691 and $1,923,868 remains outstanding. As of June 30, the GS note is in default.

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 June 30, 2024 and December 31, 2023:

Schedule of loans payable
	June 30, 2024		December 31, 2023
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
Loan payable, current	$	570,487	$	570,487

RI - SBA EIDL	$	102,597	$	102,597
RI - long-term loans		65,533		65,533
WS - SBA EIDL		26,307		26,307
WS - long-term loans		97,532		97,532
Loan payable, non-current	$	291,968	$	291,968

NOTE 12 – SECURED DEBENTURE

DPTI issued a convertible Debenture to the University (see Note 1) in exchange for the Patents assigned to the Company, in the amount of Canadian $1,500,000, or US$1,491,923 on December 16, 2010, the date of the Debenture. On April 24, 2017 DPTI issued a replacement secured term Debenture in the same CAD 1,500,000 amount as the original Debenture. The interest rate is the Bank of Canada Prime overnight rate plus 1% per annum. The Debenture had an initial required payment of CAD 42,000 (US$33,385) due on April 24, 2018 for reimbursement to the University of its research and development costs, and this has been paid. Interest-only maintenance payments are due annually starting after April 24, 2018. Payment of the principal begins on the earlier of (a) three years following two consecutive quarters of positive earnings before interest, taxes, depreciation and amortization, (b) six years from April 24, 2017, or (c) in the event DPTI fails to raise defined capital amounts or secure defined contract amounts by April 24 in the years 2018, 2019, and 2020. The Company has raised funds in excess of the amount required for 2020, 2019 and 2018. Beginning in 2023, The principal repayment amounts will be due quarterly over a six year period in the amount of Canadian Dollars 62,500. Based on the exchange rate between the Canadian Dollar and the U.S. Dollar on December 31, 2018, the quarterly principal repayment amounts will be US$48,447. The Debenture is secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010. DPTI has pledged the Patents, and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University.

F-22

The Debenture was initially recorded at the $1,491,923 equivalent U.S. Dollar amount of Canadian 1,500,000 as of December 16, 2010, the date of the original Debenture. The liability is being adjusted quarterly based on the current exchange value of the Canadian dollar to the U.S. dollar at the end of each quarter. 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, 2024, and 2023, the Company recorded interest expense of $77,644 and $28,275, respectively. As of June 30, 2024 and December 31, 2023, the debenture liability totaled $1,099,250 and $1,099,250, respectively.

NOTE 13 – LEASES

The following was included in our balance sheet as of June 30, 2024 and December 31, 2023:

Schedule of operating lease
Operating leases	June 30, 2024		December 31, 2023
Assets
ROU operating lease assets	$	473,491	$	496,685

Liabilities
Current portion of operating lease		80,400		80,400
Operating lease, net of current portion		472,220		496,335
Total operating lease liabilities	$	552,620	$	576,735

The weighted average remaining lease term and weighted average discount rate at June 30, 2024 and December 31, 2023 were as follows:


Operating leases	June 30, 2024		December 31, 2023
Weighted average remaining lease term (years)		7.50		7.75
Weighted average discount rate		6.00%		6.00%

Operating Leases

On January 12, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Mumbai, India. This three-year agreement commenced January 12, 2021 with an annual rent of approximately $50,000.

On May 27, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Warwick, United Kingdom. This ten-year agreement commenced May 27, 2021 with an annual rent of approximately $85,000 with the first six months rent free.

On August 31, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Tempe, Arizona. This five-year agreement commenced August 31, 2021 with an annual rent of approximately $192,000.

On October 20, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Warwick, United Kingdom. This ten-year agreement commenced October 20, 2021 with an annual rent of approximately $200,000 with the first six months rent free.

On March 9, 2022, the Company entered into an operating lease agreement to rent office space in Houston, Texas. This ten-year agreement commenced March 9. 2022 with an annual rent of approximately $81,000 with the first twelve months rent free.

On June 28, 2023, the Company recognized a gain on deconsolidation of $1,642,146 related to Optilan (UK) and its subsidiaries leases.

F-23

NOTE 14 - STOCKHOLDERS' EQUITY (DEFICIT)

Preferred Stock

In accordance with the Company’s bylaws, the Company has authorized a total of 2,000,000 shares of preferred stock, par value $0.01 per share, for all classes. As of June 30, 2024 and December 31, 2023, there were 88,335 and 88,335 total preferred shares issued and outstanding for all classes, respectively.

Common Stock

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, 2024 and December 31, 2023, there were 8,928,508,901 and 8,100,117,720 common shares issued, respectively. As of June 30, 2024 and December 31, 2023, there were 8,928,508,901 and 8,100,117,720 common shares outstanding, respectively.

2022 Transactions

The RRA provides that we shall (i) use our best efforts to file with the SEC a Registration Statement within 45 days of the date of the GHS Registration Rights Agreement; and (ii) have the Registration Statement declared effective by the SEC within 30 days after the date the GHS Registration Statement is filed with the SEC, but in no event more than 90 days after the GHS Registration Statement is filed.

2023 Transactions

On April 28, 2023, the Company entered into an Equity Financing Agreement with GHS, to which GHS agreed to Purchase $30,000,000 in shares of our Common Stock over the course of 12 months at 92% of the current market price.

On June 13, 2023, the Company entered into an Amendment to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to Purchase $30,000,000 in shares of our Common Stock over the course of 12 months at 92% of the current market price.

On July 10, 2023, the Company entered into a Second Amendment to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock over the course of 12 months at 92% of the current market price.

On September 5, 2023, we entered into a Stock Purchase Agreement with an investor for the purchase of 100,000,000 shares of Common Stock for a total consideration of $100,000.

Below is a table of all puts made by the Company under the 2022 EFA during 2024:

Schedule of equity financing agreement
Date of Put	Number of Common Shares Issued		Total Proceeds, Net of Discounts		Effective Price per Share	Net Proceeds
1/8/2024		52,162,997	$	44,736	$0.000858	$	40,580
2/29/2024		178,571,428		100,000	$0.000560		100,000
		230,734,425	$	144,376		$	140,580

* Issued shares pursuant to an individual stock purchase agreement with an unrelated investor (not under 2022 EFA)

F-24

In January 2023, the Company entered into a settlement of a dispute between certain stockholders in which the Company decided, during the period ended June 30, 2023, to issue shares to settle the dispute. In January 2023, the Company issued 297,000,000 shares of common stock to the individuals. The fair value of $1,989,900, or $0.0067 per share, was included in professional fees in the consolidated statements of operations in the six months ended June 30, 2024. As part of this transaction $280,536 of accrued liabilities have been reversed.

Stock Options

As of June 30, 2024 and December 31, 2023, the Company had no outstanding stock options.

NOTE 15 - COMMITMENTS & CONTINGENCIES

Potential Royalty Payments

The Company, in consideration of the terms of the debenture to the University of New Brunswick, shall pay to the University a two percent royalty on sales of any and all products or services, which incorporate the Company's patents for a period of five years from April 24, 2018.

Legal Matters

Carebourn Capital, L.P. v. DarkPulse, Inc.

On or about March 23, 2024, Carebourn appealed the final judgment entered by the State Court against Carebourn and in favor of the Company.

F-25

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 March 23, 2024, More appealed the final judgment entered by the State Court against More and in favor of the Company.

On or about March 25, 2024, the Minnesota Appellate Court entered an Order, noting that Minn. R. Civ. App. P. 104.01 provides that appeals must be taken within 60 days of the date of the final judgment and, therefore, it appears that More failed to timely take its appeal. The Appellate Court requested the parties submit informal briefing in response to two questions: (a) Did the time to appeal the December 27, 2024 amended judgment expire on February 26, 2024; and (b) If the answer to (a) is yes, must this appeal be dismissed as untimely. On or about April 4, 2024, DarkPulse filed its informal briefing in response with the Appellate Court. The Company is currently awaiting a decision from the Appellate Court.

Carebourn Capital et al v. Standard Registrar and Transfer et al

On or about November 23, 2022, the Company and the members of the Company’s executive team and board of directors named in this action moved to dismiss the Noteholders’ complaint.

F-26

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 May 22, 2024, the Court scheduled oral arguments on the Company’s sanction motion on July 2, 2024.

DarkPulse, Inc. v. FirstFire Global Opportunities Fund, LLC, and Eli Fireman

Oral arguments were held before the Second Circuit on the Company’s appeal on December 11, 2023.

As of the date hereof, this action has not yet transferred to the Delaware Court. The Company remains committed to actively litigating its claims for relief under RICO.

DarkPulse, Inc., et al v. Crown Bridge Partners, LLC, et al

As of the date hereof, the appeal is fully briefed.

The Company remains committed to actively litigating its claims for relief under RICO.

F-27

TJM West, Inc v Thomas J McCarthy Family Limited Partnership

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

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

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

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

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

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

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

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

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.

During the six months ended June 30, 2024 and 2023, certain executives of the Company received $0 and $120,000, respectively, in Directors fees from Optilan for being members of Optilan’s Board of Directors.

F-28

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 June 30, 2024 and December 31, 2023, the outstanding balance was $226,247.

WS has a loan payable with the former majority shareholder, who is a shareholder in the Company after the acquisition of 60% of WS’s membership interests. The loan is unsecured, non-interest bearing and due on demand. As of both June 30, 2024 and December 31, 2023, the outstanding balance was $135,500.

SPAC Transaction

On October 12, 2022, the Company entered into and closed the Purchase Agreement (the “Agreement”) pursuant to which the Company purchased 2,623,120 shares of Class B Common Stock (the “Class B Common Stock”) and 4,298,496 Private Placement Warrants, each of which is exercisable to purchase one share of Class A Common Stock (the “Warrants,” together, with the Class B Common Stock, the “Securities”) of Gladstone Acquisition Corp., a Delaware corporation (NASDAQ: GLEE) (the “SPAC”), from Gladstone Sponsor, LLC (“Original Sponsor”) for $1,500,000 (the “Purchase Price”). The SPAC subsequently changed its name to Global Systems Dynamics, Inc. (“GSD”).

In addition to the payment of the Purchase Price, the Company also assumed the following obligations: (i) responsibility for all of SPAC’s public company reporting obligations, (ii) the right to provide an extension payment and extend the deadline of the SPAC to complete an initial business combination from 15 months from August 9, 2021 to 18 months for an additional $1,150,000, and (iii) all other obligations and liabilities of the Original Sponsor related to the SPAC. The principal balance of this note shall be payable by GSD on the earlier to occur of: (i) the date on which GSD consummates its initial business combination (the “Business Combination”) and (ii) the date that the winding up of GSD is effective. The note does not bear interest. On February 7, 2023 and March 9, 2023, GSD issued a non-convertible promissory note in the aggregate principal amount of $167,894 ($83,947 per month) to the Company in connection with the extension of the termination date for the GSD’s initial business combination. As of June 30, 2024 and December 31, 2023, the outstanding note receivable was $0 and $0, respectively.

As of June 30, 2024 and December 31, 2023, the Company has $0 and $0, respectively, owed from GSD and included as due from related party on the consolidated balance sheet. These advances were made to pay for certain expenses on behalf of the SPAC, as well as $120,000 in accrued management fees. The advances are unsecured, non-interest bearing and due on demand. On January 24,2024 the SPAC was terminated and the outstanding due from related party was determined to be uncollectible, therefore, written off as bad debt as of December 31, 2023 and the remaining as of June 30, 2024.

NOTE 17 – SUBSEQUENT EVENTS

On April 9, 2024 the court dismissed both Carebourn and Moore’s appeal that concluded the original judgment case in which DarkPulse won its counterclaims. The Company is now actively enforcing the judgments.

On May 2, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 104,166,667 shares of Common Stock for a total consideration of $50,000.

On May 20, 2024 the Company entered into a Stock Purchase Agreements with investors for the purchase of 288,888,889 shares of Common Stock for a total consideration of $130,000.

On May 23, 2024 the Company entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

On June 9, 2024 the Company entered into a Stock Purchase Agreement with an investor for the purchase of 48,888,888 shares of Common Stock for a total consideration of $22,000.

On June 18, 2024 the Company entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

F-29

On July 1, 2024 the Company entered into a Stock Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On July 9, 2024 the Company entered into a Stock Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On July 12, 2024 the Company entered into a Stock Purchase Agreement with an investor for the purchase of 33,333,333 shares of Common Stock for a total consideration of $15,000.

On July 15, 2024 the Company entered into a Stock Purchase Agreement with an investor for the purchase of 88,888,888 shares of Common Stock for a total consideration of $40,000.

On July 18, 2024 the Company entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

F-30

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of

DARKPULSE, INC.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Darkpulse, Inc (the ‘Company’) as of December 31, 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity/ (deficit) and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company suffered an accumulated deficit of $(67,376,221), net loss of $(21,273,043) and a negative working capital of $(18,126,281). The Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to execute its plans and continue operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. Communication of critical audit matters does not alter in any way our opinion on the financial statements taken as a whole and we are not, by communicating the critical audit matters, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Revenue Recognition:

The Company recognizes revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services.

Significant judgment is exercised by the Company in determining revenue recognition for customer agreements, and include the pattern of delivery (i.e., timing of when revenue is recognized) for each distinct performance obligation.

F-31

The related audit effort in evaluating management’s judgments in determining revenue recognition for customer agreements up to the date of liquidation required a high degree of auditor judgment

The procedures performed to address the matter included.

	·	We gained an understanding of internal controls related to revenue recognition.
	·	We evaluated management’s significant accounting policies for reasonableness
	·	We Obtained and reviewed revenue contract agreements for each sample selected
	·	We check the reasonableness of the terms in the customer agreement and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions.
	·	We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements.

Going Concern Uncertainty – See also Going Concern Uncertainty explanatory paragraph above:

As described in Note 3 to the consolidated financial statements, the Company has significant operating losses and a working capital deficiency. Furthermore, the company lost majority of its revenue as a result of the discontinuation of the subsidiary (Optilan UK). The ability of the Company to continue as a going concern is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to execute its plans and continue operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The procedures performed to address the matter included.

	·	We inquired of executive officers, and key members of management, of the Company regarding factors that would have an impact on the Company’s ability to continue as a going concern,
	·	We evaluated management’s plan for addressing the adverse effects of the conditions identified, including assessing the reasonableness of forecasted information and underlying assumptions by comparing to actual results of prior periods and actual results achieved to date, and utilizing our knowledge of the entity, its business and management in considering liquidity needs and the Company’s ability to generate sufficient cash flow,
	·	We assessed the possibility of raising additional debt or credit,
	·	We evaluated the completeness and accuracy of disclosures in the consolidated financial statements.

Impairment:

During the year 2023, the company recognised an impairment loss of $6,948,349 on the balance of Goodwill and other intangible assets recognized on acquisition of Optilan the UK subsidiary company. Management determined that certain events and circumstances occurred that resulted into the liquidation of the subsidiary company (Optilan Uk) as a result, the carrying amount of the Company’s reporting is not recoverable and full impairment was recognised.

Also, during the year, company recognized bad debt expenses of $5,248,218 as a result of impairment on trade and other receivables from which a material amount of $2,422,457 is the effect of doubt on the recoverability of the account receivables from Optilan (UK) customers due to the liquidation.

We considered the computation of the impairment charged on Goodwill and other intangible assets and bad debt written off on account receivables as a critical audit matter because it required an estimation and significant judgement by management.

The procedures performed to address the matter included.

	·	We reviewed the company impairment assessment memo
	·	We reviewed the primary events and circumstances that resulted into the liquidation of the subsidiary.
	·	We circularized the independent legal advisor and other related parties
	·	We inquired from the management about the possibility of contingent liabilities on the disputed contract.
	·	We reviewed the bad debt schedule and board approval on bad debt written off.
	·	We evaluated the adequacy of the Company’s disclosures in the financial statements related to the impairment.

BOLADALE LAWAL & CO.

(Chartered Accountants)

(PCAOB ID 6993)

Lagos, Nigeria

We have served as the Company’s auditor since 2024.

July 15, 2024

F-32

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of DarkPulse, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of DarkPulse, Inc. (the “Company”) as of December 31, 2022, and the related consolidated statements of operations, comprehensive loss, stockholders’ (deficit) equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

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

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred significant operating losses and negative cash flows. The Company also has an accumulated deficit of approximately $46.6 million at December 31, 2022. The Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities to execute its plans and continue operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

F-33

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.

Revenue Recognition

As discussed in Note 2 to the financial statements, the Company recognizes revenue from the sale of services, which consist primarily of advanced technology solutions for integrated communications and security systems. At contract inception, the Company assesses the goods and services promised in the contract with customers and identifies a performance obligation for each, in accordance with ASC 606, Revenue from Contracts with Customers. To determine the performance obligation, the Company considers all products and services promised in the contract. Revenue is recognized over time using the input measure as it most accurately represents the value of goods and services transferred to the customer.

The primary procedures we performed to address this critical audit matter included:

	·	We reviewed the underlying agreements and contracts and assessed the terms to determine if the performance obligation was met and for the correct amount.
	·	We recalculated the mathematical accuracy of the revenue.
	·	We tested the contract costs to ensure they are being properly recorded.
	·	We assessed the adequacy of any loss provisions by reviewing the Company’s estimated costs to complete contracts and to ensure it is sufficient.
	·	We recalculated the margins on contracts to ensure they are consistent over the entire term of the contract and its related performance obligation.

Impairment Analysis

As discussed in Note 8 to the financial statements, management performed their annual impairment analysis during the year ended December 31, 2022. As disclosed by management, the determination of fair value using the income approach requires the use of significant estimates and assumptions, including forecasted revenue growth rates and discount rates. The determination of fair value using the market multiples approach requires the use of revenue multiples, as applicable, based on operating data from guideline publicly traded companies. If the fair value of the reporting unit is less than its carrying value, a non-cash impairment charge is recorded in an amount equal to that difference with the loss not to exceed the total amount of goodwill allocated to the reporting unit. Additionally, intangible assets subject to amortization were also reviewed for impairment. An impairment on the intangible assets shall be recognized only if the carrying amount is not recoverable and exceeds its fair value. The carrying amount of an intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset. An impairment loss shall be measured as the amount by which the carrying amount of an intangible asset exceeds its fair value.

As a result of the annual impairment assessment, the Company concluded that there was impairment to the intangible assets and goodwill in the aggregate of approximately $12.2 million.

F-34

The principal considerations for our determination that performing procedures relating to the impairment analyses is a critical audit matter are the significant judgment by management when developing the fair value measurements of the reporting unit, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management's significant assumptions related to forecasted revenue growth rates, discount rates, and revenue multiples, as applicable. In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (1) testing management’s process for developing the fair value estimates of the reporting units, (2) evaluating the allocation of assets and liabilities to the reporting units, (3) evaluating the appropriateness of the income and market approaches, (4) testing the completeness and accuracy of the underlying data used in the income and market multiple approaches, and (5) evaluating the significant assumptions used by management related to forecasted revenue growth rates, discount rates, and revenue multiples, as applicable. Evaluating management’s assumptions related to forecasted revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (1) the current and past performance of the reporting unit, (2) the actions necessary to achieve future forecasts, (3) the consistency with external market data, and (4) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the income approach and the discount rates, as well as the selection and calculation of revenue multiples, as applicable.

The primary procedures we performed to address this critical audit matter included:

	·	We evaluated and recomputed the methodology used in connection with the Company’s impairment analysis, including review of the appropriate accounting literature, valuation model, significant assumptions used, and the completeness and accuracy of the underlying data used;
	·	With the assistance of our valuation specialists, we assessed the significant assumptions used by management relating to forecasted revenue growth rates, discount rates, and revenue multiples as applicable.;
	·	We assessed the appropriate interpretation and application used by management of the FASB’s Accounting Standards Codification for the impairment analysis including topics ASC 350 - Intangibles – Goodwill and Other, ASC 360 - Property, Plant, and Equipment, and ASC 820 – Fair Value Measurements and Disclosures;
	·	We evaluated the reasonableness of the Company’s projections of future cash flows by comparing the assumptions used in the projections to actual results and other information deemed necessary as well as tested the mathematical accuracy of the calculations;
	·	We evaluated the adequacy of the Company’s disclosures in the financial statements related to the impairment.

/s/ Mazars USA LLP

We have served as the Company’s auditor since 2023.

Fort Washington, PA

June 23, 2023

F-35

DARKPULSE, INC.

Consolidated Balance Sheets


	December 31
	2023			2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,912		$	2,060,332
Accounts receivable, net		868,948			2,952,293
Inventory		–			23,825
Due from related party		–			318,025
Prepaid expenses and other current assets		76,185			180,530
Contract assets		–			1,439,844
TOTAL CURRENT ASSETS		957,045			6,974,849

NON-CURRENT ASSETS:
Property and equipment, net		743,282		$	1,933,871
Operating lease right-of-use assets		496,685			2,724,226
Patents, net		253,663			267,875
Notes receivable, related party		–			1,049,248
Investment in related party		1,500,000			1,500,000
Joint venture		–			46,724
Goodwill		–			6,462,153
Other assets, net		161,677			689,869
Intangible assets, net		–			390,330
TOTAL NON-CURRENT ASSETS		3,155,307			15,064,296
TOTAL ASSETS	$	4,112,352		$	22,039,145

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	15,663,272		$	10,736,373
Contract liabilities		–			2,215,212
Loss provision for contracts in progress		–			945,928
Convertible notes, net		120,925			378,263
Notes payable, current		1,923,868			2,000,000
Derivative liability		108,958			306,467
Loan payable, current		570,487			472,700
Loan payable, related party		361,747			361,747
Secured debenture, current		183,208			136,353
Operating lease liabilities - current		80,400			512,373
Other current liabilities		70,461			472,217
TOTAL CURRENT LIABILITIES		19,083,326			18,537,633

NON-CURRENT LIABILITIES:
Secured debenture		916,042			954,474
Loan payable		291,968			328,508
Operating lease liabilities - non-current		496,335			2,547,524
TOTAL NON-CURRENT LIABILITIES		1,704,345			3,830,506
TOTAL LIABILITIES		20,787,671			22,368,139

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 December 31, 2023 and December 31, 2022		1			1
Convertible preferred stock - Series D, par value $0.01, 100,000 shares designated, 88,235 shares issued and outstanding as of both December 31, 2023 and December 31, 2022		883			883
Common stock, par value $0.0001, 20,000,000,000 shares authorized, 8,100,117,720 and 6,427,395,360 shares issued as of December 31, 2023 and December 31, 2022, respectively,		798,346			642,740
Treasury stock at cost, 100,000 shares at December 31, 2023 and December 31, 2022		(1,000	)		(1,000	)
Additional paid-in capital		49,733,618			44,602,052
Common Stock to be issued		205,000			–
Non-controlling interests		1,217,410			2,119,566
Accumulated other comprehensive income (loss)		(1,253,356	)		(1,137,902	)
Accumulated deficit		(67,376,221	)		(46,555,334	)
TOTAL STOCKHOLDERS' DEFICIT		(16,675,319	)		(328,994	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	4,112,352		$	22,039,145

See notes to consolidated financial statements.

F-36

DARKPULSE, INC.

Consolidated Statement of Operations


	Years Ended
	December 31,
	2023			2022
REVENUES	$	2,020,971		$	9,100,255
COST OF REVENUES		2,446,756			14,543,529
GROSS PROFIT (LOSS)		(425,785	)		(5,443,274	)

OPERATING EXPENSES:
Selling, general and administrative		2,033,861			4,966,702
Salaries, wages and payroll taxes		2,630,225			7,457,491
Professional fees		3,109,717			3,718,171
Depreciation and amortization		523,147			1,568,405
Bad debt expense		5,248,218			–
Impairment expense		6,948,350			12,222,598
Gain on forgiveness of payables		–			(312,685	)
TOTAL OPERATING EXPENSES		20,493,518			29,620,682

OPERATING LOSS		(20,919,303	)		(35,063,956	)

OTHER INCOME (EXPENSE):
Interest expense		(642,506	)		(621,132	)
Loss on deconsolidation		(1,642,146	)		–
Change in fair market of derivative liabilities		167,582			227,286
Loss on equity investment		(159,849	)		(56,781	)
Gain on the forgiveness of debt		1,484,799			–
Foreign currency exchange rate variance		(11,620	)		(2,922	)
TOTAL OTHER INCOME (EXPENSE)		(803,740	)		(453,549	)

Net loss		(21,723,043	)		(35,517,505	)
Net loss attributable to non-controlling interests		902,156			238,661
Net loss attributable to Darkpulse, Inc.	$	(20,820,887	)	$	(35,278,844	)

Net loss per share - basic and diluted	$	(0.00	)	$	(0.01	)

Weighted average common shares outstanding - basic and diluted		7,411,100,872			5,713,495,965

See notes to consolidated financial statements.

F-37

DARKPULSE, INC.

Consolidated Statements of Comprehensive Loss


	Years Ended
	December 31,
	2023			2022
NET LOSS	$	(21,723,043	)	$	(35,517,505	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation		(115,454	)		(853,439	)
COMPREHENSIVE LOSS	$	(21,838,497	)	$	(36,370,944	)

See notes to consolidated financial statements.

F-38

DARKPULSE, INC.

Consolidated Statement of Stockholders’ Deficit

For the Years Ended December 31, 2023 and 2022

Preferred stock

Common stock

Additional

Non-

Accumulated other

Total stockholders’

Series A

Series D

Common stock

to be issued

Treasury stock

paid-in

Controlling

comprehensive

Accumulated

(deficit)

Amount

Shares

Amount

Amount

capital

Interests

loss

deficit

equity

Balance at December 31, 2021

–

88,235

883

5,197,821,885

519,782

–

100,000

(1,000

)

20,248,703

2,358,227

(284,463

)

(11,276,490

)

11,565,642

Conversion of convertible notes

–

Issuance of preferred shares

100

–

)

–

Common stock issued for cash

–

1,259,746,466

125,975

–

24,150,333

–

24,276,308

Common shares returned and cancelled

–

(33,898,377

)

(3,390

)

–

3,390

–

Common stock issue for TerraData acquisition

–

3,725,386

373

–

199,627

–

200,000

Foreign currency adjustment

–

(853,439

)

–

(853,433

)

Net loss

–

(238,661

)

–

(35,278,844

)

(35,517,505

)

Balance at December 31, 2022

100

88,235

883

6,427,395,360

642,740

–

100,000

(1,000

)

44,602,052

2,119,566

(1,137,902

)

(46,555,334

)

(328,994

)

Common stock issued for cash, net of fees

–

1,375,722,360

137,573

–

3,364,699

–

3,502,272

Issuance of common stock for legal settlement

–

297,000,000

29,700

–

1,960,200

–

1,989,900

Common Stock to be issued

–

(11,667

)

–

205,000

(193,333

)

(115,454

)

Foreign currency adjustment

–

(115,454

)

(115,454

)

Net loss

–

(902,156

)

–

(20,820,887

)

(21,723,043

)

Balance at December 31, 2023

100

88,235

883

8,100,117,720

798,346

–

205,000

100,000

(1,000

)

49,733,618

1,217,410

(1,253,356

)

(67,376,221

)

(16,675,319

)

See notes to consolidated financial statements.

F-39

DARKPULSE, INC.

Consolidated Statement of Cash Flows


	Year Ended
	December 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(21,723,043	)	$	(35,517,505	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		523,147			1,568,405
Gain on forgiveness of payables and liabilities		–			(312,685	)
Change in fair market of derivative liabilities		(167,582	)		(227,286	)
Impairment of goodwill and intangible assets		6,948,350			12,222,598
Loss on equity investment		159,849			56,781
Issuance of common stock for legal settlement		1,989,900			–
Bad debt expense		5,248,218			–
Loss on deconsolidation		1,642,146			–
Operating lease expense		657,848			–
Gain on forgiveness of debt		(1,484,799	)		–
Changes in operating assets and liabilities:
Accounts receivable		(1,762,213	)		1,498,978
Inventory		23,825			(11,877	)
Contract assets		1,494,163			(835,161	)
Prepaid expenses and other assets		108,345			154,245
Contract liabilities		(2,348,773	)		3,498,906
Loss provision for contracts in progress		(974,031	)		784,469
Accounts payable and accrued expenses		4,802,434			(2,609,891	)
Operating lease liabilities, net		(2,463,942	)		(412,587	)
Other current liabilities		(401,756	)		–
Other assets		2,074,700			–
Other liabilities		–			(1,556,932	)
Net cash used in operating activities		(5,653,214	)		(21,738,542	)
Cash flows from investing activities:
Purchases of property and equipment		(102,350	)		(2,074,627	)
Investment in related party		–			(1,500,000	)
Investment in joint venture		(113,125	)		(103,505	)
Issuance of note receivable, related party		–			(1,049,248	)
Advances to related party		–			(318,025	)
Net cash used in investing activities		(215,475	)		(5,045,405	)
Cash flows from financing activities:
Proceeds from sale of common stock, net of fees		3,502,272			24,276,308
Proceeds from convertible notes		145,000			–
Net repayments of loan payable		(14,885	)		(110,507	)
Net cash provided by financing activities		3,632,387			24,165,801
Net change in cash		(2,236,303	)		(2,618,146	)
Effect of exchange rate on cash		187,883			1,019,632
Cash at beginning of year		2,060,332			3,658,846
Cash at end of year	$	11,912		$	2,060,332

Supplemental disclosure of cash flow information:
Cash paid for interest	$	47,948		$	–
Cash paid for income taxes	$	–		$	–

Non-cash financing and investing activities:
Stock issued for acquisition of TerraData	$	–		$	200,000

See notes to consolidated financial statements.

F-40

DARKPULSE, INC.

Notes to the Consolidated Financial Statements

For the Years ended December 31, 2023 and 2022

NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION

Organization and Description of Business

The Company’s subsidiaries consist of DarkPulse UK, Ltd which concentrates on the sale and engineering of distributed fiber optic sensors; Optilan HoldCo 3 Limited, a company headquartered in Coventry, United Kingdom (“Optilan”) whose has ceased its business operations; Remote Intelligence, LLC, a company headquartered in Pennsylvania who provides unmanned aerial drone and unmanned ground crawler (UGC) services to a variety of clients from industrial mapping and ecosystem services, to search and rescue, to pipeline security; Wildlife Specialists, LLC, a company headquartered in Pennsylvania who provides clients with comprehensive wildlife and environmental assessment, planning, and monitoring services; TerraData Unmanned, PLLC, a company headquartered in Florida who custom manufactures NDAA compliant drones and unmanned ground crawlers to meet the needs of its customers; and DarkPulse Manufacturing formerly TJM Electronics West, Inc., a company headquartered in Arizona who is a U.S. manufacturer and tester of advanced electronics, cables and sub-assemblies specializing in advanced package and complex CCA and hardware.

Liquidation/winding up of Optilan (UK) Limited

The Company is an Unsecured creditor of Optilan (UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known for several months. The Company has approximately $19.4 million intercompany payables due from Optilan (UK), which will increase the Company liabilities for any obligations not repaid. At the time of this filing the Company is still evaluating the full effects of the winding-up order for liquidation and the material adverse effects it will have on the Company’s continued operations and ability to meet future obligations.

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

F-41

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.

Our consolidated financial statements as of December 31, 2022 and 2021 include the accounts of DarkPulse Inc. and its subsidiaries:

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

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

On August 9, 2021, the Company entered into a Share Purchase Agreement with Optilan Guernsey Limited and Optilan Holdco 2 Limited (the “Sellers”), pursuant to which the Company purchased from the Sellers all of the issued and outstanding equity interests of Optilan HoldCo 3 Limited, a private company incorporated in England and Wales (“Optilan”) for £1.00. In connection with the acquisition, the Company acquired $14,828,459 in assets and assumed liabilities totaling $25,179,320. In 2023, Optilan was deemed insolvent by the entered liquidation. See Note 1.

On August 30, 2021, the Company closed two separate Membership Interest Purchase Agreements with Remote Intelligence, Limited Liability Company, a Pennsylvania limited liability company (“RI”) and Wildlife Specialists, LLC, a Pennsylvania limited liability company (“WS”) pursuant to which the Company agreed to pay to the majority shareholder of each of RI and WS an aggregate of 15,000,000 shares of the Company’s Common Stock and $1,000,000 in exchange for 60% ownership of each of RI and WS.

Effective October 1, 2021 the Company entered into and closed the Membership Purchase Agreement with TerraData Unmanned, PLLC, a Florida limited liability company (“TerraData”), and Justin Dee, the sole shareholder of TerraData, pursuant to which the Company agreed to purchase 60% of the equity interests in TerraData in exchange for 3,725,386 shares of the Company’s Common Stock and $400,000.

Use of Estimates

F-42

Cash

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, 2023.

Each month, the Company reviews its receivables on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or perceived collection issues. Any balances that are eventually deemed uncollectible are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2023 and 2022, the Company determined that the allowance for doubtful accounts was $0 and $3,320,983, respectively. The allowance pertaining to Optilan UK was derecognized upon the Optilan Liquidation.

Accounts receivable includes retainage amounts for the portion of the contract price earned by us for work performed but held for payment by the customer as a form of security until we reach certain construction milestones or complete the project. As of December 31, 2023 and 2022, retainage receivable was $0 and $824,777, respectively. The retainage pertaining to Optilan UK was derecognized upon the Optilan Liquidation.

Foreign Currency Translation

The Company’s reporting currency is US Dollars. The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, British Pound (“GBP”) as the functional currency, as well as the Turkish lira, Emiraes Dirham, Azerbajani Manat and Indian Rupee. The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, Canadian Dollar (“CAD”) as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders' equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting 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.

F-43

The relevant translation rates are as follows: for the year ended December 31, 2023 a closing rate at 1.2197 US$: GBP, average rate at 1.2384 US$:GBP, and closing rate of 1.27 US$:CAD.

The relevant translation rates are as follows: for the year ended December 31, 2022 a closing rate at 1.20582 US$: GBP, average rate at 1.23710 US$:GBP and for the Optilan acquisition closing rate at 1.375103 US$: CAD.

Long-Lived Assets and Goodwill

During the year ended December 31, 2022, management determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s reporting unit may not be recoverable. The qualitative assessment was primarily due to underperformance of the Company’s subsidiaries as compared to the Company’s initial projections at the time of each respective acquisition. Specifically, in 2022 the Company determined that certain revenue targets would not be achieved and anticipated costs to complete projects were higher than forecasted. As such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $12,222,598 pertaining to impairment and goodwill in the consolidated statements of operations. The Company recorded impairment of the indefinite-lived intangible asset of $2,703,456, and impairment of goodwill of $9,519,143. The Company has one reporting unit which was evaluated in the impairment test noted above. Refer to Note 7.

During the year ended December 31, 2023, as a result of Optilan Liquidation as described in Note 1, management determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s reporting unit may not be recoverable. The qualitative assessment was primarily due to the customer contracts held by Optilan (UK) Limited and the associated revenue projections by the UK subsidiary that is subject to the potential winding up. As such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $6,948,349 pertaining to impairment and goodwill and intangible assets in the consolidated statements of operations. The Company has one reporting unit which was evaluated in the impairment test noted above. As a result of the impairment, the Company had a carrying value of $0 pertaining to goodwill and intangible assets as of December 31, 2023.

Property and Equipment

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The estimated useful lives of property and equipment are generally as follows:

Schedule of estimated useful lives
		Years
Office furniture and fixtures		4
Plant and equipment		4-8
Leasehold Improvements		10
Motor vehicles		3

Revenue Recognition

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Cost of Revenues

Concentration of Credit Risk

As of December 31, 2023, one customer accounted for 39% of gross accounts receivable.

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

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Fair Value of Financial Instruments

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 its holds a partnership or limited liability company interest in an entity with specific ownership accounts, unless it has virtually no influence over the investee’s operating and financial policies. The Company follows the guidance in ASC 323-10-30-2, Joint Ventures, which prescribes the use of the equity method for investments in joint ventures where the Company has significant influence. Equity method investments are recorded at cost and are adjusted to recognize (1) the Company’s share, based on percentage ownership or other contractual basis, of the investee’s net income or loss after the date of investment, (2) amortization of the recorded investment that exceeds the Company’s share of the book value of the investee’s net assets, (3) additional contributions made and dividends received, and (4) impairments resulting from other-than-temporary declines in fair value. Gain (loss) on equity investment includes realized gains or losses upon the sale of the investment and are included as other income (expense) in the consolidated statements of operations and comprehensive (loss).

F-47

Income Taxes

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's U.S. subsidiaries were incorporated in 2017, and tax returns have not yet been filed. The Company does not anticipate a tax liability for the years 2023 and 2022, however may be subject to certain penalties. The Company has filed tax returns in Canada for the year ended December 31, 2018, and they are still subject to audit.

Non-controlling Interests

During the years ended December 31, 2023 and 2022, the Company recorded a loss of $902,156 and $238,661 respectively, attributable to non-controlling interests.

F-48

Comprehensive Loss

Comprehensive loss includes net loss well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. During the years ended December 31, 2023 and 2022, the Company’s only element of other comprehensive loss was foreign currency translation.

Stock-based Compensation

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 December 31, 2023 and 2022 are as follows:

Schedule of anti dilutive shares
	Years Ended
	2023		2022
Convertible notes		210,081,967		65,827,695
Series D preferred stock		176,470		176,470
		210,258,437		66,004,165

F-49

Recently Issued Accounting Pronouncements

In November 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, issued by the Financial Accounting Standards Board. This ASU requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in the recognition of contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The Company expects that there would be no material impact on the Company’s consolidated financial statements upon the adoption of this ASU.

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.

NOTE 3 – LIQUIDITY AND GOING CONCERN

The Company generated net losses of $21,723,043 and $35,517,505 during the years ended December 31, 2023 and 2022, respectively, and net cash used in operating activities of $5,653,214 and $21,738,542, respectively. As of December 31, 2023, the Company’s current liabilities exceeded its current assets by $18,126,281 and an accumulated deficit of $67,376,221. As of December 31, 2023, the Company had $11,912 of cash.

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NOTE 4 – REVENUE

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

Schedule of timing of revenue
	Years Ended
	2023		2022
Services and products transferred at a point in time	$	788,179	$	3,843,276
Services and products transferred over time		1,232,792		5,256,979
Total revenue	$	2,020,971	$	9,100,255

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 years ended December 31, 2023 and 2022:

Schedule of revenue by source
	Years Ended
	2023		2022
Products	$	329,400		560,407
Services		1,691,571		8,539,849
Total revenue	$	2,020,971	$	9,100,255

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


	Years Ended
	2023		2022
North America	$	437,536	$	1,585,568
United Kingdom		1,583,435		5,894,060
Rest of world		–		1,620,627
Total revenue	$	2,020,971	$	9,100,255

F-51

Contracts

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

As of December 31, 2022, the Company had backlog of approximately $7,079,000. During the year ended December 31, 2022, there was approximately $4,200,000 in revenue recognized pertaining to backlog as of December 31, 2021.

Contract Assets and Liabilities

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.

F-52

Contract assets consist of the following:


	December 31,
	2023		2022
Costs and estimated earnings in excess of billings on uncompleted contracts	$	–	$	1,439,844
Total contract assets	$	–	$	1,439,844

Contract liabilities consist of the following:


	December 31,
	2023		2022
Billings in excess of costs and estimated earnings on uncompleted contracts	$	–	$	2,215,212
Total contract liabilities	$	–	$	2,215,212

Contract assets and liabilities on December 31, 2023 are $0 upon the deconsolidation related to the Optilan liquidation.

The following table is a summary of the Company’s activity of contract liabilities related to contracts with customers.

Rollforward of contract liabilities
	Total
Balance at December 31, 2021	$	6,019,371
Additions through advance billings to or payments from vendors		3,710,528
Revenue recognized from current period advance billings to or payments from vendors		(7,514,687	)
Balance at December 31, 2022		2,215,212
Deconsolidation		(2,215,212	)
Balance at December 31, 2023	$	–

Variable Consideration

F-53

NOTE 5 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

Schedule of accounts receivable
	December 31,
	2023		2022
Accounts receivable	$	868,948	$	6,273,276
Less: Allowance for doubtful accounts		–		(3,320,983	)
Accounts receivable, net	$	868,948	$	2,952,293

NOTE 6 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

Schedule of property and equipment, net
	December 31,
	2023			2022
Property and equipment	$	1,092,870		$	3,942,421
Leasehold improvements		46,934			46,934
Property and equipment at cost		1,139,804			3,989,355
Less - accumulated depreciation		(396,522	)		(2,055,484	)
Property and equipment, net	$	743,282		$	1,933,871

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

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NOTE 7 - GOODWILL AND INTANGIBLE ASSETS

Goodwill

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


	Goodwill
Balances at December 31, 2021		17,088,501
Impairment		(9,519,143	)
Foreign exchange translation		(1,107,205	)
Balances at December 31, 2022	$	6,462,153
Impairment of goodwill		(6,948,349	)
Foreign currency translation		306,196
Balances at December 31, 2023	$	–

Intangible Assets, Net

In connection with the Optilan acquisition, the Company recognized an intangible asset, a trade name, of $4,033,638. The trade name has a useful life of 25 years.

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

The following is a summary of intangible assets, net:

Summary of intangible assets
	December 31,
	2023			2022
Trade name per business combination	$	4,033,638		$	4,033,638
Impairment		(3,059,716	)		(2,703,456	)
Less: accumulated amortization		(195,416	)		(161,346	)
Foreign exchange translation		(778,506	)		(778,506	)
Intangible assets, net	$	–		$	390,330

Amortization expense was $34,070 and $161,346 for the years ended December 31, 2023 and 2022, respectively.

F-55

Patents - Intrusion Detection Intellectual Property

The Company relies on patent laws and restrictions on disclosure to protect its intellectual property rights. As of December 31, 2023 and 2022, the Company held three U.S. and foreign patents on its intrusion detection technology, which expire in calendar years 2025 through 2034 (depending on the payment of maintenance fees).

For the years ended December 31, 2023 and 2022, the Company had patent amortization costs on its intrusion detection technology totaling $14,212 and $75,087, respectively. Patents costs are being amortized over the remaining life of each patent, which is from 7 to 16 years.

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

Schedule of patents
	December 31,
	2023			2022
Patents	$	904,269		$	904,269
Less: accumulated amortization		(650,606	)		(636,394	)
Patents, net	$	253,663		$	267,875

F-56

Future expected amortization of patents is as follows:


As of December 31,
2024		51,028
2025		51,028
2026		51,028
2027		51,028
Thereafter		49,551
Total patents	$	253,663

NOTE 8 – JOINT VENTURE

During the year ended December 31, 2023, the Company contributed $113,124 to the joint venture and recorded a loss on the equity investment of $159,849. During the year ended December 31, 2022, the Company contributed $103,505 to the joint venture and recorded a loss on the equity investment of $51,753.

NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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


	December 31,
	2023		2022
Accounts payable	$	13,721,561	$	8,677,648
Accrued liabilities		1,941,711		2,058,725
Total accounts payable and accrued expenses	$	15,663,272	$	10,736,373

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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 December 31, 2023 and 2022. In 2023 management determined the expected volatility of 106.90%, a risk-free rate of interest of 5.48%, and contractual lives of the debt of three months. In 2022 management determined the expected volatility of 140.30%, a risk-free rate of interest of 4.73%, and contractual lives of the debt of three months. Management made the determination to use an expected life rather than contractual life for the calculations for the matured debt as of December 31, 2023 and 2022.

As of December 31, 2023 and, 2022, there was $166,650 and $378,263 of convertible debt principal outstanding. During the year ended December 31, 2023 and 2022, $12,025 and $0 of the debt discount was amortized.

The summary of convertible notes are:

Schedule of convertible notes
	2023			2022

Principal Outstanding	$	166,650		$	378,263
Less: unamortized debt discount		(45,725	)		–
Convertible notes, net	$	120,925		$	378,263

The table below details the Company's outstanding convertible notes and related derivative liability:

	Face Amount				Derivative Liability
	12/31/2023		12/31/2022		12/31/2023		12/31/2022
1800 Diagonal Lending	$	166,650	$	–	$	108,958	$	–
Carebourn		–		90,228		–		71,410
Carebourn		–		162,150		–		128,331
More Capital		–		72,488		–		57,369
EMA		–		53,397		–		49,357
	$	166,650	$	378,263	$	108,958	$	306,467

F-58

During the years ended December 31, 2023 and 2022, change in fair value of the derivative liability was $167,582 and $227,286, respectively. The following is a summary of the derivative liability:

Schedule of derivative liability
	Derivative
	Liability
Balances at December 31, 2021	$	533,753
Change in fair value		(227,286	)
Balances at December 31, 2022		306,467
Loss on issuance of debt		17,928
Issuance of convertible note - 1800 Diagonal Lending		58,939
Change in fair value		(167,582	)
EMA settlement		(106,794	)
Balances at December 31, 2023	$	108,958

Notes Payable

On July 14, 2021, the Company entered a Securities Purchase Agreement (the “GS SPA”) with GS Capital Partners, LLC pursuant to which the Company issued to the Lender a 6% Redeemable Note in the principal amount of $2,000,000 (the “GS Note”). The purchase price of the GS Note is $1,980,000. The GS Note matures on July 14, 2022 upon which time all accrued and unpaid interest will be due and payable. Interest accrues on the GS Note at 6% per annum until the GS Note becomes due and payable. The GS Note is subject to various “Events of Default,” which are disclosed in the GS Note. Upon the occurrence of an “Event of Default,” the interest rate on the GS Note will be 18%. The GS Note is not convertible into shares of the Company’s Common Stock and is not dilutive to existing or future shareholders and the Company used a portion of the proceeds of the GS Note to retire convertible debt. As of December 31, 2023 and 2022, $1,923,868 and $2,000,000 remains outstanding. As of December 31, 2023, the GS Note is in default.

Loans Payable

Schedule of loans payable
	December 31,
	2023		2022
RI - line of credit	$	153,358	$	99,971
RI - Short-term loans		46,544		43,899
WS - line of credit		218,616		200,000
WS - Short-term loans		151,970		128,830
Loans payable, current	$	570,487	$	472,700

RI - SBA EIDL	$	102,597	$	102,597
RI - long-term loans		65,533		86,041
WS - SBA EIDL		26,307		26,307
WS - long-term loans		97,532		113,564
Loans payable, non-current	$	291,968	$	328,508

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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 years ended December 31, 2023 and 2022, the Company recorded interest expense of $66,813 and $36,307, respectively.

As of December 31, 2023, and December 31, 2022, the outstanding balance of the debenture liability totaled $1,099,250 and $1,090,827, respectively.

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


Period ending December 31,
2023	$	183,208
2024		183,208
2025		183,208
2026		183,208
2027		183,208
Thereafter		183,208
Total	$	1,099,250

F-60

NOTE 12 – LEASES

The following was included in our balance sheet as of December 31, 2023 and 2022:

Schedule of operating leases
	December 31,
Operating leases	2023		2022

Assets
ROU operating lease assets	$	496,685	$	2,724,226

Liabilities
Current portion of operating lease	$	80,400	$	512,373
Operating lease, net of current portion		496,335		2,547,524
Total operating lease liabilities	$	576,735	$	3,059,897

The weighted average remaining lease term and weighted average discount rate at December 31, 2023 and 2022 were as follows:


	December 31,
Operating leases	2023		2022
Weighted average remaining lease term (years)		7.75		7.25
Weighted average discount rate		6.00%		6.00%

Operating Leases

On June 28, 2023, the Company recognized a gain on deconsolidation of $1,642,146 related to Optilan (UK) and its subsidiaries leases.

F-61

The following table reconciles future minimum operating lease payments to the discounted lease liability as of December 31, 2023:


Years Ended December 31,
2024		82,597
2025		84,726
2026		86,853
2027 and later		393,495
Total lease payments		736,650
Less imputed interest		(159,915	)
Total lease obligations		576,735
Less current lease obligations		(80,400	)
Long-term lease obligations	$	496,335

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 December 31, 2023 and 2022 respectively, there were 88,335 and 88,335 total preferred shares issued and outstanding for all classes.

Common Stock

In accordance with the Company’s bylaws, the Company has authorized a total of 20,000,000,000 shares of common stock, par value $0.0001 per share. As of December 31, 2023 and 2022, there were 8,100,117,720 and 6,427,395,360 common shares issued, respectively. As of December 31, 2023 and 2022, there were 8,100,117,720 and 6,427,395,360 common shares outstanding, respectively.

2022 Transactions

On May 27, 2022 we entered an Equity Financing Agreement (the “EFA”) and Registration Rights Agreement (the “RRA”) with GHS, pursuant to which GHS agreed to purchase up to $70,000,000 in shares of our Common Stock, from time to time over the course of 24 months after effectiveness of a registration statement on Form S-1 (the “Registration Statement”) of the underlying shares of Common Stock.

2023 Transactions

On April 28, 2023 the Company entered into an Equity Financing Agreement with GHS, to which GHS agreed to Purchase $30,000,000 in shares of our Common Stock over the course of 12 months at 92% of the current market price.

On June 13, 2023 the Company entered into an Amendment to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to Purchase $30,000,000 in shares of our Common Stock over the course of 12 months at 92% of the current market price.

F-62

On July 10,2023 the Company entered into a Second Amendment to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock over the course of 12 months at 92% of the current market price.

On September 5, 2023, we entered into a Stock Purchase Agreement with an investor for the purchase of 100,000,000 shares of Common Stock for a total consideration of $100,000.

The below table of puts from 1/12/2023 through 4/11/2023 were made by the Company under the 2022 EFA during 2023. The put from 4/28/2023 was made under the EFA dated 4/28/2023. The puts from 6/26/2023 and 7/3/2023 were made by the Company under the Amended EFA dated June 13, 2023. The 7/10/2023 put was made by the Company under the Second Amended EFA dated July 10, 2023.

Schedule of equity financing agreement
Date of Put	Number of Common Shares Issued		Total Proceeds, Net of Discounts		Effective Price per Share	Net Proceeds
1/12/2023		64,130,435	$	400,000	$0.006237	$	370,975
1/17/2023*		11,441,647		100,000	$0.008740		100,000
1/24/2023		77,733,861		400,000	$0.005146		370,975
2/3/2023		61,173,706		300,000	$0.004904		277,975
2/17/2023		75,447,571		300,000	$0.003976		277,975
3/1/2023		83,113,044		324,000	$0.003898		300,295
3/16/2023		93,165,852		254,232	$0.002729		235,410
3/30/2023		65,465,384		166,903	$0.002549		154,195
4/11/2023		67,462,162		203,554	$0.003017		188,279
4/28/2023		91,796,875		235,000	$0.002560		208,550
6/26/2023		44,583,334		214,000	$0.004800		141,020
7/3/2023		51,442,308		274,058	$0.004200		257,020
7/10/2023		28,593,750		91,500	$0.003200		85,094
9/5/2023*		100,000,000		100,000	$0.001000		100,000
11/7/2023*		55,555,555		50,000	$0.000900		50,000
11/8/2023*		33,333,333		30,000	$0.000900		30,000
11/14/2023		18,997,442		25,180	$0.001325		22,392
11/22/2023		29,685,620		34,717	$0.001169		31,262
11/29/2023*		55,555,555		50,000	$0.000900		50,000
11/30/2023*		27,777,777		25,000	$0.000900		25,000
12/1/2023*		33,333,333		30,000	$0.000900		30,000
12/1/2023		51,275,586		47,973	$0.000936		43,590
12/11/2023		87,136,216		108,019	$0.001240		99,433
12/27/2023		67,522,014		57,909	$0.000858		52,830
		1,375,722,360	$	3,822,044		$	3,502,272

F-63

In January 2023, the Company entered into a settlement of a dispute between certain stockholders in which the Company decided, during the period ended June 30, 2023, to issue shares to settle the dispute. In January 2023, the Company issued 297,000,000 shares of common stock to the individuals. The fair value of $1,989,900, or $0.0067 per share, was included in professional fees in the consolidated statements of operations for the year ended December 31, 2023. As part of this transaction $280,536 of accrued liabilities have been reversed.

Stock Options

As of December 31, 2023 and 2022, the Company had no outstanding stock options.

NOTE 14 – INCOME TAXES

The domestic and foreign components of loss before (benefit) provision for income taxes were as follows:

Schedule of provision for income taxes
	2023			2022
Domestic:	$	(11,676,768	)	$	(13,141,019	)
Foreign:		(7,133,368	)		(22,376,486	)
Total income (loss) before income taxes	$	(18,810,136	)	$	(35,517,505	)

The provision for income taxes for the years ended December 31, 2023 and 2022 differs from the amount which would be expected as a result of applying the statutory tax rates to the losses before income taxes due primarily to the valuation allowance to fully reserve net deferred tax assets.

The following table summarizes the significant differences between statutory rates for the years ended December 31, 2023 and 2022:

Schedule of statutory rate
	2023		2022
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%
		–%		–%

F-64

The Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows:


	2023			2022
Deferred Tax (Liabilities):
Net operating losses	$	8,964,470		$	9,033,067
Intangible assets		(736,905	)		(441,543	)
Right of use asset		84,170			84,256
Stock based compensation		424,681			424,681
Property and equipment		497,037			248,362
Other		11,077			8,227
Less: Valuation allowance		(9,244,530	)		(9,357,049	)
Deferred tax assets (liabilities)	$	–		$	–

The Company has approximately $26,485,942 of federal and state net operating loss carryforwards as of December 31, 2023. Of the $26.4 million of NOL's, $4.8 million will begin to expire in 2023 while $15.9 million will not expire but will be limited to 80% utilization. The company also has net operating losses in the UK of $22,085,338 and $636,852 of net operating loss carryforwards in Canada which will begin to expire in 2038.

The Company records a tax valuation allowance when it is more likely than not that it will not be able to recover the value of its deferred tax assets. For the years ended December 31, 2023 and 2022, the Company calculated its estimated annualized effective tax rate at 0% and 0%, respectively, for both the United States, Canada and the UK. The Company had no income tax expense on its losses for the years ended December 31, 2023 and 2022, respectively.

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 December 31, 2023 and 2022, the Company had no uncertain tax positions.

The Company does not anticipate any significant changes to the total amounts of unrecognized tax benefits in the next twelve months. The Company files income tax returns in New Brunswick, Canada, and the U.S. federal, New York, and Delaware and the UK jurisdictions. Tax years 2012 to current remain open to examination by Canadian authorities; the tax year 2020 remains open to examination by U.S. authorities.

F-65

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Potential Royalty Payments

Legal Matters

Carebourn Capital, L.P. v. DarkPulse, Inc.

On or about March 23, 2024, Carebourn appealed the final judgment entered by the State Court against Carebourn and in favor of the Company.

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.

F-66

More Capital, LLC v. DarkPulse, Inc. et al

On or about March 23, 2024, More appealed the final judgment entered by the State Court against More and in favor of the Company.

On or about March 25, 2024, the Minnesota Appellate Court entered an Order, noting that Minn. R. Civ. App. P. 104.01 provides that appeals must be taken within 60 days of the date of the final judgment and, therefore, it appears that More failed to timely take its appeal. The Appellate Court requested the parties submit informal briefing in response to two questions: (a) Did the time to appeal the December 27, 2024 amended judgment expire on February 26, 2024; and (b) If the answer to (a) is yes, must this appeal be dismissed as untimely. On or about April 4, 2024, DarkPulse filed its informal briefing in response with the Appellate Court. The Company is currently awaiting a decision from the Appellate Court.

Carebourn Capital et al v. Standard Registrar and Transfer et al

On or about November 23, 2022, the Company and the members of the Company’s executive team and board of directors named in this action moved to dismiss the Noteholders’ complaint.

F-67

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 May 22, 2024, the Court scheduled oral arguments on the Company’s sanction motion on July 2, 2024.

DarkPulse, Inc. v. FirstFire Global Opportunities Fund, LLC, and Eli Fireman

Oral arguments were held before the Second Circuit on the Company’s appeal on December 11, 2023.

As of the date hereof, this action has not yet transferred to the Delaware Court. The Company remains committed to actively litigating its claims for relief under RICO.

DarkPulse, Inc., et al v. Crown Bridge Partners, LLC, et al

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

On October 23, 2023, the plaintiffs appealed the Court’s decision to the Second Circuit.

As of the date hereof, the appeal is fully briefed.

The Company remains committed to actively litigating its claims for relief under RICO.

F-68

NOTE 16 – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2023 and 2022, certain executives of the Company received $120,000 and $270,000, respectively, in Directors fees from Optilan for being members of Optilan’s Board of Directors.

Remote Intelligence and Wildlife Specialists Loan Payables

RI has a loan payable with the former majority shareholder, who is a shareholder in the Company after the acquisition of 60% of RI’s membership interests. The loan is unsecured, non-interest bearing and due on demand. As of both year ended 2023 and 2022, the outstanding balance was $226,247.

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 year ended 2023 and 2022, the outstanding balance was $135,500.

SPAC Transaction

As of December 31, 2023 and December 31, 2022, the Company’s $1,500,000 investment in GSD was accounted for as cost.

F-69

As of December 31, 2023 and December 31, 2022, the outstanding note receivable was $0 and $1,049,248, respectively. On January 24,2024 the SPAC was terminated and the outstanding note receivable was determined to be uncollectible, therefore, written off as bad debt as of December 31, 2023.

As of December 31, 2023 and 2022, the Company has $0 and $318,025, respectively, owed from GSD and included as due from related party on the consolidated balance sheet. These advances were made to pay for certain expenses on behalf of the SPAC, as well as $120,000 in accrued management fees. The advances are unsecured, non-interest bearing and due on demand. On January 24,2024 the SPAC was terminated and the outstanding due from related party was determined to be uncollectible, therefore, written off as bad debt as of December 31, 2023.

NOTE 17 – SUBSEQUENT EVENTS

On January 8, 2024 the Company issued 52,162,997 shares to a third party in exchange for cash in accordance with its equity agreement.

On February 12, 2024, February 13, 2024 and February 14, 2024 the Company executed a convertible note from a third party, into 36,363,636, 32,786,885 and 42,117,347 shares respectively, in accordance with its Securities Purchase Agreement.

On February 28, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 178,571,428 shares of Common Stock for a total consideration of $100,000.

On March 28, 2024 the Company issued 27,777,777 shares to a third party of in accordance with the Securities Purchase Agreement Dated November 30, 2023.

On May 2, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 104,166,667 shares of Common Stock for a total consideration of $50,000.

On May 20, 2024 the company entered into a Stock Purchase Agreements with investors for the purchase of 288,888,889 shares of Common Stock for a total consideration of $130,000.

On May 23, 2024 the company entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

On June 9, 2024 the company entered into a Stock Purchase Agreement with an investor for the purchase of 48,888,888 shares of Common Stock for a total consideration of $22,000.

F-70

On June 18, 2024 the company entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

On July 1, 2024 the company entered into a Stock Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On July 9, 2024 the company entered into a Stock Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On July 12, 2024 the company entered into a Stock Purchase Agreement with an investor for the purchase of 33,333,333 shares of Common Stock for a total consideration of $15,000.

On July 18, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

On August 13, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On August 19, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 13,333,333 shares of Common Stock for a total consideration of $10,000.

On August 19, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

On August 27, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 48,000,000 shares of Common Stock for a total consideration of $36,000.

On August 27, 2024, we issued a convertible note in the principal amount of $67,200. The note bears interest at a rate of 12% per annum and matures after one year. Following 180 days from the note, the noteholder may convert at a discount of 35%.

F-71

Up to 3,500,000,000 Shares of Common Stock to be Issued Under Equity Financing Agreement

271,971,823 Shares of Common Stock

Text

Description automatically generated with medium confidence

DARKPULSE, INC.

PROSPECTUS

, 2024

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13 - Other Expenses of Issuance and Distribution

We estimate that expenses in connection with the distribution described in this Registration Statement (other than brokerage commissions, discounts or other expenses relating to the sale of the shares by the Selling Security Holder) will be as set forth below. We will pay all of the expenses with respect to the distribution, and such amounts, with the exception of the SEC registration fee, are estimates.

	Amount to Be Paid
SEC registration fee	$	685.90
State filing fees		500.00
Edgarizing costs		1,500.00
Accounting fees and expenses		15,000.00
Legal fees and expenses		7,500.00
Total	$	25,185.90

Item 14 - Indemnification of Directors and Officers

We do not maintain any policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under any circumstances.

Item 15 - Recent Sales of Unregistered Securities

Convertible Notes

On April 26, 2021, we entered a Securities Purchase Agreement with FirstFire Global Opportunities Fund LLC, (“FirstFire”) pursuant to which we issued to FirstFire a Convertible Promissory Note in the principal amount of $825,000. The note matures on January 26, 2022 upon which time all accrued and unpaid interest will be due and payable. Interest accrues on the note at 10% per annum guaranteed until the note becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The note is convertible at any time after 180 days from issuance, upon the election of FirstFire, into shares of our Common Stock at $0.015 per share. A finder’s fee of $15,000 was paid to J.H. Darbie Co. pursuant to our agreement.

II-1

On August 7, 2023, we issued a convertible note in the principal amount of $57,750. The note bears interest at a rate of 10% per annum and matures after one year. Following 180 days from the note, the noteholder may convert at a discount of 39%.

On October 4, 2023, we issued a convertible note in the principal amount of $57,750. The note bears interest at a rate of 10% per annum and matures after one year. Following 180 days from the note, the noteholder may convert at a discount of 39%.

On December 4, 2023, we issued a convertible note in the principal amount of $51,150. The note bears interest at a rate of 10% per annum and matures after one year. Following 180 days from the note, the noteholder may convert at a discount of 39%.

Each of the notes above were sold in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D under the Securities Act, based in part on the representations of the investor. Unless stated above, there were no sales commissions paid pursuant to this transaction and general solicitation was not used in connection with the offers and sales of these securities.

Note Conversions

On November 17, 2021, we issued an aggregate of 177,375,000 shares of common stock upon the conversion of convertible debt, as issued on April 26, 2021, which converted all principal and accrued and unpaid interest. The lender has agreed to return 118,254,000 shares due to an error in the conversion.

The shares issued pursuant to the note conversions were issued in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D under the Securities Act, based in part on the representations of the investor. There were no sales commissions paid pursuant to this transaction.

Shares Issued Under Equity Financing Agreements

November 2021 Equity Finance Agreement with GHS

On November 9, 2021, we entered an Equity Financing Agreement with GHS, pursuant to which GHS agreed to purchase up to $30,000,000 in shares of our Common Stock, from time to time over the Contract Period after effectiveness of the Registration Statement of the underlying shares of Common Stock.

Pursuant to the Equity Financing Agreement, on December 21, 2021, we and GHS agreed that we would issue and sell to GHS, and GHS would purchase from us 43,777,478 shares of Common Stock for total proceeds to us, net of discounts, of $2,548,326, at an effective price of $0.0696 per share (the “First EFA Closing”). We received approximately $2,296,469 in net proceeds from the First EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Second Closing for working capital and for general corporate purposes. 251857

Pursuant to the Equity Financing Agreement, on January 12, 2022, we and GHS agreed that we would issue and sell to GHS, and GHS would purchase from us 23,372,430 shares of Common Stock for total proceeds to us, net of discounts, of $1,150,000, at an effective price of $0.054124 per share (the “Second EFA Closing”). We received approximately $1,033,975 in net proceeds from the Second EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Second EFA Closing for working capital and for general corporate purposes. 116025

Pursuant to the Equity Financing Agreement, on January 21, 2022, we and GHS agreed that we would issue and sell to GHS, and GHS would purchase from us 33,454,988 shares of Common Stock for total proceeds to us, net of discounts, of $1,150,000, at an effective price of $0.037812 per share (the “Third EFA Closing”). We received approximately $1,033,975 in net proceeds from the Third EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Third EFA Closing for working capital and for general corporate purposes. 116025

Pursuant to the Equity Financing Agreement, on February 7, 2022, we and GHS agreed that we would issue and sell to GHS, and GHS would purchase from us 16,040,411 shares of Common Stock for total proceeds to us, net of discounts, of $500,000, at an effective price of $0.0342884 per share (the “Fourth EFA Closing”). We received approximately $448,975 in net proceeds from the Fourth EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Fourth EFA Closing for working capital and for general corporate purposes.51025

II-2

Pursuant to the Equity Financing Agreement, on March 23, 2022, we and GHS agreed that we would issue and sell to GHS, and GHS would purchase from us 29,257,395 shares of Common Stock for total proceeds to us, net of discounts, of $1,500,000, at an effective price of $0.056396 per share (the “Fifth EFA Closing”). We received approximately $1,348,975 in net proceeds from the Fifth EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Fifth EFA Closing for working capital and for general corporate purposes.151025

Pursuant to the Equity Financing Agreement, on April 11, 2022, we and GHS agreed that we would issue and sell to GHS, and GHS would purchase from us 23,746,816 shares of Common Stock for total proceeds to us, net of discounts, of $1,000,000, at an effective price of $0.04211091 per share (the “Sixth EFA Closing”). We received approximately $898,975 in net proceeds from the Sixth EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Sixth EFA Closing for working capital and for general corporate purposes.

Pursuant to the Equity Financing Agreement, on May 3, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 29,522,276 shares of Common Stock for total proceeds to us, net of discounts, of $1,000,000, at an effective price of $0.03387273 per share (the “Seventh EFA Closing”). We received approximately $898,975 in net proceeds from the Seventh EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Seventh EFA Closing for working capital and for general corporate purposes.

Pursuant to the Equity Financing Agreement, on May 13, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 26,100,979 shares of Common Stock for total proceeds to us, net of discounts, of $556,750, at an effective price of $0.0213306 per share (the “Eighth EFA Closing”). We received approximately $500,050 in net proceeds from the Eighth EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Eighth EFA Closing for working capital and for general corporate purposes.

Pursuant to the Equity Financing Agreement, on May 23, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 25,025,540 shares of Common Stock for total proceeds to us, net of discounts, of $556,750, at an effective price of $0.0222473 per share (the “Ninth EFA Closing”). We received approximately $500,050 in net proceeds from the Ninth EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Ninth EFA Closing for working capital and for general corporate purposes.

Pursuant to the Equity Financing Agreement, on June 1, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 25,901,921 shares of Common Stock for total proceeds to us, net of discounts, of $556,750, at an effective price of $0.02149454 per share (the “Tenth EFA Closing”). We received approximately $500,050 in net proceeds from the Tenth EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Tenth EFA Closing for working capital and for general corporate purposes.

Pursuant to the Equity Financing Agreement, on June 16, 2022, we and GHS agreed that the Company would issue and sell to GHS, and GHS would purchase from us, 23,799,766 shares of Common Stock for total proceeds to us, net of discounts, of $402,086, at an effective price of $0.018584 per share (the “Eleventh EFA Closing”). We received approximately $360,852 in net proceeds from the Eleventh EFA Closing after deducting the fees and other estimated offering expenses payable by us. We used the net proceeds from the Eleventh EFA Closing for working capital and for general corporate purposes.

The shares issued in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D under the Securities Act, based in part on the representations of the investor. There were $1,094,215 in sales commissions paid to J.H. Darbie & Co., Inc. (“J.H. Darbie”) pursuant to these transactions.

II-3

May 2022 Equity Finance Agreement with GHS

Below are the shares sold pursuant to the 2022 EFA:

Date of Put	Number of Shares Sold	Total Proceeds, Net of Discounts	Effective Price per Share	Net Proceeds
6/24/22	38,391,106	$643,539	$0.01978	$578,160
7/1/22	33,525,465	$556,750	$0.019596	$500,050
7/11/22	32,756,532	$556,750	$0.01699661	$550,050
7/20/22	29,386,519	$556,750	$0.01894558	$550,050
7/28/22	35,884,040	$556,750	$0.018308	$500,050
8/10/22	44,505,857	$680,109	$0.015281	$611,073
8/18/22	54,574,909	$948,863	$0.017386441	$852,952
8/25/22	105,255,759	$2,264,961	$0.021518644	$2,128,038
9/2/22	140,073,757	$3,000,000	$0.021417288	$2,788,975
9/14/22	79,092,686	$1,757,466	$0.022220339	$1,757,466
9/30/22	30,538,303	$500,000	$0.0163729	$463,975
10/14/22	35,628,020	$500,000	$0.014034	$463,975
11/7/22	22,022,709	$326,235	$0.014814	$302,373
11/18/22	39,699,793	$325,000	$0.008186	$301,225
12/2/22	42,148,416	$325,000	$0.007711	$301,225
12/20/22	78,705,534	$540,000	$0.006861	$501,175
12/30/22	63,338,702	$400,000	$0.006315	$370,975
1/12/23	64,130,435	$400,000	$0.006237	$370,975
1/24/23	77,733,861	$400,000	$0.005146	$370,975
2/3/23	61,173,706	$300,000	$0.004904	$277,975
2/17/23	75,447,571	$300,000	$0.003976	$277,975
3/1/23	83,113,044	$324,000	$0.003898	$300,295
3/16/23	93,165,852	$254,232	$0.002729	$235,410
3/30/23	65,465,384	$166,903	$0.002549	$154,195
4/11/23	67,462,162	$203,552	$0.0030173	$188,279
11/14/23	18,997,442	$25,179	$0.0013254	$22,392
11/22/23	29,685,620	$34,717	$0.0011695	$31,261
12/1/23	51,275,586	$47,973	$0.0009356	$43,589
12/11/23	87,136,216	$108,019	$0.0012397	$99,433
12/27/23	67,522,014	$57,908	$0.0008576	$52,830
1/8/24	52,262,997	$44,736	$0.0008576	$40,579

The shares issued in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D under the Securities Act, based in part on the representations of the investor. There were $1,306,693 in sales commissions paid to J.H. Darbie & Co., Inc. (“J.H. Darbie”) pursuant to these transactions.

II-4

August 2024 Equity Finance Agreement with GHS

Below is a table of all puts made by the Company under the Third Amended Equity Financing Agreement with GHS dated August 14, 2024:

Date of Put	Number of Common Shares Issued		Total Proceeds, Net of Discounts		Effective Price per Share		Net Proceeds
4/28/23		91,796,875	$	235,000	$	0.00256	$	208,550
6/26/23		44,583,334		214,000	$	0.00480		141,020
7/3/23		51,442,308		274,058	$	0.00420		257,020
7/10/23		28,593,750		91,500	$	0.00320		85,094
8/19/24		55,555,556		40,000	$	0.00072		36,175
		271,971,823	$	854,558			$	727,859

The shares above were issued in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D under the Securities Act, based in part on the representations of the investor. Prior to the sales being made, GHS agreed to purchase the shares without an effective registration statement in place, and, as such, the shares were restricted. There were $56,204 in sales commissions paid to J.H. Darbie & Co., Inc. pursuant to the August 2024 EFA.

Private Sales

On February 21, 2022, we sold 75,798,921 shares of our Common Stock at $0.032982 per share to a single investor for total consideration of $2,500,000.

On March 3, 2022, we sold 16,579,569 shares of our Common Stock at $0.0301576 per share to a single investor for total consideration of $500,000.

On March 14, 2022, we sold 5,617,347 shares of our Common Stock at $0.071208 per share to a single investor for total consideration of $400,000.

Effective January 17, 2023, we entered into a Securities Purchase Agreement with George Thomas Rettas pursuant to which we sold 11,441,647 shares of Common Stock $0.0087 per share for gross proceeds of $100,000.

II-5

On September 29, 2023, we sold 100,000,000 shares of common stock to Brian Dodd for net proceeds of $100,000.

On November 7, 2023, we sold 55,555,555 shares of common stock to Aaron Tofte for net proceeds of $50,000.

On November 8, 2023, we sold 33,333,333 shares of common stock to Dan Holt for net proceeds of $30,000.

On November 29, 2023, we sold 55,555,555 shares of common stock to Paul Ellefson for net proceeds of $50,000.

On November 30, 2023, we sold 27,777,777 shares of common stock to Paul Ellefson for net proceeds of $25,000.

On December 1, 2023, we sold 33,333,333 shares of common stock to Dan Holt for net proceeds of $30,000.

On February 28, 2024, we sold 178,571,428 shares of common stock to Brian Dodd for net proceeds of $100,000.

On May 2, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 104,166,667 shares of Common Stock for a total consideration of $50,000.

On May 20, 2024, we entered into a Stock Purchase Agreements with investors for the purchase of 288,888,889 shares of Common Stock for a total consideration of $130,000.

On May 23, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

On June 9, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 48,888,888 shares of Common Stock for a total consideration of $22,000.

On June 18, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

On July 1, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On July 9, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On July 12, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 33,333,333 shares of Common Stock for a total consideration of $15,000.

On July 18, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

II-6

On August 13, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 111,111,111 shares of Common Stock for a total consideration of $50,000.

On August 19, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 13,333,333 shares of Common Stock for a total consideration of $10,000.

On August 19, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 22,222,222 shares of Common Stock for a total consideration of $10,000.

On August 27, 2024, we entered into a Stock Purchase Agreement with an investor for the purchase of 48,000,000 shares of Common Stock for a total consideration of $36,000.

Miscellaneous Issuances

Pursuant to a Finder’s Fee Agreement with J.H. Darbie, from October 4, 2021 to October 25, 2021, we issued to J.H. Darbie an aggregate of 5,425,453 shares of common stock.

In January 2023, the Company entered into a settlement of a dispute between certain stockholders in which the Company decided, during the period ended March 31, 2023, to issue shares to settle the dispute. In January 2023, the Company issued 297,000,000 shares of common stock to the individuals. The fair value of $1,989,900, or $0.0067 per share, was included in professional fees in the consolidated statements of operations in the three months ended March 31, 2023.

These issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

Series A Preferred Stock Issuance

On June 24, 2022, pursuant to the Employment Agreement dated effective April 1, 2022 with Dennis O’Leary, our CEO, we issued 100 shares of Series A Preferred Stock to Mr. O’Leary.

II-7

Item 16 - Exhibits

The following exhibits are included with this Prospectus:

Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
2.1	Form of Agreement and Plan of Merger by and between Klever Marketing, Inc., DarkPulse Technologies Inc. and DPTH Acquisition Corporation dated April 27, 2018	8-K	000-18730	2.1	5/1/18
2.2	Form of Amendment No. 1 to Agreement and Plan of Merger by and between Klever Marketing, Inc., DarkPulse Technologies Inc. and DPTH Acquisition Corporation dated June 29, 2018	8-K/A	000-18730	2.1	7/13/18
2.3	Form of Amendment No. 2 to Agreement and Plan of Merger by and between Klever Marketing, Inc., DarkPulse Technologies Inc. and DPTH Acquisition Corporation dated August 17, 2018, effective as of July 18, 2018	8-K	000-18730	2.1	8/21/18
2.4#	Business Combination Agreement, by, between, and among DarkPulse, Inc., Global System Dynamics, Inc., and Zilla Acquisition Corp.	8-K	000-18730	2.1	12/15/22
3.1	Restated Certificate of Incorporation of Klever Marketing, Inc. a Delaware corporation	10-KSB	000-18730	3.01	6/20/97
3.2	Certificate of Amendment to Certificate of Incorporation	8-K	000-18730	3.1	7/24/18
3.3	Certificate of Amendment to Certificate of Incorporation filed February 5, 2019	10-K	000-18730	3.05	4/15/21
3.4	Certificate of Amendment to Certificate of Incorporation filed February 20, 2020	10-K	000-18730	3.06	4/15/21
3.5	Bylaws	10-KSB	000-18730	3.02	6/20/97
3.6	Amended Bylaws	10-KSB	000-18730	3.03	3/29/01
3.7	Certificate of Designation for Series A Preferred Stock dated June 22, 2022	8-K	000-18730	3.1	6/23/22
3.8	Certificate of Amendment for Series A Preferred Stock filed December 2, 2022	8-K	000-18730	3.1	12/8/22
3.9	Certificate of Correction for Certificate of Amendment For Series A Preferred Stock filed December 8, 2022	8-K	000-18730	3.2	12/8/22
3.10	Certificate of Designation of Series D Preferred Stock	8-K	000-18730	3.2	7/24/18
3.11	Certificate of Amendment for Series D Preferred Stock filed December 23, 2021	8-K	000-18730	3.01	12/27/21
3.12	Certificate of Amendment for Series D Preferred Stock filed December 2, 2022	8-K	000-18730	3.3	12/8/22

II-8

5.1	Legal Opinion of Business Legal Advisors, LLC					X
10.1	Assignment Agreement with the University of New Brunswick, Canada	10-K	000-18730	10.05	4/15/21
10.2	Convertible Debenture (Secured) Issued April 24, 2017	10-K	000-18730	10.06	4/15/21
10.3	Amendment No. 01 to Convertible Debenture (Secured) Term Debenture dated January 17, 2024 with the University of New Brunswick, Canada	S-1/A	333-276114	10.3	2/9/24
10.4	Finder’s Fee Agreement dated January 8, 2021 with J.H. Darbie & Co., Inc.	10-Q	000-18730	10.1	5/17/21
10.5	Securities Purchase Agreement dated as of April 26, 2021 with FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC	10-Q	000-18730	10.1	8/16/21
10.6	Registration Rights Agreement dated April 26, 2021 to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC	10-Q	000-18730	10.2	8/16/21
10.7	Membership Interest Purchase Agreement dated August 30, 2021 with Remote Intelligence, Limited Liability Company	10-Q	000-18730	10.9	11/15/21
10.8	Membership Purchase Agreement dated August 24, 2022 with Remote Intelligence, Limited Liability Company	10-Q	000-18730	10.2	11/4/22
10.9	Membership Interest Purchase Agreement dated August 30, 2021 with Wildlife Specialists, LLC	10-Q	000-18730	10.10	11/15/21
10.10	Membership Purchase Agreement dated August 24, 2022 with Wildlife Specialists, LLC	10-Q	000-18730	10.3	11/4/22
10.11	Stock Purchase Agreement dated September 8, 2021 with TJM Electronics West, Inc.	10-Q	000-18730	10.15	11/15/21
10.12	Membership Purchase Agreement with TerraData Unmanned, PLLC dated effective October 1, 2021	S-1	333-261453	10.48	12/1/21
10.13*	Employment Agreement dated effective April 1, 2022 with Dennis O’Leary	10.2	000-18730	10.2	8/10/22
10.14	Exclusive Commercial Agency Agreement dated July 27, 2022 with Gulf Automation Services & Oilfield Supplies Company [Gasos] LLC	10-Q	000-18730	10.1	11/4/22
10.14	Purchase Agreement dated October 12, 2022 with Gladstone Sponsor, LLC and Gladstone Acquisition Corp.	10-K	000-18730	10.63	6/23/23
10.16	Assignment, Assumption, Release and Waiver of the Letter Agreement dated October 12, 2022 with Gladstone Sponsor, LLC and Gladstone Acquisition Corp.	10-K	000-18730	10.64	6/23/23
10.17	Joinder to the Registration Rights Agreement dated October 12, 2022 with Gladstone Acquisition Corp.	10-K	000-18730	10.65	6/23/23

II-9

10.18

Sale Agreement dated December 1, 2023

S-1

333-276144

10.66

12/18/23

10.19

Equity Financing Agreement dated April 28, 2023 with GHS Investments, LLC

S-1/A

333-276144

10.19

2/9/24

10.20

Amended Equity Financing Agreement dated June 13, 2023 with GHS Investments, LLC

S-1/A

333-276144

10.20

2/9/24

10.21

Second Amended Equity Financing Agreement dated July 10, 2023 with GHS Investments, LLC

S-1/A

333-276144

10.21

2/9/24

10.22

Amendment No. 1 to Second Amended Equity Financing Agreement dated January 30, 2024 with GHS Investments, LLC

S-1/A

333-276144

10.22

2/9/24

10.23

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

10.24

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

10.25

Settlement Agreement with GS Capital Partners LLC dated July 24 2024

16.1

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

8-K

000-18730

16.1

1/28/22

16.2

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

8-K

000-18730

16.1

1/4/23

16.3

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

8-K/A

000-18730

16.1

7/3/24

21.1

List of Subsidiaries

23.1

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

23.2

Consent of Mazars USA LLP, independent registered public accounting firm

23.3

Consent of Attorney (included in Exhibit 5.1)

101.INS

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

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted in Inline XBRL, and included in exhibit 101).

107

Filing Fee Table

____________

Indicates management contract or compensatory plan or arrangement.

Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601. The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

II-10

Item 17 - Undertakings

(A) The undersigned Registrant hereby undertakes:

(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:

	(i)	To include any prospectus required by Section 10(a)(3) of the Securities Act;

	(ii)	Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

	(iii)	Include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)	That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)	Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(B) The issuer is subject to Rule 430C (ss. 230. 430C of this chapter): Each prospectus filed pursuant to Rule 424(b)(ss. 230.424(b) of this chapter) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (ss. 230. 430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

II-11

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Houston, Texas on September 12, 2024.

DARKPULSE, INC.

By:	/s/ Dennis O’Leary
	Dennis O’Leary
	Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)

Date:	September 12, 2024

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

By:

/s/ Dennis O’Leary

Dennis O’Leary, Director, Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial and Accounting Officer)

Date:

September 12, 2024

By:	/s/ Dr. Anthony Brown
	Dr. Anthony Brown, Director
Date:	September 12, 2024

By:	/s/ Craig Atkin
	Craig Atkin, Director
Date:	September 12, 2024

II-12

Exhibit 5.1

14888 Auburn Sky Drive, Draper, UT 84020

(801) 634-1984

brian@businesslegaladvisor.com

Brian Higley

Attorney at Law

Licensed in Utah

September 12, 2024

Dennis O’Leary, CEO

DarkPulse, Inc.

815 Walker Street, Suite 1155

Houston, TX 77002

Re:

Registration Statement on Form S-1

Dear Mr. O’Leary:

I have acted as counsel for DarkPulse, Inc., a Delaware corporation (the “Company”) in connection with the Company’s Registration Statement on Form S-1 (the “Registration Statement”), as amended, filed with the U.S. Securities and Exchange Commission under the Securities Act of 1933, as amended.

I have reviewed the Registration Statement, including the prospectus (the “Prospectus”) that is a part of the Registration Statement. The Registration Statement registers the offering and sale by a certain selling stockholder of the Company of 3,500,000,000 shares of the Company’s common stock to be issued and 271,971,823 shares of the Company’s common stock which were previously issued as restricted securities (the “Shares”).

In connection with this opinion, I have reviewed originals or copies (certified or otherwise identified to my satisfaction) of the Company’s Certificate of Incorporation, the Company’s Bylaws, resolutions adopted by the Company’s Board of Directors, the Registration Statement, the exhibits to the Registration Statement, and such other records, documents, statutes and decisions, and such certificates or comparable documents of public officials and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as I have deemed relevant in rendering this opinion.

In such examination, I have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents.

The opinions expressed below are limited to the laws of the State of Delaware (including the applicable provisions of the Delaware Constitution, applicable judicial and regulatory decisions interpreting these laws, and applicable rules and regulations underlying these laws) and the federal laws of the United States.

Based on the foregoing and in reliance thereon and subject to the assumptions, qualifications and limitations set forth herein, I am of the opinion that pursuant to the corporate laws of the State of Delaware, including all relevant provisions of the state constitution and all judicial interpretations interpreting such provisions, the Shares were legally issued, fully paid and non-assessable and, when issued, will be legally issued, fully paid and non-assessable.

I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of my firm’s name in the related Prospectus under the heading “Legal Matters.”

	Very truly yours,

	/s/ Brian Higley

Exhibit 10.23

THIRD AMENDED EQUITY FINANCING AGREEMENT

This THIRD AMENDED EQUITY FINANCING AGREEMENT (the “Agreement”), dated as of August 14, 2024 (the “Execution Date”), is entered into by and between DarkPulse, Inc., a Delaware corporation with its principal executive office at 815 Walker St., Suite 1155, Houston, Texas 77002 (the “Company”), and GHS Investments LLC, a Nevada limited liability company, with offices at 420 Jericho Turnpike, Suite 102, Jericho, NY 11753 (the “Investor”) and is intended to supersede and replace that certain Second Amended Equity Financing Agreement dated July 10, 2023.

RECITALS:

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Investor shall invest up to Thirty Million Dollars ($30,000,000) (the "Commitment Amount"), over the course of twelve (12) months immediately following the Effective Date (the “Contract Period”) to purchase the Company’s common stock, par value $0.0001 per share (the “Common Stock”);

WHEREAS, such investments will be made in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), Rule 506 of Regulation D promulgated by the SEC under the 1933 Act, and/or upon such other exemption from the registration requirements of the 1933 Act as may be available with respect to any or all of the investments in Common Stock to be made hereunder; and

WHEREAS, contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration rights under the 1933 Act, and the rules and regulations promulgated thereunder, and applicable state securities laws.

NOW THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants and agreements set forth hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Investor hereby agree as follows:

SECTION I.
DEFINITIONS

For all purposes of and under this Agreement, the following terms shall have the respective meanings below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms.

“1933 Act” shall have the meaning set forth in the recitals.

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the SEC thereunder, all as the same will then be in effect.

“Affiliate” shall have the meaning set forth in Section 5.7.

“Agreement” shall have the meaning set forth in the preamble.

“Articles of Incorporation” shall have the meaning set forth in Section 4.3.

“By-laws” shall have the meaning set forth in Section 4.3.

“Closing” shall have the meaning set forth in Section 2.4.

“Closing Date” shall have the meaning set forth in Section 2.4.

“Common Stock” shall have the meaning set forth in the recitals.

“Control” or “Controls” shall have the meaning set forth in Section 5.7.

“Effective Date” shall mean the date the SEC declares effective under the 1933 Act the Registration Statement covering the Securities.

“Environmental Laws” shall have the meaning set forth in Section 4.13.

“Execution Date” shall have the meaning set forth in the preamble.

“Indemnified Liabilities” shall have the meaning set forth in Section 10.

“Indemnitees” shall have the meaning set forth in Section 10.

“Indemnitor” shall have the meaning set forth in Section 10.

“Ineffective Period” shall mean any period of time that the Registration Statement or any supplemental registration statement becomes ineffective or unavailable for use for the sale or resale, as applicable, of any or all of the Registrable Securities (as defined in the Registration Rights Agreement) for any reason (or in the event the prospectus under either of the above is not current and deliverable) during any time period required under the Registration Rights Agreement.

“Initial Puts” shall have the meaning set forth in Section 2.1.

“Investor” shall have the meaning set forth in the preamble.

“Market Price” shall mean the lowest daily volume weighted average price of the Common Stock during the Pricing Period.

“Material Adverse Effect” shall have the meaning set forth in Section 4.1.

“Maximum Common Stock Issuance” shall have the meaning set forth in Section 2.5.

“Open Period” shall mean the period beginning on and including the Trading Day immediately following the Effective Date and ending on the termination of the Agreement in accordance with Section 8.

“Pricing Period” shall mean the five (5) consecutive Trading Days preceding the relevant Put Notice Date.

“Principal Market” shall mean the New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Markets, whichever is the principal market on which the Common Stock is listed.

“Prospectus” shall mean the prospectus, preliminary prospectus and supplemental prospectus used in connection with the Registration Statement.

“Purchase Amount” shall mean the total amount being paid by the Investor on a particular Closing Date to purchase the Securities.

“Purchase Price” shall mean ninety two percent (92%) of the Market Price.

“Put” shall mean the Company is entitled to request equity investments (the “Put” or “Puts”) by the Investor, pursuant to which the Company will issue Common Stock to the Investor with an aggregate Purchase Price equal to the value of the Put, subject to a price per share calculation based on the Market Price.

“Put Amount” shall mean the total dollar amount requested by the Company pursuant to an applicable Put. The timing and amounts of each Put shall be at the discretion of the Company. The maximum dollar amount of each Put will not exceed one hundred percent (100%) of the average daily trading dollar volume for the Common Stock during the ten (10) consecutive Trading Days preceding the Put Notice Date. No Put will be made in an amount equaling less than ten thousand dollars ($10,000) or greater than one million dollars ($1,000,000). Puts are further limited to the Investor owning no more than 4.99% of the outstanding stock of the Company at any given time.

“Put Notice” shall mean a written notice sent to the Investor by the Company stating the Put Amount in U.S. dollars that the Company intends to sell to the Investor pursuant to the terms of the Agreement and stating the current number of Shares issued and outstanding on such date.

“Put Notice Date” shall mean the Trading Day on which the Investor receives a Put Notice.

“Put Restriction” shall mean a minimum of five (5) Trading Days following a Closing Date. During this time, the Company shall not be entitled to deliver another Put Notice.

“Put Shares” shall have the meaning set forth in Section 2.4.

“Registered Offering Transaction Documents” shall mean this Agreement and the Registration Rights Agreement between the Company and the Investor as of the date herewith.

“Registration Rights Agreement” shall have the meaning set forth in the recitals.

“Registration Statement” means the registration statement of the Company filed under the 1933 Act covering the Securities issuable hereunder.

“Related Party” shall have the meaning set forth in Section 5.7.

“Resolution” shall have the meaning set forth in Section 7.5.

“SEC” shall mean the U.S. Securities and Exchange Commission.

“SEC Documents” shall have the meaning set forth in Section 4.6.

“Securities” shall mean the shares of Common Stock issued pursuant to the terms of this Agreement.

“Settlement Date” shall have the meaning set forth in Section 2.4.

“Shares” shall mean the shares of the Common Stock.

“Subsidiaries” shall have the meaning set forth in Section 4.1.

“Trading Day” shall mean any day on which the Principal Market for the Common Stock is open for trading, from the hours of 9:30 am until 4:00 pm.

“Transaction Costs” the Company shall bear the costs of the Registration Statement. At the Closing of the first Put, the Company shall deposit ten thousand dollars ($10,000) with the Investor’s designated legal counsel to offset legal costs.

SECTION II

PURCHASE AND SALE OF COMMON STOCK

2.1 PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions set forth herein, the Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, up to that number of Shares having an aggregate Purchase Price of Thirty Million Dollars ($30,000,000).

i. Following the execution of the Equity Financing Agreement dated April, 28, 2023 (which was superseded by a subsequent agreement), the Investor purchased two hundred and thirty-five thousand dollars ($235,000) of Common Stock at the then applicable Purchase Price (“Initial Put”). Following the filing of the Form 10-K for the period ended December 31, 2022, the Investor purchased two hundred and fourteen thousand dollars ($214,000) of Common Stock at the then applicable Purchase Price (“Second Initial Put”). Within ten (10) trading days following the Closing of the Second Initial Put, the Investor purchased two hundred and fourteen thousand dollars ($214,000) of common stock at the then applicable Purchase Price (“Third Initial Put”). Concurrently with the execution of the Second Amended Agreement, the Investor purchased ninety one thousand five hundred dollars ($91,500) of Common Stock at the then applicable Purchase Price (“Fourth Initial Put”). Concurrently with the execution of this Third Amended Agreement, the Investor shall purchase forty thousand dollars ($40,000) of Common Stock at the then applicable Purchase Price (“Fifth Initial Put”). The common stock underlying the Initial Put, the Second Initial Put, the Third Initial Put the Fourth Initial Put and the Fifth Initial Put shall be registered for resale in the Registration Statement.

2.2 DELIVERY OF PUT NOTICES. Subject to the terms and conditions herein, and from time to time during the Open Period, the Company may, in its sole discretion, deliver a Put Notice to the Investor which states the dollar amount (designated in U.S. Dollars), which the Company intends to sell to the Investor on a Closing Date (the “Put”). The Put Notice shall be in the form attached hereto as Exhibit C and incorporated herein by reference. The Purchase Price of the Put shall be ninety-two percent (92%) percent of the Market Price. During the Open Period, the Company shall not be entitled to submit a Put Notice until after the previous Closing has been completed. There will be a minimum of five (5) trading days between Closings. No Put will be made in an amount equaling less than ten thousand dollars ($10,000) or greater than one million dollars ($1,000,000).

2.3 CONDITIONS TO INVESTOR’S OBLIGATION TO PURCHASE SHARES. Notwithstanding anything to the contrary in this Agreement, the Company shall not be entitled to deliver a Put Notice and the Investor shall not be obligated to purchase any Shares at a Closing, unless each of the following conditions are satisfied:

	i.	except for the Initial Put, a Registration Statement shall have been declared effective and shall remain effective and available for the resale of all the Registrable Securities (as defined in the Registration Rights Agreement) at all times until the Closing with respect to the subject Put Notice;

	ii.	at all times during the period beginning on the related Put Notice Date and ending on and including the related Closing Date, the Common Stock shall have been listed or quoted for trading on the Principal Market and shall not have been suspended from trading thereon for a period of two (2) consecutive Trading Days during the Open Period and the Company shall not have been notified of any pending or threatened proceeding or other action to suspend the trading of the Common Stock;

	iii.	the Company has complied with its obligations and is otherwise not in breach of or in default under, this Agreement, the Registration Rights Agreement or any other agreement executed between the parties, which has not been cured prior to delivery of the Put Notice;

	iv.	no injunction shall have been issued and remain in force, or action commenced by a governmental authority which has not been stayed or abandoned, prohibiting the purchase or the issuance of the Securities; and

	v.	the issuance of the Securities will not violate any requirements of the Principal Market.

If any of the events described in clauses (i) through (v) above occurs during a Pricing Period, then the Investor shall have no obligation to purchase the Put Amount of Common Stock set forth in the applicable Put Notice.

2.4 MECHANICS OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction of the conditions set forth in Sections 2.5, 7 and 8 of this Agreement, at the end of the Pricing Period, the Purchase Price shall be established and an amount of Shares equaling one hundred and fifteen percent (115%) of the Put Amount (the “Put Shares”) shall be delivered to the Investor’s broker for a particular Put.

The Closing of a Put shall occur upon the first Trading Day following the confirmation of receipt and approval for trading by Investor's broker of the Put Shares, whereby the Company shall have caused the Transfer Agent to electronically transmit, prior to the applicable Closing Date, the applicable Put Shares by crediting the account of the Investor's broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The Investor shall deliver the Purchase Amount specified in the Put Notice (less deposit and clearing fees) by wire transfer of immediately available funds to an account designated by the Company if the aforementioned receipt and approval are confirmed before 9:30 AM ET or on the following Trading Day if receipt and approval by the Investor's broker is made after 9:30 AM ET("Closing Date" or "Closing"). In addition, on or prior to such Closing Date, each of the Company and Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

2.5 OVERALL LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained herein to the contrary, if during the Open Period the Company becomes listed on an exchange which limits the number of shares of Common Stock that may be issued without shareholder approval, then the number of Shares issuable by the Company and purchasable by the Investor, shall not exceed that number of the shares of Common Stock that may be issuable without shareholder approval (the “Maximum Common Stock Issuance”). If such issuance of shares of Common Stock could cause a delisting on the Principal Market then the Maximum Common Stock Issuance shall first be approved by the Company’s shareholders in accordance with applicable law and the By-laws and the Articles of Incorporation of the Company. The parties understand and agree that the Company’s failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization of the issuance and sale of Securities or the Investor’s obligation in accordance with the terms and conditions hereof to purchase a number of Shares in the aggregate up to the Maximum Common Stock Issuance, and that such approval pertains only to the applicability of the Maximum Common Stock Issuance limitation provided in this Section 2.5.

2.6 LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary in this Agreement, in no event shall the Investor be entitled to purchase that number of Shares, which when added to the sum of the number of shares of Common Stock beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the 1934 Act), by the Investor, would exceed 4.99% of the number of shares of Common Stock outstanding on the Closing Date, as determined in accordance with Rule 13d-1(j) of the 1934 Act.

2.7 Reserved.

SECTION III

INVESTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS

The Investor represents and warrants to the Company, and covenants, that to the best of the Investor's knowledge:

3.1SOPHISTICATED INVESTOR. The Investor has, by reason of its business and financial experience, such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that it is capable of (I) evaluating the merits and risks of an investment in the Securities and making an informed investment decision; (II) protecting its own interest; and (III) bearing the economic risk of such investment for an indefinite period of time.

3.2AUTHORIZATION; ENFORCEMENT. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is a valid and binding agreement of the Investor enforceable against the Investor in accordance with its terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

3.3SECTION 9 OF THE 1934 ACT. During the term of this Agreement, the Investor will comply with the provisions of Section 9 of the 1934 Act, and the rules promulgated thereunder, with respect to transactions involving the Common Stock.

3.4ACCREDITED INVESTOR. Investor is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D of the 1933 Act.

3.5NO CONFLICTS. The execution, delivery and performance of the Documents by the Investor and the consummation by the Investor of the transactions contemplated hereby and thereby will not result in a violation of Partnership Agreement or other organizational documents of the Investor.

3.6OPPORTUNITY TO DISCUSS. The Investor has received all materials relating to the Company’s business, finance and operations which it has requested. The Investor has had an opportunity to discuss the business, management and financial affairs of the Company with the Company’s management.

3.7INVESTMENT PURPOSES. The Investor is purchasing the Securities for its own account for investment purposes and not with a view towards distribution and agrees to resell or otherwise dispose of the Securities solely in accordance with the registration provisions of the 1933 Act (or pursuant to an exemption from such registration provisions).

3.8GOOD STANDING. The Investor is a limited liability company, duly organized, validly existing and in good standing in the State of Nevada.

3.9TAX LIABILITIES. The Investor understands that it is liable for its own tax liabilities.

3.10 REGULATION M. The Investor will comply with Regulation M under the 1934 Act, if applicable.

3.11 PROHIBITED TRADING. No short sales shall be permitted by the Investor or its affiliates during the period commencing on the Execution Date and continuing through the termination of this Agreement.

SECTION IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the Schedules attached hereto, or as disclosed on the Company’s SEC Documents, the Company represents and warrants to the Investor that:

4.1ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware, and has the requisite corporate power and authorization to own its properties and to carry on its business as now being conducted. Both the Company and the companies it owns or controls (“Subsidiaries”) are duly qualified to do business and are in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means a change, event, circumstance, effect or state of facts that has had or is reasonably likely to have, a material adverse effect on the business, properties, assets, operations, results of operations, financial condition or prospects of the Company and its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of the Company to perform its obligations under the Registered offering Transaction Documents.

4.2 AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.

	i.	The Company has the requisite corporate power and authority to enter into and perform this Agreement and the Registration Rights Agreement (collectively, the “Registered Offering Transaction Documents”), and to issue the Securities in accordance with the terms hereof and thereof.

	ii.	The execution and delivery of the Registered Offering Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, including without limitation the issuance of the Securities pursuant to this Agreement, have been duly and validly authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its Board of Directors, or its shareholders.

	iii.	The Registered Offering Transaction Documents have been duly and validly executed and delivered by the Company.

	iv.	The Registered Offering Transaction Documents constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

4.3 CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of: (i) 20,000,000,000 shares of the Common Stock, par value $0.0001 per share, of which as of the date hereof 9,106,286,677 shares are issued and outstanding; and, (ii) 2,000,000 shares of Preferred Stock, par value $0.01 of which as of the date hereof 88,335 Preferred Stock are issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable.

Except as disclosed in the Company’s publicly available filings with the SEC and as will be disclosed in the Registration Statement, and based on the best information available and efforts of the Company’s management, or as otherwise set forth on Schedule 4.3:

no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company;

	ii.	there are no outstanding debt securities;

	iii.	there are no outstanding shares of capital stock, options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries;

	iv.	there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement);

	v.	there are no outstanding securities of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries;

	vi.	there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities as described in this Agreement;

	vii.	the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and

	viii.	there is no dispute as to the classification of any shares of the Company’s capital stock.

The Company has furnished to the Investor, or the Investor has had access through EDGAR to, true and correct copies of the Company’s Articles of Incorporation and all amendments thereto, as in effect on the date hereof (the “Articles of Incorporation”), and the Company’s By-laws and all amendments thereto, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.

4.4ISSUANCE OF SHARES. As of the filing of the Registration Statement the Company will have reserved the amount of Shares included in the Registration Statement for issuance pursuant to the Registered Offering Transaction Documents, which have been duly authorized and reserved (subject to adjustment pursuant to the Company’s covenant set forth in Section 5.5 below) pursuant to this Agreement. Upon issuance in accordance with this Agreement, the Securities will be validly issued, fully paid for and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. In the event the Company cannot register a sufficient number of Shares for issuance pursuant to this Agreement, the Company will use its best efforts to authorize and reserve for issuance the number of Shares required for the Company to perform its obligations hereunder as soon as reasonably practicable.

4.5NO CONFLICTS. The execution, delivery and performance of the Registered Offering Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby will not (i) result in a violation of the Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the By-laws; or (ii) conflict with, or constitute a material default (or an event which with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument to which the Company or any of its Subsidiaries is a party, or to the Company’s knowledge result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws and regulations and the rules and regulations of the Principal Market or principal securities exchange or trading market on which the Common Stock is traded or listed) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected. Neither the Company nor its Subsidiaries is in violation of any term of, or in default under, the Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the By-laws or their organizational charter or by-laws, respectively, or any contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except for possible conflicts, defaults, terminations, amendments, accelerations, cancellations and violations that would not individually or in the aggregate have or constitute a Material Adverse Effect. The business of the Company and its Subsidiaries is not being conducted, and shall not be conducted, in violation of any law, statute, ordinance, rule, order or regulation of any governmental authority or agency, regulatory or self-regulatory agency, or court, except for possible violations the sanctions for which either individually or in the aggregate would not have a Material Adverse Effect. Except as specifically contemplated by this Agreement and as required under the 1933 Act or any securities laws of any states, to the Company’s knowledge, the Company is not required to obtain any consent, authorization, permit or order of, or make any filing or registration (except the filing of a registration statement as outlined in the Registration Rights Agreement between the parties) with, any court, governmental authority or agency, regulatory or self-regulatory agency or other third party in order for it to execute, deliver or perform any of its obligations under, or contemplated by, the Registered Offering Transaction Documents in accordance with the terms hereof or thereof. All consents, authorizations, permits, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof and are in full force and effect as of the date hereof. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The Company is not, and will not be, in violation of the listing requirements of the Principal Market as in effect on the date hereof and on each of the Closing Dates and is not aware of any facts which would reasonably lead to delisting of the Common Stock by the Principal Market in the foreseeable future.

4.6SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, and amendments thereto, being hereinafter referred to as the “SEC Documents”). The Company has delivered to the Investor or its representatives, or they have had access through EDGAR to, true and complete copies of the SEC Documents. As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC or the time they were amended, if amended, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, by a firm that is a member of the Public Companies Accounting Oversight Board (“PCAOB”) consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other written information provided by or on behalf of the Company to the Investor which is not included in the SEC Documents, including, without limitation, information referred to in Section 4.3 of this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstance under which they are or were made, not misleading. Neither the Company nor any of its Subsidiaries or any of their officers, directors, employees or agents have provided the Investor with any material, nonpublic information which was not publicly disclosed prior to the date hereof and any material, nonpublic information provided to the Investor by the Company or its Subsidiaries or any of their officers, directors, employees or agents prior to any Closing Date shall be publicly disclosed by the Company prior to such Closing Date.

4.7ABSENCE OF CERTAIN CHANGES. Except as otherwise set forth in the SEC Documents, the Company does not intend to change the business operations of the Company in any material way. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any bankruptcy law nor does the Company or its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings.

4.8ABSENCE OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of Company or any of its Subsidiaries, threatened against or affecting the Company, the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a Material Adverse Effect.

4.9ACKNOWLEDGMENT REGARDING INVESTOR’S PURCHASE OF SHARES. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length investor with respect to the Registered Offering Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Registered Offering Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Investor or any of its respective representatives or agents in connection with the Registered Offering Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investor’s purchase of the Securities, and is not being relied on by the Company. The Company further represents to the Investor that the Company’s decision to enter into the Registered Offering Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.

4.10 NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as set forth in the SEC Documents, as of the date hereof, no event, liability, development or circumstance has occurred or exists, or to the Company’s knowledge is contemplated to occur, with respect to the Company or its Subsidiaries or their respective business, properties, assets, prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws on a registration statement filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.

4.11 EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries is involved in any union labor dispute nor, to the knowledge of the Company or any of its Subsidiaries, is any such dispute threatened. Neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that relations with their employees are good. No executive officer (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company’s employ or otherwise terminate such officer’s employment with the Company.

4.12 INTELLECTUAL PROPERTY RIGHTS. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted. Except as set forth in the SEC Documents, none of the Company’s trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, government authorizations, trade secrets or other intellectual property rights necessary to conduct its business as now or as proposed to be conducted have expired or terminated, or are expected to expire or terminate within three (3) years from the date of this Agreement. The Company and its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical trade secrets or technical information by others and, except as set forth in the SEC Documents, there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company or its Subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and the Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and its Subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties.

4.13 ENVIRONMENTAL LAWS. The Company and its Subsidiaries (i) are, to the knowledge of the management and directors of the Company and its Subsidiaries, in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”); (ii) have, to the knowledge of the management and directors of the Company, received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance, to the knowledge of the management and directors of the Company, with all terms and conditions of any such permit, license or approval where, in each of the three (3) foregoing cases, the failure to so comply would have, individually or in the aggregate, a Material Adverse Effect.

4.14 TITLE. The Company and its Subsidiaries have good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are described in the SEC Documents or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries. Any real property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

4.15 INSURANCE. Each of the Company’s Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for and neither the Company nor its Subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

4.16 REGULATORY PERMITS. The Company and its Subsidiaries have in full force and effect all certificates, approvals, authorizations and permits from the appropriate federal, state, local or foreign regulatory authorities and comparable foreign regulatory agencies, necessary to own, lease or operate their respective properties and assets and conduct their respective businesses, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, approval, authorization or permit, except for such certificates, approvals, authorizations or permits which if not obtained, or such revocations or modifications which, would not have a Material Adverse Effect.

4.17 INTERNAL ACCOUNTING CONTROLS. Except as otherwise set forth in the SEC Documents, the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles by a firm with membership to the PCAOB and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company’s management has determined that the Company’s internal accounting controls were not effective as of the date of this Agreement as further described in the SEC Documents.

4.18 NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

4.19 TAX STATUS. The Company and each of its Subsidiaries has made or filed all United States federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

4.20 CERTAIN TRANSACTIONS. Except as set forth in the SEC Documents filed at least ten (10) days prior to the date hereof and except for arm’s length transactions pursuant to which the Company makes payments in the ordinary course of business upon terms no less favorable than the Company could obtain from disinterested third parties, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, such that disclosure would be required in the SEC Documents..

4.21 DILUTIVE EFFECT. The Company understands and acknowledges that the number of shares of Common Stock issuable upon purchases pursuant to this Agreement will increase in certain circumstances including, but not necessarily limited to, the circumstance wherein the trading price of the Common Stock declines during the period between the Effective Date and the end of the Open Period. The Company’s executive officers and directors have studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential dilutive effect on the shareholders of the Company. The Board of Directors of the Company has concluded, in its good faith business judgment, and with full understanding of the implications, that such issuance is in the best interests of the Company. The Company specifically acknowledges that, subject to such limitations as are expressly set forth in the Registered Offering Transaction Documents, its obligation to issue shares of Common Stock upon purchases pursuant to this Agreement is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

4.22 NO GENERAL SOLICITATION. Neither the Company, nor any of its affiliates, nor any person acting on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Common Stock to be offered as set forth in this Agreement.

4.23 NO BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. Other than J.H. Darbie & Co., Inc., no brokers, finders or financial advisory fees or commissions will be payable by the Company, its agents or Subsidiaries, with respect to the transactions contemplated by this Agreement.

4.24 EXCLUSIVITY. The Company shall not pursue a similar equity financing transaction as envisioned hereunder (the “Equity Financing”) with any other party unless and until good faith negotiations have terminated between the Investor and the Company or until such time as the Registration Statement has been declared effective by the SEC.

SECTION V

COVENANTS OF THE COMPANY

5.1BEST EFFORTS. The Company shall use all commercially reasonable efforts to timely satisfy each of the conditions set forth in Section 7 of this Agreement.

5.2REPORTING STATUS. Until one of the following occurs, the Company shall file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status, or take an action or fail to take any action, which would terminate its status as a reporting company under the 1934 Act: (i) this Agreement terminates pursuant to Section 8 and the Investor has the right to sell all of the Securities without restrictions pursuant to Rule 144 promulgated under the 1933 Act, or such other exemption, or (ii) the date on which the Investor has sold all the Securities and this Agreement has been terminated pursuant to Section 8.

5.3USE OF PROCEEDS. The Company will use the proceeds from the sale of the Put Shares(excluding amounts paid by the Company for fees as set forth in the Registered Offering Transaction Documents) for general corporate and working capital purposes and acquisitions or assets, businesses or operations or for other purposes that the Board of Directors, in good faith, deem to be in the best interest of the Company.

5.4FINANCIAL INFORMATION. During the Open Period, the Company agrees to make available to the Investor via EDGAR or other electronic means the following documents and information on the forms set forth: (i) within five (5) Trading Days after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any Registration Statements or amendments filed pursuant to the 1933 Act; (ii) copies of any notices and other information made available or given to the shareholders of the Company generally, contemporaneously with the making available or giving thereof to the shareholders; and (iii) within two (2) calendar days of filing or delivery thereof, copies of all documents filed with, and all correspondence sent to, the Principal Market, any securities exchange or market, or the Financial Industry Regulatory Association, unless such information is material nonpublic information.

5.5RESERVATION OF SHARES. The Company shall take all action necessary to at all times have authorized, and reserved the amount of Shares included in the Company’s registration statement for issuance pursuant to the Registered Offering Transaction Documents. In the event that the Company determines that it does not have a sufficient number of authorized shares of Common Stock to reserve and keep available for issuance as described in this Section 5.5, the Company shall use all commercially reasonable efforts to increase the number of authorized shares of Common Stock by seeking shareholder approval for the authorization of such additional shares.

5.6LISTING. The Company shall promptly secure and maintain the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) on the Principal Market and each other national securities exchange and automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain, such listing of all Registrable Securities from time to time issuable under the terms of the Registered Offering Transaction Documents. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market (excluding suspensions of not more than one (1) Trading Day resulting from business announcements by the Company). The Company shall promptly provide to the Investor copies of any notices it receives from the Principal Market regarding the continued eligibility of the Common Stock for listing on such automated quotation system or securities exchange. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 5.6.

5.7TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of its Subsidiaries not to, enter into, amend, modify or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment or arrangement with any of its or any Subsidiary’s officers, directors, persons who were officers or directors at any time during the previous two (2) years, shareholders who beneficially own 5% or more of the Common Stock, or Affiliates or with any individual related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual owns a 5% or more beneficial interest (each a “Related Party”), except for (i) customary employment arrangements and benefit programs on reasonable terms, (ii) any agreement, transaction, commitment or arrangement on an arms-length basis on terms no less favorable than terms which would have been obtainable from a disinterested third party other than such Related Party, or (iii) any agreement, transaction, commitment or arrangement which is approved by a majority of the disinterested directors of the Company. For purposes hereof, any director who is also an officer of the Company or any Subsidiary of the Company shall not be a disinterested director with respect to any such agreement, transaction, commitment or arrangement. “Affiliate” for purposes hereof means, with respect to any person or entity, another person or entity that, directly or indirectly, (i) has a 5% or more equity interest in that person or entity, (ii) has 5% or more common ownership with that person or entity, (iii) controls that person or entity, or (iv) is under common control with that person or entity. “Control” or “Controls” for purposes hereof means that a person or entity has the power, directly or indirectly, to conduct or govern the policies of another person or entity.

5.8[RESERVED]

5.9CORPORATE EXISTENCE. The Company shall use all commercially reasonable efforts to preserve and continue the corporate existence of the Company.

5.10 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE A PUT. The Company shall promptly notify the Investor upon the occurrence of any of the following events in respect of a Registration Statement or related prospectus in respect of an offering of the Securities: (i) receipt of any request for additional information by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Securities for sale in any jurisdiction or the initiation or notice of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in such Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of a Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (v) the Company’s reasonable determination that a post-effective amendment or supplement to the Registration Statement would be appropriate, and the Company shall promptly make available to Investor any such supplement or amendment to the related prospectus. The Company shall not deliver to Investor any Put Notice during the continuation of any of the foregoing events in this Section 5.10.

5.11 TRANSFER AGENT. The Company shall deliver instructions to its transfer agent to issue Shares to the Investor that are issued to the Investor pursuant to the Equity Financing and transactions contemplated herein.

5.12 ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants to the Investor that: (i) it is voluntarily entering into this Agreement of its own free will, (ii) it is not entering this Agreement under economic duress, (iii) the terms of this Agreement are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection with this Agreement.

SECTION VI

CONDITIONS OF THE COMPANY’S OBLIGATION TO SELL

The obligation hereunder of the Company to issue and sell the Securities to the Investor is further subject to the satisfaction, at or before each Closing Date, of each of the following conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion.

6.1The Investor shall have executed this Agreement and the Registration Rights Agreement and delivered the same to the Company.

6.2The Investor shall have delivered to the Company the Purchase Price for the Securities being purchased by the Investor.

6.3No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

SECTION VII

FURTHER CONDITIONS OF THE INVESTOR’S OBLIGATION TO PURCHASE

The obligation of the Investor hereunder to purchase Securities is subject to the satisfaction, on or before each Closing Date, of each of the following conditions set forth below.

7.1The Company shall have executed the Registered Offering Transaction Documents and delivered the same to the Investor.

7.2The representations and warranties of the Company shall be true and correct as of the date when made and as of the applicable Closing Date as though made at that time and the Company shall have performed, satisfied and complied with the covenants, agreements and conditions required by the Registered Offering Transaction Documents to be performed, satisfied or complied with by the Company on or before such Closing Date. The Investor may request an update as of such Closing Date regarding the representation contained in Section 4.3.

7.3The Company shall have executed and delivered to the Investor via DWAC the Securities (in such denominations as the Investor shall request) being purchased by the Investor at such Closing.

7.4The Board of Directors of the Company shall have adopted resolutions consistent with Section 4.2(ii) (the “Resolutions”) and such Resolutions shall not have been amended or rescinded prior to such Closing Date.

7.5No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.

7.6Within fifteen (15) calendar days after the Agreement is executed, the Company agrees to use its best efforts to file with the SEC the Registration Statement covering the shares of stock underlying the Equity Financing contemplated herein. Such Registration Statement shall conform to the requirements of the rules and regulations of the SEC and be subject to the reasonable approval of the Investor. The Company will take any and all steps necessary to have its Registration Statement declared effective by the SEC within thirty (30) calendar days but no more than ninety (90) calendar days after the Company has filed its Registration Statement. The Registration Statement shall be effective on each Closing Date and no stop order suspending the effectiveness of the Registration statement shall be in effect or to the Company’s knowledge shall be pending or threatened. Furthermore, on each Closing Date (I) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so (unless the SEC’s concerns have been addressed), and (II) no other suspension of the use or withdrawal of the effectiveness of such Registration Statement or related prospectus shall exist.

7.7At the time of each Closing, the Registration Statement (including information or documents incorporated by reference therein) and any amendments or supplements thereto shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading or which would require public disclosure or an update supplement to the prospectus.

7.8If applicable, the shareholders of the Company shall have approved the issuance of any Shares in excess of the Maximum Common Stock Issuance in accordance with Section 2.5 or the Company shall have obtained appropriate approval pursuant to the requirements of applicable state and federal laws and the Company’s Articles of Incorporation and By-laws.

7.9 The conditions to such Closing set forth in Section 2.3 shall have been satisfied on or before such Closing Date.

7.10The Company shall have certified to the Investor the number of Shares of Common Stockoutstanding when a Put Notice is given to the Investor. The Company’s delivery of a Put Notice to the Investor constitutes the Company’s certification of the existence of the necessary number of shares of Common Stock reserved for issuance.

SECTION VIII
TERMINATION

This Agreement shall terminate upon any of the following events:

8.1when the Investor has purchased an aggregate of Thirty Million Dollars ($30,000,000) in the Common Stock of the Company pursuant to this Agreement; or

8.2twelve (12) months from the date of this Agreement's execution have elapsed. Any and all shares, or penalties, if any, due under this Agreement shall be immediately payable and due upon termination of this Agreement.

SECTION IX
SUSPENSION

This Agreement shall be suspended upon any of the following events, and shall remain suspended until such event is rectified:

	i.	The trading of the Common Stock is suspended by the SEC, the Principal Market or FINRA for a period of two (2) consecutive Trading Days during the Open Period;

	ii.	The Common Stock ceases to be quoted, listed or traded on the Principal Market or the Registration Statement is no longer effective (except as permitted hereunder);

	iii.	The Company breaches representation, warranty, covenant or other such term;

	iv.	The Company files, threatens or is compelled into Bankruptcy or insolvency; or

	v.	The Common Stock is no longer DWAC eligible.

	vi.	Immediately upon the occurrence of one of the above-described events, the Company shall send written notice of such event to the Investor.

SECTION X

INDEMNIFICATION

In consideration of the parties mutual obligations set forth in the Transaction Documents, the Company ( the “Indemnitor”) shall defend, protect, indemnify and hold harmless the Investor and all of the investor’s shareholders, officers, directors, employees, counsel, and direct or indirect investors and any of the foregoing person’s agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (I) any misrepresentation or breach of any representation or warranty made by the Indemnitor or any other certificate, instrument or document contemplated hereby or thereby; (II) any breach of any covenant, agreement or obligation of the Indemnitor contained in the Registered Offering Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby; or (III) any cause of action, suit or claim brought or made against such Indemnitee by a third party and arising out of or resulting from the execution, delivery, performance or enforcement of the Registered Offering Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, except insofar as any such misrepresentation, breach or any untrue statement, alleged untrue statement, omission or alleged omission is made in reliance upon and in conformity with information furnished to Indemnitor which is specifically intended for use in the preparation of any such Registration Statement, preliminary prospectus, prospectus or amendments to the prospectus. To the extent that the foregoing undertaking by the Indemnitor may be unenforceable for any reason, the Indemnitor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The indemnity provisions contained herein shall be in addition to any cause of action or similar rights Indemnitor may have, and any liabilities the Indemnitor or the Indemnitees may be subject to.

SECTION XI

GOVERNING LAW: DISPUTES SUBMITTED TO ARBITRATION.

11.1 LAW GOVERNING THIS AGREEMENT. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state or federal courts located in New York City, New York State. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The parties executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Documents by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

11.2 LEGAL FEES; AND MISCELLANEOUS FEES. At the Closing of the Initial Put, the Company shall deposit ten thousand dollars ($10,000) with the Investor’s designated legal counsel to offset legal costs. Except as otherwise set forth in the Registered Offering Transaction Documents (including but not limited to Section V of the Registration Rights Agreement), each party shall pay the fees and expenses of its advisers, counsel, the accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. Any attorneys’ fees and expenses incurred by either the Company or the Investor in connection with the preparation, negotiation, execution and delivery of any amendments to this Agreement or relating to the enforcement of the rights of any party, after the occurrence of any breach of the terms of this Agreement by another party or any default by another party in respect of the transactions contemplated hereunder, shall be paid on demand by the party which breached the Agreement and/or defaulted, as the case may be. The Company shall pay all stamp and other taxes and duties levied in connection with the issuance of any Securities.

11.3 COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. This Agreement may be executed by facsimile transmission, PDF, electronic signature or other similar electronic means with the same force and effect as if such signature page were an original thereof.

11.4 HEADINGS; SINGULAR/PLURAL. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and masculine shall include the feminine.

11.5 SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

11.6 ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the FINAL AGREEMENT between the Company and the Investor with respect to the terms and conditions set forth herein, and, the terms of this Agreement may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the Parties. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Investor, and no provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. The execution and delivery of the Registered Offering Transaction Documents shall not alter the force and effect of any other agreements between the Parties, and the obligations under those agreements.

11.7 NOTICES. Any notices or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (I) upon receipt, when delivered personally; (II) upon receipt, when sent by email; or (III) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:

	If to the Company:	Attn: Dennis O’Leary, CEO 815 Walker St. Suite 1155 Houston, TX 77002

	With a copy to:	Attn: Brian Higley, Esq 14888 Auburn Sky Drive Draper, UT 84020

	(which copy shall not constitute notice)

	If to the Investor:	GHS Investments, LLC 420 Jericho Turnpike, Suite 102 Jericho, NY 11753

Each party shall provide five (5) days prior written notice to the other party of any change in address.

11.8 NO ASSIGNMENT. This Agreement may not be assigned.

11.9 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except that the Company acknowledges that the rights of the Investor may be enforced by its general partner.

11.10 SURVIVAL. The representations and warranties of the Company and the Investor contained in Sections 3 and 4, the agreements and covenants set forth in Sections 5 and 6, and the indemnification provisions set forth in Section 10, shall survive each of the Closings and the termination of this Agreement.

11.11 PUBLICITY. The Investor acknowledges that this Agreement and all or part of the Registered Offering Transaction Documents may be deemed to be “material contracts” as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the 1933 Act or the 1934 Act. The Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.

11.12 FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

11.13 PLACEMENT AGENT. If so required, the Company agrees to pay a registered broker dealer, to act as placement agent. The Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other persons or entities for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Registered Offering Transaction Documents. The Company shall indemnify and hold harmless the Investor, their employees, officers, directors, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorney’s fees) and expenses incurred in respect of any such claimed or existing fees, as such fees and expenses are incurred.

11.14 NO STRICT CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party, as the parties mutually agree that each has had a full and fair opportunity to review this Agreement and seek the advice of counsel on it.

11.15 REMEDIES. The Investor shall have all rights and remedies set forth in this Agreement and the Registration Rights Agreement and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which the Investor has by law. Any person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any default or breach of any provision of this Agreement, including the recovery of reasonable attorneys fees and costs, and to exercise all other rights granted by law.

11.16 PAYMENT SET ASIDE. To the extent that the Company makes a payment or payments to the Investor hereunder or under the Registration Rights Agreement or the Investor enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

11.17 PRICING OF COMMON STOCK. For purposes of this Agreement, the price of the Common Stock shall be as reported by Quotestream Media.

SECTION XII

NON-DISCLOSURE OF NON-PUBLIC INFORMATION

The Company shall not disclose non-public information to the Investor, its advisors, or its representatives.

Nothing herein shall require the Company to disclose non-public information to the Investor or its advisors or representatives, and the Company represents that it does not disseminate non-public information to any investors who purchase stock in the Company in a public offering, to money managers or to securities analysts, provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided, immediately notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting non-public information (whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the Registration Statement would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements, therein, in light of the circumstances in which they were made, not misleading. Nothing contained in this Section 12 shall be construed to mean that such persons or entities other than the Investor (without the written consent of the Investor prior to disclosure of such information) may not obtain non-public information in the course of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company of their opinion that based on such due diligence by such persons or entities, that the Registration Statement contains an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

SECTION XIII

ACKNOWLEDGEMENTS OF THE PARTIES

Notwithstanding anything in this Agreement to the contrary, the parties hereto hereby acknowledge and agree to the following: (i) the Investor makes no representations or covenants that it will not engage in trading in the securities of the Company, other than as provided in Section 3.12 of this Agreement; (ii) the Company shall, by 8:30 a.m. EST on the fourth Trading Day following the date hereof, file a current report on Form 8-K disclosing the material terms of the transactions contemplated hereby and in the other Registered Offering Transaction Documents; (iii) the Company has not and shall not provide material nonpublic information to the Investor unless prior thereto the Investor shall have executed a written agreement regarding the confidentiality and use of such information; and (iv) the Company understands and confirms that the Investor will be relying on the acknowledgements set forth in clauses (i) through (iii) above if the Investor effects any transactions in the securities of the Company.

[Signature page follows]

Your signature on this Signature Page evidences your agreement to be bound by the terms and conditions of the Investment Agreement as of the date first written above. The undersigned signatory hereby certifies that he has read and understands the Investment Agreement, and the representations made by the undersigned in this Investment Agreement are true and accurate, and agrees to be bound by its terms.

	GHS INVESTMENTS, LLC


	By:	/s/ Mark Grober
	Name: Mark Grober
	Title: Member

	DARKPULSE, INC.


	By:	/s/ Dennis O’Leary
	Name: Dennis O’Leary
	Title: Chief Executive Officer

[SIGNATURE PAGE OF EQUITY FINANCING AGREEMENT]

LIST OF EXHIBITS

EXHIBIT ARegistration Rights Agreement

EXHIBIT BNotice of Effectiveness

EXHIBIT CPut Notice

EXHIBIT DPut Settlement Sheet

EXHIBIT A

REGISTRATION RIGHTS AGREEMENT

See attached.

EXHIBIT B

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

Date: _____________________

[TRANSFER AGENT]

Re: DarkPulse, Inc.

Ladies and Gentlemen:

We are counsel to DarkPulse, Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with that certain Equity Financing Agreement (the “Investment Agreement”) entered into by and among the Company and GHS Investments, LLC(the “Investor”) pursuant to which the Company has agreed to issue to the Investor shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”) on the terms and conditions set forth in the Investment Agreement. Pursuant to the Investment Agreement, the Company also has entered into a Registration Rights Agreement with the Investor (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock issued or issuable under the Investment Agreement under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration Rights Agreement, on__________ ___, 20__, the Company filed a Registration Statement on Form S-1 (File No. __-______ ) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names the Investor as a selling shareholder thereunder.

In connection with the foregoing, we advise you that a member of the SEC's staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at ______ on _________ , 20__ and we have no knowledge, after telephonic inquiry of a member of the SEC's staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for sale under the 1933 Act pursuant to the Registration Statement

Very truly yours,

[Company Counsel]

EXHIBIT C

FORM OF PUT NOTICE

Date:

RE: Put Notice Number __

Dear Mr./Ms.________,

This is to inform you that as of today, DarkPulse, Inc., a Delaware corporation (the “Company”), hereby elects to exercise its right pursuant to the Equity Financing Agreement to require GHS Investments LLC to purchase shares of its common stock. The Company hereby certifies that:

The amount of this put is $_________ .

The Pricing Period runs from_______________ until_____________ .

The Purchase Price is: $_____________

The number of Put Shares due:_________________ .

The current number of shares of common stock issued and outstanding is:_______________ .

The number of shares currently available for issuance on the S-1 is: _____________________ .

Regards,

DarkPulse, Inc..

By:______________________________

Name:

Title:

EXHIBIT D

PUT SETTLEMENT SHEET

Date:_______________

Dear Mr.________,

Pursuant to the Put given by DarkPulse, Inc., to GHS Investments LLC (“GHS”) on 202_, we are now submitting the amount of common shares for you to issue to GHS.

Please have a certificate bearing no restrictive legend totaling ________________ shares issued to GHS immediately and send via DWAC to the following account:

[INSERT]

If not DWAC eligible, please send FedEx Priority Overnight to:

[INSERT ADDRESS]

Once these shares are received by us, we will have the funds wired to the Company.

Regards,

GHS INVESTMENTS LLC

By:______________________________
Name:
Title

Exhibit 10.24

WAIVER AND RIGHTS AGREEMENT

This Waiver and Rights Agreement, dated as of August 14, 2024 (this “Agreement”), is entered into by and among DarkPulse, Inc. (“Company”) and the Investor identified on the signature page hereto (the “Investor”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the EFA (defined below).

RECITALS

WHEREAS, as of August 14, 2024, Company issued an aggregate of approximately 271,971,823 Shares (the “Shares”) on April 28, 2023, June 13, 2023, June 26, 2023, July 3, 2023, July 10, 2023, and August 14, 2024, respectively, pursuant to the Third Amended Equity Financing Agreement dated August 14, 2024 (the “EFA”) to the Investor;

WHEREAS, the terms of the EFA provide that the Company register with the Commission for resale the shares issued pursuant to the EFA and;

WHEREAS, pursuant to the EFA and the Registration Rights Agreement, the Company was required to file a registration statement for the Shares and to keep the registration statement effective while the Investor owns any Shares; and

WHEREAS, the Company desires a waiver from the Investor, and to cure said breach/default;

WHEREAS, in consideration of the waiver from the Investor and cure of said breach/default, the Company desires to grant to the Investor the Rights, as defined herein; and

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Waiver. The Investor hereby agrees that in lieu of any liquidated damages payable to the Investor which have accrued up to and including the date hereof, the Investor will accept as full and final payment of any obligation due by Company to the Investor, the Shares, as defined herein.

2. General. The Company grants to the Investor the rights (the “Rights”) to receive 962,489,983 shares of Common Stock (the “Shares,” or the “Securities”). The Company and the Investor hereby agree that no additional consideration is payable in connection with the issuance of the Rights or the exercise of the Rights.

3. Exercise of Right of Issuance of Shares. Subject to the terms hereof, the exercise of the Rights may be made, in whole or in part, at any time or times on or after the date hereof by delivery to the Company of a duly executed PDF copy of a Notice of Issuance in the form annexed hereto as Exhibit A (each, a “Notice of Issuance”, and the corresponding date thereof, the “Exercise Date”). Partial exercises of the Rights resulting in issuances of a portion of the total number of Shares available thereunder shall have the effect of lowering the outstanding number of Shares issuable thereunder in an amount equal to the applicable number of Shares issued. Investor and the Company shall maintain records showing the number of Shares issued and the date of such issuances. The Company shall deliver any objection to any Notice of Issuance within one (1) Trading Day (as defined below) of receipt of such notice. Investor acknowledges and agrees that, by reason of the provisions of this Section, following each exercise of the Rights issued hereunder and the issuance of a portion of the Shares pursuant thereto, the number of Shares available for issuance pursuant to the Rights issued hereunder at any given time may be less than the amount stated herein. For the purposes hereof, “Trading Day” means any day on which shares of Common Stock are purchased and sold on the principal market on which the Common Stock is listed or quoted.

4. Delivery of Shares. The Shares issued hereunder shall be transmitted by the Company’s transfer agent (the “Transfer Agent”) to Investor by crediting the account of Investor’s prime broker with The Depository Trust Company through its Deposit/Withdrawal at Custodian system if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Shares to or resale of the Shares by Investor or (B) the Shares are eligible for resale by Investor without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery to the address specified by Investor in the Notice of Issuance by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Issuance (such date, the “Share Delivery Deadline”). The Shares shall be deemed to have been issued, and Investor or any other person so designated to be named therein shall be deemed to have become the holder of record of such shares for all purposes, as of the date the Rights have been exercised.

5. Charges, Taxes and Expenses. Issuance of Shares shall be made without charge to Investor for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of Investor. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Issuance.

6. Authorized Shares. The Company covenants that, during the period the Rights are outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Shares upon the exercise of the Rights. The Company further covenants that its issuance of the Rights shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates, if any, for the Shares upon the due exercise of the Rights. The Company will take all such reasonable action as may be necessary to assure that such Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the OTC Markets or any of the following other markets or exchanges on which the Common Stock is then listed or quoted for trading: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing) or a principal quotation system (i.e., OTCQX, OTCQB, OTC Pink). The Company covenants that all Shares which may be issued upon the exercise of the Rights represented by this Agreement will, upon exercise of the Rights, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes and all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

7. Impairment. Except and to the extent as waived or consented to by Investor, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Investor as set forth in this Agreement against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Shares upon the exercise of the Rights and (iii) use reasonable best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Agreement.

8. Authorizations. Before taking any action which would result in an adjustment in the number of Shares for which the Rights provides for, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

9. Limitations on Exercise. The Company shall not effect the exercise of any Rights, and Investor shall not have the right to exercise any portion of any Rights pursuant to the terms and conditions of this Agreement and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, Investor together with Investor’s Affiliates (as defined below), and any other Persons (as defined below) acting as a group together with Investor or any of Investor’s Affiliates (such Persons, “Attribution Parties”) collectively would beneficially own in excess of 4.99% (the “Beneficial Ownership Limitation”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by Investor and the other Attribution Parties shall include the number of shares of Common Stock beneficially owned by Investor and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of the Rights issued hereunder with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, nonexercised portion of the Rights beneficially owned by Investor or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants) beneficially owned by Investor or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section. For purposes of this Section, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”). For purposes of determining the number of outstanding shares of Common Stock Investor may acquire upon the exercise of the Rights without exceeding the Beneficial Ownership Limitation, Investor may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission (the “SEC”), as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives a Notice of Issuance from Investor at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify Investor in writing of the number of shares of Common Stock then outstanding and, to the extent that such Notice of Issuance would otherwise cause Investor’s beneficial ownership, as determined pursuant to this Section, to exceed the Beneficial Ownership Limitation, Investor must notify the Company of a reduced number of shares of Common Stock to be issued pursuant to such Notice of Issuance. For any reason at any time, upon the written (which may be an e-mail) request of Investor, the Company shall within one (1) Business Day confirm orally and in writing (which may be an e-mail) to Investor the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Rights, by Investor and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to Investor upon exercise of the Rights results in Investor and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Beneficial Ownership Limitation of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which Investor’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Beneficial Ownership Limitation (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and Investor shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, Investor may from time to time increase (with such increase not effective until the sixty-first (61^st) day after delivery of such notice) or decrease the Beneficial Ownership Limitation to any other percentage not in excess of 4.99% as specified in such notice; provided that any such increase in the Beneficial Ownership Limitation will not be effective until the sixty- first (61^st) day after such notice is delivered to the Company. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of the Rights hereunder in excess of the Beneficial Ownership Limitation shall not be deemed to be beneficially owned by Investor for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise any Rights pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of Rights. For purposes of this Agreement, (x) “Person” means an individual, a limited liability company, a partnership (general or limited), a joint venture, a corporation, a trust, an unincorporated organization, or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof and (y) “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.

10. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of the Rights, pursuant to the terms hereof.

11. Stock Dividends and Splits. If the Company, at any time while the Rights exist: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the number of Shares issuable upon exercise of the Rights shall be proportionately adjusted. Any adjustment made pursuant to this Section shall become effective immediately upon the record date for the determination of stockholders entitled to receive such dividend or distribution (provided that if the declaration of such dividend or distribution is rescinded or otherwise cancelled, then such adjustment shall be reversed upon notice to Investor of the termination of such proposed declaration or distribution as to any unexercised portion of the Rights at the time of such rescission or cancellation) and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

12. No Rights as Stockholder Until Exercise. Each Right does not entitle Investor to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof.

13. Transferability. Subject to compliance with any applicable securities laws, the Rights and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon written assignment in the form reasonably agreed to by the Company and Investor duly executed by Investor or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer of this Agreement delivered to the principal office of the Company or its designated agent. Upon such assignment and, if required, such payment, the Company shall enter into a new agreement with the assignee or assignees, as applicable, and this Agreement shall promptly be cancelled. Any Right, if properly assigned in accordance herewith, may be exercised by such assignee for the issue of Shares without having a new agreement executed.

14. Registration Rights. On or prior to the thirtieth (30^th) calendar day following the date hereof, the Company will file a registration statement on Form S-1 (or an amendment to an existing S-1) covering the resale of all of the Shares that are not then registered on an effective Registration Statement. The Company shall use its best efforts to cause such registration statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, and shall use its best efforts to keep such registration statement continuously effective under the Securities Act until the date that all Shares covered by such registration statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the Investor.

15. Effect of this Waiver. This Agreement shall only be deemed to be in full force and effect from and after both the execution of this Agreement by the parties hereto and the execution of an agreement substantially identical to this Agreement by the Company and the Investor.

16. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and thereof and supersedes all prior agreements and understandings, written or oral, with respect to such matters, which the parties acknowledge have been merged into the Agreement.

17. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdictions other than the State of Nevada. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

18. Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

[Signature page follows]

IN WITNESS WHEREOF, the Company and the Investor have executed this Agreement as of the date first written above.

	COMPANY:

	DarkPulse, Inc.


	By:	/s/ Dennis O’Leary
		Name: Dennis O’Leary
		Title: CEO

[Signature Page to Waiver Agreement]

	INVESTOR:

	GHS Investments, LLC


	By:	/s/ Mark Grober
		Name: Mark Grober
		Title: Member

EXHIBIT A

NOTICE OF ISSUANCE

The undersigned holder hereby exercises the rights (the “Rights”) to receive ___________________ of the shares of Common Stock (the “Shares”) of DarkPulse, Inc., a Delaware corporation (the “Company”), established pursuant to that certain Waiver and Rights Agreement, dated August 14, 2024 (the “Agreement”), by and between the Company and GHS Investments LLC (“Investor”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Agreement.

The Company shall deliver to Investor, or its designee or agent as specified below, ___________________Shares in accordance with the terms of the Rights. Delivery shall be made to Investor, or for its benefit, as follows:

☐ Check here if requesting delivery as a certificate to the following name and to the following address:

	Issue to:

☐ Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:

	DTC Participant:
	DTC Number:
	Account Number:

Date: _________________________ ,

Name of Registered Holder

By:
	Name:
	Title:

	Tax ID:

	Facsimile:

E-mail Address: ___________________________

Exhibit 10.25

SETTLEMENT AGREEMENT

This Settlement Agreement (the "Settlement Agreement") is entered into as of July 24, 2024 by and between OS Capital Partners LLC ("GS") and DarkPulse, Inc. (hereafter, "DPLS"), on the other hand. GS and DPLS are collectively referred to as the “Parties.”

Recitals

WHEREAS, the Parties have entered into a 6% Redeemable Note ("Note") pursuant to which there is a balance owed by DPLS to GS;

WHEREAS, GS commenced an action in New York Supreme Court titled, GS Capital Partners LLC v. DarkPulse, Inc., Index No. 652689/2023, asserting a breach of the Note;

WHEREAS, a judgment was entered against DPLS in favor of GS in the amount of $2,511,822.51 (the "Judgment");

WHEREAS, on September 27, 2023, in response to the Judgment, DPLS and GS entered into a settlement agreement (First Settlement) to resolve the Judgment, which required DPLS to, among other things, (1) make monthly payments of $100,000.00 to GS, (2) establish a reserve of its Common Stock for the benefit of GS initially containing 2,511,822,510 shares (the "Initial Reserve), and (3) file a registration statement on Form S-1 (Registration Statement) providing for the resale of shares of DPLS' common stock by GS (in connection with the First Settlement) through the registration of the Initial Reserve in an amount equal 2,511,822,510 shares. DPLS has not complied with all the terms of the First Settlement giving rise to a GS claim for the Judgment balance of $2,673,423.19 ("Balance") in default interest and the foreclosure on shares of Preferred Series A stock in DPLS ("Breach of Settlement Claims");

WHEREAS, on July 3, 2024, GS commenced an action against DPLS in the Eighth Judicial District Court, Clark County, Nevada, to which DPLS expressly agrees to such venue and jurisdiction, asserting the Breach of Settlement Claims ("Action")

WHEREAS, the Parties desire to settle the Breach of Settlement Claims and have engaged in arms' length negotiations, with each Party having been represented by counsel, in a joint effort to settle the Breach of Settlement Claims; and

WHEREAS, the Parties desire to settle the Breach of Settlement Claims on the terms stated herein, through the initiation of a legal proceeding in order to obtain the approval of the Court (as defined in Section l(c), below) in satisfaction of, and pursuant to, Section 3(a)(10) of the Securities Act of 1933 (15 U.S.C. § 77c(a)(10) (1976)) (hereafter, "Section 3(a)(10)");

NOW, THEREFORE, in consideration of the mutual covenants and agreements, and other good and valuable consideration provided for herein, the sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. Exchange of Settlement Documents.

	a.	Together with the execution of this Settlement Agreement, DPLS shall deliver via em.ail to GS, an executed scanned copy of the confession of judgment setting forth an award in favor of GS and against DPLS of $2,673,423.19, subject to any reductions per Section 3e herein, fully executed and in the form attached hereto at Exhibit 1 (the "Confession of Judgment"). Within 10 days after the final share distribution under paragraph 3 hereof is made, ifDPLS has fully com.plied with all of its obligations hereunder, GS will (1) return to DPLS or destroy all copies of the Confession of Judgment; and, (2) if requested in writing by DPLS, file with the Court an Acknowledgement of Full Satisfaction of Judgment acknowledging full satisfaction of the Settlement Agreement.

	b.	As soon as practicable after the filing of the Action (though no earlier than fifteen days thereafter), the Parties shall jointly file with the Court a Motion to Approve Settlement Agreement under Section 3(a)(10), or a similarly fashioned pleading (the "Motion"), and set the hearing thereon at the earliest time practical to obtain the Court's order approving the Motion. All Parties will support the granting of that Motion, including, without limitation, providing for any additional provisions not otherwise materially inconsistent with the terms and conditions of this Settlem.entAgreem.ent. If the Motion is denied or not approved within 60 days of filing, this Settlement Agreement shall be null and void. GS shall prepare the Motion, and DPLS shall promptly cooperate with all aspects of the filing and hearing to seek approval of the Motion.

2. Forbearance Period. GS agrees to hold the Confession of Judgment and not to file or otherwise enforce the Confession of Judgment during the "Forbearance Period." The Forbearance Period shall begin concurrently upon execution of this Settlement Agreement and shall end if and only in the event that DPLS fails to com.ply with the share issuance requirements set forth in Section 3, below.

3. DPLS Share Issuances to GS. Upon approval of the Court:

	a.	DPLS shall issue to GS free trading unrestricted shares of its common stock (subject to counsel of GS providing all relevant legal opinions) ("Settlement Shares") pursuant to a drawdown request and instructions by GS as delivered to DPLS or its Transfer Agent, in the form of Exhibit 2, in amounts determined by GS (each, a "Drawdown").

	b.	In no event shall the GS be allowed to effect a Drawdown if such Drawdown, along with all other shares of DPLS Common Stock beneficially owned by GS and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of DPLS.

	c.	The Settlement Shares shall be issued to GS at a price for each share equal to the average of the three lowest volume-weighted average prices ("VWAPs") of the Settlement Shares as reported on the National Quotations Bureau OTC Markets exchange which DPLS's shares are traded or any exchange upon which the Settlement Shares may be traded in the future ("Exchange"), for the five prior trading days ("Drawdown Price").

	d.	It is anticipated that for each Drawdown, DPLS will not need to take any further action or provide any further consents or instructions. However, if required to do so, DPLS shall promptly instruct its Transfer Agent to issue the Settlement Shares via DWAC. GS or its broker shall promptly submit any instructions necessary to initiate, accept and receive such DWAC transfers into GS's brokerage account for each Drawdown.

	e.	DPLS and GS agree that the amount of the Balance shall be reduced by the net proceeds received by GS from its sale of the Settlement Shares. GS shall provide DPLS written statements of the net proceeds received from each Drawdown each quarter.

	f.	DPLS shall take all actions necessary to ensure that all Settlement Shares are (1) issued under Section 3(a)(10); (2) duly authorized and, when issued, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens, encumbrances, and preemptive and similar rights to subscribe for or purchase securities; and, (3) free from restrictive legend.

	g.	If the any Settlement Shares are not issued and delivered within three trading days of GS's issuance of the instructions, GS shall have the right to have the Court enter the Confession of Judgment and to proceed to enforce that judgment, without further delay.

	h.	GS shall be allowed to sell, the greater of (1) in one week, no more than 1% of the total outstanding shares of the Company as reported in the Company's most recently filed SEC report or registration statement, which number may be updated from time to time, based upon the number of shares reflected as being outstanding in the Company's most recent SEC filing, on a non-cumulative basis, meaning that if the amount of shares allowed to be sold under this subparagraph are not sold in any specific week, that the unsold amount cannot be cumulated and sold in any subsequent week or weeks with the sale of other shares that are allowed to be sold in a specific week, and that all of such sales be shall made at the "ask" price and not at the "bid" price for the Company's shares in any applicable public market for such shares, and (2) 15% of the daily trading volume of the Company's common stock on any single trading day (the "daily trading volume" shall be defined as the number of shares of the Company's common stock traded on any stock exchange during regular trading hours on the applicable trading day).

	i.	Upon satisfaction of the obligations contained in this Settlement Agreement, GS and DPLS shall terminate the Pledge Agreement dated September 27, 2023 and GS shall release all release claims and liens it has on the 100 shares of Series A Super Voting Preferred Stock ofDPLS ("Series A") owned by Dennis O'Leary so that GS shall have no rights to any shares of Series A Preferred Stock of DPLS. For the avoidance of doubt, GS agrees to not to foreclose on the Series A so long as DPLS is in compliance with the Settlement Agreement.

4. Reserve. DPLS shall issue irrevocable transfer agent instructions reserving 2,500,000,000 shares of its common stock (the "Share Reserve") as the settlement Shares set forth in Exhibit 3. Upon full satisfaction of the Balance, any shares remaining in the Share Reserve shall be cancelled.

DPLS shall pay all transfer agent costs associated with issuing and delivering the Settlement Shares to GS. DPLS shall at all times reserve a minimum of 1 times the number of shares required to satisfy a full conversion of the outstanding Balance. GS may reasonably request increases from time to time to reserve such amounts. DPLS will instruct its transfer agent to provide the outstanding share information to the GS in connection with its conversions.

5. Prepayment. DPLS shall have the right to prepay any or all of the Balance, without penalty.

6. General Release Between GS and DPLS. GS, on the one hand, and DPLS, on the other hand, effective upon approval of the Settlement Agreement by the Court and except for the obligations contained in this agreement, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, do hereby absolutely, fully, and forever release, relieve, waive, relinquish, and discharge the other, and each of them, as well as each of their respective successors, predecessors, assigns, affiliates, principals, parent companies, subsidiary companies, officers, directors, joint venturers, franchisors, shareholders, members, partners, agents, servants, employers, employees, heirs, distributees, beneficiaries, executors, representatives, administrators, accountants, attorneys, insurers, guarantors and each of them (the "Releasees"), from any and all claims, affirmative defenses, liabilities, demands, judgments and causes of action of any kind or nature, in law or in equity, whether known or unknown, whether fixed or contingent, whether actual or alleged, which existed at the time of the signing of this Settlement Agreement, whether or not arising from or related to the facts alleged by GS and/or DPLS in the Action or that could have been alleged by any of such parties in such Action, and any cross-complaint, counter-complaint, answer or other pleading that was or could have been filed by any of the Parties or that arose in connection with any of the matters stated in the Recitals to this Settlement Agreement. Notwithstanding the foregoing, nothing herein is intended to alter, amend, release or otherwise affect the Unaffected Rights and/or the obligations arising under this Agreement. Also, notwithstanding the foregoing, if the Court does not timely (within 60 days of the execution of this Settlement Agreement) approve the Settlement Agreement, such releases shall be null and void.

7. Further Actions. Each of the Parties agrees to take such actions and/or to execute such documents as reasonably may be necessary to effectuate, achieve, or/and clarify the purposes of this Settlement Agreement.

8. No Assignment. Each of the Parties represents and warrants to each of the other Parties that, except as provided herein, said Party has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity not a party to this agreement any right, claim, demand, damage, debt, liability, obligation, account, reckoning, cost, expense, lien, action, or cause of action which the party has ever had against any of the other Parties to this agreement, or any part or portion thereof. Each of the Parties to this agreement agrees to indemnify each of the other Parties, and to hold each of them harmless, of, from, and against any and all rights, claims, demands, damages, debts, liabilities, obligations, accounts, reckonings, costs, expenses, liens, actions, or causes of action (including the payment of reasonable attorneys' fees and costs, whet er or not litigation is commenced), based on, arising out of or in connection with, or otherwise attributable to, any such transfer or assignment.

9. No Waiver of Breaches. No delay in exercising any right or remedy hereunder shall constitute a waiver thereof, and no waiver by a Party of a breach of this agreement shall be a waiver of any preceding or succeeding breach.

10. Representations and Warranties.

	a.	DPLS and GS represent and warrant to the each other that nothing contained in this Settlement Agreement violates the terms of any other agreement or any applicable law. DPLS expressly represents and warrants the issuance of the Settlement Shares under the terms of this Settlement Agreement by DPLS will not constitute or cause a breach of any DPLS shareholder rights or trigger the requirement that DPLS must issue or sell additional shares to any other person, including, without limitation, to any of DPLS (except as otherwise provided in this Agreement), and including, without limitation, any anti-dilution provision under any contract or security to which DPLS is a party or an issuer.

	b.	Within four business days of the Court approving the settlement, DPLS shall disclose the material terms of this settlement in a form 8-K filed with the Securities and Exchange Commission.

	c.	No representations or warranties have been or are being made by any of the Parties, including their parents, subsidiaries, affiliates, predecessors, successors, assigns, officers, directors, shareholders, members, partners, employees, agents or representatives, in connection with the purchase and sale of the securities being made pursuant to this Settlement Agreement, except as expressly stated herein.

	d.	This Settlement Agreement and the releases contained herein shall not be deemed an admission by any of the Parties of any sort. No right shall inure to any third party from the obligations, representations and agreements made or reflected herein.

	e.	Each of the Parties acknowledges that it has read this Settlement Agreement, has been, or has had the opportunity to be, represented by independent counsel of his or its own choice in connection with the circumstances leading up to the execution of the Settlement Agreement, understands its terms, conditions and consequences, and is freely and voluntarily entering into this Settlement Agreement.

	f.	Nothing in this Settlement Agreement shall release or waive the obligations or rights set forth in this Agreement.

	g.	The Parties will represent to the Court that the terms of this Settlement Agreement are fair to GS, and fair to DPLS and its stockholders.

	h.	DPLS will confirm in writing, as requested by GS, that at no time was GS ever, and was not at time of the issuance of the confirmation, an affiliate, officer, director, or 10% or more stockholder ofDPLS.

11. Terms of Agreement Are Contractual. It is expressly understood and agreed that the terms of this Settlement Agreement (including the recitals in the preamble) are contractual and not merely recitations and that the agreements herein contained are to compromise doubtful and disputed claims, avoid litigation, and buy peace and that no releases or other consideration given shall be construed as an admission of liability, all liability being expressly denied by each released Party hereto.

12. Notice. Any notice required or appropriate under this Settlement Agreement shall be given at the Parties' addresses given below, as may be amended, and shall be deemed to have been successfully sent and delivered on the date that such notice is either (a) actually received by air courier or messenger, evidenced by the signature of the parties; or (b) sent via fax and email to both the party to whom notice is intended, and with a copy of such notice to the parties' counsel.

13. Binding Agreement. The provisions of this Settlement Agreement shall be binding upon, and shall obligate, extend to, and inure to the benefit of, each of the legal successors, assigns, transferees, grantees, and heirs of each of the Parties, and all persons who may assume any or all of the above-described capacities subsequent to the execution of this Settlement Agreement.

14. Entire Agreement. This Settlement Agreement contains the final, complete, exclusive, and entire agreement and understanding concerning the matters referenced in the Recitals between the Parties (except as noted hereafter in this paragraph), and supersedes and/or replaces any and all prior negotiations, proposed agreements, and agreements, whether written or oral on such subject matter. Each of the Parties acknowledges that no other Party, nor any agent or attorney of any other Party, has made any promise, representation, or warranty whatsoever, express or implied, which is not contained herein concerning such subject matter, to induce the Party to execute this Agreement, and acknowledges that the party has not executed this Settlement Agreement in reliance upon any such promise, representation, or warranty not contained herein.

15. Modification. This Settlement Agreement may not be modified except by a writing signed by all Parties affected by such purported modification.

16. Severability. In the event that any portion of this Settlement Agreement is held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality, and enforceability of the remaining portions of this Settlement Agreement and the application thereof shall not in any way be affected thereby.

17. Interpretation. Whenever in this Settlement Agreement the context may so require, the neuter gender shall be deemed to refer to and include the masculine and the feminine, the singular number shall be deemed to refer to and include the plural, and vice versa. This Settlement Agreement is the result of negotiations, and no Party shall be deemed to have drafted this Settlement Agreement for purposes of construing any portion of the Settlement Agreement for or against any Party. The descriptive headings in this Settlement Agreement are included for convenience of reference and are not intended to affect the meaning or construction of any of the provisions herein. Any exhibit attached hereto shall be deemed to have been incorporated herein by this reference as if set forth herein at length.

18. Attorneys' Fees and Costs. The Parties agree that except as otherwise included in the consideration exchanged in this Settlement Agreement and the Unaffected Rights, the Parties agree to bear their own costs and attorney's fees incurred to date, if any. In the event that one of the Parties is required to incur attorneys' fees and/or costs to enforce or interpret any provision of this Settlement Agreement in an action against another Party, or is required to defend any action brought by any other Party, based on, arising from or related to this Settlement Agreement or to a matter released under this Agreement, the unsuccessful Party agrees to pay to the prevailing Party its reasonable attorneys' fees and costs.

19. Governing Law and Jurisdiction. This Settlement Agreement shall in all respects be interpreted, enforced, and governed by and under the laws of the State of Nevada without giving effect to its conflicts of law provisions. The Parties each expressly agree and consent to the appropriateness of the venue and jurisdiction of the State of Nevada and all state and federal courts having geographical jurisdiction for such County as the exclusive forum for the purposes of any action to enforce or interpret this Agreement.

20. Capacity to Execute. Each of the Parties, and each person signing this Agreement, represents and warrants that it and its representative(s) executing this Settlement Agreement on its behalf each has the authority and capacity to execute this Agreement, to make its warranties and representations, to perform its covenants, to give its releases, and to fulfill its conditions.

21. Counterparts. Except as otherwise provided herein, the Parties may execute this Agreement, and any modification(s) hereof, in two or more counterparts which shall, in the aggregate, be signed by all of the Parties. Each counterpart shall be deemed an original instrument as against any Party who has signed it. A faxed or scanned copy of the signature of any of the Parties shall have the same force and effect as an original signature of such Party.

22. Time of the Essence. To the extent that performance is to be governed by time, time shall be deemed to be of the essence hereof.

23. Non-circumvention. DPLS hereby covenants and agrees that it will not, by amendment of its Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Settlement Agreement, and will at all times in good faith carry out all the provisions of this Settlement Agreement and take all action as may be required to protect the rights of GS hereunder.

WHEREFORE, the Parties have executed this agreement on the day and year set out next to each of their signatures.

GS:		DPLS:

GS CAPITAL PARTNERS LLC		DARK.PULSE, INC.

BY:	/s/ Gabe Sayegh	BY:	/s/ Dennis O’Leary

NAME:	Gabe Sayegh	NAME:	Dennis O’Leary

TITLE:	President	TITLE:	CEO

DATED:	7/24/2024	DATED:	7/24/2024

Exhibit 1 - Confession of Judgment

Exhibit 2 -Drawdown Notice

The undersigned hereby requests _______________ shares of DarkPulse, Inc. ("DPLS") Common Stock, as set forth below, pursuant to the conditions of the Settlement Agreement between GS Capital Partners, LLC and DPLS dated July 2024.

Delivery instructions for the shares are as follows:

The undersigned hereby requests that DPLS issues shares of Common Stock to be transferred using the DTC System for the benefit of the party specified immediately below:

GS Capital Partners, LLC

Attn: Gabe Sayegh, President

1325 Airmotive Way #202,

Reno, NV 89502

TIN:

Please deliver the shares using the following DWAC instructions:

DTC Broker:

DTC Number:

FBO: GS Capital Partners, LLC

Account Number:

Date of Drawdown: ______________

Number of Shares: _______________

GS Capital Partners, LLC

By: ____________

Name: __________

Title: ___________

Date: ___________

Exhibit 3 – TA Letter

July_, 2024

Standard Registrar & Transfer Co., Inc.

Re: Irrevocable Transfer Agent Instructions

Ladies and Gentlemen:

On July 24 2024, DarkPulse, Inc., a Delaware corporation (the "Company"), and GS Capital Partners, LLC (“GS”) have entered into a Settlement Agreement (the “Agreement”).

You, as transfer agent, are hereby irrevocably authorized and instructed to reserve 2,500,000,000 shares of common stock (“Common Stock”) of the Company for issuance upon for Drawdown in accordance with the terms of the Agreement (“Reserved Shares”). GS shall have the right to periodically request from the Company that the number of Reserved Shares be increased so that the number of Reserved Shares at least equals 100% of the number of shares of Company common stock issuable upon Drawdown of the full Balance due under the Agreement. The transfer agent is not responsible for any figures used to determine conversions and the resulting number of shares to be issued. The transfer agent is not responsible for determining GS’s reserve balance. These items are to be determined by GS and the Company. The transfer agent can only issue up to the number of shares requested in the reserve letter. When that figure has been met, GS can request an increase in shares from the Company. The Company will instruct the transfer agent to increase the reserve accordingly, assuming sufficient authorized, unissued, and unreserved shares exist. The transfer agent will have no authority to increase the reserve without formal written instruction by the issuer. Once the Company pays all amounts due under the Agreement, upon written (e-mail being acceptable) confirmation by the GS or GS Counsel as well as the Company, Transfer Agent shall have no further obligation to maintain a reserve on behalf of the GS or to issue any share of Common Stock to the GS under the terms of that Agreement.

The Company must be participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program in order for the shares to be delivered electronically. The shares to be issued are to be registered in the names of the registered holder of the securities submitted for conversion or exercise.

The shares shall be issued within three (3) business days of Standard Registrar’s compliance review of the Notice of Conversion. If the Company’s account is at least 30 days past due, the GS is responsible for the prepaid Transfer Agent transfer and shipping fees. In no event shall the Transfer Agent be required to issue and deliver share certificates without the prior payment of its fees for the certificates to be issued. Transfer Agent shall directly provide the GS with the number of shares of authorized capital and the outstanding shares of the Company upon request of the GS. GS understands and acknowledges that if the Company is delinquent in its account with the transfer agent, the conversion request will be honored with payment for the transaction of $525.00 by GS. If the Company account is suspended due to non-payment, an account payment would need to be made for any transactions to be completed by Standard Registrar.

The Company and the GS intend that these instructions require the placement of a restrictive legend on all applicable share certificates unless the requirements listed below are met and the GS provides the Transfer agent with an acceptable legal opinion stating that share certificates can be issued without a legend. So long as you have previously received such legal opinion from the Company (or GS counsel) that the shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144 or other exemption, including , Section 3(a)(10) of the Securities Act of 1933 (15 U.S.C. § 77c(a)(10) (1976)), without any restriction and the number of shares to be issued are less than 9.9% of the total issued and outstanding common stock of the Company, such shares should be transferred, at the option of the GS as specified in the Drawdown Notice, either (i) electronically by crediting the account of a Prime Broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission system if the Company is a participant or (ii) in certificated form without any legend which would restrict the transfer of the shares, and you should remove all stop-transfer instructions relating to such shares. Until such time as you are advised by GS counsel that the shares have been registered under the 1933 Act or otherwise may be sold pursuant to Rule 144 or other exemption without any restriction and the number of shares to be issued are less than 9.9%, of the total issued and outstanding common stock of the Company, you are hereby instructed to place the following legends on the certificates:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF GS COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

The legend set forth above shall be removed and you are instructed to issue a certificate without such legend to the holder of any shares upon which it is stamped, if: (a) such shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or other exemption without any restriction and the number of shares to be issued is less than 9.9% of the total issued and outstanding common stock of the Company, (b) such holder provides the Company and the transfer agent with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions (and satisfactory to the transfer agent), to the effect that a public sale or transfer of such security may be made without registration under the 1933 Act and such sale or transfer is effected and (c) such holder provides the Company and the transfer agent with reasonable assurances that such shares can be sold pursuant to Rule 144, and (d) upon receipt of standard seller and broker rep letters. Nothing herein shall be construed to require the Transfer Agent to take any action which would violate state or federal rules, regulations or law. If an instruction herein would require such a violation, such instructions, but not any other term herein, shall be void and unenforceable.

The Company shall indemnify and defend you and your officers, directors, principals, partners, agents and representatives, and hold each of them harmless from and against any and all loss, liability, damage, claim or expense (including the reasonable fees and disbursements of its and Transfer Agent’s attorney) incurred by or asserted against you or any of them arising out of or in connection with the instructions set forth herein, the performance of your duties hereunder and otherwise in respect hereof, including the costs and expenses of defending yourself or themselves against any claim or liability hereunder, except that the Company shall not be liable hereunder as to matters in respect of which it is determined that you have acted with gross negligence or in bad faith (which gross negligence, bad faith or willful misconduct must be determined by a final, non- appealable order, judgment, decree or ruling of a court of competent jurisdiction). You shall have no liability to the Company or the GS in respect to any action taken or any failure to act in respect of this if such action was taken or omitted to be taken in good faith, and you shall be entitled to rely in this regard on the advice of counsel.

The Company agrees that in the event that the Transfer Agent resigns (or is terminated) as the Company’s transfer agent, the Company shall engage a suitable replacement transfer agent that will agree to serve as transfer agent for the Company and be bound by the terms and conditions of these Irrevocable Instructions within five (5) business days. The Company and GS agree that any action which names the Transfer Agent as a party shall be brought in a court of general jurisdiction in Nevada and no other court.

GS is intended to be a party to these instructions and are third party beneficiaries hereof, and no amendment or modification to the instructions set forth herein may be made without the consent of GS. Standard Registrar participates in this instruction letter only to facilitate the appropriate share reserve and process the associated conversions. The Company or GS will not take legal action against the transfer agent related to this agreement.

Very truly yours,

DARKPULSE, INC.

By:

Title:



Acknowledged and Agreed:

STANDARD REGISTRAR & TRANSFER CO., INC.

By:

Title:

Exhibit 21.1

LIST OF SUBSIDIARIES

DARKPULSE, INC.

DarkPulse, Inc., a Delaware corporation, has the following subsidiaries:

DarkPulse Technologies Inc., a New Brunswick corporation (“DTI”) (wholly-owned).

	2.	TJM Electronics West, Inc., an Arizona corporation (wholly-owned).
	3.	Remote Intelligence, Limited Liability Company, a Pennsylvania limited liability company (60% owned).
	4.	Wildlife Specialists, LLC, a Pennsylvania limited liability company (60% owned).
	5.	TerraData Unmanned, PLLC, a Florida limited liability company (60% owned).
	6.	DTI owns 100% of DarkPulse Technology Holdings Inc., a New York corporation.
	7.	DTI owns a controlling interest in DarkPulse Technologies International Inc., a New York corporation.
	8.	DTI owns 37.572% of the shares of common stock of DarkPulse Technologies International Inc., a Delaware corporation (“DTII”), and 100% of the issued shares of Series A Preferred Stock of DTII.
	9.	DTI owns 60% of DarkPulse BVTK, LLC, a Virginia limited liability company.

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Shareholders and Board of Directors of Darkpulse, Inc.

We consent to the use in the Form S-1/A Registration Statement under the Securities Act of 1933 of our report dated July 15, 2024, of the consolidated financial statements of Darkpulse, Inc. as of December 31, 2023, for the year ended December 31, 2023. The report for Darkpulse, Inc. includes an explanatory paragraph about the existence of substantial doubt about its ability to continue as a going concern.

/S/ Boladale lawal

BOLADALE LAWAL & CO

Chartered Accountant

PCAOB No:6993

Lagos, Nigeria

September 12, 2024

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Preliminary Prospectus of DarkPulse, Inc. on Form S-1 Amendment No. 2 (File No. 333-276114) of our report dated June 23, 2023, on the consolidated financial statements of DarkPulse, Inc. as of December 31, 2022 and for the year ended December 31, 2022, which appears in the Annual Report on Form 10-K of DarkPulse, Inc. for the year ended December 31, 2022. The report for DarkPulse, Inc. includes an explanatory paragraph about the existence of substantial doubt about its ability to continue as a going concern. We also consent to the reference to our Firm under the caption “Experts” in the Preliminary Prospectus.

/s/ Mazars USA LLP

Fort Washington, PA

September 12, 2024

Exhibit 107

Calculation of Filing Fee Table

Form S-1

(Form Type)

DarkPulse, Inc.

(Exact Name of Registrant as Specified in its Charter)

Newly Registered Securities

Security Type	Security Class Title	Fee Calculation Rule	Amount Registered(1)(2)	Proposed Maximum Offering Price Per Unit(3)	Maximum Aggregate Offering Price	Fee Rate	Amount of Registration Fee
Equity	Common Stock, $0.0001 par value per share, issuable pursuant to an equity line	Rule 457(c)	3,500,000,000	$0.00125	$4,375,000	$0.0001476	$645.75
Equity	Common Stock, $0.0001 par value per share, issuable pursuant to an equity line	Rule 457(c)	271,971,823	$0.001	$271,972	$0.0001476	$40.14
Total Offering Amounts					$4,646,972	$0.0001476	$685.89
Total Fee Offsets							$0.00
Total Fees Previously Paid							$645.75
Net Fee Due							$40.14

(1)	Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also covers any additional shares of Common Stock of DarkPulse, Inc. (the “Registrant”) that may become issuable as a result of any future stock splits, stock dividends or similar adjustments of the Registrant’s outstanding Common Stock.
(2)	Represents shares of the Registrant’s Common Stock issuable pursuant to the EFA (as defined in the Registration Statement) and shares issued under the EFA. Such shares will be issued to the Selling Security Holder named in this Registration Statement upon purchase.
(3)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) of the Securities Act. The proposed maximum offering price per share is estimated to be $0.001, based on the average of the high sales price ($0.001) and the low sales price ($0.0009) for the Registrant’s Common Stock as reported by the OTC Markets on September 10, 2024.

Cover	6 Months Ended
Cover	Jun. 30, 2024
Cover [Abstract]
Document Type	S-1/A
Amendment Flag	true
Amendment Description	Client added information about the Companys business
Entity Registrant Name	DARKPULSE, INC.
Entity Central Index Key	0000866439
Entity Tax Identification Number	87-0472109
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	815 Walker Street
Entity Address, Address Line Two	Suite 1155
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77002
City Area Code	800
Local Phone Number	436-1436
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false

Consolidated Balance Sheets - USD ($)	Jun. 30, 2024	Dec. 31, 2023
CURRENT ASSETS:
Cash and cash equivalents	$ 953	$ 11,912
Accounts receivable, net	897,399	868,948
Due from related party	0	0
Prepaid expenses and other current assets	75,196	76,185
TOTAL CURRENT ASSETS	973,548	957,045
NON-CURRENT ASSETS:
Property and equipment, net	704,923	743,282
Operating lease right-of-use assets	473,491	496,685
Patents, net	228,149	253,663
Notes receivable, related party	0	0
Investment in related party	0	1,500,000
Other assets, net	161,677	161,677
TOTAL NON-CURRENT ASSETS	1,568,240	3,155,307
TOTAL ASSETS	2,541,788	4,112,353
CURRENT LIABILITIES:
Accounts payable and accrued expenses	16,128,871	15,663,273
Convertible notes, net	91,971	120,925
Notes payable, current	2,435,691	1,923,868
Derivative liability	94,759	108,958
Loan payable, current	570,487	570,487
Loan payable, related party	361,747	361,747
Secured debenture, current	183,208	183,208
Operating lease liabilities - current	80,400	80,400
Other current liabilities	70,745	70,461
TOTAL CURRENT LIABILITIES	20,017,879	19,083,326
NON-CURRENT LIABILITIES:
Secured debenture	916,042	916,042
Loan payable	291,968	291,968
Operating lease liabilities - non-current	472,220	496,335
TOTAL NON-CURRENT LIABILITIES	1,680,230	1,704,345
TOTAL LIABILITIES	21,698,110	20,787,671
Commitments and contingencies
STOCKHOLDERS' DEFICIT:
Common stock, par value $0.0001, 20,000,000,000 shares authorized, 8,928,508,901 and 8,100,117,720 shares issued as of June 30, 2024 and December 31, 2023, respectively.	863,328	798,346
Treasury stock at cost, 100,000 shares at June 30, 2024 and December 31, 2023	(1,000)	(1,000)
Additional paid-in capital	50,140,739	49,733,618
Common Stock to be issued	205,000	205,000
Non-controlling interests	1,207,957	1,217,410
Accumulated other comprehensive income (loss)	(1,253,356)	(1,253,356)
Accumulated deficit	(70,319,873)	(67,376,221)
TOTAL STOCKHOLDERS' DEFICIT	(19,156,322)	(16,675,319)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	2,541,788	4,112,353
Series A Preferred Stock [Member]
STOCKHOLDERS' DEFICIT:
Preferred stock, value	1	1
Series D Convertible Preferred Stock [Member]
STOCKHOLDERS' DEFICIT:
Preferred stock, value	$ 883	$ 883

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	20,000,000,000	20,000,000,000
Common Stock, Shares, Issued	8,928,508,901	8,100,117,720
Common Stock, Shares, Outstanding	8,928,508,901	8,100,117,720
Treasury Stock, Common, Shares	100,000	100,000
Series A Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	100	100
Preferred Stock, Shares Issued	100	100
Preferred Stock, Shares Outstanding	100	100
Series D Convertible Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	100,000	100,000
Preferred Stock, Shares Issued	88,235	88,235
Preferred Stock, Shares Outstanding	88,235	88,235

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
REVENUES	$ 14,318	$ 412,769	$ 25,168	$ 1,950,602
COST OF REVENUES	671	1,184,848	870	2,411,640
GROSS PROFIT (LOSS)	13,647	(772,079)	24,298	(461,038)
OPERATING EXPENSES:
Selling, general and administrative	170,315	615,508	327,426	1,513,368
Salaries, wages and payroll taxes	185,000	578,900	396,877	2,126,108
Bad debt expense	59,817	57,480	59,817	2,422,457
Professional fees	23,260	255,690	180,631	3,206,388
Depreciation and amortization	44,584	220,749	63,872	451,983
Impairment expense	0	0	0	6,925,137
TOTAL OPERATING EXPENSES	482,976	1,728,326	1,028,623	16,645,441
OPERATING LOSS	(469,329)	(2,500,405)	(1,004,325)	(17,106,482)
OTHER INCOME (EXPENSE):
Interest expense	(415,920)	(39,647)	(417,322)	(157,062)
Loss on deconsolidation	0	(1,642,795)	0	(1,642,795)
Change in fair market of derivative liabilities	(31,457)	16,334	(31,457)	16,334
Loss on equity investment	(1,500,000)	(74,028)	(1,500,000)	(139,084)
Gain on the forgiveness of debt		106,794		106,794
Restructuring costs	0		0	0
Foreign currency exchange rate variance	0	15,651	0	4,932
TOTAL OTHER INCOME (EXPENSE)	(1,947,377)	(1,617,691)	(1,948,779)	(1,810,881)
Net loss	(2,416,706)	(4,118,096)	(2,953,104)	(18,917,360)
Net loss attributable to non-controlling interests	6,444	30,997	9,453	810,693
Net loss attributable to DarkPulse, Inc.	$ (2,410,261)	$ (4,087,099)	$ (2,943,650)	$ (18,106,669)
Net loss per share - basic	$ (0.00)	$ 0.00	$ (0.00)	$ 0.00
Net loss per share - diluted	$ (0.00)	$ 0.00	$ (0.00)	$ 0.00
Weighted average common shares outstanding - basic	8,191,535,359	7,445,611,222	8,213,651,977	7,202,813,171
Weighted average common shares outstanding - diluted	8,191,535,359	7,445,611,222	8,213,651,977	7,202,813,171

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS UNAUDITED - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
NET LOSS	$ (2,416,706)	$ (4,118,096)	$ (2,953,104)	$ (18,917,360)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation	1	(395,508)	1	(857,853)
COMPREHENSIVE LOSS	$ (2,416,705)	$ (4,513,604)	$ (2,953,103)	$ (19,775,213)

Consolidated Statement of Stockholders' Equity Deficit - USD ($)	Preferred Stock Series A [Member]	Preferred Stock Series D [Member]	Common Stock [Member]	Common Stock To Be Issued [Member]	Treasury Stock, Common [Member]	Additional Paid-in Capital [Member]	Noncontrolling Interest [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2022	$ 1	$ 883	$ 642,740	$ 0	$ (1,000)	$ 44,602,052	$ 2,119,566	$ (1,137,902)	$ (46,555,334)	$ (328,994)
Beginning balance, shares at Dec. 31, 2022	100	88,235	6,427,395,360	0	100,000
Common stock issued for cash, net of fees			$ 53,167
Common stock issued for cash, shares			531,671,500
Issuance of common stock for legal settlement			$ 29,700			1,960,200				1,989,900
Issuance of common stock for legal settlement, shares			297,000,000
Common Stock to be issued
Foreign currency adjustment								(462,345)		(462,345)
Net loss							(779,696)		(14,019,568)	(14,799,264)
Common stock issued for cash						2,034,634				2,087,801
Ending balance, value at Mar. 31, 2023	$ 1	$ 883	$ 725,608	$ 0	$ (1,000)	48,596,886	1,339,870	(1,600,247)	(60,574,902)	(11,512,902)
Ending balance, shares at Mar. 31, 2023	100	88,235	7,256,066,860	0	100,000
Beginning balance, value at Dec. 31, 2022	$ 1	$ 883	$ 642,740	$ 0	$ (1,000)	44,602,052	2,119,566	(1,137,902)	(46,555,334)	(328,994)
Beginning balance, shares at Dec. 31, 2022	100	88,235	6,427,395,360	0	100,000
Common Stock to be issued
Net loss										(18,917,360)
Ending balance, value at Jun. 30, 2023	$ 1	$ 883	$ 745,992	$ 0	$ 1,000	49,114,351	1,308,873	(1,995,755)	(64,662,001)	(15,488,656)
Ending balance, shares at Jun. 30, 2023	100	88,235	7,459,909,231	0	100,000
Beginning balance, value at Mar. 31, 2023	$ 1	$ 883	$ 725,608	$ 0	$ (1,000)	48,596,886	1,339,870	(1,600,247)	(60,574,902)	(11,512,902)
Beginning balance, shares at Mar. 31, 2023	100	88,235	7,256,066,860	0	100,000
Issuance of common stock for legal settlement
Common Stock to be issued
Foreign currency adjustment								(395,508)		(395,508)
Net loss							(30,997)		(4,087,099)	(4,118,096)
Common stock issued for cash			$ 20,384			517,465				537,849
Common stock issued for cash, shares			203,842,371
Ending balance, value at Jun. 30, 2023	$ 1	$ 883	$ 745,992	$ 0	$ 1,000	49,114,351	1,308,873	(1,995,755)	(64,662,001)	(15,488,656)
Ending balance, shares at Jun. 30, 2023	100	88,235	7,459,909,231	0	100,000
Beginning balance, value at Dec. 31, 2023	$ 1	$ 883	$ 798,346	$ 205,000	$ (1,000)	49,733,618	1,217,410	(1,253,356)	(67,376,221)	(16,675,319)
Beginning balance, shares at Dec. 31, 2023	100	88,235	8,100,117,720	0	100,000
Issuance of common stock for legal settlement						100,000				100,000
Common Stock to be issued
Foreign currency adjustment
Net loss							(3,009)		(533,389)	(536,398)
Common stock issued for cash			$ 5,218			35,364				40,580
Common stock issued for cash, shares			52,162,997
Ending balance, value at Mar. 31, 2024	$ 1	$ 883	$ 803,564	$ 205,000	$ (1,000)	49,868,982	1,214,401	(1,253,356)	(67,909,610)	(17,071,136)
Ending balance, shares at Mar. 31, 2024	100	88,235	8,152,280,717	0	100,000
Beginning balance, value at Dec. 31, 2023	$ 1	$ 883	$ 798,346	$ 205,000	$ (1,000)	49,733,618	1,217,410	(1,253,356)	(67,376,221)	(16,675,319)
Beginning balance, shares at Dec. 31, 2023	100	88,235	8,100,117,720	0	100,000
Common Stock to be issued
Net loss										(2,953,104)
Ending balance, value at Jun. 30, 2024	$ 1	$ 883	$ 863,328	$ 205,000	$ (1,000)	50,140,739	1,207,957	(1,253,356)	(70,319,873)	(19,156,322)
Ending balance, shares at Jun. 30, 2024	100	88,235	8,928,508,901	0	100,000
Beginning balance, value at Mar. 31, 2024	$ 1	$ 883	$ 803,564	$ 205,000	$ (1,000)	49,868,982	1,214,401	(1,253,356)	(67,909,610)	(17,071,136)
Beginning balance, shares at Mar. 31, 2024	100	88,235	8,152,280,717	0	100,000
Common Stock to be issued
Common Stock to be issued, shares			166,666,666
Foreign currency adjustment
Net loss							(6,444)		(2,410,261)	(2,416,706)
Common stock issued for cash			$ 48,638			173,363				222,001
Common stock issued for cash, shares			498,293,650
Issuance of common stock for conversion of convertible debt			$ 11,127			98,394				109,521
Issuance of common stock for conversion of convertible debt, shares			111,267,868
Ending balance, value at Jun. 30, 2024	$ 1	$ 883	$ 863,328	$ 205,000	$ (1,000)	$ 50,140,739	$ 1,207,957	$ (1,253,356)	$ (70,319,873)	$ (19,156,322)
Ending balance, shares at Jun. 30, 2024	100	88,235	8,928,508,901	0	100,000

CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net loss	$ (2,953,104)	$ (18,917,360)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	63,872	451,983
Gain on forgiveness of payables and liabilities	0	(53,397)
Change in fair market of derivative liabilities	31,457	(69,731)
Loss on equity investment	1,500,000	139,084
Issuance of common stock for legal settlement	0	1,989,900
Amortization of debt discount	28,796
Impairment of goodwill and intangible assets	0	6,925,137
Bad debt expense	59,817	2,422,457
Loss on deconsolidation	0	1,642,795
Operating lease expense	23,195	31,087
Changes in operating assets and liabilities:
Accounts receivable	(28,452)	80,303
Inventory	0	(8,252)
Contract assets	0	(73,048)
Prepaid expenses and other assets	989	20,715
Contract liabilities	0	323,471
Loss provision for contracts in progress	0	15,968
Accounts payable and accrued expenses	983,536	2,699,960
Operating lease liabilities, net	(24,115)	(30,372)
Other current liabilities	284	(74,087)
Other assets	0	0
Other liabilities	0	0
Net cash used in operating activities	(313,725)	(2,483,389)
Cash flows from investing activities:
Purchases of property and equipment	0	(102,350)
Investment in related party	0	0
Investment in joint venture	0	(113,124)
Issuance of note receivable, related party	(29,817)	(419,737)
Advances to related party	(30,000)	(519,637)
Net cash used in investing activities	(59,817)	(1,154,848)
Cash flows from financing activities:
Issuance of common stock, net of fees	362,582	2,625,650
Proceeds from convertible notes	0	(27,043)
Net repayments of loan payable	0	0
Net cash provided by financing activities	362,582	2,598,607
Net change in cash	(10,960)	(1,039,630)
Effect of exchange rate on cash	0	(972,129)
Cash at beginning of year	11,912	2,060,332
Cash at end of year	952	48,573
Supplemental disclosure of cash flow information:
Cash paid for interest	77,644	47,948
Cash paid for income taxes	0	0
Non-cash financing and investing activities:
Conversion of convertible debt	$ 109,521	$ 0

Pay vs Performance Disclosure - USD ($)	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (2,410,261)	$ (4,087,099)	$ (2,943,650)	$ (18,106,669)

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Description of Business

Liquidation/winding up of Optilan (UK) Limited

The Company is an Unsecured creditor of Optilan (UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known for several months. The Company has approximately $19.4 million intercompany payables due from Optilan (UK), which will increase the Company liabilities for any obligations not repaid. At the time of this filing the Company is still evaluating the full effects of the winding-up order for liquidation and the material adverse effects it will have on the Company’s continued operations and ability to meet future obligations.

On August 9, 2023, Evelyn Partners was appointed Joint Liquidator.

Liquidation of Optilan (UK) Limited

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

Unaudited Interim Financial Information

Use of Estimates

Cash

Accounts Receivable

Foreign Currency Translation

*Optilian has been deconsolidated, and as a result, no translation rates were applied for the six-months ending June 30, 2024.

The relevant translation rates are as follows: for the six months ended June, 2024 closing rate at 1.3740 US$:CAD.

Long-Lived Assets and Goodwill

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

Liquidation of Optilan (UK) Limited

Cost of Revenues

Concentration of Credit Risk

Leases

Derivative Financial Instruments

Fair Value of Financial Instruments

The Company’s derivative liability is a Level 3 liability measured at fair value on a recurring basis. See Note 11.

Equity Investments

Income Taxes

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.

Non-controlling Interests

During the six months ended June 30, 2024 and 2023, the Company recorded a loss of $9,453 and $810,693, respectively, attributable to non- controlling interests.

Comprehensive Loss

Stock-based Compensation

Loss Per Common Share

Schedule of anti dilutive securities
	June 30, 2024		December 31, 2023
Convertible notes		147,874,598		65,827,695
Series D preferred stock		176,470		176,470
		148,051,068		66,004,165

Recent Accounting Pronouncements

LIQUIDITY AND GOING CONCERN

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

LIQUIDITY AND GOING CONCERN

NOTE 3 – LIQUIDITY AND GOING CONCERN

BUSINESS ACQUISITIONS

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

BUSINESS ACQUISITIONS

NOTE 4 – BUSINESS ACQUISITIONS

Wildlife Specialists, LLC and Remote Intelligence, LLC


	Consideration
Cash	$	500,000
Common stock		978,000
Purchase price	$	1,478,000

The allocation of the total purchase price to the tangible and intangible assets acquired and liabilities assumed by DarkPulse based on the estimated fair values as of August 29, 2021 was as follows:


(Amounts in US$’s)	Amounts Recognized as of Acquisition Date		Measurement Period Adjustments			Fair Value
Cash	$	33,910	$	(6,098	)	$	27,812
Accounts receivable		161,866		170,486			332,352
Other current assets		600		20,947			21,547
Property & equipment		99,490		(77,945	)		21,545
Goodwill		1,191,085		1,597,593			2,788,678
Total assets		1,486,951		1,704,983			3,191,934
Assumed liabilities		393,651		334,950			728,601
Non-controlling interest		–		985,333			985,333
Total Consideration for 60% of equity interests	$	1,478,000	$	–		$	1,478,000

TJM Electronics West, Inc.


	Fair Value
Accounts receivable	$	3,400
Property & equipment		91,051
Goodwill		355,549
Total assets		450,000
Total Consideration	$	450,000

TerraData Unmanned, PLLC


	Consideration
Cash	$	400,000
Common stock		200,000
Purchase price	$	600,000

The allocation of the total purchase price to the tangible and intangible assets acquired and liabilities assumed by the Company based on the fair values as of October 1, 2021 was as follows:


(Amounts in US$’s)	Fair Value
Cash	$	8,691
Goodwill		992,049
Total assets		1,000,740
Assumed liabilities		740
Non-controlling interest		400,000
Total Consideration for 60% of equity interests	$	600,000

REVENUE

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE

NOTE 5 – REVENUE

The following table is a summary of the Company’s timing of revenue recognition for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Services and products transferred at a point in time	$	5,584	$	76,120	$	9,816	$	764,548
Services and products transferred over time		8,734		336,649		15,352		1,186,054
Total revenue	$	14,318	$	412,769	$	25,168	$	1,950,602

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

Revenue by source consisted of the following for the three and six months ended June 30, 2024 and 2023:

Schedule of revenue by source
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Products	$	–	$	137,342	$	–	$	257,514
Services		14,318		275,427		25,168		1,693,088
Total revenue	$	14,318	$	412,769	$	25,168	$	1,950,602

Revenue by geographic destination consisted of the following for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
North America	$	14,318	$	155,386	$	25,168	$	374,652
United Kingdom		–		207,404		–		1,389,667
Rest of world		–		49,979		–		186,283
Total revenue	$	14,318	$	412,769	$	25,168	$	1,950,602

Contracts

Performance Obligations

Contract Assets and Liabilities

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 liabilities on June 30, 2024 are $0 upon the deconsolidation related to the Optilan liquidation.

Variable Consideration

ACCOUNTS RECEIVABLE

6 Months Ended

Jun. 30, 2024

Receivables [Abstract]

ACCOUNTS RECEIVABLE

NOTE 6 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following as of June 30, 2024 and December 31, 2023:

Schedule of accounts receivable
	June 30, 2024			December 31, 2023
Accounts receivable	$	902,857		$	868,948
Less: Allowance for doubtful accounts		(5,458	)		–
Accounts receivable, net	$	897,399		$	868,948

PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 7 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of June 30, 2024 and December 31, 2023:

Schedule of property and equipment
	June 30, 2024			December 31, 2023
Property and equipment	$	1,092,870		$	1,092,870
Leasehold improvements		46,934			46,934
Property and equipment at cost		1,139,804			1,139,804
Less - accumulated depreciation		(434,881	)		(396,522	)
Property and equipment, net	$	704,923		$	743,282

GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following is a summary of activity of goodwill for the three months ended June 30, 2024:

Schedule of goodwill activity
		Goodwill
Balances at December 31, 2023	$	–
Impairment of goodwill pertaining to Optilan		–
Balances at June 30, 2024	$	–

Patents - Intrusion Detection Intellectual Property

The following is a summary of the DPTI patents:

Schedule of patents
	June 30, 2024			December 31, 2023
Patents	$	904,269		$	904,269
Less: accumulated amortization		(676,120	)		(650,606	)
Patents, net	$	228,149		$	253,663

For the six months ended June 30, 2024 and 2023, the Company amortized $25,524 and $25,514, respectively.

Future expected amortization of patents is as follows:


As of December 31,
2024	$	51,028
2025		51,028
2026		51,028
2027		51,028
Thereafter		49,551
Total patents	$	253,663

JOINT VENTURE

6 Months Ended

Jun. 30, 2024

Equity Method Investments and Joint Ventures [Abstract]

JOINT VENTURE

NOTE 9 – JOINT VENTURE

During the six months ended June 30, 2024, the Company contributed $0 to the joint venture and recorded a loss on the equity investment of $0.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following as of June 30, 2024 and December 31, 2023:


	June 30, 2024		December 31, 2023
Accounts payable	$	13,973,471	$	13,721,562
Accrued liabilities		2,155,400		1,941,711
Total accounts payable and accrued expenses	$	16,128,871	$	15,663,273

DEBT

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

DEBT

NOTE 11 – DEBT

Convertible Notes

As of both June 30, 2024 and December 31, 2023, there was $91,971 and $120,925 of convertible debt outstanding respectively, and a derivative liability of $94,759 and $108,958 respectively.

The summary of convertible notes is as follows:

Schedule of convertible notes
	June 30, 2024			December 31, 2023
Principal Outstanding	$	108,900		$	166,650
Less: unamortized debt discount		(16,929	)		(45,725	)
Convertible notes, net	$	91,971		$	120,925

Notes Payable

Loans Payable

Schedule of loans payable
	June 30, 2024		December 31, 2023
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
Loan payable, current	$	570,487	$	570,487

RI - SBA EIDL	$	102,597	$	102,597
RI - long-term loans		65,533		65,533
WS - SBA EIDL		26,307		26,307
WS - long-term loans		97,532		97,532
Loan payable, non-current	$	291,968	$	291,968

SECURED DEBENTURE

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

SECURED DEBENTURE

NOTE 12 – SECURED DEBENTURE

LEASES

6 Months Ended

Jun. 30, 2024

Leases

LEASES

NOTE 13 – LEASES

The following was included in our balance sheet as of June 30, 2024 and December 31, 2023:

Schedule of operating lease
Operating leases	June 30, 2024		December 31, 2023
Assets
ROU operating lease assets	$	473,491	$	496,685

Liabilities
Current portion of operating lease		80,400		80,400
Operating lease, net of current portion		472,220		496,335
Total operating lease liabilities	$	552,620	$	576,735

The weighted average remaining lease term and weighted average discount rate at June 30, 2024 and December 31, 2023 were as follows:


Operating leases	June 30, 2024		December 31, 2023
Weighted average remaining lease term (years)		7.50		7.75
Weighted average discount rate		6.00%		6.00%

Operating Leases

On June 28, 2023, the Company recognized a gain on deconsolidation of $1,642,146 related to Optilan (UK) and its subsidiaries leases.

STOCKHOLDERS' EQUITY (DEFICIT)

6 Months Ended

Jun. 30, 2024

STOCKHOLDERS' DEFICIT:

STOCKHOLDERS' EQUITY (DEFICIT)

NOTE 14 - STOCKHOLDERS' EQUITY (DEFICIT)

Preferred Stock

Common Stock

2022 Transactions

2023 Transactions

On September 5, 2023, we entered into a Stock Purchase Agreement with an investor for the purchase of 100,000,000 shares of Common Stock for a total consideration of $100,000.

Below is a table of all puts made by the Company under the 2022 EFA during 2024:

Schedule of equity financing agreement
Date of Put	Number of Common Shares Issued		Total Proceeds, Net of Discounts		Effective Price per Share	Net Proceeds
1/8/2024		52,162,997	$	44,736	$0.000858	$	40,580
2/29/2024		178,571,428		100,000	$0.000560		100,000
		230,734,425	$	144,376		$	140,580

* Issued shares pursuant to an individual stock purchase agreement with an unrelated investor (not under 2022 EFA)

Stock Options

As of June 30, 2024 and December 31, 2023, the Company had no outstanding stock options.

COMMITMENTS & CONTINGENCIES

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS & CONTINGENCIES