DarkPulse, Inc. 10-K

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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December
 31, 2024

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission file number: 000-18730

 DarkPulse, Inc.

 (Exact Name of Registrant as Specified in its Charter)

 Delaware

 87-0472109

 (State of other jurisdiction of incorporation or organization)

 (I.R.S. Employer Identification No.)

 3 Columbus Circle

 Floor 15

 New York, NY

 10019

 (Address of Principal Executive Offices)

 (Zip Code)

 ( 800) 436-1436

 (Registrant's Telephone Number, including
Area Code)

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 N/A

 N/A

 N/A

 Securities registered pursuant to Section 12(g) of the Act: Common
Stock, par value $0.0001 per share

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

has submitted electronically, every Interactive Data File pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for
such shorter period that the registrant was required to submit such files). Yes No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes No

 The aggregate market value of the voting and non-voting
stock held by non-affiliates of the registrant as of the last business day of the registrants most recently completed second fiscal quarter,
based on the price at which the common equity was last sold on the OTC Markets on June 30, 2024 was approximately $ 10,714,210. For purposes
of this computation only, all officers, directors and 10% or greater stockholders of the registrant are deemed to be "affiliates."

 The number of shares of the registrant's
common stock, $0.0001 par value per share, outstanding as of April 10, 2025, was 12,517,591,357.

 ITEM 1. BUSINESS.

 ITEM 1A. RISK FACTORS.

 ITEM 1B. UNRESOLVED STAFF COMMENTS.

 ITEM 1C. CYBERSECURITY.

 ITEM 2. PROPERTIES.

 ITEM 3. LEGAL PROCEEDINGS.

 ITEM 4. MINE SAFETY DISCLOSURES.

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 ITEM 6. [RESERVED].

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 ITEM 9A. CONTROLS AND PROCEDURES.

 ITEM 9B. OTHER INFORMATION.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 ITEM 11. EXECUTIVE COMPENSATION.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

 ITEM 16. FORM 10-K SUMMARY.

 i

 FORWARD-LOOKING STATEMENTS

 This Annual Report on Form 10-K (the " Form
10-K ") for DarkPulse, Inc., a Delaware corporation (the " Company "), and the exhibits attached hereto contain
"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking
statements concern the Company's anticipated results and developments in the Company's operations in future periods, planned
development of the Company's technology, plans related to its business and other matters that may occur in the future. These statements
relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and
assumptions of management. Such forward-looking statements include, among others, those statements including the words "expects",
"anticipates", "intends", "believes" and similar language. Our actual results may differ significantly
from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not
limited to, those discussed in the section "Risk Factors." We undertake no obligation to publicly release any revisions to
the forward-looking statements or reflect events or circumstances after the date of this report.

 Although we believe that the expectations reflected
in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause
actual results to differ materially from such forward-looking statements. These factors include among others:

 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;

 Our ability to raise sufficient capital and continue to fund operating expenses;

 Our ability to get our technology to work in accordance with our technical specifications;

 Our ability to attract customers to our products once they are developed;

 Our ability to generate sales of our products once they are developed;

 Our ability to attract and retain the necessary personnel with the expertise needed to ensure that we can operate the Company effectively;

 Actions or inactions of third-party contractors and vendors;

 Our ability to successfully patent and protect our intellectual property; and

 General economic conditions.

 This list is not exhaustive of the factors that
may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements
are described further under the sections titled " Business ", " Risk Factors ", and " Management's
Discussion and Analysis." Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. We caution readers not to place
undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to
revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence
of anticipated or unanticipated events.

 We qualify all the forward-looking statements
contained in this Form 10-K by the foregoing cautionary statements.

 ii

 ITEM 1.
 BUSINESS.

 As used in this Form 10-K, the terms "we,"
"us," "our," and the "Company" refer to DarkPulse, Inc., a Delaware corporation, and its subsidiaries.

 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

 As a result of the liquidation of Optilan UK Ltd,
our current operations now include: DarkPulse, Inc., based in New York; Terradata Unmanned PLLC, based in Florida; Optilan India Pvt Ltd
based in Navi-Mumbai and Optilan Communications & Security Systems Ltd, based in Ankara Turkey.

 Optilan India Pvt Ltd, operating in India, provides
project engineering & design, system provisioning and contract bid services for the Company globally. Optilan Communications &
Security Systems Ltd, provides project engineering & design, system provisioning and contract bid services for the Company throughout
Europe.

 DarkPulse Manufacturing Inc., based in Arizona
(formerly TJM Electronics West, Inc.), is no longer providing products or services as a result of the Company's relationship with
Sanmina Corporation who is handling both the design and manufacturing of the Company's patented hardware.

 Remote Intelligence, LLC and Wildlife Specialists,
LLC are no longer providing services as a result of redundant service offerings that are now being offered by TerraData Unmanned.

 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. Sanmina has completed two of the Company's system hardware
units which are being utilized for product demonstrations for Border Security opportunities and Pipeline Leak Detection opportunities
both inside and outside of the United States. Our business model, as it relates to hardware sales, is "Just in Time" 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. As mentioned, our manufacturing partner has 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 the period
for royalties has expired prior to any sales of the patented technology. The Company has no further requirement to pay royalties.

 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 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

 (c) all costs associated with protecting the Technology."

 Our Operating Units

 Our material subsidiaries consist of the following:

 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.

 Optilan India Pvt Ltd is operating in India providing
project engineering and design, system provisioning and contract bid services for the Company globally.

 Optilan Communications & Security Systems
Ltd, (Turkey) is providing project engineering & design, system provisioning and contract bid services for the Company throughout
Europe.

 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.

 Optilan Communications & Security Systems
Ltd, (Turkey)

 Optilan
Communications & Security Systems Ltd (Turkey) operates as a telecommunications systems integrator company. The company provides a
supply of equipment and cable installation services. Optilan offers services in market areas including oil and gas, rail, law enforcement,
telecoms, and other power utilities. The company also offers training, safety, and management systems for the Company throughout
Europe.

 Optilan India Pvt Ltd

 Is a leading independent security and communications
systems integrator worldwide. It has thirty years of expertise in areas from planning and design to site commissioning and post-installation
support. Optilan provides integrated telecoms, telecoms and transport services and support with pipeline integrity systems as well as
critical infrastructure. Optilan understands the day-to-day challenges posed to its customers in the ever-changing world of communications
and security. Optilan supports and works together with customers in delivering mission critical, efficient, innovative and UKAS accredited
solutions to meet project requirements. Optilan is providing project engineering and design, system provisioning and contract bid services
for the Company globally.

 Recent Acquisitions

 On or about May 20, 2024, we became aware of an
ambiguity in the signed Sale Agreement to purchase Optitlan India Pvt Ltd, Optilan Communications & Security Systems Ltd (Turkey)
and certain intellectual properties belonging to Optilan UK Ltd (in liquidation). During negotiations Eveyln (the liquidator) suggested
a broader language scope related to the intellectual property portion of the agreement. Upon additional discussions with Evelyn, an ambiguity
was discussed related to software that was built by employees of Optilan UK Ltd. The Company had always intended to include the software
as part of the asset purchase; however, Evelyn understood the agreement to exclude this important piece of intellectual property. After
discussions related to the Company's expenses related to the creation of the software and its crucial role in the completion of
the user interface, both groups agreed the software would be part of the original Sales Agreement. No supplemental agreements were signed.

 On September 11, 2024,
we entered into and closed the Sale Agreement with Optilan (UK) Limited (in liquidation) incorporated and registered in England and Wales
with company number 02715788 (" Optilan " or the " Seller "), and Colin Hardman, Christopher Allen and
Gregory Andrew Palfrey, as joint liquidators of the Seller all of Evelyn Partners LLP (the " Joint Liquidators "). Under
the agreement, we purchased from the Seller for $65,000 all right, title, and interest in the following: (1) shares in Otilan India PVT
(India), (2) shares in Optilan Communications & Security Systems Ltd (Turkey), and (3) the "Applicable Intellectual Property
Rights," as defined in the agreement and below. The following are excluded from the purchase: (1) any Excluded Intellectual Property
Rights, as defined in the agreement; (2) any cash in hand or at the bank; (3) any real property owned, leased or used by the Seller; (4)
all policies of insurance and assurance and any actual or potential claim under such policies or similar contracts or in damages against
any third party; (5) the benefit of any actual or potential claim, or right to make a claim, against any person including the proceeds
of any litigation; (6) any other shares or other securities owned by the Seller; (7) any stock-in-trade, work-in-progress or raw materials
owned by the Seller; and (8) any plant and machinery, including but not limited to any motor vehicles owned or used by the Seller. "Applicable
Intellectual Property Rights" are defined in Schedule 2 of the agreement as: (1) The software the Buyer assisted in creating for:
(a) the accounting systems; (b) customer resource management; and (c) the user interface for sensor systems. (2) The "Optilan.com"
domain name and continued use of the "@optilan.com" email accounts.

 The main interest for
the Company's acquisition of "certain assets" of Optilan UK Ltd include past performance linked to both Optilan India
Pvt Ltd and Optilan Communications & Security Solutions Ltd to wit large scale Oil & Gas pipeline monitoring systems but equally
important the design, engineering of fiber optic sensing systems along with extensive engineering capabilities across multiple industry
segments globally.

 Liquidation/winding up of Optilan (UK) Limited

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

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

 At 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 against Optilan (UK) Limited
as of the date hereof and Evelyn Partners continues 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

 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.

 Revenue

 Our 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.

 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

 We 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.

 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 May 19, 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 April 14,
2025, we had 13 full-time employees and no part-time employees.

 ITEM 1A.
 RISK FACTORS.

 Readers of this Form 10-K 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.

 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 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 the date hereof
against Optilan (UK) Limited and Evelyn Partners continues 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 affected.

 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.

 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 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.

 On
or about April 17,2024 GSD has redeemed the remaining public shares and has been liquidated and dissolved. The Company may be subject
to claims of creditors based on the type and nature of claims stemming from this transaction, however any such prospective claims at this
point in time are speculative at best.

 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 $3,321,823 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
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 April 14,
2025, GHS has purchased and sold 3,903,802,753 and 3,748,743,031 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
report on our audited financial statements for the years ended December 31, 2024 and 2023 indicates 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 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

 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.

 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.

 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 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.

 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.

 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.

 The issuance of shares pursuant to the Settlement
Agreement with GS Capital Partners, LLC may have a significant dilutive effect.

 July 24, 2024, we and GS Capital Partners, LLC
entered into a Settlement Agreement pursuant to which the Company entered into a confession of judgment in favor of GS Capital in the
amount of $2,673,423.19 (the " Balance "). Upon approval of the court on August 19, 2024, the Company will issue to GS
Capital free-trading and unrestricted shares of Common Stock pursuant to drawdown requests in the amounts determined by GS Capital, subject
to a 4.99% beneficial ownership limitation. The shares will be issued a price per share equal to the average of the three lowest VWAPs
for the five prior trading days. GS Capital will be allowed to sell, the greater of (1) in one week, no more than 1% of the total outstanding
shares of the Company on a non-cumulative basis at the "ask" price, and (2) 15% of the daily trading volume of the Common
Stock on any single trading day. Each drawdown will reduce the Balance. The Company is required to reserve 2,500,000,000 shares of Common
Stock.

 On August 19, 2024, the Eighth Judicial District
Court in Clark County, Nevada approved the settlement agreement and the litigation action (Case No: A-24-896764-C) has been concluded.

 Depending on the number of shares we issue pursuant
to the Settlement Agreement, it could have a significant dilutive effect upon our existing shareholders. Although the number of shares
that we may issue pursuant to the Settlement Agreement 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
issuances for the full amount of the Settlement Agreement are realized. As of April 14, 2025, 450,000,000 shares have been issued pursuant
to the Settlement Agreement. Based on the three lowest VWAP's of our Common Stock for the five prior trading days on April 14, 2025,
we would have to issue approximately 272,896,666 shares of Common Stock to satisfy our remaining obligations.

 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 workarounds, 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.

 ITEM 1B.
 UNRESOLVED STAFF COMMENTS.

 None.

 ITEM 1C.
 CYBERSECURITY.

 Risk Management and Strategy

 The identification, detection, prevention and
remediation of known or potential IT security vulnerabilities, including those arising from third-party hackers, hardware or software,
is extremely costly and time consuming. The Company does not have the manpower, expertise or financial resources to effectively identify,
detect, prevent or remediate cybersecurity risks. No assurance or guarantee whatsoever can be given that the Company will not be damaged
by the exploitation of its cybersecurity vulnerabilities.

 During the year ended December 31, 2024, we did
 not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy,
results of operations, or financial condition. However, we may not be aware of all vulnerabilities or might not accurately assess the
risks of incidents, and such preventative measures cannot provide absolute security and may not be sufficient in all circumstances or
mitigate all potential risks.

 ITEM 2.
 PROPERTIES.

 Our current office is located at 3 Columbus
Circle 15 th Floor, New York, NY 10019. The space is a virtual address which we leased for six months from November 22,
2024.

 ITEM 3.
 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).

 As of the date hereof, the final judgment remains
unsatisfied by Carebourn. DarkPulse intends to continue to exercise all legal rights and remedies available to it to collect the amounts
awarded should Carebourn fail to voluntarily pay the same.

 More Capital, LLC v. DarkPulse, Inc. et
al

 On or about June 29, 2021, More Capital, LLC (" More ")
commenced an action against the Company in Minnesota State Court. More alleged that the Company was in breach of a certain securities
purchase agreement and convertible promissory note sold to More on or about August 20, 2018.

 On or about September 3, 2021, the Company answered
More's complaint and interposed affirmative defenses, including that More was an unregistered "dealer," as such term
is defined in the 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).

 As of the date hereof, the final judgment remains
unsatisfied by More. DarkPulse intends to continue to exercise all legal rights and remedies available to it to collect the amounts awarded
should More fail to voluntarily pay the same.

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

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

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

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

 On or about December 4, 2023, the Court entered
an order granting dismissal of the Noteholders' claims with prejudice. The Court acknowledged that notwithstanding its dismissal
of the Noteholders' claims, the Court continues to retain jurisdiction over the Noteholders because of DarkPulse's pending
motion for sanctions against the Noteholders and their attorneys.

 On September 10, 2024, the Court entered an order
granting in part the Company's motion for sanctions against the Noteholders and their counsel of record.

 As of the date hereof, the Court has not yet rendered
its decision on the amount sanctions that will be imposed against the Noteholders and their counsel of record and awarded to the Company.

 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. On the same day, the Company appealed the Court's
decision to the United States Court of Appeals for the Second Circuit (" Second Circuit ").

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

 On September 9, 2024, the FirstFire Defendants
filed their opening memorandum of law in support of their motion to dismiss. Shortly thereafter, the Company opposed the FirstFire Defendants'
motion and the FirstFire Defendants filed their reply in further support.

 As of the date hereof, the Court has not scheduled
oral arguments on the FirstFire Defendants' motion to dismiss or rendered its decision thereon. The Company remains committed to
actively litigating its claims for relief against the FirstFire Defendants.

 DarkPulse, Inc., et al v. 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 United States Court of Appeals for the Second Circuit (" Second Circuit ").

 On August 19, 2024, the Second Circuit issued
its decision and found that the District Court erred when granting the Crown Bridge Defendants' motion to dismiss. As a result,
the Second Circuit vacated the District Court's decision and remanded the case back to the District Court for further proceedings
consistent with its decision.

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

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

 GS Capital Partners, LLC v. DarkPulse, Inc.

 On June 2, 2023, GS Capital Partners, LLC (" GS
Capital ") commenced an action in the Supreme Court for New York County against the Company through the filing of motion for
summary judgment in lieu of a complaint. The motion claims that the Company is in breach of a convertible promissory note, dated July
14, 2021, and accompanying securities purchase agreement, dated the same.

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

 On July 27, 2023, the Company moved to set aside
the default judgment entered in favor of GS Capital and against the Company on July 25, 2023. GS Capital's opposition thereto is
due on or before August 31, 2023. Thereafter, DarkPulse's reply is due on or before September 6, 2023. Oral arguments are currently
not scheduled on the Company's motion.

 On or about September 27, 2023, the Company and
GS Capital confidentially settled the dispute. On or about October 3, 2023, the parties filed a stipulation with the court to vacate the
judgment entered against the Company and in favor of GS Capital, vacate the motion filed by the Company, and discontinue the action.

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

 The Company defaulted upon the settlement and,
on July 24, 2024, the Company and GS Capital entered into a Settlement Agreement pursuant to which the Company entered into a confession
of judgment in favor of GS Capital in the amount of $2,673,423.19 (the " Balance "). Upon approval of the court on August
19, 2024, the Company will issue to GS Capital free-trading and unrestricted shares of Common Stock pursuant to drawdown requests in the
amounts determined by GS Capital, subject to a 4.99% beneficial ownership limitation. The shares will be issued a price per share equal
to the average of the three lowest VWAPs for the five prior trading days. GS Capital will be allowed to sell, the greater of (1) in one
week, no more than 1% of the total outstanding shares of the Company on a non-cumulative basis at the "ask" price, and (2)
15% of the daily trading volume of the Common Stock on any single trading day. Each drawdown will reduce the Balance. The Company is required
to reserve 2,500,000,000 shares of Common Stock.

 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 the date hereof, the Company is interviewing new counsel and evaluating its claims against landlord to determine if it's
financially responsible to incur additional fees related to exercising TJM's rights against the landlord for terminating the lease.

 On or about June 28, 2024, the Company discussed
with possible new counsel the feasibility of recovering its damages utilizing the courts. At that time, it appeared the cost of recovery
would exceed the recoverable amount should the Company be successful in its litigation. TJM West is awaiting updates from the court in
Maricopa County as to the status of the case.

 The facilities in question had served as TJM West's
manufacturing facility and is located at 2640 W Medtronic Way Tempe, AZ 85281. Currently, we do
not have access to the facility nor have we signed a new lease signed with the landlord.

 In addition to the foregoing Legal Proceedings,
we are also actively investigating potential legal claims, including but not limited to stock fraud, market manipulation, and/or defamation,
against certain Twitter accounts, websites, and social media channels. The investigation is ongoing and should potential claims be identified,
we will evaluate commencing formal litigation proceedings.

 From time to time, we may become involved in litigation
relating to claims arising out of our operations in the normal course of business. We are not currently involved in any pending legal
proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are
a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on our business,
financial condition and operating results.

 ITEM 4.
 MINE SAFETY DISCLOSURES.

 Not applicable.

 ITEM 5.
 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES

 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.

 2025

 High

 Low

 First Quarter

 $
 0.0010

 $
 0.0002

 2024

 High

 Low

 First Quarter

 $
 0.0130

 $

 Second Quarter

 $
 0.0053

 $

 Third Quarter

 $
 0.0023

 $

 Fourth Quarter

 $
 0.0013

 $

 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

 $

 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.

 Approximate Number of Equity Security Holders

 As of April 14, 2025, there were approximately
927 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 paid any cash dividends to date and
we do not anticipate paying cash dividends in the foreseeable future. It is the present intention of management to utilize any available
funds for the development of our business.

 Equity Compensation Plan Information

 As of December 31, 2024, there were no securities
authorized for issuance under equity compensation plans.

 Issuer Purchases of Equity Securities

 During the quarter ended December 31, 2024, there
were no purchases made by or on behalf of the issuer or any "affiliated purchaser," as defined in § 240.10b-18(a)(3)
of Regulation S-K of shares or other units of any class of our equity securities that are registered by us pursuant to section 12 of the
Exchange Act.

 ITEM 6.
 [RESERVED].

 ITEM 7.
 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 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 comparables 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, 2024, including the carrying value of the identifiable intangible
assets and goodwill assigned to the respective reporting unit.

 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 New York, 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; Optilan India, PVT located in Kilpauk, Chennai India and Optilan Communication &
Security Systems, Ltd located in Ankara, Turkey provide project engineering & design, system provisioning and contract bid services
globally and throughout Europe. TerraData Unmanned, PLLC, a company headquartered in Florida who custom manufactures NDAA compliant drones
and unmanned ground crawlers to meet the needs of its customers;

 Current Operations

 As a result of the liquidation of Optilan, our
current operations now include: DarkPulse, Inc., based in New York City, New York; Terradata Unmanned PLLC, based in Florida; Optilan
Pvt Ltd Navi-Mumbai and Optilan Communications & Security Systems Ltd, based in Ankara Turkey. Remote Intelligence, LLC and Wildlife
Specialists, LLC are no longer providing services as a result of redundant service offerings that are now being offered by TerraData Unmanned.
DarkPulse Manufacturing Inc. (formerly TJM Electronics West, Inc.) is no longer providing products or services as a result of those products
and services now being contracted through Sanmina Corp.

 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. We base our claims related to the technologies capabilities from both experimental data obtained during the creation of the patent
as well as real world POC deployments beginning in 2009 with most recent deployment in 2021. There are also papers submitted and published
via IEEE and available online. The system components include: Patented hardware containing various electronic components and lasers. Proprietary
software utilized to collect analog data and convert that data to digital data. A user interface utilizing proprietary software as well
as Unity game engine for the VR capability component of the User Interface. Deployment of the system begins with engineering design based
on Scope requirements and installation environment. Fiber optic cable is then installed into the medium to be monitored. The system is
then provisioned remotely by optical engineers.

 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 the period
for royalties has expired prior to any sales of the patented technology. The Company has no further requirement to pay royalties.

 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 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 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 remaining assets held by Optilan (UK) Limited were fully impaired in 2023 as
a result of the winding-up order for liquidation.

 Twelve-Months Ended December 31, 2024 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 September
30, 2024.

 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.

 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 2023:

 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

 1/24/2023

 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

 587,692,015

 $

 $2,348,689

 $

 $2,176,079

 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, which was then superseded by the Thrid Amended Equity Financing Agreement dated
August 14, 2024 as amended (the " EFA "), and 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 12 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

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

 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

 $

 0.000560

 8/19/2024*

 55,555,556

 40,000

 $

 0.0007200

 36,175

 286,289,981

 $

 184,376

 $

 176,755

 *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 $ 3,893,859 and $21,723,043 during the years ended December 31, 2024 and 2023, respectively, and
net cash used in operating activities of $(1,514,351) and $(5,653,215), respectively. As of December 31, 2024, the Company's current
liabilities exceeded its current assets by $17,160,706 and has an accumulated deficit of $71,259,677. As of December 31, 2024, the Company
had $86,531 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.

 We will require additional funding to finance
the growth of our operations and achieve our strategic objectives. These factors, as relative to capital raising activities, create substantial
doubt as to our ability to continue as a going concern. We are seeking to raise additional capital and are targeting strategic partners
in an effort to accelerate the sales and marketing of our products and begin generating revenues. Our ability to continue as a going concern
is dependent upon the success of future capital offerings or alternative financing arrangements, expansion of our operations and generating
sales. The accompanying financial statements do not include any adjustments that might be necessary should we 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;
however, management cannot make any assurances that such financing will be secured.

 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 Years Ended December 31, 2024 and 2023

 Revenues

 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.

 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 year ended December 31, 2024, total revenues
were $126,836 compared to $2,020,971 for the year ended December 31, 2023, a decrease of $1,894,135. The decrease was primarily due to
the Optilan liquidation and no revenue being generated by Wildlife, Remote and TJM Electronics West, Inc given capital and resources restraints.
The breakdown of revenues by entity for the years ended December 31, 2024 and 2023 is as follows:

 2024

 2023

 Optilan

 $

 $
 1,583,435

 Wildlife

 –

 TJM

 329,400

 Remote Intelligence

 –

 TerraData

 66,968

 82,639

 DarkPulse

 ____

 25,497

 Optilan India

 59,868

 –

 $

 $

 Cost of Revenues and Gross Margin

 For the year ended December 31, 2024, cost of
revenues was $2,266 compared to $2,446,756 for the year ended December 31, 2023, a decrease of $2,444,490. The decrease was attributable
to the Optilan liquidation and no revenues being generated from Remote Intelligence, Wildlife Specialists, and TJM Electronics West, Inc.

 Gross (loss) profit for the year ended December
31, 2024 was $124,570 with a gross profit of 98% compared to $(425,785) for the year ended December 31, 2023 with a (21)% gross margin.

 Operating Expenses

 Selling, general and administrative expenses for year
ended December 31, 2024 decreased by $1,562,273, or 77%, to $471,588 from $2,033,8612 for the year ended December 31, 2023. The decrease
primarily consisted of decreases in contractors, insurance and information technology expenses of operations that have been shuttered.

 Salaries, wages and payroll taxes for year ended
December 31, 2024 decreased by $1,805,595, or 69%, to $824,630 from $2,630,225 for the year ended December 31, 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 year ended December
31, 2024 decreased by $2,592,916, or 83%, to $516,756 from $3,109,717 for the year ended December 31, 2023 due to decreased audit and
legal fees in 2023.

 Depreciation and amortization for year ended December
31, 2024 decreased by $394,658, or 75%, to $128,489 from $523,147 for the year ended December 31, 2023. This decrease is primarily due
to the Optilan liquidation and sale of some subsidiary property, plant and equipment.

 During the years ended December 31, 2024 and 2023,
the Company recorded $0 and $6,948,350, respectively, in impairment on the Company's goodwill and intangible assets.

 During the years ended December 31, 2024 and 2023,
the Company recorded $59,817 and $5,248,218, respectively, in bad debt expense.

 Other Income (Expense)

 For the year ended December 31, 2024, we had other
expense of ($2,017,149) compared to other expense of ($803,740) in 2023. The increase is due to loss on equity investment of $1,500,000,
offset by the loss on deconsolidation of ($1,642,146) and a $1,484,799 gain on forgiveness of debt.

 Net Loss

 As a result of the above, we reported a net loss of
$3,893,859 and $21,723,043 for the years ended December 31, 2024 and 2023, 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 year ended December 31, 2024,
we had $1,055,196 in cash proceeds from our equity financings compared to $3,297,272 in 2023.

 As of December 31, 2024, we had cash of $86,531compared
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 December
31, 2024, our current liabilities exceeded our current assets by $17,160,706.

 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 year ended December 31, 2024, net cash
used in operating activities was $1,514,351 resulting from our net loss of $3,893,859, partially offset by non-cash charges of $1,634,681
primarily driven by our loss on equity investment offset by Impairment of goodwill and issuance of common stock for 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.

 Cash Flows from Investing Activities

 During the year ended December 31, 2024, we had
net cash used in investing activities of $92,979, including writeoff of related party receivables of $59,817, and purchase of property
and equipment of $33,162.

 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.

 Cash Flows from Financing Activities

 During the year ended December 31, 2024, net cash
provided by financing activities was $2,079,643 which was primarily comprised of proceeds from the sale of common stock of $3,946,075
and proceeds from convertible notes of $0 less net repayments of loans of $1,866,432.

 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.

 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 2024 the FASB issued ASU 2024-03 Income Statement —
Reporting Comprehensive Income (Subtopic 2220-40) which intends to improve the disclosures about a public business entity's expenses
and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee
compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and
research and development).

 In November 2024 the FASB issued ASU 2024-04 Debt with Conversion and
Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments to improve and clarify the requirements for determining
whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

 In March 2024 the FASB issued ASU 2024-01, Compensation – Stock
Compensation Topic (718) contains amendments by adding an illustrative example to demonstrate how an entity should apply the scope guidance
in paragraph 718- 10-15-3 to determine whether profits interest and similar awards improve the understandability of paragraph 718-10-15-3
apply to all entities that enter into share-based payment transactions.

 In March 2024 the FASB issued ASU 2024-02 Codification Improvements
which contains amendments to the Codification that remove references to various FASB Concepts Statements. The Board has a standing project
on its agenda to address suggestions received from stakeholders on the Accounting Standards Codification and other incremental improvements
to generally accepted accounting principles (GAAP). This effort facilitates Codification updates for technical corrections such as conforming
amendments, clarifications to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The resulting
amendments are referred to as Codification improvements.

 ITEM 7A.
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 Not applicable.

 ITEM 8.
 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 The financial statements of the Company are included
beginning on page F-1 immediately following the signature page to this Form 10-K.

 ITEM 9.
 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 None.

 ITEM 9A.
 CONTROLS AND PROCEDURES.

 Evaluation of Disclosure Controls and Procedures

 We have established disclosure controls and procedures
that are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act
of 1934, as amended (the " Exchange Act "), is recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC and, as such, is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer,
Dennis O'Leary, who serves as our principal executive officer and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure. Mr. O'Leary, evaluated the effectiveness of our disclosure controls and procedures, as defined in
Rule 13a-15(e) of the Exchange Act, as of December 31, 2024. Based on his evaluation, Mr. O'Leary concluded that, due to a material
weakness in our internal control over financial reporting as described below, our disclosure controls and procedures were not effective
as of December 31, 2024. In light of the material weakness in internal control over financial reporting, we completed substantive procedures,
including validating the completeness and accuracy of the underlying data used for accounting prior to filing this Form 10-K.

 These additional procedures have allowed us to
conclude that, notwithstanding the material weakness in our internal control over financial reporting, the consolidated financial statements
included in this Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for
the periods presented in conformity with accounting principles generally accepted in the United States of America.

 Internal Control Over Financial Reporting

 Our management is responsible for establishing
and maintaining adequate internal controls over financial reporting for the Company. Due to limited resources, management conducted an
evaluation of internal controls based on criteria established in 2013 Internal Control - Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (" COSO "). The results of this evaluation determined that our
internal control over financial reporting was ineffective as of December 31, 2024, due to material weaknesses. A material weakness in
internal control over financial reporting is defined as a deficiency, or a combination of deficiencies, in internal control over financial
reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will
not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal
control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible
for oversight of our financial reporting.

 Management's assessment identified the following
material weaknesses in internal control over financial reporting:

 The small size of our company limits our ability to achieve the desired level of separation of duties to achieve effective internal controls over financial reporting. We do not have a separate CEO and CFO, to review and oversee our financial policies and procedures, which does achieve a degree of separation. However, until such time as we are able to hire a controller, we do not believe we meet the full requirement for separation.

 We do not have an audit committee.

 We have not achieved the desired level of documentation of our internal controls and procedures. This documentation will be strengthened through utilizing a third-party consulting firm to assist management with its internal control documentation and further help to limit the possibility of any lapse in controls occurring.

 We have not achieved the desired level of corporate governance to ensure that our accounting for all of our contractual and other agreements is in accordance with all of the relevant terms and conditions.

 As a result of the material weaknesses in internal
control over financial reporting described above, our management has concluded that, as of December 31, 2024, our internal control over
financial reporting was not effective based on the criteria in Internal Control - Integrated Framework issued by the COSO.

 We will continue to follow the standards for the
Public Company Accounting Oversight Board (United States) for internal control over financial reporting to include procedures that:

 Pertain to the maintenance of records in reasonable detail accurately that fairly reflect the transactions and dispositions of our assets;

 Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and

 Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

 Despite the material weaknesses in financial reporting
noted above, we believe that our financial statements included in this report fairly present our financial position, results of operations
and cash flows as of and for the years presented in all material respects.

 Changes in Internal Controls

 There were no changes in our internal control
over financial reporting that occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.

 We have taken limited steps to meet our Sarbanes-Oxley
(SOX) Section 404 compliance requirements and implement procedures to assure financial reports are prepared in accordance with generally
accepted accounting principles (GAAP) and therefore fairly represent the results and condition of the Company. We are not materially compliant
with the Section 404 requirements due to economic constraints.

 ITEM 9B.
 OTHER INFORMATION.

 During the quarter ended December 31, 2024, no
director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is
defined in Item 408(a) of Regulation S-K.

 ITEM 9C.
 DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 Not applicable to the
Company.

 ITEM 10.
 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 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

 Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Secretary & Treasurer

 Dr. Anthony Brown

 Craig Atkin

 George Pappas

 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.

 George Pappas, Director. Mr. Pappas has
served as a Director of DarkPulse since November 2024. Mr. Pappas is a national security, foreign policy, intelligence, and special operations
expert with over four decades of experience as a government executive, and military officer. Mr. Pappas has served as Staff Director,
House Permanent Select Committee on Intelligence; Deputy Chief Financial Executive at the Defense Intelligence Agency; and in other senior
posts across the intelligence and special operations communities.

 Mr. Pappas' longstanding relationships and
experiences have been critical to the safety and security of the nation.

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

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

 At 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 against Optilan UK Ltd
as of the date hereof and Evelyn Partners continues 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.

 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.

 Compliance with Section 16(a) of the Securities Exchange Act
of 1934

 Section 16(a) of the Exchange Act requires the
Company's directors, executive officers, and persons who own more than 10% of a registered class of the Company's equity securities,
to file with the Commission reports regarding initial ownership and changes in ownership. Directors, executive officers, and greater than
10% stockholders are required by the Commission to furnish the Company with copies of all Section 16(a) forms they file.

 We are not aware of any common stock transactions
during the year ended December 31, 2024 for which either Forms 3, 4, or 5 were required to be filed.

 Code of Ethics

 We have not adopted a formal, written code of
ethics due to a small number of members of management. We plan to adopt a Code of Ethics during the fiscal year ending December 31, 2025.

 Insider Trading Policy

 We do no t maintain insider
trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by our directors, officers,
and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations applicable
to us. We have failed to do so due to limited number of members of management, limited resources, and the lack of equity awards granted
to management.

 ITEM 11.
 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, 2024 and 2023.

 Name and Principal Position

 Year Ended

Dec 31,

 Salary

 Total

 Dennis O'Leary

 2024

 $

 (1)

 $

 Chairman/CEO and Director

 2023

 $

 165,000

 (1)

 $

 (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, 2024.

 Name and Principal Position

 Salary

 Total

 Dr. Anthony Brown, Director

 $

 (1)

 $

 Craig Atkin, Director

 $

 (1)

 $

 George Pappas, Director

 $

 (1)

 _________________

 (1)

 All of this amount was accrued and unpaid.

 Equity Awards

 As of December 31, 2024, there were no outstanding
equity awards.

 Policies and Practices Related to the Timing
of Grants of Certain Equity Awards

 It is management's practice to approve ordinary
course annual equity grants during a scheduled meeting held each year. At this meeting, management will approve each named executive officer's
annual equity award, if any. At this time, we do not currently anticipate granting stock options to any of our named executive officers.
 We do not schedule our equity grants in anticipation of the release of material, non-public information, nor do we time the release of
material nonpublic information based on equity grant dates.

 ITEM 12.
 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 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 12,517,679,592 (12,517,591,357 common plus 88,235 preferred) shares as of April 14, 2025. 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 April 14, 2025. 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 3 Columbus Circle, Floor 15, New York, NY 10019.

 Name and Position

 Shares of

 Common Stock

 Owned

 Shares of

 Series A

 Preferred Stock

 Owned (1)

 Shares of

 Series D

 Preferred Stock

 Owned (2)

 Amount and Nature of

 Beneficial

 Ownership (3)

 Percentage of

 Beneficial

 Ownership

 Votes

 Percentage of

 Votes

 Dennis O'Leary, CEO and Director

 –

 67,647

 135,294

 *

 26,500,884,714

 67.70%

 Dr. Anthony Brown, Director

 –

 –

 5,882

 11,764

 *

 352,920,000

 *

 Craig Atkin, Director

 –

 –

 –

 –

 –

 –

 George Pappas

 2,000,000

 –

 –

 –

 –

 2,000,000

 –

 Total named executive officers, executive officers, and directors (four persons)

 2,000,000

 73,529

 147,058

 *

 26,503,237,634

 67.71%

 *Less than 1%

 (1)

 The shares of Series A Preferred Stock are not convertible into shares of the Company's Common Stock. The holders of the Series A Preferred Stock shall be entitled to vote, on a pro-rata basis, on all matters subject to a vote or written consent of the holders of the Company's Common Stock, and on all such matters, the shares of Series A Preferred Stock shall be entitled to that number of votes equal to the number of votes that all issued and outstanding shares of Common Stock and all other securities of the Company are entitled to, as of any such date of determination, on a fully diluted basis, plus 1,000,000 votes, it being the intention that the holders of the Series A Preferred Stock shall have effective voting control of the Company, on a fully diluted basis.

 (2)

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

 (3)

 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 Form 10-K.

 ITEM 13.
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 For transactions with
our executive officers, please see the disclosure under " Item 11. Executive Compensation. " above.

 From August 2023 to January 30, 2024, Mr. Pappas
served as a director of GSD.

 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.

 ITEM 14.
 PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 Audit Fees. Consists of fees billed for
professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly
reports, services performed in connection with filings with the SEC, and related other services that were provided by Mazars
USA LLP (" Mazars ") and Fruci & Associates II, PLLC (" Fruci "),
our previous independent registered public accounting firms, and Boladale Lawal & Co. (" BLC "), our current independent
registered public accounting firm, in connection with statutory and regulatory filings or engagements.

 The following is a summary of the fees incurred
by the Company Mazars, Fruci, and BLC for professional services rendered for the years ended December 31, 2024 and 2023, respectively.

 Service

 2024

 2023

 Audit Fees

 $
 343,949

 $
 519,183

 Audit-Related Fees

 24,211

 –

 Total

 $
 368,160

 $
 591,183

 Tax Fees. Consists of fees billed for professional
services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance
and consultation in connection with various transactions. There were no tax fees incurred by the Company for the years ended December
31, 2024 and 2023.

 Board of Directors Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditors

 The Board of Directors may pre-approve all audit
and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services
and other services as allowed by law or regulation. Pre-approval is generally provided for up to one year and any pre-approval is detailed
as to the particular service or category of services and is generally subject to a specifically approved amount. The independent auditors
and management are required to periodically evaluate the extent of services provided by the independent auditors in accordance with this
pre-approval and the fees incurred to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.

 The Board of Directors pre-approved 100% of the
Company's 2024 and 2023 audit fees, audit-related fees and all other fees.

 ITEM 15.
 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

 Exhibits

 The following exhibits are included as part of
this Form 10-K:

 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

 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

 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

 2.1

 8/21/18

 2.4#

 Business Combination Agreement, by, between, and among DarkPulse, Inc., Global System Dynamics, Inc., and Zilla Acquisition Corp.

 2.1

 12/15/22

 2.5

 Sale Agreement dated September 11, 2024 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 Seller all of Evelyn Partners LLP

 S-1/A

 2.5

 11/6/24

 3.1

 Restated Certificate of Incorporation of Klever Marketing, Inc. a Delaware corporation

 10-KSB

 3.01

 6/20/97

 3.2

 Certificate of Amendment to Certificate of Incorporation

 3.1

 7/24/18

 3.3

 Certificate of Amendment to Certificate of Incorporation filed February 5, 2019

 3.05

 4/15/21

 3.4

 Certificate of Amendment to Certificate of Incorporation filed February 20, 2020

 3.06

 4/15/21

 3.5

 Bylaws

 10-KSB

 3.02

 6/20/97

 3.6

 Amended Bylaws

 10-KSB

 3.03

 3/29/01

 3.7

 Certificate of Designation for Series A Preferred Stock dated June 22, 2022

 3.1

 6/23/22

 3.8

 Certificate of Amendment for Series A Preferred Stock filed December 2, 2022

 3.1

 12/8/22

 3.9

 Certificate of Correction for Certificate of Amendment For Series A Preferred Stock filed December 8, 2022

 3.2

 12/8/22

 3.10

 Certificate of Designation of Series D Preferred Stock

 3.2

 7/24/18

 3.11

 Certificate of Amendment for Series D Preferred Stock filed December 23, 2021

 3.01

 12/27/21

 3.12

 Certificate of Amendment for Series D Preferred Stock filed December 2, 2022

 3.3

 12/8/22

 10.1

 Assignment Agreement with the University of New Brunswick, Canada

 10.05

 4/15/21

 10.2

 Convertible Debenture (Secured) Issued April 24, 2017

 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

 10.4

 Finder's Fee Agreement dated January 8, 2021 with J.H. Darbie & Co., Inc.

 10.1

 5/17/21

 10.5

 Securities Purchase Agreement dated as of April 26, 2021 with FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC

 10.1

 8/16/21

 10.6

 Registration Rights Agreement dated April 26, 2021 to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC

 10.2

 8/16/21

 10.7

 Membership Interest Purchase Agreement dated August 30, 2021 with Remote Intelligence, Limited Liability Company

 10.9

 11/15/21

 10.8

 Membership Purchase Agreement dated August 24, 2022 with Remote Intelligence, Limited Liability Company

 10.2

 11/4/22

 10.9

 Membership Interest Purchase Agreement dated August 30, 2021 with Wildlife Specialists, LLC

 10.10

 11/15/21

 10.10

 Membership Purchase Agreement dated August 24, 2022 with Wildlife Specialists, LLC

 10.3

 11/4/22

 10.11

 Stock Purchase Agreement dated September 8, 2021 with TJM Electronics West, Inc.

 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

 10.2

 8/10/22

 10.14

 Exclusive Commercial Agency Agreement dated July 27, 2022 with Gulf Automation Services & Oilfield Supplies Company [Gasos] LLC

 10.1

 11/4/22

 10.14

 Purchase Agreement dated October 12, 2022 with Gladstone Sponsor, LLC and Gladstone Acquisition Corp.

 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.

 10.64

 6/23/23

 10.17

 Joinder to the Registration Rights Agreement dated October 12, 2022 with Gladstone Acquisition Corp.

 10.65

 6/23/23

 10.18

 Sale Agreement dated December 1, 2023

 S-1

 10.66

 12/18/23

 10.19

 Equity Financing Agreement dated April 28, 2023 with GHS Investments, LLC

 S-1/A

 10.19

 10.20

 Amended Equity Financing Agreement dated June 13, 2023 with GHS Investments, LLC

 S-1/A

 10.20

 10.21

 Second Amended Equity Financing Agreement dated July 10, 2023 with GHS Investments, LLC

 S-1/A

 10.21

 10.22

 Amendment No. 1 to Second Amended Equity Financing Agreement dated January 30, 2024 with GHS Investments, LLC

 S-1/A

 10.22

 10.23

 Third Amended Equity Financing Agreement dated August 14, 2024 with GHS Investments, LLC

 S-1/A

 10.23

 9/12/24

 10.24

 Waiver and Rights Agreement with GHS Investments LLC dated August 14, 2024

 S-1/A

 10.24

 9/12/24

 10.25

 Settlement Agreement with GS Capital Partners LLC dated July 24 2024

 S-1/A

 10.25

 9/12/24

 16.1

 Letter from Boyle CPA Dated January 28, 2022 Regarding Change in Certifying Accountant

 16.1

 1/28/22

 16.2

 Letter from Urish Popeck & Co., LLC Dated January 4, 2023 Regarding Change in Certifying Accountant

 16.1

 1/4/23

 16.3

 Letter from Fruci & Associates II, PLLC to the SEC, dated July 3, 2024

 8-K/A

 16.1

 7/3/24

 21.1

 List of Subsidiaries

 S-1/A

 21.1

 11/6/24

 31.1

 Rule 13a-14(a) Certification by Principal Executive Officer

 X

 31.2

 Rule 13a-14(a) Certification by Principal Financial and Accounting Officer

 X

 32.1+

 S ection 1350 Certification of Principal Executive Officer and Principal Financial and Accounting Officer

 X

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 ____________

 *

 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.

 +

 Furnished not filed.

 ITEM 16.
 FORM 10-K SUMMARY.

 None.

 SIGNATURES

 Pursuant to the requirements of section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

 Dated: April 14,
 2025

 By:

 /s/ Dennis M. O'Leary

 Dennis M. O'Leary

 Chairman, Chief Executive Officer and President, and Chief Financial Officer (Principal Executive Officer, Principal Financial and Accounting Officer)

 Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities
indicated on this 14th day of April 2025.

 Signature

 Title

 /s/ Dennis M. O'Leary

 Dennis M. O'Leary

 Chairman, Chief Executive Officer, President, Chief Financial Officer, Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer

 /s/ Dr. Anthony Brown

 Dr. Anthony Brown

 /s/ Craig Atkin

 Craig Atkin

 /s/ George Pappas

 George Pappas

 Index to Financial Statements

 As of December 31, 2024 and 2023

 and for the Years Ended December 31, 2024 and
2023

 Report of Independent Registered Public Accounting Firm

 ( Boladale Lawal & Co., Lagos, Nigeria, PCAOB ID 6993)

 F- 2

 Audited Consolidated Balance Sheets

 F- 4

 Audited Consolidated Statements of Operations

 F- 5

 Audited Consolidated Statements of Comprehensive Loss

 Audited Consolidated Statements of Stockholders' Deficit

 F- 7

 Audited Consolidated Statements of Cash Flows

 F- 8

 Notes to the Audited Consolidated Financial Statements

 F- 9

 F- 1

 Report of Independent Registered Public Accounting
Firm

 The Board of Directors and Stockholders of

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of Darkpulse, Inc (the 'Company') as of December 31, 2024 and 2023, and the related consolidated statements
of operations and comprehensive loss, changes in stockholders' equity/ (deficit) and cash flows for each of the two years in the
period ended December 31, 2024 and 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, 2024 and 2023, and the
results of its operations and its cash flows for each of the two years in the period ended December 31, 2024 and 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 $(71,259,677), net loss of $(3,893,859) and a negative working capital of $(17,160,706). 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.

 Business Combinations

 As described in Note 4 of the Consolidated Financial
Statements, the Company completed the acquisitions of 100% of Optilan India, PVT located in Kilpauk, Chennai India and Optilan Communication
& Security Systems, Ltd located in Ankara, Turkey along with the applicable intellectual property rights including the following (1)
the user interface for sensor systems. (2) The "Optilan.com" domain name and continued use of the "@optilan.com"
email accounts. The Company agreed to pay $65,000 USD for both companies and the intellectual property rights.

 The Company recorded the acquired assets and liabilities
initially at cost and subsequently performed a material adjustment affecting the assets, and liabilities of the acquired companies in
determining the fair value.

 F- 2

 We considered this a critical audit matter because
the adjustment is significantly material to the consolidated financial statement.

 Our principal audit procedures to evaluate the
impact of the adjustment included the following:

 We read the purchase agreements used in the underlying acquisitions and utilized by the Company to allocate the purchase price.

 We reviewed the adjusting entries made by the acquired companies impacting the net assets acquired.

 Considered the reasonableness of the overall allocation of the total purchase price.

 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. 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.

 /S/ Boladale Lawal

 BOLADALE LAWAL & CO.

 (Chartered Accountants)

 (PCAOB ID 6993)

 Lagos, Nigeria

 We have served as the Company's auditor
since 2024.

 F- 3

 Consolidated Balance Sheets

 December 31

 2024

 2023

 ASSETS

 CURRENT ASSETS:

 Cash and cash equivalents

 $
 86,531

 $
 11,912

 Accounts receivable, net

 915,044

 868,948

 Inventory

 –

 –

 Due from related party

 –

 –

 Prepaid expenses and other current assets

 102,782

 76,185

 Contract assets

 –

 –

 TOTAL CURRENT ASSETS

 1,104,357

 957,045

 NON-CURRENT ASSETS:

 Property and equipment, net

 698,982

 743,282

 Operating lease right-of-use assets

 449,556

 496,685

 Patents, net

 202,635

 253,663

 Notes receivable, related party

 –

 –

 Investment in related party

 –

 1,500,000

 Joint venture

 –

 –

 Goodwill

 23,965

 –

 Other assets, net

 308,804

 161,677

 Intangible assets, net

 –

 –

 TOTAL NON-CURRENT ASSETS

 1,683,942

 3,155,307

 TOTAL ASSETS

 $
 2,788,299

 $
 4,112,352

 LIABILITIES AND STOCKHOLDERS' DEFICIT

 CURRENT LIABILITIES:

 Accounts payable and accrued expenses

 $
 16,863,559

 $
 15,663,272

 Contract liabilities

 –

 –

 Loss provision for contracts in progress

 –

 –

 Convertible notes, net

 –

 120,925

 Notes payable, current

 114,000

 1,923,868

 Derivative liability

 ( 57,235
)

 108,958

 Loan payable, current

 571,530

 570,487

 Loan payable, related party

 361,747

 361,747

 Secured debenture, current

 260,550

 183,208

 Operating lease liabilities - current

 80,400

 80,400

 Other current liabilities

 70,513

 70,461

 TOTAL CURRENT LIABILITIES

 18,265,063

 19,083,326

 NON-CURRENT LIABILITIES:

 Secured debenture

 781,094

 916,042

 Loan payable

 291,967

 291,968

 Operating lease liabilities - non-current

 447,009

 496,335

 TOTAL NON-CURRENT LIABILITIES

 1,520,070

 1,704,345

 TOTAL LIABILITIES

 19,785,133

 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 December 31, 2024 and December 31, 2023

 Convertible preferred stock - Series D, par value $ 0.01, 100,000 shares designated, 88,235 shares issued and outstanding as of both December 31, 2024 and December 31, 2023

 Common stock, par value $ 0.0001, 20,000,000,000 shares authorized, 10,551,957,534 and 8,100,117,720 shares issued as of December 31, 2024 and December 31, 2023, respectively,

 1,055,196

 798,346

 Treasury stock at cost, 100,000 shares at December 31, 2024 and December 31, 2023

)

)

 Additional paid-in capital

 51,157,797

 49,733,618

 Common Stock to be issued

 2,470,046

 205,000

 Non-controlling interests

 1,207,006

 1,217,410

 Accumulated other comprehensive income (loss)

 ( 1,627,086
)

 ( 1,253,356
)

 Accumulated deficit

 ( 71,259,677
)

 ( 67,376,221
)

 TOTAL STOCKHOLDERS' DEFICIT

 ( 16,996,834
)

 ( 16,675,319
)

 TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 $
 2,788,299

 $
 4,112,352

 See notes
to audited consolidated financial statements.

 F- 4

 Consolidated Statement of Operations

 2024

 2023

 REVENUES

 $

 $

 COST OF REVENUES

 2,266

 2,446,756

 GROSS PROFIT (LOSS)

 124,570

 ( 425,785
)

 OPERATING EXPENSES:

 Selling, general and administrative

 471,588

 2,033,861

 Salaries, wages and payroll taxes

 824,630

 2,630,225

 Professional fees

 516,756

 3,109,717

 Depreciation and amortization

 128,489

 523,147

 Bad debt expense

 59,817

 5,248,218

 Impairment expense

 –

 6,948,350

 Gain on forgiveness of payables

 –

 –

 TOTAL OPERATING EXPENSES

 2,001,280

 20,493,518

 OPERATING LOSS

 ( 1,876,710
)

 ( 20,919,303
)

 OTHER INCOME (EXPENSE):

 Interest expense

 ( 628,104
)

 ( 642,506
)

 Loss on deconsolidation

 –

 ( 1,642,146

 Change in fair market of derivative liabilities

 ( 60,291
)

 167,582

 Loss on equity investment

 ( 1,500,000
)

 ( 159,849
)

 Gain on the forgiveness of debt

 161,045

 1,484,799

 Foreign currency exchange rate variance

 ( 2,447
)

 ( 11,620
)

 Exceptional Costs Gain

 12,648

 –

 TOTAL OTHER INCOME (EXPENSE)

 ( 2,017,149
)

 ( 803,740
)

 Net loss

 ( 3,893,859
)

 ( 21,723,043
)

 Net loss attributable to non-controlling interests

 10,404

 902,156

 Net loss attributable to Darkpulse, Inc.

 $
 ( 3,883,455
)

 $
 ( 20,820,887
)

 Net loss per share - basic and diluted

 $
 ( 0.00
)

 $
 ( 0.00
)

 Weighted average common shares outstanding - basic and diluted

 8,213,651,977

 7,411,100,872

 See notes
to audited consolidated financial statements.

 F- 5

 Consolidated Statements of Comprehensive Loss

 2024

 2023

 NET LOSS

 $
 ( 3,893,859
)

 $
 ( 21,723,043
)

 OTHER COMPREHENSIVE INCOME (LOSS)

 Foreign currency translation

 ( 373,729
)

 ( 115,454
)

 COMPREHENSIVE LOSS

 $
 ( 4,267,588
)

 $
 ( 21,838,497
)

 See notes
to audited consolidated financial statements.

 F- 6

 Consolidated Statement of Stockholders'
Deficit

 For the Years Ended December 31, 2024 and 2023

 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)

 capital

 Interests

 loss

 deficit

 equity

 Balance at December 31, 2022

 88,235

 $

 6,427,395,360

 642,740

 –

 –

)

 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

 $

 88,235

 $

 8,100,117,720

 $
 798,346

 –

 $
 205,000

 $
)

 $
 49,733,618

 $
 1,217,410

 $
 ( 1,253,356
)

 $
 ( 67,376,221
)

 $( 16,675,319)

 Common stock issued for cash, net of fees

 –

 –

 –

 –

 2,146,127,502

 220,724

 –

 –

 –

 –

 812,852

 –

 –

 –

 1,033,575

 Issuance of common stock for legal settlement

 –

 –

 –

 –

 194,444,444

 19,444

 2,305,555,556

 2,446,046

 –

 –

 307,933

 –

 –

 –

 2,733,423

 Conversion of convertible debt into common stock

 –

 –

 –

 –

 111,267,868

 16,682

 –

 ( 205,000
)

 –

 –

 303,894

 –

 –

 –

 115,076

 Common Stock to be issued

 –

 –

 –

 –

 –

 –

 240,000,000

 24,000

 –

 –

 –

 –

 –

 –

 24,000

 Foreign currency adjustment

 –

 –

 –

 –

 –

 –

 –

 –

 –

 –

 –

 –

 ( 373,703
)

 –

 ( 373,703)

 Net loss

 –

 –

 –

 –

 –

 –

 –

 –

 –

 –

 –

 ( 10,404
)

 –

 ( 3,883,455
)

 ( 3,893,859)

 Balance at December 31, 2024

 88,235

 10,551,957,534

 1,055,196

 2,545,555,556

 2,470,046

)

 51,157,797

 1,207,006

 ( 1,627,086
)

 ( 71,259,677
)

 ( 16,996,834)

 See
notes to audited consolidated financial statements.

 F- 7

 Consolidated Statement
of Cash Flows

 Year Ended

 2024

 2023

 Cash flows from operating activities:

 Net loss

 $
 ( 3,893,859
)

 $
 ( 21,723,043
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Depreciation and amortization

 128,489

 523,147

 Gain on forgiveness of payables and liabilities

 –

 –

 Change in fair market of derivative liabilities

 60,291

 ( 167,582
)

 Impairment of goodwill and intangible assets

 –

 6,948,350

 Loss on equity investment

 1,500,000

 159,849

 Issuance of common stock for legal settlement

 –

 1,989,900

 Bad debt expense

 59,817

 5,248,218

 Loss on deconsolidation

 –

 1,642,146

 Operating lease expense

 47,129

 657,848

 Gain on forgiveness of debt

 ( 161,045
)

 ( 1,484,799
)

 Changes in operating assets and liabilities:

 Accounts receivable

 ( 46,097
)

 ( 1,762,213
)

 Inventory

 –

 23,825

 Contract assets

 –

 1,494,163

 Prepaid expenses and other assets

 ( 173,724
)

 108,345

 Contract liabilities

 –

 ( 2,348,773
)

 Loss provision for contracts in progress

 –

 ( 974,031
)

 Accounts payable and accrued expenses

 1,361,331

 4,802,434

 Operating lease liabilities, net

 ( 170,251
)

 ( 2,463,942
)

 Other current liabilities

 ( 226,432
)

 ( 401,756
)

 Other assets

 –

 2,074,700

 Other liabilities

 –

 –

 Net cash used in operating activities

 ( 1,514,351
)

 ( 5,653,215
)

 Cash flows from investing activities:

 Purchases of property and equipment

 ( 33,162
)

 ( 102,350
)

 Investment in related party

 –

 –

 Investment in joint venture

 –

 ( 113,125
)

 Issuance of note receivable, related party

 ( 29,817
)

 –

 Advances to related party

 ( 30,000
)

 –

 Net cash used in investing activities

 ( 92,979
)

 ( 215,475
)

 Cash flows from financing activities:

 Proceeds from sale of common stock, net of fees

 3,946,075

 3,502,272

 Proceeds from convertible notes

 –

 145,000

 Net repayments of loan payable

 ( 1,866,432
)

 ( 14,885
)

 Net cash provided by financing activities

 2,079,643

 3,632,387

 Net change in cash

 472,313

 ( 2,236,303
)

 Effect of exchange rate on cash

 ( 397,615
)

 187,883

 Cash at beginning of year

 11,912

 2,060,332

 Cash at end of year

 $
 86,531

 $
 11,912

 Supplemental disclosure of cash flow information:

 Cash paid for interest

 $
 18,971

 $
 47,948

 Cash paid for income taxes

 $
 –

 $
 –

 Non-cash financing and investing activities:

 Conversion of convertible debt

 $
 109,251

 $
 –

 See
notes to audited consolidated financial statements.

 F- 8

 Notes to the

 Audited Consolidated Financial Statements

 For the Years ended December 31, 2024 and 2023

 NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION

 Organization and Description of Business

 DarkPulse, Inc. ("DPI"
or "Company") is a technology-security company incorporated in 1989 as Klever Marketing, Inc. ("Klever"). Its'
wholly- owned subsidiary, DarkPulse Technologies Inc. ("DPTI"), originally started as a technology spinout from the University
of New Brunswick, Fredericton, Canada. The Company's security and monitoring systems will initially be delivered in applications
for border security, pipelines, the oil and gas industry and mine safety. Current uses of fiber optic distributed sensor technology have
been limited to quasi-static, long-term structural health monitoring due to the time required to obtain the data and its poor precision.
The Company's patented BOTDA dark-pulse sensor technology allows for the monitoring of highly dynamic environments due to its greater
resolution and accuracy.

 The Company's subsidiaries consist of:
DarkPulse, Inc., based in New York; Terradata Unmanned PLLC, based in Florida; Optilan India Pvt Ltd based in Navi-Mumbai and
Optilan Communications & Security Systems Ltd, based in Ankara Turkey.

 Optilan India Pvt Ltd, operating in India, provides
project engineering & design, system provisioning and contract bid services for the Company globally. Optilan Communications &
Security Systems Ltd, provides project engineering & design, system provisioning and contract bid services for the Company throughout
Europe.

 DarkPulse Manufacturing Inc., based in Arizona (formerly
TJM Electronics West, Inc.), is no longer providing products or services as a result of the Company's relationship with Sanmina
Corporation who is handling both the design and manufacturing of the Company's patented hardware.

 Remote Intelligence, LLC and Wildlife Specialists,
LLC are no longer providing services as a result of redundant service offerings that are now being offered by TerraData Unmanned.

 Liquidation/winding up of Optilan (UK) Limited

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

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

 At 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
occurred July 18, 2023.

 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- 9

 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 A summary of the significant accounting policies
consistently applied in the preparation of the accompanying financial statements are as follows:

 Basis of Presentation and Principles of Consolidation

 The Company's consolidated financial
statements are prepared in accordance with accounting principles generally accepted in the United States ("US GAAP"). The
consolidated financial statements of the Company include the Company and its wholly-owned subsidiaries. All material intercompany balances
and transactions have been eliminated in consolidation.

 The Company evaluates its relationships
with other entities to identify whether they are variable interest entities ("VIE") as defined by Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("ASC") Topic 810, Consolidation ("ASC 810"),
and to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary,
then that entity is consolidated.

 Use of Estimates

 The preparation of the Company's
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements
include, but are not limited to, assumptions used to calculate derivative liabilities, revenue recognition and impairment of long-lived
assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that
it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in
circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could
differ from those estimates.

 Cash

 The Company considers all highly liquid
investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit
quality financial institutions. The Company's account at this institution is insured by the Federal Deposit Insurance Corporation
("FDIC") up to $250,000. To reduce its risk associated with the failure of such a financial institution, the Company evaluates
at least annually the rating of the financial institution in which it holds deposits.

 Accounts Receivable

 Accounts receivable and contract assets
include amounts billed to customers under the terms and provisions of the contracts. Most billings are determined based on contractual
terms. As is common practice in the industry, the Company classifies all accounts receivable and contract assets, including retainage,
as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage
on those contracts may extend beyond one year. Contract assets include amounts billed to customers under retention provisions in construction
contracts. Such provisions are standard in the Company's industry and usually allow for a portion of progress billings on the contract
price, typically 5-10%, to be withheld by the customer until after the Company has completed work on the project. Billings for such retention
balances at each balance sheet date are finalized and collected after project completion. Generally, unbilled amounts will be billed and
collected within one year. The Company determined that there are no material amounts due past one year and no material amounts billed
but not expected to be collected within one year. Also, the Company adopted ASU 2016-13 in January 2023 and the adoption did not have
a material impact on the Company's consolidated financial statements and related disclosures for the year ended December 31, 2024.

 Each month, the Company reviews its
receivables on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or
perceived collection issues. Any balances that are eventually deemed uncollectible are written off against the allowance after all means
of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2024 and 2023, the Company determined
that the allowance for doubtful accounts was $ 5,457 and $ 0, respectively. The allowance pertaining to Optilan UK was derecognized upon
the Optilan Liquidation.

 F- 10

 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, 2024 and 2023, retainage receivable was $ 0
and $ 0, 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.

 The relevant translation rates are as
follows: for the year ended December 31, 2024 a closing rate at 1.2516 US$: GBP, average rate at 1.2633 US$:GBP, and closing rate of 1.27
US$:CAD.

 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 at 1.27
US$: CAD.

 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.

 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.

 F- 11

 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:

 Schedule of estimated useful lives of property and equipment

 Years

 Office furniture and fixtures

 Plant and equipment

 4-8

 Leasehold Improvements

 Motor vehicles

 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 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- 12

 In accordance with ASU No. 2016-12,
 Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedient, which is to (1) clarify the
objective of the collectability criterion for applying paragraph 606-10-25-7; (2) permit an entity to exclude amounts collected from customers
for all sales (and other similar) taxes from the transaction price; (3) specify that the measurement date for noncash consideration is
contract inception; (4) provide a practical expedient that permits an entity to reflect the aggregate effect of all modifications that
occur before the beginning of the earliest period presented when identifying the satisfied and unsatisfied performance obligations, determining
the transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations; (5) clarify that
a completed contract for purposes of transition is a contract for which all (or substantially all) of the revenue was recognized under
legacy GAAP before the date of initial application, and (6) clarify that an entity that retrospectively applies the guidance in Topic
606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption. The amendments
of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. There was
no impact as a result of adopting this ASU on the financial statements and related disclosures. Based on the terms and conditions of the
product arrangements, the Company believes that its products and services can be accounted for separately as its products and services
have value to the Company's customers on a stand-alone basis. When a transaction involves more than one product or service, revenue
is allocated to each deliverable based on its relative fair value; otherwise, revenue is recognized as products are delivered or as services
are provided over the term of the customer contract.

 Cost of Revenues

 Cost of revenues consists primarily
of materials and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and
other implementation costs incurred to install our products and train customer personnel, and customer service and third- party original
equipment manufacturer costs to provide continuing support to our customers. Cost of revenues also includes direct labor attributable
to revenue service arrangements.

 Concentration of Credit Risk

 Financial instruments that potentially
subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company has not experienced
any losses related to its cash and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated
with commercial banking relationships. As of December 31, 2024, 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

 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.

 F- 13

 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 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).

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

 Income Taxes

 The Company accounts for income taxes
pursuant to the provision of ASC 740-10, ("ASC 740-10") which requires, among other things, an asset and liability approach
to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.
A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that
the net deferred asset will not be realized.

 F- 14

 The Company follows the provision of
ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits
of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the
benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management
believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation
processes, if any. Tax positions taken are not offset or aggregated with other positions.

 Tax positions that meet the more likely
than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized
upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount
measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with
any associated interest and penalties that would be payable to the taxing authorities upon examination.

 The Company believes its tax positions
are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

 The Company has adopted ASC 740-10-25,
 Definition of Settlement which provides guidance on how an entity should determine whether a tax position is effectively settled
for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the
completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled,
an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained
based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns
of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.

 The Company's U.S. subsidiaries were
incorporated in 2017. The Company does not anticipate a tax liability for the years 2024 and 2023, 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 years ended December 31,
2024 and 2023, the Company recorded a loss of $ 10,404 and $ 902,156 respectively, attributable to non- controlling interests.

 Comprehensive Loss

 Comprehensive loss includes net loss
well as other changes in stockholders' equity that result from transactions and economic events other than those with stockholders.
During the years ended December 31, 2024 and 2023, the Company's only element of other comprehensive loss was foreign currency translation.

 F- 15

 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 December 31, 2024 and 2023 are as follows:

 Schedule of anti dilutive securities

 2024

 2023

 Convertible notes

 210,081,967

 Series D preferred stock

 176,470

 176,470

 176,470

 210,258,437

 Recently Issued Accounting Pronouncements

 On January 1, 2023, the Company adopted
ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326).
This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit
loss ("CECL") methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset
using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured
at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as
unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be
collected by using an allowance for credit losses. The Company adopted this new guidance on January 1, 2023 and the adoption did not have
a material impact on the Company's consolidated financial statements and related disclosures.

 Management does not believe that any
other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.
As new accounting pronouncements are issued, the Company will adopt those that are applicable

 NOTE 3 – LIQUIDITY AND GOING CONCERN

 The Company generated net losses of $ 3,893,859 and
$ 21,723,043 during the years ended December 31, 2024 and 2023, respectively, and net cash used in operating activities of $ 1,514,351 and
$ 5,653,215, respectively. As of December 31, 2024, the Company's current liabilities exceeded its current assets by $ 17,160,706
and an accumulated deficit of $ 71,259,677. As of December 31, 2024, the Company had $ 86,531 of cash.

 F- 16

 The Company will require additional
funding during the next twelve months to finance the growth of its current operations and achieve its strategic objectives. These factors,
as well as the uncertain conditions that the Company faces relative to capital raising activities, create substantial doubt as to the
Company's ability to continue as a going concern. The Company is seeking to raise additional capital principally through private
placement offerings and is targeting strategic partners in an effort to finalize the development of its products and begin generating
revenues. The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative
financing arrangements or expansion of its operations. The accompanying consolidated financial statements do not include any adjustments
that might be necessary should the Company be unable to continue as a going concern. Management is actively pursuing additional sources
of financing sufficient to generate enough cash flow to fund its operations for twelve months from the issuance date of these consolidated
financial statements. However, management cannot make any assurances that such financing will be secured.

 NOTE 4 – BUSINESS ACQUISITIONS

 Optilan India PV,TLtd and Optilan Communication
& Security Systems, Ltd.

 On September 11, 2024, the Company closed a sale
agreement with COLIN HARDMAN, CHRISTOPHER ALLEN AND GREGORY ANDREW PALFREY as Joint Liquidators, Optilan (UK) Limited incorporated and
registered in England and Wales acting by the Joint Liquidators (Seller), purchasing the right, title and interest of shares in Optilan
India, PVT located in Kilpauk, Chennai India and Optilan Communication & Security Systems, Ltd located in Ankara, Turkey along with
the applicable intellectual property rights including (1) the user interface for sensor systems, (2) The "Optilan.com" domain name and continued use of the "@optilan.com"
email accounts. The Company agreed to pay $ 65,000 USD for both companies and the intellectual property rights.

 The Company has accounted for the purchase using the acquisition method
of accounting for business combinations under ASC 805. Accordingly, the purchase price has been allocated to the underlying assets and
liabilities in proportion to their respective actual values as of the purchase date. The excess of the consideration transferred over
the actual estimated fair values of the net assets acquired was recorded as goodwill. The following table summarizes the acquired assets
and assumed liabilities for the actual value of the assets and liabilities recognized at the date of acquisition:

 Schedule of acquired assets and assumed liabilities

 Consideration

 Property, Plant & Equipment

 $
 22,100

 42,900

 Purchase price

 $
 65,000

 The allocation of the total purchase price to
the tangible and intangible assets acquired and liabilities assumed by DarkPulse based on actual values as of September 11, 2024,
and measurement period adjustments resulting from the Optilan India fiscal audit period April 2023 – March 2024 which was
completed in December 2024 are as follows:

 Schedule of fair value assets acquired and liabilities

 (Amounts in US$'s)

 Amounts Recognized as of Acquisition Date

 Measurement
 Period
 Adjustments

 Fair Value

 Cash

 $
 1,637

 $

 $
 1,836

 Accounts receivable

 128,392

 61,376

 189,732

 Other current assets

 89,082

 56,455

 145,536

 Property & equipment

 35,595

 ( 2,246
)

 33,349

 Goodwill

 181,478

 ( 156,563
)

 24,770

 Total assets

 436,184

 ( 40,779
)

 395,223

 Assumed liabilities

 371,184

 56,755

 314,247

 Gain on acquisition

 –

 ( 15,976
)

 ( 15,976
)

 Total Consideration for 100% of equity interests

 $
 65,000

 $
 –

 $
 65,000

 F- 17

 NOTE 5 – REVENUE

 The following table is a summary of the Company's
timing of revenue recognition for the years ended December 31, 2024 and 2023:

 Schedule of timing of revenue recognition

 2024

 2023

 Services and products transferred at a point in time

 $
 49,466

 $
 788,179

 Services and products transferred over time

 77,370

 1,232,792

 Total revenue

 $

 $

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

 Revenue by source consisted of the following
for the years ended December 31, 2024 and 2023:

 Schedule of revenue by source

 2024

 2023

 Products

 $

 329,400

 Services

 1,691,571

 Total revenue

 $

 $

 Revenue by geographic destination consisted of
the following for the for the years ended December 31, 2024 and 2023:

 Schedule of revenue by geographic destination

 2024

 2023

 North America

 $
 –

 $
 437,536

 United Kingdom

 1,583,435

 Rest of world

 –

 –

 Total revenue

 $

 $

 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.

 F- 18

 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.

 As of December 31, 2024, the Company
had backlog of approximately $0. During the year ended December 31, 2023, there was approximately $0 in revenue recognized pertaining
to any backlog.

 Contract Assets and Liabilities

 The Company bill its customers based
on contractual terms, including, milestone billings based on the completion of certain phases of the work. Sometimes, billing occurs after
revenue recognition, resulting in unbilled revenue, which is accounted for as a contract asset. Sometimes the Company receives advances
payments from our customers before revenue is recognized, resulting in deferred revenue, which is accounted for as a contract liability.

 Contract assets in the consolidated
balance sheets represents costs and estimated earnings in excess of billings, which arise when revenue has been recorded but the amount
has not been billed.

 Contract assets and liabilities on 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.

 Schedule of roll forward 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

 $
 –

 F- 19

 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:

 Schedule of accounts receivable

 2024

 2023

 Accounts receivable

 $
 920,502

 $
 868,948

 Less: Allowance for doubtful accounts

 ( 5,458
)

 –

 Accounts receivable, net

 $
 915,044

 $
 868,948

 NOTE 7 – PROPERTY AND EQUIPMENT, NET

 Property and equipment, net consisted of the
following:

 Schedule of property and equipment

 2024

 2023

 Property and equipment

 $
 1,125,013

 $
 1,092,870

 Leasehold improvements

 46,934

 46,934

 Property and equipment at cost

 1,171,947

 1,139,804

 Less - accumulated depreciation

 ( 472,965
)

 ( 396,522
)

 Property and equipment, net

 $
 698,982

 $
 743,282

 Depreciation expenses was $ 128,489 and $ 523,147 for the years
ended December 31, 2024 and 2023, respectively.

 NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

 Goodwill

 The following is a summary of activity of goodwill for the years ended December 31, 2024 and 2023:

 Schedule of goodwill activity

 Goodwill

 Balances at December 31, 2023

 –

 Acquisition

 23,965

 Foreign exchange translation

 –

 Balances at December 31, 2024

 $
 23,965

 F- 20

 The following is a summary of intangible assets, net:

 Schedule of intangible assets

 2024

 2023

 Trade name per business combination

 $

 $
 4,033,638

 Impairment

 ( 0
)

 ( 3,059,716
)

 Less: accumulated amortization

 ( 0
)

 ( 195,416
)

 Foreign exchange translation

 ( 0
)

 ( 778,506
)

 Intangible assets, net

 $
 –

 $
 –

 Amortization expense was $ 0 and $ 34,070 for the years ended December
31, 2024 and 2023, respectively.

 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, 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 years ended December 31, 2024 and 2023,
the Company had patent amortization costs on its intrusion detection technology totaling $ 51,028 and $ 14,212, respectively. Patents costs
are being amortized over the remaining life of each patent, which is from 7 to 16 years.

 The DPTI issued patents cover a System
and Method 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.

 F- 21

 The following is a summary of the DPTI patents
as of December 31, 2024 and 2023:

 Schedule of patents

 2024

 2023

 Patents

 $
 904,269

 $
 904,269

 Less: accumulated amortization

 ( 701,634
)

 ( 650,606
)

 Patents, net

 $
 202,635

 $
 253,663

 Future
expected amortization of patents is as follows:

 Schedule of future expected amortization of patents

 As of December 31,

 2024

 51,028

 2025

 51,028

 2026

 51,028

 2027

 49,551

 Thereafter

 Total patents

 $
 202,635

 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 year ended December 31, 2024, the Company
contributed $ 0 to the joint venture and recorded a loss on the equity investment of $ 0. During the year ended December 31, 2023, the Company
contributed $ 113,125 to the joint venture and recorded a loss on the equity investment of $ 159,849.

 NOTE 10 – ACCOUNTS PAYABLE AND ACCRUED
EXPENSES

 Accounts payable and accrued expenses consists
of the following as of December 31, 2024 and December 31, 2023:

 Schedule of accounts payable and accrued expenses

 2024

 2023

 Accounts payable

 $
 16,863,559

 $
 13,721,561

 Accrued liabilities

 1,941,711

 Total accounts payable and accrued expenses

 $
 16,863,559

 $
 15,663,272

 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 December 31, 2024 and 2023. 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, 2024 and 2023.

 F- 22

 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 15).

 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 December 31, 2024 and, 2023,
there was $ 0 and $ 166,650 of convertible debt principal outstanding. During the year ended December 31, 2024 and 2023, $ 0 and $ 12,025
of the debt discount was amortized.

 The summary of convertible notes are:

 Schedule of convertible notes

 2024

 2023

 Principal Outstanding

 $
 –

 $
 166,650

 Less: unamortized debt discount

 –

 ( 45,725
)

 Convertible notes, net

 $
 –

 $
 120,925

 The
table below details the Company's outstanding convertible notes and related derivative liability:

 Schedule of outstanding convertible notes and derivative liability

 Face Amount

 Derivative Liability

 12/31/2024

 12/31/2023

 12/31/2024

 12/31/2023

 1800 Diagonal Lending

 $
 –

 $
 166,650

 $
 –

 $
 108,958

 Carebourn

 –

 –

 –

 –

 Carebourn

 –

 –

 –

 –

 More Capital

 –

 –

 –

 –

 EMA

 –

 –

 –

 –

 $
 –

 $
 166,650

 $
 –

 $
 108,958

 During the years ended December 31, 2024 and
2023, change in fair value of the derivative liability was $(45,268) and $167,582, respectively. The following is a summary of the derivative
liability:

 Schedule of derivative liability

 Derivative Liability

 Balances at December 31, 2023

 $

 108,958

 Loss on issuance of debt

 –

 Issuance of convertible note - 1800 Diagonal Lending

 ( 120,925

)

 Change in fair value

 ( 45,268

)

 EMA settlement

 –

 Balances at December 31, 2024

 $

 ( 57,235

)

 F- 23

 Notes Payable

 On August 27, 2024, the Company entered into
a promissory note for a principal of $ 67,200, which was funded on August 30, 2024. The note bears interest at a rate of 12 % per annum
and matures after nine months.

 On November 20, 2024, the Company entered
into a promissory note for a principal of $ 67,860, which was funded on December 2, 2024. The note bears interest at a rate of 15 % per
annum and matures after nine months.

 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 December 31, 2024 and 2023:

 Schedule of loans
payable

 2024

 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

 OPT – Optilan Communications & Security Ltd

 1,042

 –

 Loans payable, current

 $
 571,530

 $
 570,487

 RI - SBA EIDL

 $
 102,597

 $
 102,597

 RI - long-term loans

 65,532

 63,533

 WS - SBA EIDL

 26,307

 26,307

 WS - long-term loans

 97,532

 97,532

 Loans payable, non-current

 $
 291,967

 $
 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- 24

 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, 2024 and 2023,
the Company recorded interest expense of $ 26,955 and $ 66,813, respectively.

 As of December 31, 2024, and December
31, 2023, the outstanding balance of the debenture liability totaled $ 1,041,644 and $ 1,099,250, respectively.

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

 Schedule of future
minimum required payments

 Period ending December 31,

 2024

 $
 260,550

 2025

 260,550

 2026

 260,550

 2027

 259,994

 2025

 –

 Total

 $
 1,041,644

 NOTE 13 – LEASES

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

 Schedule of operating lease

 Operating leases

 2024

 2023

 Assets

 ROU operating lease assets

 $
 449,556

 $
 496,685

 Liabilities

 Current portion of operating lease

 $
 80,400

 $
 80,400

 Operating lease, net of current portion

 447,009

 496,335

 Total operating lease liabilities

 $
 527,409

 $
 576,735

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

 Schedule of weighted average remaining lease term and discount rate

 Operating leases

 2024

 2023

 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- 25

 The following table reconciles future minimum
operating lease payments to the discounted lease liability as of December 31, 2024:

 Schedule of future minimum operating lease payments

 Years Ended December 31,

 2024

 82,597

 2025

 84,726

 2026

 86,853

 2027 and later

 482,474

 Total lease payments

 736,650

 Less imputed interest

 ( 209,241
)

 Total lease obligations

 527,409

 Less current lease obligations

 ( 80,400
)

 Long-term lease obligations

 $
 447,009

 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 December
31, 2024 and 2023 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, 2024
and 2023, there were 10,551,957,534 and 8,100,117,720 common shares issued, respectively.

 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.

 F- 26

 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

 $ 0.008740

 1/24/2023

 77,733,861

 400,000

 $ 0.005146

 370,975

 2/3/2023

 61,173,706

 $ 0.004904

 277,975

 2/17/2023

 75,447,571

 $ 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

 $ 0.001000

 11/7/2023*

 55,555,555

 50,000

 50,000

 11/8/2023*

 33,333,333

 30,000

 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

 50,000

 11/30/2023*

 27,777,777

 25,000

 25,000

 12/1/2023*

 33,333,333

 30,000

 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

 1/8/2024

 52,162,997

 44,736

.000858

 40,580

 2/29/2024

 178,571,428

.000560

 8/19/2024

 55,555,556

 40,000

.0007200

 36,175

 1,662,012,341

 $

 1,666,019,121

 $

 3,679,027

 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.

 2024 Transactions

 On November 6, 2024 the Company entered
into an Amendment to the 2023 Equity Financing Agreement with GHS, to which GHS agreed to Purchase $ 30,000,000 in shares of our Common
Stock over the course of 12 months at 92% of the current market price.

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

 Stock Options

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

 F- 27

 NOTE 15 – INCOME TAXES

 The domestic and foreign components of loss
before (benefit) provision for income taxes were as follows:

 Schedule of provision for income taxes

 2024

 2023

 Domestic:

 $
 ( 11,676,768
)

 $
 ( 11,676,768
)

 Foreign:

 ( 7,133,368
)

 ( 7,133,368
)

 Total income (loss) before income taxes

 $
 ( 18,810,136
)

 $
 ( 18,810,136
)

 The provision for income taxes for the years ended
December 31, 2024 and 2023 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, 2024 and 2023:

 Schedule of statutory rate

 2024

 2023

 Statutory tax rate:

 U.S.

 21.00 %

 21.00 %

 State taxes

 1.36 %

 1.36 %

 Foreign rate differential

 1.26 %

 1.26 %

 Goodwill impairment

 - 7.33 %

 - 7.33 %

 NOLs carryforward adjustment

 3.61 %

 3.61 %

 Other

 - 0.22 %

 - 0.22 %

 Change in valuation allowance:

 - 19.67 %

 - 19.67 %

 – %

 – %

 The Company's deferred tax assets and liabilities
as of December 31, 2024 and 2023 are as follows:

 Schedule of deferred
tax assets and liabilities

 2024

 2023

 Deferred Tax (Liabilities):

 Net operating losses

 $
 8,964,470

 $
 8,964,470

 Intangible assets

 ( 736,905
)

 ( 736,905
)

 Right of use asset

 84,170

 84,170

 Stock based compensation

 424,681

 424,681

 Property and equipment

 497,037

 497,681

 Other

 11,077

 11,077

 Less: Valuation allowance

 ( 9,244,530
)

 ( 9,244,530
)

 Deferred tax assets (liabilities)

 $
 –

 $
 –

 The Company has approximately $ 26,485,942 of federal
and state net operating loss carryforwards as of December 31, 2024. 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,
2024 and 2023, 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, 2024 and 2023, respectively.

 F- 28

 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, 2024 and 2023, 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.

 NOTE 16 – COMMITMENTS AND CONTINGENCIES

 Legal Matters

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

 On or about January 29, 2021, Carebourn Capital,
L.P. (" Carebourn ") commenced an action against the Company in Minnesota State Court. Carebourn alleged that the Company
was in breach of certain securities purchase agreements and convertible promissory notes sold to Carebourn on or about July 17, 2018 and
July 24, 2018.

 On or about August 31, 2021, the Company answered
Carebourn's complaint and interposed affirmative defenses, including that Carebourn was an unregistered "dealer," as
such term is defined in the Securities Exchange Act of 1934 (" Exchange Act ") and, therefore, all contracts between
the parties arising from or related to the securities purchase agreements and convertible promissory notes sold to Carebourn on or about
July 17, 2018 and July 24, 2018 were void pursuant to the Exchange Act. The Company also asserted counterclaims against Carebourn under
the Minnesota Securities Act.

 On or about April 21, 2023, the State Court ruled
in the Company's favor on its motion for partial summary judgment on its Exchange Act defense, holding that (i) Carebourn is
a "dealer" under the Exchange Act in violation of the mandatory registration requirement imposed thereby, and (ii) all
contracts between the parties are void.

 On or about November 17, 2023, the State Court
ruled in the Company's favor on its motion for summary judgment on its Minnesota Securities Act counterclaims against Carebourn
and awarded damages for Carebourn's violation of Minn. Stat. § 80A.76(d) in the amount of $124,012.91, attorney's
fees in the amount of $239,923.33 and costs in the amount of $23,757.24 (or a total award in the amount of $387,693.48).

 As of the date hereof, the final judgment remains
unsatisfied by Carebourn. DarkPulse intends to continue to exercise all legal rights and remedies available to it to collect the amounts
awarded should Carebourn fail to voluntarily pay the same.

 More Capital, LLC v. DarkPulse, Inc. et
al

 On or about June 29, 2021, More Capital, LLC (" More ")
commenced an action against the Company in Minnesota State Court. More alleged that the Company was in breach of a certain securities
purchase agreement and convertible promissory note sold to More on or about August 20, 2018.

 On or about September 3, 2021, the Company answered
More's complaint and interposed affirmative defenses, including that More was an unregistered "dealer," as such term
is defined in the 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).

 F- 29

 As of the date hereof, the final judgment remains
unsatisfied by More. DarkPulse intends to continue to exercise all legal rights and remedies available to it to collect the amounts awarded
should More fail to voluntarily pay the same.

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

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

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

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

 On or about December 4, 2023, the Court entered
an order granting dismissal of the Noteholders' claims with prejudice. The Court acknowledged that notwithstanding its dismissal
of the Noteholders' claims, the Court continues to retain jurisdiction over the Noteholders because of DarkPulse's pending
motion for sanctions against the Noteholders and their attorneys.

 On September 10, 2024, the Court entered an order
granting in part the Company's motion for sanctions against the Noteholders and their counsel of record.

 As of the date hereof, the Court has not yet rendered
its decision on the amount sanctions that will be imposed against the Noteholders and their counsel of record and awarded to the Company.

 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. On the same day, the Company appealed the Court's
decision to the United States Court of Appeals for the Second Circuit (" Second Circuit ").

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

 On September 9, 2024, the FirstFire Defendants
filed their opening memorandum of law in support of their motion to dismiss. Shortly thereafter, the Company opposed the FirstFire Defendants'
motion and the FirstFire Defendants filed their reply in further support.

 As of the date hereof, the Court has not scheduled
oral arguments on the FirstFire Defendants' motion to dismiss or rendered its decision thereon. The Company remains committed to
actively litigating its claims for relief against the FirstFire Defendants.

 F- 30

 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 United States Court of Appeals for the Second Circuit (" Second Circuit ").

 On August 19, 2024, the Second Circuit issued
its decision and found that the District Court erred when granting the Crown Bridge Defendants' motion to dismiss. As a result,
the Second Circuit vacated the District Court's decision and remanded the case back to the District Court for further proceedings
consistent with its decision.

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

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

 GS Capital Partners, LLC v. DarkPulse, Inc.

 On June 2, 2023, GS Capital Partners, LLC (" GS
Capital ") commenced an action in the Supreme Court for New York County against the Company through the filing of motion for
summary judgment in lieu of a complaint. The motion claims that the Company is in breach of a convertible promissory note, dated July
14, 2021, and accompanying securities purchase agreement, dated the same.

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

 On July 27, 2023, the Company moved to set aside
the default judgment entered in favor of GS Capital and against the Company on July 25, 2023. GS Capital's opposition thereto is
due on or before August 31, 2023. Thereafter, DarkPulse's reply is due on or before September 6, 2023. Oral arguments are currently
not scheduled on the Company's motion.

 On or about September 27, 2023, the Company and
GS Capital confidentially settled the dispute. On or about October 3, 2023, the parties filed a stipulation with the court to vacate the
judgment entered against the Company and in favor of GS Capital, vacate the motion filed by the Company, and discontinue the action.

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

 The Company defaulted upon the settlement and,
on July 24, 2024, the Company and GS Capital entered into a Settlement Agreement pursuant to which the Company entered into a confession
of judgment in favor of GS Capital in the amount of $ 2,673,423.19 (the " Balance "). Upon approval of the court on August
19, 2024, the Company will issue to GS Capital free-trading and unrestricted shares of Common Stock pursuant to drawdown requests in the
amounts determined by GS Capital, subject to a 4.99 % beneficial ownership limitation. The shares will be issued a price per share equal
to the average of the three lowest VWAPs for the five prior trading days. GS Capital will be allowed to sell, the greater of (1) in one
week, no more than 1% of the total outstanding shares of the Company on a non-cumulative basis at the "ask" price, and (2)
15% of the daily trading volume of the Common Stock on any single trading day. Each drawdown will reduce the Balance. The Company is required
to reserve 2,500,000,000 shares of Common Stock.

 F- 31

 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 the date hereof, the Company is interviewing new counsel and evaluating its claims against landlord to determine if it's
financially responsible to incur additional fees related to exercising TJM's rights against the landlord for terminating the lease.

 On or about June 28, 2024, the Company discussed
with possible new counsel the feasibility of recovering its damages utilizing the courts. At that time, it appeared the cost of recovery
would exceed the recoverable amount should the Company be successful in its litigation. TJM West is awaiting updates from the court in
Maricopa County as to the status of the case.

 The facilities in question had served as TJM West's
manufacturing facility and is located at 2640 W Medtronic Way Tempe, AZ 85281. Currently, we do
not have access to the facility nor have we signed a new lease signed with the landlord.

 In addition to the foregoing Legal Proceedings,
we are also actively investigating potential legal claims, including but not limited to stock fraud, market manipulation, and/or defamation,
against certain Twitter accounts, websites, and social media channels. The investigation is ongoing and should potential claims be identified,
we will evaluate commencing formal litigation proceedings.

 From time to time, we may become involved in litigation
relating to claims arising out of our operations in the normal course of business. We are not currently involved in any pending legal
proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are
a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on our business,
financial condition and operating results.

 F- 32

 NOTE 17 – 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 years ended December 31,
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.

 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 years ended 2024 and 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 years ended 2024 and 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"). As of December 31, 2023 and December 31, 2022, the Company's $ 1,500,000 investment in GSD was accounted
for as cost.

 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 December 31 2024 and December 31, 2023, the outstanding note receivable was $ 0
and $ 0, respectively.

 F- 33

 As of December 31, 2024 and 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, 2024

 NOTE 18 – SUBSEQUENT EVENTS

 On January 3, 2025 the Company issued 36,640,375
shares of common stock for a total consideration of $23,449.84

 On January 13, 2025 the Company issued 51,215,454
shares of common stock for a total consideration of $32,777.89

 On January 22, 2025 the Company issued 79,061,625
shares of common stock for a total consideration of $50,618.64

 On January 30, 2025 the Company issued 139,008,500
shares of common stock for a total consideration of $55,603.40

 On February 7, 2025 the Company issued 124,464,575
shares of common stock for a total consideration of $49,785.83

 On February 27, 2025, the Company issued 142,074,500
shares of common stock for a total consideration of $34,097.88

 On March 10, 2025, the Company issued 132,699,709
shares of common stock for a total consideration of $31,847,93

 On March 18, 2025, the Company issued 224,563,917
shares of common stock for a total consideration of $53,895.34

 On March 27, 2025, the Company issued 203,844,344
shares of common stock for a total consideration of $65,230.19

 On April 4, 2025, the Company issued 130,615,137
shares of common stock for a total consideration of $41,796.85

 F- 34