OTC: DPLS

We have recently completed
development activities of our Gen. 3 dark-pulse BOTDA system and are pending a Purchase Order issuance to our contract manufacturer Sanmina
Corp for full manufacturing of our patented BOTDA sensor system hardware. We currently expect to submit a Purchase Order to Sanmina Corp
during Q2 2026, subject to the availability of sufficient working capital, completion of final engineering specifications, and other conditions.
There can be no assurance that we will submit such Purchase Order on the anticipated timeline, or at all. This expectation constitutes
a forward-looking statement subject to the cautionary factors described herein. We base our claims related to the technologies capabilities
from both experimental data obtained during the creation of the patent as well as real world POC deployments beginning in 2009 with most
recent deployment in 2021. There are also papers submitted and published via IEEE and available online. The system components include:
patented hardware containing various electronic components and lasers, proprietary software utilized to collect analog data and convert
that data to digital data, and a user interface utilizing proprietary software as well as Unity game engine for the VR capability component
of the User Interface. Deployment of the system begins with engineering design based on Scope requirements and installation environment.
Fiber optic cable is then installed into the medium to be monitored. The system is then provisioned remotely by optical engineers.

Our business model,
as it relates to hardware sales, is “Just in Time” and maintaining a very low inventory. Projects require several weeks of
installation, design, and engineering followed by the installation of fiber optic cables. The average time required to build hardware
units is less than the time needed for the engineering and fiber installation process. To date, we have yet to sell our patented BOTDA
dark-pulse sensor system and we have built two units for demonstration of the system to potential customers. We are now able to sell
our patented technology and related services. We currently have no commitments to buy our units.

Our Subsidiaries

Our subsidiaries consist
of: DarkPulse UK Ltd,, a company headquartered in, United Kingdom, DarkPulse Technologies FZCOwhose focus is in engineering, telecommunications,
energy, rail, critical network infrastructure, pipeline integrity systems, renewables and security; Optilan India, PVT Ltd. located in
Kilpauk, Chennai India and Optilan Communication & Security Systems, Ltd located in Ankara, Turkey which provides project engineering
& design, system provisioning and contract bid services globally and throughout Europe. TerraData Unmanned, PLLC, a company headquartered
in Florida who custom manufactures NDAA compliant drones and unmanned ground crawlers to meet the needs of its customers.

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TerraData Unmanned

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

Optilan Communications & Security Systems
Ltd, (Turkey)

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

Optilan India Pvt Ltd

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

Acquisitions

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

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

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

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

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

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

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

Liquidation/winding up of Optilan (UK) Limited

On June 28, 2023, the High Court of Justice in
the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of Optilan (UK) Limited ("Optilan
Liquidation"), a former wholly-owned subsidiary of the Company's subsidiary Optilan HoldCo 3 Limited. Evelyn Partners LLP was
appointed Joint Liquidator on August 9, 2023, and continues to liquidate the company's assets as of the date of this filing.

On September 11, 2024, the Company completed the
purchase of certain assets from Optilan (UK) Limited (in liquidation) for $65,000, including the shares of Optilan India PVT Ltd and Optilan
Communications & Security Systems Ltd (Turkey) and certain applicable intellectual property rights. See "Acquisitions"
above for additional detail.

The Company is an unsecured creditor of Optilan
(UK) Limited. The Company has approximately $19.4 million in intercompany payables due from Optilan (UK), which have been fully impaired.
There can be no assurance that the Company will recover any portion of these amounts. There are no new claims against Optilan (UK) Limited
as of the date hereof. For a discussion of the associated risks, see "Risk Factors — Our former wholly owned subsidiary,
Optilan (UK) Limited, is in liquidation."

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Global System Dynamics, Inc.

On December 14, 2022, we entered into a Business Combination Agreement
(the "BCA") with Global System Dynamics, Inc., a Delaware corporation ("GSD"), pursuant to which we
agreed to serve as GSD's Sponsor in connection with a proposed business combination. On January 23, 2024, the BCA was terminated by mutual
consent of the parties. GSD failed to consummate a business combination by February 9, 2024, and on or about April 17, 2024, GSD redeemed
its remaining public shares and was liquidated and dissolved. In connection with the GSD transaction, the Company expended an estimated
aggregate of $3,321,823, which has been fully recognized as a loss in prior periods. Although, as former Sponsor of GSD, the Company may
be subject to claims of creditors in connection with the GSD transaction, any such prospective claims are speculative at this time.

Our Business

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

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

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

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

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

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

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

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

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

·
Integration: Capable of integrating with existing systems; and

·
Central station monitoring/cloud-based GUI.

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

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Revenue

The Company’s revenues are generated primarily
from the sales of our services, which consist primarily of advanced technology solutions for integrated communications and security systems,
as well as habitat management. The Company’s sales of products are primarily generated from our Optilan India subsidiaries.

Our Market

Current uses of fiber optic distributed sensor
technology have been limited to quasi-static, long-term structural health monitoring due to the time required to obtain the data and its
poor precision. Our BOTDA technology allows for the monitoring of highly dynamic environments due to its magnitude of increased resolution
and greater accuracy. The resulting high speed, real-time monitoring capabilities of our BOTDA technology should satisfy a broad range
of existing and emerging requirements. Use of our BOTDA technology by our customers should result in lower production costs with increased
sensing capabilities that can integrate with existing technology and be upgraded cost effectively.

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

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

Structural Monitoring

·
Buildings and Skyscrapers;

·
Bridges, Tunnels and Dams; and

·

Roads and Railway tracks.

·
Aerospace Structural Components

Temperature Sensing

·
Fire Alarm and Environment control;

·
Low cost and maintenance;

·
Long life span; and

·
Ability to withstand harsh working environment.

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Security & Defense

·
National Border Protection; and

·
Protection of Military and other sensitive installations.

Consulting Services:

·
Consulting (as stand-alone or presales);

·
Post sales deployment and Support; and

·
Managed services (monitoring, etc.).

Additional Potential Markets:

·
Monitoring of composite structures in aircraft;

·
Dynamic stress monitoring of runways;

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

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

·
Monitor low temperatures as part of control systems;

·
Monitoring of temperatures in extreme refrigeration environments;

·
Avalanche early warning systems; and

·
Sea defense monitoring.

Marketing

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

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Competition

The overall optical sensing market is projected
to reach USD $29 billion by 2026 from USD $23 billion in 2023 , at a CAGR of 9 - 11% annually between 2023 and 2026.1
We are active in the optical sensing market, including Oil & Gas pipeline health monitoring, Infrastructure, National Border Security
applications, and the mining industry. We believe that fiber sensing applications which incorporate our BOTDA technology may provide significant
competitive advantages over structural health monitoring applications offered by the long-term leaders in the field, such as Schlumberger,
Hewlett-Packard, and Yokogawa, which collectively account for a significant portion of industry sales. These companies, as well as others,
have numerous differences in feature sets and functionality, but all share certain basic attributes: a bright-pulse technology as the
core of their systems architecture. An architecture designed using bright-pulsing technology has limited sensing capabilities and resolutions
of one meter allowing for mostly long-term quasi-static deployments.

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

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

Intellectual Property

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

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

Through DPTI’s April 2017 Intellectual Property
agreement with the University, DPTI was sold, transferred, and assigned U.S. Patent Nos. 7,245,790 (Canadian Patent No. 2,502,275 and
active until March 24, 2027), 8,643,829 (active until September 7, 2030), and 9,534,965 (active until April 26, 2031), each of which are
related to our BOTDA dark-pulse technology.

________________________

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

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Suppliers

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

Government Regulation

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

Employees

As of April 14, 2026, we had 16 full-time employees and
no part-time employees.