10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2019

 ☒        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File No. 000-18730

DARKPULSE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	87-0472109
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

350 5th Ave, 59th Fl. New York, NY	10118
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 436-1436

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 6, 2019, there were 1,129,719,021 shares of the Registrant’s common stock, $0.01 par value per share, issued.

DARKPULSE, INC.

FORM 10-Q

TABLE OF CONTENTS

FOR THE QUARTER ENDED SEPTEMBER 30, 2019

PART I - Financial Information
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018	3
	Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2019 and 2018 (unaudited)	4
	Condensed Consolidated Statements of Comprehensive Gain/Loss (unaudited)	5
	Condensed Consolidated Statements of Stockholders’ Deficit for the Three Months and Nine Months Ended September 30, 2019 and 2018 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	18
PART II - Other Information
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults upon Senior Securities	19
Item 4.	Mine Safety Disclosures	19
Item 5.	Other Information	19
Item 6.	Exhibits	20
Signatures		21

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

DARKPULSE, INC.

Condensed Consolidated Balance Sheets

Unaudited

	September 30,			December 31,
	2019			2018
ASSETS
CURRENT ASSETS:
Cash	$	1,408		$	72,294
Prepaid expenses		746			746
TOTAL CURRENT ASSETS		2,154			73,040
Other assets, net		116,495			70,679
Patents, net		457,775			486,932
TOTAL ASSETS	$	576,424		$	630,651
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	264,185		$	59,160
Convertible notes, net of discount $93,138 and $440,800 respectively		928,702			601,250
Derivative liability		341,209			653,831
Accrued liabilities		465,337			343,519
Contract liability, related party		42,000			42,000
Related party notes payable		44,096			44,096
TOTAL CURRENT LIABILITIES		2,085,529			1,743,856
Secured debenture		1,132,965			1,102,243
TOTAL LIABILITIES		3,218,494			2,846,099
Commitments and contingencies
STOCKHOLDERS' DEFICIT
Common stock (par value $0.01), 3,000,000,000 and 250,000,000 shares authorized, 872,309,164 and 89,680,567 shares issued and outstanding respectively		8,723,092			896,806
Treasury stock, 100,000 shares		(1,000	)		(1,000	)
Convertible preferred stock, Series D (par value $0.01) 100,000 shares authorized, 88,235 shares issued and outstanding respectively		883			883
Paid in capital in excess of par value		(6,703,232	)		859,481
Non-controlling interest in a variable interest entity and subsidiary		(12,439	)		(12,439	)
Accumulated other comprehensive income		358,958			389,680
Accumulated deficit		(5,008,332	)		(4,348,859	)
TOTAL STOCKHOLDERS' DEFICIT		(2,642,070	)		(2,215,448	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	576,424		$	630,651

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

DARKPULSE, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
REVENUES	$	–		$	–		$	–		$	–
OPERATING EXPENSES:
General and administrative expenses		40,453			281,996			144,965			1,911,353
Payroll and compensation		–			–			168,945			–
Legal expenses		48,868			–			96,962			–
Amortization of patents		12,757			18,216			38,271			43,730
Debt transaction expenses		–			–			24,900			–
TOTAL OPERATING EXPENSES		102,078			300,212			474,043			1,955,083
OPERATING LOSS		(102,078	)		(300,212	)		(474,043	)		(1,955,083	)
OTHER INCOME (EXPENSE):
Interest expense		(50,649	)		(139,961	)		(399,895	)		(164,990	)
Loss on convertible notes		(47,266	)		(916,977	)		(351,662	)		(916,977	)
Gain on change in fair market values of derivative liabilities		221,879			689,949			566,127			689,949
Loss on merger		–			(110,685	)		–			(110,685	)
TOTAL OTHER INCOME (EXPENSE)		123,964			(477,674	)		(185,430	)		(502,703	)
NET INCOME (LOSS)		21,886			(777,886	)		(659,473	)		(2,457,786	)
Net loss attributable to noncontrolling interests in variable interest entity and subsidiary		–			100			–			11,172
Net income (loss) attributable to Company stockholders	$	21,886		$	(777,786	)	$	(659,473	)	$	(2,446,614	)
GAIN (LOSS) PER SHARE:
Basic and Diluted	$	0.00		$	(0.00	)	$	(0.00	)	$	(0.03	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and Diluted		518,604,087			89,680,567			252,457,517			76,127,111

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

DARKPULSE, INC.

Condensed Consolidated Statements of Comprehensive Gain/Loss

(Unaudited)

	FOR THE THREE MONTHS					FOR THE NINE MONTHS
	ENDED SEPTEMBER 30,					ENDED SEPTEMBER 30,
	2019		2018			2019			2018
NET INCOME (LOSS)	$	21,886	$	(777,786	)	$	(659,473	)	$	(2,446,614	)
OTHER COMPREHENSIVE GAIN (LOSS)
Unrealized Gain (Loss) on Foreign Exchange		12,671		(20,638	)		(30,722	)		29,359
COMPREHENSIVE GAIN (LOSS)	$	34,557	$	(798,424	)	$	(690,195	)	$	(2,417,255	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

DARKPULSE, INC.

Consolidated Statement of Stockholders' Deficit

For the Periods Ended September 30, 2019 and 2018

	Preferred Stock				Common Stock				Treasury			Paid in Capital in Excess of Par			Non- Controlling Interest in			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Stock			Value			Subsidiary			Income			Deficit			Deficit
Balance, December 31, 2018		88,235	$	883		89,680,467	$	896,806	$	(1,000	)	$	859,481		$	(12,439	)	$	389,680		$	(4,348,859	)	$	(2,215,448	)
Conversion of convertible notes		–		–		12,488,347		124,883		–			(45,837	)		–			–			–			79,046
Foreign currency adjustment		–		–		–		–		–			–			–			(22,050	)					(22,050	)
Net loss		–		–		–		–		–			–			–			–			(806,568	)		(806,568	)
Balance, March 31, 2019		88,235	$	883		102,168,914	$	1,021,689	$	(1,000	)	$	813,644		$	(12,439	)	$	367,630		$	(5,155,427	)	$	(2,965,020	)
Conversion of convertible notes		–		–		137,005,692		1,370,057		–			(1,284,135	)		–			–			–			85,922
Foreign currency adjustment		–		–		–		–		–			–			–			(21,343	)					(21,343	)
Net gain (loss)		–		–		–		–		–			–			–			–			125,210			125,210
Balance, June 30, 2019		88,235	$	883		239,174,606	$	2,391,746	$	(1,000	)	$	(470,491	)	$	(12,439	)	$	346,287		$	(5,030,217	)	$	(2,775,231	)
Conversion of convertible notes		–		–		633,134,558		6,331,346		–			(6,232,741	)		–			–			–			98,605
Foreign currency adjustment		–		–		–		–		–			–			–			12,671						12,671
Net gain (loss)		–		–		–		–		–			–			–			–			21,886			21,886
Balance, September 30, 2019		88,235	$	883		872,309,164	$	8,723,092	$	(1,000	)	$	(6,703,232	)	$	(12,439	)	$	358,958		$	(5,008,332	)	$	(2,642,069	)
Balance, December 31, 2017		–	$	–		100	$	–	$	–		$	–		$	25,808		$	298,908		$	(1,030,800	)	$	(706,084	)
Foreign currency adjustment		–		–		–		–		–			–			–			29,886						29,886
Net loss		–		–		–		–		–			–			–			–			(25,308	)		(25,308	)
Balance, March 31, 2018		–	$	–		100	$	–	$	–		$	–		$	25,808		$	328,794		$	(1,056,108	)	$	(701,506	)
Foreign currency adjustment		–		–		–		–		–			–			–			20,111			–			20,111
Net loss		–		–		–		–		–			–			–			–			(24,231	)		(24,231	)
Balance, June 30, 2018		–	$	–		100	$	–	$	–		$	–		$	25,808		$	348,905		$	(1,080,339	)	$	(705,626	)
Recapitalization of the Company		88,235		883		89,680,467		896,806		(1,000	)		859,481			(38,247	)		–			(1,630,461	)		87,462
Foreign currency adjustment		–		–		–		–		–			–			–			(20,637	)		–			(20,637	)
Net loss		–		–		–		–		–			–			–			–			(777,786	)		(777,786	)
Balance, September 30, 2018		88,235	$	883		89,680,567	$	896,806	$	(1,000	)	$	859,481		$	(12,439	)	$	328,268		$	(3,488,586	)	$	(1,416,587	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

DARKPULSE, INC.

Condensed Consolidated Statement of Cash Flows

(Unaudited)

	FOR THE NINE MONTHS
	ENDED SEPTEMBER 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(659,473	)	$	(2,457,786	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		38,271			45,536
Loan acquisition costs		24,900			–
Stock based compensation		–			1,602,570
Interest on notes payable		27,446			–
Debt discount		(205,000	)		205,406
Amortization of debt discount		568,985			–
Derivative liability		(312,622	)		115,678
Changes in operating assets and liabilities:
Accounts payable		205,025			54,153
Contract liabilities		–			42,000
Accrued liabilities		110,340			138,540
Cash held by officer of VIE		–			10,650
Prepaid expenses		–			(746	)
Net cash used by operating activities		(202,128	)		(243,999	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Noncontrolling interest		–			(38,247	)
Investment in patents		(54,930	)		(141,223	)
Net Cash Used by Investing Activities		(54,930	)		(179,470	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		180,100			572,072
Payments on convertible notes and interest		(24,650	)		(8,050	)
Proceeds from related party payable		–			44,096
Payments on note payable		–			(33,386	)
Net Cash Provided by Financing Activities		155,450			574,732
Effect of exchange rate on cash		30,722			–
NET INCREASE (DECREASE) IN CASH		(70,886	)		151,263
CASH, beginning of period		72,294			8,025
CASH, end of period	$	1,408		$	159,288
Noncash investing and financing activities for the quarter ending September 30:
Stock issued for convertible notes payable and accrued interest	$	232,535		$	–
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash	$	66,850		$	–
Taxes paid in cash	$	–		$	–

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

DARKPULSE, INC.

Notes to Condensed Financial Statements

(Unaudited)

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

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial statements not misleading. The consolidated financial statements as of December 31, 2018 have been audited by an independent registered public accounting firm. The accounting policies and procedures employed in the preparation of these condensed consolidated financial statements have been derived from the audited financial statements of the Company for the year ended December 31, 2018, which are contained in Form 10-K as filed with the Securities and Exchange Commission on April 16,2019. The consolidated balance sheet as of December 31, 2018 was derived from those financial statements.

Basis of Presentation and Principles of Consolidation

The consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission for Interim Financial Information. The condensed consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2019, and the results of operations and cash flows for the nine months ended September 30, 2019 have been included. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year.

Description of Business

DarkPulse, Inc. ("DPI" or "Company") is a technology-security company incorporated in 1989 as Klever Marketing, Inc. ("Klever"). The Company’s wholly-owned subsidiary, DarkPulse Technologies Inc. ("DPTI"), was originally formed as a privately held technology spinout from the University of New Brunswick, Fredericton, Canada. The Company plans for its security and monitoring systems to 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.

On April 27, 2018, Klever entered into an Agreement and Plan of Merger (the “Merger Agreement”) involving Klever as the surviving parent corporation acquiring DPTI as its wholly owned subsidiary (the “Merger”). On June 29, 2018, the parties entered into Amendment No. 1 to the Merger Agreement, and on July 18, 2018 the parties closed the Merger. With the change of control of the Company, the Merger is was accounted for as a recapitalization in a manner similar to a reverse acquisition.

On July 20, 2018, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the State of Delaware changing the name of the Company to DarkPulse, Inc. The Company filed a corporate action notification with the Financial Industry Regulatory Authority (FINRA), and the Company's ticker symbol was changed to DPLS.

Going Concern Uncertainty

As shown in the accompanying financial statements, during the three months ended September 30, 2019, the Company did not generate any revenues and reported a net gain of $21,886. As of September 30, 2019, the Company’s current liabilities exceeded its current assets by $2,083,374. As of September 30, 2019, the Company had $1,408 of cash.

8

The Company will require additional funding during the next nine months to finance the growth of its 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 and expansion of its operations. The accompanying 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. However, management cannot make any assurances that such financing will be secured.

Use of Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the assumptions used to calculate stock-based compensation, derivative liabilities, preferred deemed dividend and common stock issued for services.

Cash and Cash Equivalents

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 a 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 financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. 

Intangible Assets

The Company reviews intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows.

Foreign Currency Translation

The company translates monetary assets and liabilities (any item paid for or settled in foreign currency) into the United States Dollar at exchange rates prevailing on the balance sheet date. Non-monetary assets and liabilities are translated at the historical rate in effect when the transaction occurred. Revenues and expenses are translated at the spot rate on the date the transaction occurred. Exchange gains and losses from the translation of monetary items are included in unrealized gain/loss on Foreign Exchange as Other Comprehensive Loss.

The following table discloses the dates and exchange rates used for converting Canadian Dollar amounts to U.S. Dollar amounts disclosed in the balance sheet and the statement of operations.

The spot exchange rate between the Canadian Dollar and the U.S. Dollar on December 31, 2018 closing rate at 1.3642 US$: CAD, average rate at 1.2958 US$: CAD and for the three and nine months ended September 30, 2019 closing rate at 1.3209 US$: CAD, average rate at 1.3294 US$.

9

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the "more likely than not" criteria of ASC 740.

ASC 740-10 requires that the Company recognize 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 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Accounting for Derivatives

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. 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 probability weighted average series Binomial lattice formula pricing models 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 or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Fair Value of Financial Instruments

The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, and accruals approximate their fair values because of the short maturity of these instruments. The Company believes the carrying value of its secured debenture payable approximates fair value because the terms were negotiated at arms length.

Recent Accounting Pronouncements

There were no new accounting pronouncements issued or proposed by the Financial Accounting Standards Board during the nine months ended September 30, 2019, and through the date of filing of this report that the Company believes has had or will have a material impact on its financial position or results of operations, including the recognition of revenue, cash flows or disclosures. The Company has no lease obligations.

Income (Loss) Per Common Share

Basic net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share of common stock is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents outstanding. Potential dilutive common share equivalents consist of shares issuable upon exercise of outstanding convertible preferred stock and stock options.

10

For the nine months ended September 30, 2019, there were no stock options nor convertible preferred stock outstanding. For the nine months ended September 30, 2019, common stock equivalents related to convertible preferred stock and convertible debt have not been included in the calculation of diluted loss per common share because they are anti-dilutive. Therefore, basic loss per common share is the same as diluted loss per common share. There are 1,277,690,836 common shares reserved for the potential conversion of the Company's convertible debt.

NOTE 2 - DEBENTURE

DPTI issued a convertible Debenture to the University 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 C$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 Canadian $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 by April 24, 2018. 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 September 30, 2019, the quarterly principal repayment amounts will be US$49,644. The Debenture is secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010. DPTI has pledged the Patents, and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University.

The Debenture was initially recorded at the $1,491,923 equivalent US Dollar amount of Canadian $1,500,000 as of December 16, 2010, the date of the original Debenture. The liability is being adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the end of each quarter. The adjustment is recorded as unrealized gain or loss in the change of the value of the two currencies during the quarter. The amounts recorded as an unrealized gain (loss) for the three months ended September 30, 2019 and 2018, were $12,671 and ($20,638) respectively. These amounts are included in Accumulated Other Comprehensive Loss in the Equity section of the consolidated balance sheet, and as Unrealized Loss on Foreign Exchange on the consolidated statement of comprehensive loss. The Debenture also includes a provision requiring DPTI to pay the University a two percent (2%) royalty on sales of any and all products or services which incorporate the Patents for a period of five (5) years from April 24, 2018.

For the three months ended September 30, 2019, and 2018, the Company recorded interest expense of $12,745 and $12,551, respectively.

As of September 30, 2019 the debenture liability totaled $1,132,965, all of which was long term.

Future minimum required payments over the next 5 years and thereafter are as follows:

Period ending September 30,
2020	$	–
2021		–
2022		–
2023		–
2024 and after		1,132,965
Total	$	1,132,965

NOTE 3 – CONVERTIBLE DEBT SECURITIES

The Company uses the Black-Scholes Model to calculate the derivative value of its convertible debt. The valuation result generated by this pricing model is necessarily driven by the value of the underlying common stock incorporated into the model. The values of the common stock used were based on the price at the date of issue of the debt security as of September 30, 2019. Management determined the expected volatility between 318.38-487.51%, a risk free rate of interest between 1.75-1.92%, and contractual lives of the debt varying from six months to two years. The table below details the Company's outstanding convertible notes, with totals for the face amount, amortization of discount, initial loss, change in the fair market value, and the derivative liability.

11

	Face		Amortization		Initial		Q3 change			Derivative Balance
	Amount		of Discount		Loss		in FMV			9/30/2019
	$	90,228	$	–	$	58,959	$	(67,989	)	$	–
		162,150		–		74,429		(128,965	)		–
		75,652		–		11,381		–			–
		208,436		–		–		–			–
		79,622		–		8,904		–			–
		65,372		–		5,651		–			–
		55,180		12,344		28,566		(7,305	)		62,544
		33,194		6,647		16,558		(3,934	)		33,677
		29,250		367		–		(340	)		28,368
		49,726		624		–		(579	)		48,226
		41,774		524		–		(486	)		40,514
		29,250		367		–		(340	)		28,368
		40,000		10,055		10,605		(4,593	)		38,274
		64,000		16,339		17,676		(7,348	)		61,238
Subtotal		1,023,834		47,266		232,729		(221,879	)		341,209
Transaction expense		–		–		–		–			–
	$	1,023,834	$	47,266	$	232,729	$	(221,879	)	$	341,209

During the three months ended September 30, 2019, a total of $70,696 in principal and $10,070 in interest were converted into 633,134,558 shares of the Company’s common stock.

As of September 30, 2019 and 2018 respectively, there was $928,702 and $0 of convertible debt outstanding, net of debt discount of $93,138, and $0, As of September 30, 2019 and 2018 respectively, there was derivative liability of $341,209 and $0 related to convertible debt securities.

NOTE 4 - STOCKHOLDERS' DEFICIT

As of September 30, 2019, there were 872,309,164 shares of common stock and 88,235 shares of preferred stock issued and outstanding.

NOTE 5 - COMMITMENTS & CONTINGENCIES

Potential Royalty Payments

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

Potential Commission Payments

The Company, in consideration of the Strategic Alliance Agreement with Bravatek, for the purpose of promoting the Company’s products, will pay Bravatek sales commissions for clients introduced to the Company by Bravatek.

Legal Matters

On March 27, 2019, Thomas A. Cellucci, et al. v. DarkPulse, Inc. et al. (the “Complaint”) was filed in the United States District Court for the Southern District of New York by certain of the Company’s former executive officers, one also being a former director, and a non-employee shareholder (collectively, the “Plaintiffs”), against the Company, its sole officer and director, and others, claiming that the Plaintiffs brought the action to protect their individual rights as minority shareholders, as improperly-ousted officers (other than the non-employee shareholder), and as an improperly-ousted director, seeking equitable relief, damages, recovery of unpaid salaries and other relief. It is the Company's position that the Complaint represents a frivolous harassment lawsuit, and the Company has filed a motion to dismiss all claims made in the Complaint and intends to otherwise defend itself vigorously in this matter. The Company is also exploring filing counterclaims against the Plaintiffs in the action.

12

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.

NOTE 6 – INTANGIBLE ASSETS

Intangible Assets - Intrusion Detection Intellectual Property

The Company relies on patent laws and restrictions on disclosure to protect its intellectual property rights. As of March 31, 2019, the Company held 3 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 three months ended September 30, 2019 and 2018, the Company amortized $12,757, respectively. Future amortization of intangible assets is as follows:

2019	$	12,757
2020		51,028
2021		51,028
2022		51,028
2023		51,028
Thereafter		236,805
	$	453,674

NOTE 7 – 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.

13

In May 2018, the JV Entity received $42,000 for an order from Bravetek and the JV Entity then placed a corresponding order with the Company. The Company’s former executive office is also the CEO of Bravatek. The proceeds were to be used for marketing efforts to generate sales of our intrusion detection product. The order has been recorded as a prepaid sale and is a current liability as of September 30, 2019.

NOTE 8 – PREFERRED STOCK

In accordance with the Company’s bylaws, the Company has authorized a total of 2,000,000 shares of preferred stock, par value $0.01 per share, for all classes. As of September 30, 2019, and December 31, 2018, there were 88,235 total preferred shares issued and outstanding for all classes.

On July 12, 2018, the Company filed a Certificate of Designation with the State of Delaware amending the designation of its previously designated “Class D Voting Preferred Stock,” designating 100,000 shares of the Company’s preferred stock as “Series D Preferred Stock.” Each share of Series D Preferred Stock entitles the holder to 6,000 votes on all matters submitted to a vote of the Company’s stockholders and is convertible at the election of the holder into a number of shares of common stock equal to the number of outstanding shares of common stock of the Company multiplied by 5 ⅔, divided by the number of outstanding shares of Series D Preferred Stock. All of these shares are owned by the Company's management, with control ownership held by the Company's CEO.

NOTE 9 – COMMON STOCK

In accordance with the Company’s bylaws, the Company has authorized a total of 3,000,000,000 shares of common stock, par value $0.01 per share. As of September 30, 2019 and December 31, 2018 respectively, there were 872,309,164 and 89,680,567 common shares issued and outstanding.

During the three months ended September 30, 2019, the Company issued 633,134,558 shares of common stock as settlement of convertible notes payable and interest in the total amount of $80,766.

NOTE 10 – STOCK OPTIONS

The Company’s shareholders approved, by a majority vote, the adoption of the 1998 Stock Incentive Plan (the “Plan”). As amended on August 11, 2003, the Plan reserves 20,000,000 shares of common stock for issuance upon the exercise of options which may be granted from time-to-time to officers, directors, certain employees and consultants of the Company or its subsidiaries by the Board of Directors. The Plan permits the award of both qualified and non-qualified incentive stock options.

During the three months ended September 30, 2019, the Company did not issue any stock options and had no stock options outstanding at September 30, 2019.

NOTE 11 – SUBSEQUENT EVENTS

The Company evaluated events occurring after the date of the accompanying unaudited condensed consolidated balance sheets through the date the financial statements were issued and the Company does not have any subsequent events to be disclosed prior to this filing.

14

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Background

DarkPulse, Inc. ("DPI" or "Company") is a technology-security company incorporated in 1989 as Klever Marketing, Inc. ("Klever"). The Company’s wholly-owned subsidiary, DarkPulse Technologies Inc. ("DPTI"), was originally formed as a privately held technology spinout from the University of New Brunswick, Fredericton, Canada. The Company plans for its security and monitoring systems to 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.

On April 27, 2018, Klever entered into an Agreement and Plan of Merger (the “Merger Agreement”) involving Klever as the surviving parent corporation acquiring DPTI as its wholly owned subsidiary (the “Merger”). On June 29, 2018, the parties entered into Amendment No. 1 to the Merger Agreement, and on July 18, 2018 the parties closed the Merger. With the change of control of the Company, the Merger was be accounted for as a recapitalization in a manner similar to a reverse acquisition.

On July 20, 2018, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the State of Delaware, changing the name of the Company to DarkPulse, Inc. The Company filed a corporate action notification with the Financial Industry Regulatory Authority (FINRA), and the Company's ticker symbol was changed to DPLS.

Going Concern Uncertainty

As shown in the accompanying financial statements, during the three months ended September 30, 2019, the Company did not generate any revenues and reported a net gain of $21,886. As of September 30, 2019, the Company’s current liabilities exceeded its current assets by $2,083,374. As of September 30, 2019, the Company had $1,408 of cash.

The Company will require additional funding during the next nine months to finance the growth of its 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 and expansion of its operations. The accompanying 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. However, management cannot make any assurances that such financing will be secured.

Results of Operations for the Three and Nine Months Ended September 30, 2019 compared to the Three and Nine Months Ended September 30, 2018

Revenues

To date, the Company has not generated any operating revenues.

Operating Expenses

General and administrative expenses for the three months ended September 30, 2019, decreased by $241,543 to $40,453 from $281,996 for the three months ended September 30, 2018. During the three months ended September 30, 2019, the Company continued to actively preparing to commercialize its patented technology. During the three months ended September 30, 2018, there were no revenues and all expenses during that time were related to the Company's patented technology.

15

General and administrative expenses for nine months ended September 30, 2019, decreased by $1,766,388 to $144,965 from $1,911,353 for the nine months ended September 30, 2018. During the nine months ended September 30, 2019, the Company continued to actively preparing to commercialize its patented technology. During the nine months ended September 30, 2018, there were no revenues and all expenses during that time were related to the Company's patented technology.

The Company had no payroll and compensation expenses for three months ended September 30, 2019 or September 30, 2018. The Company expects a significant reduction in payroll related expenses for the remainder of 2019 because it terminated four employees during March 2019.

Payroll and compensation expenses for the nine months ended September 30, 2019 increased to $168,945 compared to $0 for the nine months ended September 30, 2018. The Company expects a significant reduction in payroll related expenses for the remainder of 2019 because it terminated four employees during March 2019.

Legal expense for three months ended September 30, 2019 increased to $48,868 from $0 for the three months ended September 30, 2018. Legal expense for nine months ended September 30, 2019 increased $96,962 from $0 for the nine months ended September 30, 2018.

Amortization of patents expense for three months ended September 30, 2019 decreased $5,459 to $12,757 from $18,216 for the three months ended September 30, 2018. Amortization of patents expense for nine months ended September 30, 2019 decreased $5,459 to $38,271 from $43,730 for the nine months ended September 30, 2018.

Other Income (Expense)

Interest expense was $50,649 and $139,961 for the three months ended September 30, 2019 and 2018, respectively. This increase is primarily related to an increase in notes payable.

Interest expense was $399,895 and $164,990 for the nine months ended September 30, 2019 and 2018, respectively. This increase is primarily related to an increase in notes payable.

Loss on convertible notes expense was $47,266 for the three months ended September 30, 2019 compared to $916,977 for the three months ended September 30, 2018. Gain on change in fair market value of derivative liabilities was $221,879 for the three months ended September 30, 2019 compared to $689,949 for the three months ended September 30, 2018.

Loss on convertible notes expense was $351,662 for the nine months ended September 30, 2019 compared to $916,977 for the nine months ended September 30, 2018. Gain on change in fair market value of derivative liabilities was $566,127 for the nine months ended September 30, 2019 compared to $689,949 for the nine months ended September 30, 2018.

Provision for Income Taxes

The provision for income taxes was $0 and $0 for the three and nine months ended September 30, 2019 and 2018, respectively.

Net Income (Loss)

As a result of the above, we reported a net income of $123,964 and a net loss of $477,674 for the three months ended September 30, 2019 and 2018, respectively.

Additionally as a result of the above, we reported a net loss of $185,430 and a net loss of $502,703 for the nine months ended September 30, 2019 and 2018, respectively.

16

Liquidity and Capital Resources

The Company requires working capital to fund the further development and commercialization of its proprietary fiber optic sensing devices, and for operating expenses.

As of September 30, 2019, we had cash of $1,408, compared to $72,294 as of December 31, 2018. As of September 30, 2019, our current liabilities exceeded our current assets by $2,083,374.

Cash Flows From Operating Activities

During the nine months ended September 30, 2019, net cash used by operating activities was $202,128, resulting from our net loss of $659,473 and an increase in expenses related to our convertible notes payables, including amortization of debt discount of $568,985, debt discount of $205,000, increases in accounts payable of $205,025 and accrued liabilities of $110,340.

By comparison, during the nine months ended September 30, 2018, net cash used by operating activities was $243,999, resulting from our net loss of $2,457,786 and an increase in expenses related to stock based compensation of $1,602,570 as well our convertible notes payables, including debt discount of $205,406, increases in accounts payable of $54,153 and accrued liabilities of $138,540.

Cash Flows From Investing Activities

During the three months ended September 30, 2019, the Company used $54,930 in investing activities, all of which was related to our patents and trademarks. During the three months ended September 30, 2018, used $179,470 in investing activities of which $141,223 was related to our patents and trademarks.

Cash Flows From Financing Activities

During the nine months ended September 30, 2019, net cash provided by financing activities was $155,450, comprised of proceeds from the issuance of convertible debt in the amount of $180,100, offset by payments on convertible debt of $24,650. During the nine months ended September 30, 2018, net cash provided by financing activities was $574,732, comprised of proceeds from the issuance of convertible debt in the amount of $572,072, offset by payments on convertible debt of $8,050 as well as payments on notes payable of $33,386.

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.

Recent Accounting Pronouncements

The Company has provided a discussion of recent accounting pronouncements in Note 1 to the Condensed Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable: the Company is a “smaller reporting company.”

17

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to help ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation and the requirements of the Exchange Act, our Chief Executive Officer concluded that, as of September 30, 2019, our disclosure controls and procedures continue to be ineffective. The small size of our Company does not provide for the desired segregation of duty control functions, and we do not have the required level of documentation of our monitoring and control procedures. Currently, our financial constraints prevent us from fully implementing the internal controls prescribed by the Sarbanes-Oxley Act.

Changes in Internal Control Over Financial Reporting

Management and directors will continue to monitor and evaluate the effectiveness of the Company's internal controls and procedures and the Company's internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. On March 8, 2019, the Company terminated the Company’s Chief Financial Officer and appointed Dennis M. O’Leary as Chief Financial Officer of the Company. The Company will continue to use outside accounting consultants to assist with the Company’s financial reporting. Otherwise, there have been no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting during the quarter ended September 30, 2019.

18

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

On March 27, 2019, Thomas A. Cellucci, et al. v. DarkPulse, Inc. et al. (the “Complaint”) was filed in the United States District Court for the Southern District of New York by certain of the Company’s former executive officers, one also being a former director, and a non-employee shareholder (collectively, the “Plaintiffs”), against the Company, its sole officer and director, and others, claiming that the Plaintiffs brought the action to protect their individual rights as minority shareholders, as improperly-ousted officers (other than the non-employee shareholder), and as an improperly-ousted director, seeking equitable relief, damages, recovery of unpaid salaries and other relief. It is the Company's position that the Complaint represents a frivolous harassment lawsuit, and the Company has filed a motion to dismiss all claims made in the Complaint and intends to otherwise defend itself vigorously in this matter. The Company is also exploring filing counterclaims against the Plaintiffs in the action.

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 1A. Risk Factors

Readers should carefully consider the risks and uncertainties described in ITEM 1A in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC before deciding whether to invest in shares of our common stock. See also risks discussed above under the section on “Factors That May Affect Future Results” and “Internal Controls”.

Our failure to successfully address the risks and uncertainties described in our 2018 Form 10-K 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. 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended September 30, 2019, we had no unregistered sales of equity securities.

Item 3. Defaults upon Senior Securities

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Not Applicable.

19

Item 6: Exhibits

The following exhibits are filed as part of this report:

Exhibit Number	Title of Document
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

__________________________

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DARKPULSE, INC.
Dated: November 19, 2019	By  /s/ Dennis M. O’Leary
	Dennis M. O’Leary
	Chief Executive Officer and Chief Financial Officer
	(Principal Executive, Financial and Accounting Officer)

21

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dennis M. O’Leary, certify that:

1. I have reviewed this quarterly report on Form 10-Q of DarkPulse, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. As the registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. As the registrant’s certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 19, 2019	/s/ Dennis M. O’Leary
	Dennis M. O’Leary Chief Executive Officer and Chief Financial Officer
	(Principal Executive, Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q of DarkPulse, Inc., for the period ended September 30, 2019, I, Dennis M. O’Leary, Chief Executive Officer and Chief Financial Officer of DarkPulse, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

1.   Such Quarterly Report on Form 10-Q for the period ended September 30, 2019, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in such Quarterly Report on Form 10-Q for the period ended September 30, 2019, fairly represents in all material respects, the financial condition and results of operations of DarkPulse, Inc.

November 19, 2019	/s/ Dennis M. O’Leary
	Dennis M. O’Leary Chief Executive Officer and Chief Financial Officer
	(Principal Executive, Financial and Accounting Officer)

XML

11. SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 11 – SUBSEQUENT EVENTS

The Company evaluated events occurring after the date of the accompanying unaudited condensed consolidated balance sheets through the date the financial statements were issued and the Company does not have any subsequent events to be disclosed prior to this filing.

XML

3. CONVERTIBLE DEBT SECURITIES

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

CONVERTIBLE DEBT SECURITIES

NOTE 3 – CONVERTIBLE DEBT SECURITIES

The Company uses the Black-Scholes Model to calculate the derivative value of its convertible debt. The valuation result generated by this pricing model is necessarily driven by the value of the underlying common stock incorporated into the model. The values of the common stock used were based on the price at the date of issue of the debt security as of September 30, 2019. Management determined the expected volatility between 318.38-487.51%, a risk free rate of interest between 1.75-1.92%, and contractual lives of the debt varying from six months to two years. The table below details the Company's outstanding convertible notes, with totals for the face amount, amortization of discount, initial loss, change in the fair market value, and the derivative liability.

	Face		Amortization		Initial		Q3 change			Derivative Balance
	Amount		of Discount		Loss		in FMV			9/30/2019
	$	90,228	$	–	$	58,959	$	(67,989	)	$	–
		162,150		–		74,429		(128,965	)		–
		75,652		–		11,381		–			–
		208,436		–		–		–			–
		79,622		–		8,904		–			–
		65,372		–		5,651		–			–
		55,180		12,344		28,566		(7,305	)		62,544
		33,194		6,647		16,558		(3,934	)		33,677
		29,250		367		–		(340	)		28,368
		49,726		624		–		(579	)		48,226
		41,774		524		–		(486	)		40,514
		29,250		367		–		(340	)		28,368
		40,000		10,055		10,605		(4,593	)		38,274
		64,000		16,339		17,676		(7,348	)		61,238
Subtotal		1,023,834		47,266		232,729		(221,879	)		341,209
Transaction expense		–		–		–		–			–
	$	1,023,834	$	47,266	$	232,729	$	(221,879	)	$	341,209

During the three months ended September 30, 2019, a total of $70,696 in principal and $10,070 in interest were converted into 633,134,558 shares of the Company’s common stock.

As of September 30, 2019 and 2018 respectively, there was $928,702 and $0 of convertible debt outstanding, net of debt discount of $93,138, and $0, As of September 30, 2019 and 2018 respectively, there was derivative liability of $341,209 and $0 related to convertible debt securities.

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7. RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 – 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.

In May 2018, the JV Entity received $42,000 for an order from Bravetek and the JV Entity then placed a corresponding order with the Company. The Company’s former executive office is also the CEO of Bravatek. The proceeds were to be used for marketing efforts to generate sales of our intrusion detection product. The order has been recorded as a prepaid sale and is a current liability as of September 30, 2019.

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9. COMMON STOCK (Details Narrative) - USD ($)	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Dec. 31, 2018
Common stock par value (in Dollars per share)	$ 0.01				$ 0.01
Common stock, shares authorized	3,000,000,000				250,000,000
Common stock, shares issued	872,309,164				89,680,567
Common stock, shares outstanding	872,309,164				89,680,567
Conversion of convertible notes, shares issued				87,462
Conversion of convertible notes, value	$ 98,605	$ 85,922	$ 79,046
Settlement of Convertible Notes [Member]
Conversion of convertible notes, shares issued	633,134,558
Conversion of convertible notes, value	$ 80,766

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6. INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Future amortization schedule

2019	$	12,757
2020		51,028
2021		51,028
2022		51,028
2023		51,028
Thereafter		236,805
	$	453,674

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3. CONVERTIBLE DEBT SECURITIES (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Amortization of discount	$ 568,985	$ 0
Derivative balance	341,209	$ 0
Convertible Debt Securities [Member]
Face amount	1,023,834
Amortization of discount	47,266
Initial loss	232,729
Change in Fair Market Value	(221,879)
Derivative balance	341,209
Transaction expense	0
Convertible Debt 1 [Member]
Face amount	90,228
Amortization of discount	0
Initial loss	58,959
Change in Fair Market Value	(67,989)
Derivative balance	0
Convertible Debt 2 [Member]
Face amount	162,150
Amortization of discount	0
Initial loss	74,429
Change in Fair Market Value	(128,965)
Derivative balance	0
Convertible Debt 3 [Member]
Face amount	75,652
Amortization of discount	0
Initial loss	11,381
Change in Fair Market Value	0
Derivative balance	0
Convertible Debt 4 [Member]
Face amount	208,436
Amortization of discount	0
Initial loss	0
Change in Fair Market Value	0
Derivative balance	0
Convertible Debt 5 [Member]
Face amount	79,622
Amortization of discount	0
Initial loss	8,904
Change in Fair Market Value	0
Derivative balance	0
Convertible Debt 6 [Member]
Face amount	65,372
Amortization of discount	0
Initial loss	5,651
Change in Fair Market Value	0
Derivative balance	0
Convertible Debt 7 [Member]
Face amount	55,180
Amortization of discount	12,344
Initial loss	28,566
Change in Fair Market Value	(7,305)
Derivative balance	62,544
Convertible Debt 8 [Member]
Face amount	33,194
Amortization of discount	6,647
Initial loss	16,558
Change in Fair Market Value	(3,934)
Derivative balance	33,677
Convertible Debt 9 [Member]
Face amount	29,250
Amortization of discount	367
Initial loss	0
Change in Fair Market Value	(340)
Derivative balance	28,368
Convertible Debt 10 [Member]
Face amount	49,726
Amortization of discount	624
Initial loss	0
Change in Fair Market Value	(579)
Derivative balance	48,226
Convertible Debt 11 [Member]
Face amount	41,774
Amortization of discount	524
Initial loss	0
Change in Fair Market Value	(486)
Derivative balance	40,514
Convertible Debt 12 [Member]
Face amount	29,250
Amortization of discount	367
Initial loss	0
Change in Fair Market Value	(340)
Derivative balance	28,368
Convertible Debt 13 [Member]
Face amount	40,000
Amortization of discount	10,055
Initial loss	10,605
Change in Fair Market Value	(4,593)
Derivative balance	38,274
Convertible Debt 14 [Member]
Face amount	64,000
Amortization of discount	16,339
Initial loss	17,676
Change in Fair Market Value	(7,348)
Derivative balance	$ 61,238

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2. DEBENTURE

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

DEBENTURE

NOTE 2 - DEBENTURE

DPTI issued a convertible Debenture to the University 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 C$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 Canadian $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 by April 24, 2018. 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 September 30, 2019, the quarterly principal repayment amounts will be US$49,644. The Debenture is secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010. DPTI has pledged the Patents, and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University.

The Debenture was initially recorded at the $1,491,923 equivalent US Dollar amount of Canadian $1,500,000 as of December 16, 2010, the date of the original Debenture. The liability is being adjusted quarterly based on the current exchange value of the Canadian dollar to the US dollar at the end of each quarter. The adjustment is recorded as unrealized gain or loss in the change of the value of the two currencies during the quarter. The amounts recorded as an unrealized gain (loss) for the three months ended September 30, 2019 and 2018, were $12,671 and ($20,638) respectively. These amounts are included in Accumulated Other Comprehensive Loss in the Equity section of the consolidated balance sheet, and as Unrealized Loss on Foreign Exchange on the consolidated statement of comprehensive loss. The Debenture also includes a provision requiring DPTI to pay the University a two percent (2%) royalty on sales of any and all products or services which incorporate the Patents for a period of five (5) years from April 24, 2018.

For the three months ended September 30, 2019, and 2018, the Company recorded interest expense of $12,745 and $12,551, respectively.

As of September 30, 2019 the debenture liability totaled $1,132,965, all of which was long term.

Future minimum required payments over the next 5 years and thereafter are as follows:

Period ending September 30,
2020	$	–
2021		–
2022		–
2023		–
2024 and after		1,132,965
Total	$	1,132,965

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 06, 2019
Cover [Abstract]
Entity Registrant Name	DarkPulse, Inc.
Entity Central Index Key	0000866439
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,129,719,021
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2019
Entity Small Business	true
Entity Emerging Growth	false
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	DE
Entity File Number	000-18730

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
NET INCOME (LOSS)	$ 21,886	$ (777,786)	$ (659,473)	$ (2,446,614)
OTHER COMPREHENSIVE GAIN (LOSS)
Unrealized Gain (Loss) on Foreign Exchange	12,671	(20,637)	(30,722)	29,359
COMPREHENSIVE GAIN (LOSS)	$ 34,557	$ (798,424)	$ (690,195)	$ (2,417,255)

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1. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	9 Months Ended	12 Months Ended
	Sep. 30, 2019 USD ($) shares	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Working Capital	$ (2,083,374)
Cash	$ 1,408	$ 72,294	$ 159,288	$ 8,025
Antidilutive shares | shares	1,277,690,836
C A D
Translation rate at end of period	1.3209	1.3642
Translation rate during period	1.3294	1.2958

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3. CONVERTIBLE DEBT SECURITIES (Details Narrative) - USD ($)	3 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Debt Disclosure [Abstract]
Debt converted, amount converted	$ 70,696
Debt converted, interest converted	$ 10,070
Debt converted, shares issued	633,134,558
Convertible debt outstanding	$ 928,702	$ 0
Unamortized discount	93,138	0
Derivative liability	$ 341,209	$ 0

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Revenues	$ 0	$ 0	$ 0	$ 0
OPERATING EXPENSES
General and administrative expenses	40,453	281,996	144,965	1,911,353
Payroll and compensation	0	0	168,945	0
Legal expenses	48,868	0	96,962	0
Amortization of patents	12,757	18,216	38,271	43,730
Debt transaction expenses	0	0	24,900	0
Total operating expenses	102,078	300,212	474,043	1,955,083
OPERATING LOSS	(102,078)	(300,212)	(474,043)	(1,955,083)
OTHER INCOME (EXPENSE)
Interest expense	(50,649)	(139,961)	(399,895)	(164,990)
Loss on convertible notes	(47,266)	(916,977)	(351,662)	(916,977)
Gain on change in fair market values of derivative liabilities	221,879	689,949	566,127	689,949
Loss on merger	0	(110,685)	0	(110,685)
TOTAL OTHER INCOME (EXPENSE)	123,964	(477,674)	(185,430)	(502,703)
NET INCOME (LOSS)	21,886	(777,886)	(659,473)	(2,457,786)
Net loss attributable to noncontrolling interests in variable interest entity and subsidiary	0	100	0	11,172
Net income (loss) attributable to Company stockholders	$ 21,886	$ (777,786)	$ (659,473)	$ (2,446,614)
GAIN (LOSS) PER SHARE: Basic and Diluted	$ 0.00	$ (0.00)	$ (0.00)	$ (0.03)
WEIGHTED AVERAGE SHARES OUTSTANDING: Basic and Diluted	518,604,087	89,680,567	252,457,517	76,127,111

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1. BASIS OF FINANCIAL STATEMENT PRESENTATION

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF FINANCIAL STATEMENT PRESENTATION

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

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial statements not misleading. The consolidated financial statements as of December 31, 2018 have been audited by an independent registered public accounting firm. The accounting policies and procedures employed in the preparation of these condensed consolidated financial statements have been derived from the audited financial statements of the Company for the year ended December 31, 2018, which are contained in Form 10-K as filed with the Securities and Exchange Commission on April 16,2019. The consolidated balance sheet as of December 31, 2018 was derived from those financial statements.

Basis of Presentation and Principles of Consolidation

The consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission for Interim Financial Information. The condensed consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2019, and the results of operations and cash flows for the nine months ended September 30, 2019 have been included. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year.

Description of Business

DarkPulse, Inc. ("DPI" or "Company") is a technology-security company incorporated in 1989 as Klever Marketing, Inc. ("Klever"). The Company’s wholly-owned subsidiary, DarkPulse Technologies Inc. ("DPTI"), was originally formed as a privately held technology spinout from the University of New Brunswick, Fredericton, Canada. The Company plans for its security and monitoring systems to 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.

On April 27, 2018, Klever entered into an Agreement and Plan of Merger (the “Merger Agreement”) involving Klever as the surviving parent corporation acquiring DPTI as its wholly owned subsidiary (the “Merger”). On June 29, 2018, the parties entered into Amendment No. 1 to the Merger Agreement, and on July 18, 2018 the parties closed the Merger. With the change of control of the Company, the Merger is was accounted for as a recapitalization in a manner similar to a reverse acquisition.

On July 20, 2018, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the State of Delaware changing the name of the Company to DarkPulse, Inc. The Company filed a corporate action notification with the Financial Industry Regulatory Authority (FINRA), and the Company's ticker symbol was changed to DPLS.

Going Concern Uncertainty

As shown in the accompanying financial statements, during the three months ended September 30, 2019, the Company did not generate any revenues and reported a net gain of $21,886. As of September 30, 2019, the Company’s current liabilities exceeded its current assets by $2,083,374. As of September 30, 2019, the Company had $1,408 of cash.

The Company will require additional funding during the next nine months to finance the growth of its 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 and expansion of its operations. The accompanying 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. However, management cannot make any assurances that such financing will be secured.

Use of Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the assumptions used to calculate stock-based compensation, derivative liabilities, preferred deemed dividend and common stock issued for services.

Cash and Cash Equivalents

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 a 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 financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

Intangible Assets

The Company reviews intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows.

Foreign Currency Translation

The company translates monetary assets and liabilities (any item paid for or settled in foreign currency) into the United States Dollar at exchange rates prevailing on the balance sheet date. Non-monetary assets and liabilities are translated at the historical rate in effect when the transaction occurred. Revenues and expenses are translated at the spot rate on the date the transaction occurred. Exchange gains and losses from the translation of monetary items are included in unrealized gain/loss on Foreign Exchange as Other Comprehensive Loss.

The following table discloses the dates and exchange rates used for converting Canadian Dollar amounts to U.S. Dollar amounts disclosed in the balance sheet and the statement of operations.

The spot exchange rate between the Canadian Dollar and the U.S. Dollar on December 31, 2018 closing rate at 1.3642 US$: CAD, average rate at 1.2958 US$: CAD and for the three and nine months ended September 30, 2019 closing rate at 1.3209 US$: CAD, average rate at 1.3294 US$.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the "more likely than not" criteria of ASC 740.

ASC 740-10 requires that the Company recognize 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 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Accounting for Derivatives

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. 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 probability weighted average series Binomial lattice formula pricing models 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 or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Fair Value of Financial Instruments

The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, and accruals approximate their fair values because of the short maturity of these instruments. The Company believes the carrying value of its secured debenture payable approximates fair value because the terms were negotiated at arms length.

Recent Accounting Pronouncements

There were no new accounting pronouncements issued or proposed by the Financial Accounting Standards Board during the nine months ended September 30, 2019, and through the date of filing of this report that the Company believes has had or will have a material impact on its financial position or results of operations, including the recognition of revenue, cash flows or disclosures. The Company has no lease obligations.

Income (Loss) Per Common Share

Basic net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share of common stock is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents outstanding. Potential dilutive common share equivalents consist of shares issuable upon exercise of outstanding convertible preferred stock and stock options.

For the nine months ended September 30, 2019, there were no stock options nor convertible preferred stock outstanding. For the nine months ended September 30, 2019, common stock equivalents related to convertible preferred stock and convertible debt have not been included in the calculation of diluted loss per common share because they are anti-dilutive. Therefore, basic loss per common share is the same as diluted loss per common share. There are 1,277,690,836 common shares reserved for the potential conversion of the Company's convertible debt.

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4. STOCKHOLDERS' DEFICIT

9 Months Ended

Sep. 30, 2019

STOCKHOLDERS' DEFICIT

STOCKHOLDERS' DEFICIT

NOTE 4 - STOCKHOLDERS' DEFICIT

As of September 30, 2019, there were 872,309,164 shares of common stock and 88,235 shares of preferred stock issued and outstanding.

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8. PREFERRED STOCK

9 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

PREFERRED STOCK

NOTE 8 – PREFERRED STOCK

In accordance with the Company’s bylaws, the Company has authorized a total of 2,000,000 shares of preferred stock, par value $0.01 per share, for all classes. As of September 30, 2019, and December 31, 2018, there were 88,235 total preferred shares issued and outstanding for all classes.

On July 12, 2018, the Company filed a Certificate of Designation with the State of Delaware amending the designation of its previously designated “Class D Voting Preferred Stock,” designating 100,000 shares of the Company’s preferred stock as “Series D Preferred Stock.” Each share of Series D Preferred Stock entitles the holder to 6,000 votes on all matters submitted to a vote of the Company’s stockholders and is convertible at the election of the holder into a number of shares of common stock equal to the number of outstanding shares of common stock of the Company multiplied by 5 ⅔, divided by the number of outstanding shares of Series D Preferred Stock. All of these shares are owned by the Company's management, with control ownership held by the Company's CEO.

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1. SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission for Interim Financial Information. The condensed consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2019, and the results of operations and cash flows for the nine months ended September 30, 2019 have been included. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year.

Description of Business

Description of Business

DarkPulse, Inc. ("DPI" or "Company") is a technology-security company incorporated in 1989 as Klever Marketing, Inc. ("Klever"). The Company’s wholly-owned subsidiary, DarkPulse Technologies Inc. ("DPTI"), was originally formed as a privately held technology spinout from the University of New Brunswick, Fredericton, Canada. The Company plans for its security and monitoring systems to 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.

On April 27, 2018, Klever entered into an Agreement and Plan of Merger (the “Merger Agreement”) involving Klever as the surviving parent corporation acquiring DPTI as its wholly owned subsidiary (the “Merger”). On June 29, 2018, the parties entered into Amendment No. 1 to the Merger Agreement, and on July 18, 2018 the parties closed the Merger. With the change of control of the Company, the Merger is was accounted for as a recapitalization in a manner similar to a reverse acquisition.

On July 20, 2018, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the State of Delaware changing the name of the Company to DarkPulse, Inc. The Company filed a corporate action notification with the Financial Industry Regulatory Authority (FINRA), and the Company's ticker symbol was changed to DPLS.

Going Concern Uncertainty

Going Concern Uncertainty

As shown in the accompanying financial statements, during the three months ended September 30, 2019, the Company did not generate any revenues and reported a net gain of $21,886. As of September 30, 2019, the Company’s current liabilities exceeded its current assets by $2,083,374. As of September 30, 2019, the Company had $1,408 of cash.

The Company will require additional funding during the next nine months to finance the growth of its 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 and expansion of its operations. The accompanying 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. However, management cannot make any assurances that such financing will be secured.

Use of Estimates

Use of Estimates

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the assumptions used to calculate stock-based compensation, derivative liabilities, preferred deemed dividend and common stock issued for services.

Cash and Cash Equivalents

Cash and Cash Equivalents

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 a 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 financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

Intangible Assets

Intangible Assets

The Company reviews intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows.

Foreign Currency Translation

Foreign Currency Translation

The company translates monetary assets and liabilities (any item paid for or settled in foreign currency) into the United States Dollar at exchange rates prevailing on the balance sheet date. Non-monetary assets and liabilities are translated at the historical rate in effect when the transaction occurred. Revenues and expenses are translated at the spot rate on the date the transaction occurred. Exchange gains and losses from the translation of monetary items are included in unrealized gain/loss on Foreign Exchange as Other Comprehensive Loss.

The following table discloses the dates and exchange rates used for converting Canadian Dollar amounts to U.S. Dollar amounts disclosed in the balance sheet and the statement of operations.

The spot exchange rate between the Canadian Dollar and the U.S. Dollar on December 31, 2018 closing rate at 1.3642 US$: CAD, average rate at 1.2958 US$: CAD and for the three and nine months ended September 30, 2019 closing rate at 1.3209 US$: CAD, average rate at 1.3294 US$.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the "more likely than not" criteria of ASC 740.

ASC 740-10 requires that the Company recognize 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 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Accounting for Derivatives

Accounting for Derivatives

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. 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 probability weighted average series Binomial lattice formula pricing models 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 or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, and accruals approximate their fair values because of the short maturity of these instruments. The Company believes the carrying value of its secured debenture payable approximates fair value because the terms were negotiated at arms length.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

There were no new accounting pronouncements issued or proposed by the Financial Accounting Standards Board during the nine months ended September 30, 2019, and through the date of filing of this report that the Company believes has had or will have a material impact on its financial position or results of operations, including the recognition of revenue, cash flows or disclosures. The Company has no lease obligations.

Income (Loss) Per Common Share

Income (Loss) Per Common Share

Basic net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share of common stock is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding and the dilutive potential common share equivalents outstanding. Potential dilutive common share equivalents consist of shares issuable upon exercise of outstanding convertible preferred stock and stock options.

For the nine months ended September 30, 2019, there were no stock options nor convertible preferred stock outstanding. For the nine months ended September 30, 2019, common stock equivalents related to convertible preferred stock and convertible debt have not been included in the calculation of diluted loss per common share because they are anti-dilutive. Therefore, basic loss per common share is the same as diluted loss per common share. There are 1,277,690,836 common shares reserved for the potential conversion of the Company's convertible debt.

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8. PREFERRED STOCK (Details Narrative) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Stockholders' Equity Note [Abstract]
Convertible preferred stock - shares authorized	100,000	100,000
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares issued	88,235	88,235
Convertible preferred stock - shares outstanding	88,235	88,235

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6. INTANGIBLE ASSETS (Details - Amortization schedule)	Sep. 30, 2019 USD ($)
Finite-Lived Intangible Assets, Gross [Abstract]
Amortization year ending 2019	$ 12,757
Amortization year ending 2020	51,028
Amortization year ending 2021	51,028
Amortization year ending 2022	51,028
Amortization year ending 2023	51,028
Thereafter	236,805
Total	$ 453,674

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3. CONVERTIBLE DEBT SECURITIES (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of convertible debt

	Face		Amortization		Initial		Q3 change			Derivative Balance
	Amount		of Discount		Loss		in FMV			9/30/2019
	$	90,228	$	–	$	58,959	$	(67,989	)	$	–
		162,150		–		74,429		(128,965	)		–
		75,652		–		11,381		–			–
		208,436		–		–		–			–
		79,622		–		8,904		–			–
		65,372		–		5,651		–			–
		55,180		12,344		28,566		(7,305	)		62,544
		33,194		6,647		16,558		(3,934	)		33,677
		29,250		367		–		(340	)		28,368
		49,726		624		–		(579	)		48,226
		41,774		524		–		(486	)		40,514
		29,250		367		–		(340	)		28,368
		40,000		10,055		10,605		(4,593	)		38,274
		64,000		16,339		17,676		(7,348	)		61,238
Subtotal		1,023,834		47,266		232,729		(221,879	)		341,209
Transaction expense		–		–		–		–			–
	$	1,023,834	$	47,266	$	232,729	$	(221,879	)	$	341,209

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2. DEBENTURE (Details Narrative) - USD ($)	3 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Debenture liability	$ 1,132,965		$ 1,102,243
Debenture [Member]
Unrealized gain (loss) on foreign exchange rates	12,671	$ (20,638)
Interest expense	$ 12,745	$ 12,551

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash	$ 1,408	$ 72,294
Prepaid expenses	746	746
Total current assets	2,154	73,040
Other assets, net	116,495	70,679
Patents, net	457,775	486,932
Total assets	576,424	630,651
CURRENT LIABILITIES
Accounts payable	264,185	59,160
Convertible notes, net of discount $93,138 and $440,800 respectively	928,702	601,250
Derivative liability	341,209	653,831
Accrued liabilities	465,337	343,519
Contract liability, related party	42,000	42,000
Related party notes payable	44,096	44,096
Total current liabilities	2,085,529	1,743,856
Secured Debenture	1,132,965	1,102,243
Total liabilities	3,218,494	2,846,099
Commitments and Contingencies
STOCKHOLDERS' DEFICIT
Common stock (par value $0.01), 3,000,000,000 and 250,000,000 shares authorized, 872,309,164 and 89,680,567 shares issued and outstanding respectively	8,723,092	896,806
Treasury stock, 100,000 shares	(1,000)	(1,000)
Convertible preferred stock, Series D (par value $0.01) 100,000 shares authorized, 88,235 shares issued and outstanding respectively	883	883
Paid in capital in excess of par value	(6,703,232)	859,481
Non-controlling interest in a variable interest entity and subsidiary	(12,439)	(12,439)
Accumulated other comprehensive income	358,958	389,680
Accumulated deficit	(5,008,332)	(4,348,859)
TOTAL STOCKHOLDERS' DEFICIT	(2,642,070)	(2,215,448)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 576,424	$ 630,651

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Consolidated Statement of Stockholders' Equity (Deficit) - USD ($)	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-In Capital	Noncontrolling Interest	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2017	0	100
Beginning balance, value at Dec. 31, 2017	$ 0	$ 0	$ 0	$ 0	$ 25,808	$ 298,908	$ (1,030,800)	$ (706,084)
Foreign currency adjustment						29,886	29,886	29,886
Net gain (loss)							(25,308)	(25,308)
Ending balance, shares at Mar. 31, 2018	0	100
Ending balance, value at Mar. 31, 2018	$ 0	$ 0	0	0	25,808	328,794	(1,056,108)	(701,506)
Beginning balance, shares at Dec. 31, 2017	0	100
Beginning balance, value at Dec. 31, 2017	$ 0	$ 0	0	0	25,808	298,908	(1,030,800)	(706,084)
Foreign currency adjustment								29,359
Net gain (loss)								(2,446,614)
Ending balance, shares at Sep. 30, 2018	88,235	89,680,567
Ending balance, value at Sep. 30, 2018	$ 883	$ 896,806	(1,000)	859,481	(12,439)	328,268	(3,488,586)	(1,416,587)
Beginning balance, shares at Mar. 31, 2018	0	100
Beginning balance, value at Mar. 31, 2018	$ 0	$ 0	0	0	25,808	328,794	(1,056,108)	(701,506)
Foreign currency adjustment						20,111		20,111
Net gain (loss)							(24,231)	(24,231)
Ending balance, shares at Jun. 30, 2018	0	100
Ending balance, value at Jun. 30, 2018	$ 0	$ 0	$ 0	$ 0	$ 25,808	348,905	$ (1,080,339)	$ (705,626)
Recpitalization of the company, shares	88,235	89,680,467
Conversion of convertible notes, shares	883	896,806	(1,000)	859,481	(38,247)		(1,630,461)	87,462
Foreign currency adjustment						(20,637)		$ (20,637)
Net gain (loss)							$ (777,786)	(777,786)
Ending balance, shares at Sep. 30, 2018	88,235	89,680,567
Ending balance, value at Sep. 30, 2018	$ 883	$ 896,806	$ (1,000)	$ 859,481	$ (12,439)	328,268	(3,488,586)	(1,416,587)
Beginning balance, shares at Dec. 31, 2018	88,235	89,680,467
Beginning balance, value at Dec. 31, 2018	$ 883	$ 896,806	(1,000)	859,481	(12,439)	389,680	(4,348,859)	(2,215,448)
Conversion of convertible notes, shares		12,488,347
Conversion of convertible notes, value		$ 124,883		(45,837)				79,046
Foreign currency adjustment						(22,050)		(22,050)
Net gain (loss)							(806,568)	(806,568)
Ending balance, shares at Mar. 31, 2019	88,235	102,168,914
Ending balance, value at Mar. 31, 2019	$ 883	$ 1,021,689	(1,000)	813,644	(12,439)	367,630	(5,155,427)	(2,965,020)
Beginning balance, shares at Dec. 31, 2018	88,235	89,680,467
Beginning balance, value at Dec. 31, 2018	$ 883	$ 896,806	(1,000)	859,481	(12,439)	389,680	(4,348,859)	(2,215,448)
Foreign currency adjustment								(30,722)
Net gain (loss)								(659,473)
Ending balance, shares at Sep. 30, 2019	88,235	872,309,164
Ending balance, value at Sep. 30, 2019	$ 883	$ 8,723,092	(1,000)	(6,703,232)	(12,439)	358,958	(5,008,332)	(2,642,070)
Beginning balance, shares at Mar. 31, 2019	88,235	102,168,914
Beginning balance, value at Mar. 31, 2019	$ 883	$ 1,021,689	(1,000)	813,644	(12,439)	367,630	(5,155,427)	(2,965,020)
Conversion of convertible notes, shares		137,005,692
Conversion of convertible notes, value		$ 1,370,057		(1,284,135)				85,922
Foreign currency adjustment						(21,343)		(21,343)
Net gain (loss)							125,210	125,210
Ending balance, shares at Jun. 30, 2019	88,235	239,174,606
Ending balance, value at Jun. 30, 2019	$ 883	$ 2,391,745	(1,000)	(470,491)	(12,439)	346,287	(5,030,217)	(2,775,231)
Conversion of convertible notes, shares		633,134,558
Conversion of convertible notes, value		$ 6,331,346		(6,232,741)				98,605
Foreign currency adjustment						12,671		12,671
Net gain (loss)							21,886	21,886
Ending balance, shares at Sep. 30, 2019	88,235	872,309,164
Ending balance, value at Sep. 30, 2019	$ 883	$ 8,723,092	$ (1,000)	$ (6,703,232)	$ (12,439)	$ 358,958	$ (5,008,332)	$ (2,642,070)

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10. STOCK OPTIONS (Details Narrative)	9 Months Ended
	Sep. 30, 2019 shares
Share-based Payment Arrangement [Abstract]
Common stock reserved for issuance	20,000,000
Stock options granted	0
Stock options outstanding	0

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6. INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Finite-Lived Intangible Assets, Gross [Abstract]
Amortization expense	$ 12,757	$ 18,216	$ 38,271	$ 43,730

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6. INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 6 – INTANGIBLE ASSETS

Intangible Assets - Intrusion Detection Intellectual Property

The Company relies on patent laws and restrictions on disclosure to protect its intellectual property rights. As of March 31, 2019, the Company held 3 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 three months ended September 30, 2019 and 2018, the Company amortized $12,757, respectively. Future amortization of intangible assets is as follows:

2019	$	12,757
2020		51,028
2021		51,028
2022		51,028
2023		51,028
Thereafter		236,805
	$	453,674

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10. STOCK OPTIONS

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

STOCK OPTIONS

NOTE 10 – STOCK OPTIONS

The Company’s shareholders approved, by a majority vote, the adoption of the 1998 Stock Incentive Plan (the “Plan”). As amended on August 11, 2003, the Plan reserves 20,000,000 shares of common stock for issuance upon the exercise of options which may be granted from time-to-time to officers, directors, certain employees and consultants of the Company or its subsidiaries by the Board of Directors. The Plan permits the award of both qualified and non-qualified incentive stock options.

During the three months ended September 30, 2019, the Company did not issue any stock options and had no stock options outstanding at September 30, 2019.

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7. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Advance from related party	$ 0	$ 44,096
Bravetek and JV Entity [Member]
Advance from related party			$ 42,000
Deferred revenue			$ 42,000

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5. COMMITMENTS & CONTINGENCIES

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS & CONTINGENCIES

NOTE 5 - COMMITMENTS & CONTINGENCIES

Potential Royalty Payments

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

Potential Commission Payments

The Company, in consideration of the Strategic Alliance Agreement with Bravatek, for the purpose of promoting the Company’s products, will pay Bravatek sales commissions for clients introduced to the Company by Bravatek.

Legal Matters

On March 27, 2019, Thomas A. Cellucci, et al. v. DarkPulse, Inc. et al. (the “Complaint”) was filed in the United States District Court for the Southern District of New York by certain of the Company’s former executive officers, one also being a former director, and a non-employee shareholder (collectively, the “Plaintiffs”), against the Company, its sole officer and director, and others, claiming that the Plaintiffs brought the action to protect their individual rights as minority shareholders, as improperly-ousted officers (other than the non-employee shareholder), and as an improperly-ousted director, seeking equitable relief, damages, recovery of unpaid salaries and other relief. It is the Company's position that the Complaint represents a frivolous harassment lawsuit, and the Company has filed a motion to dismiss all claims made in the Complaint and intends to otherwise defend itself vigorously in this matter. The Company is also exploring filing counterclaims against the Plaintiffs in the action.

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.

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9. COMMON STOCK

9 Months Ended

Sep. 30, 2019

STOCKHOLDERS' DEFICIT

COMMON STOCK

NOTE 9 – COMMON STOCK

In accordance with the Company’s bylaws, the Company has authorized a total of 3,000,000,000 shares of common stock, par value $0.01 per share. As of September 30, 2019 and December 31, 2018 respectively, there were 872,309,164 and 89,680,567 common shares issued and outstanding.

During the three months ended September 30, 2019, the Company issued 633,134,558 shares of common stock as settlement of convertible notes payable and interest in the total amount of $80,766.

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2. DEBENTURE (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Future minimum required payments

Period ending September 30,
2020	$	–
2021		–
2022		–
2023		–
2024 and after		1,132,965
Total	$	1,132,965

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2. DEBENTURE (Details)	Sep. 30, 2019 USD ($)
Debt Disclosure [Abstract]
Period ending 2020	$ 0
Period ending 2021	0
Period ending 2022	0
Period ending 2023	0
Period ending 2024 and after	1,132,965
Total	$ 1,132,965

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4. STOCKHOLDERS' DEFICIT (Details Narrative) - shares	Sep. 30, 2019	Dec. 31, 2018
STOCKHOLDERS' DEFICIT
Common stock, shares issued	872,309,164	89,680,567
Common stock, shares outstanding	872,309,164	89,680,567
Convertible preferred stock - shares issued	88,235	88,235
Convertible preferred stock - shares outstanding	88,235	88,235

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Convertible Notes, discount	$ 93,138	$ 440,800
Convertible preferred stock - par value	$ 0.01	$ 0.01
Convertible preferred stock - shares authorized	100,000	100,000
Convertible preferred stock - shares issued	88,235	88,235
Convertible preferred stock - shares outstanding	88,235	88,235
Common stock par value (in Dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	3,000,000,000	250,000,000
Common stock, shares issued	872,309,164	89,680,567
Common stock, shares outstanding	872,309,164	89,680,567
Treasury stock shares	100,000	100,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (659,473)	$ (2,457,786)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization	38,271	45,536
Loan acquisition costs	24,900	0
Stock based compensation	0	1,602,570
Interest on notes payable	27,446	0
Debt discount	(205,000)	205,406
Amortization of debt discount	568,985	0
Derivative liability	(312,622)	115,678
Changes in operating assets and liabilities:
Accounts payable	205,025	54,153
Contract liabilities	0	42,000
Accrued liabilities	110,340	138,540
Cash held by officer of VIE	0	10,650
Prepaid expenses	0	(746)
Net cash used in operating activities	(202,128)	(243,999)
CASH FLOWS FROM INVESTING ACTIVITIES:
Noncontrolling interest	0	(38,247)
Investment in patents	(54,930)	(141,223)
Net cash used in investing activities	(54,930)	(179,470)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable	180,100	572,072
Payments on convertible notes and interest	(24,650)	(8,050)
Proceeds from related party payable	0	44,096
Payments on note payable	0	(33,386)
Net cash provided by financing activities	155,450	574,732
Effect of exchange rate on cash	30,722	0
Net Cash Increase (Decrease) in cash	(70,886)	151,263
CASH, Beginning of period	72,294	8,025
CASH, End of period	1,408	159,288
Noncash investing and financing activities
Stock issued for convertible notes payable and accrued interest	232,535	0
Supplementary Cash Flow Information:
Interest paid in cash	66,850	0
Taxes paid in cash	$ 0	$ 0