DPLS.OQBDarkpulse, INC
10-K: DarkPulse Reports FY2025 Results Amidst Financial Challenges
Sentiment:
Annual Report
DarkPulse, Inc. filed its annual report for fiscal year 2025, detailing revenue growth but also significant net losses and ongoing concerns about its ability to continue as a going concern.
Delay expectedThe company previously anticipated submitting a Purchase Order to Sanmina Corp in an earlier period, but the timeline has been extended due to ongoing working capital constraints and engineering specification requirements.The company expects 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.
Capital raiseThe company is seeking to raise additional capital through private placement offerings.The company is targeting strategic partners to accelerate sales and marketing.The company has an Equity Financing Agreement with GHS Investments LLC to purchase up to $30,000,000 in shares of Common Stock.The company has used equity financings and convertible notes as principal funding sources.
Worse than expectedThe company reported a net loss of $2,925,582 for the fiscal year ended December 31, 2025.Current liabilities exceeded current assets by $19,721,196 as of December 31, 2025.The company has only $62,786 in cash as of December 31, 2025.Substantial doubt exists regarding the company's ability to continue as a going concern.The company has not yet sold its patented BOTDA dark-pulse sensor system.Material weaknesses in internal controls over financial reporting were identified.
Summary
- DarkPulse, Inc. reported revenues of $308,492 for the fiscal year ended December 31, 2025, an increase from $126,836 in the prior year, primarily driven by its Optilan India and TerraData Unmanned subsidiaries.
- The company incurred a net loss of $2,925,582 for FY2025, compared to a net loss of $3,893,859 in FY2024.
- As of December 31, 2025, DarkPulse had $62,786 in cash and current liabilities exceeded current assets by $19,721,196, raising substantial doubt about its ability to continue as a going concern.
- The company is actively seeking additional capital through private placements and strategic partnerships to fund operations and achieve its objectives.
- A 1-for-200 reverse stock split was effective on October 8, 2025.
- The company's CEO, Dennis O'Leary, holds significant voting control through Series A Preferred Stock.
- Several legal proceedings are ongoing, with the company pursuing collection of awarded damages in some cases.
- Material weaknesses in internal control over financial reporting were identified, including lack of segregation of duties and absence of an audit committee.
Sentiment
Score: 2
Explanation: StockSavvy.ai views this filing as negative due to significant financial challenges, including substantial net losses, a precarious liquidity position, and identified material weaknesses in internal controls, despite some revenue growth.
Positives
- Revenue increased by $181,656 to $308,492 in FY2025, driven by Optilan India and TerraData Unmanned.
- Gross profit margin was 68% in FY2025, up from 98% in FY2024, indicating improved profitability on revenue.
- Professional fees decreased by 53% to $241,700 in FY2025 due to reduced legal and professional expenses.
- The company is actively pursuing financing and strategic partnerships to support its growth.
- The company has patented BOTDA dark-pulse sensor technology with potential for various applications.
Negatives
- Net loss of $2,925,582 in FY2025.
- Current liabilities exceeded current assets by $19,721,196 as of December 31, 2025.
- Cash balance was only $62,786 as of December 31, 2025.
- Substantial doubt exists regarding the company's ability to continue as a going concern.
- The company has not yet sold its patented BOTDA dark-pulse sensor system.
- Material weaknesses in internal controls over financial reporting were identified.
- The company has an accumulated deficit of $74,226,493.
- The company is subject to penny stock regulations, which may limit trading liquidity and increase transaction costs.
Risks
- Default on the Secured Debenture could lead to the secured holder taking possession of assets, including patents and intellectual property.
- Stockholders have limited voting power compared to the holder of Series A Preferred Stock.
- Limited operating history in an evolving and volatile industry makes future prospects difficult to evaluate.
- Intense and increasing competition could harm competitive positioning and operating results.
- Operating results may fluctuate due to market forces outside of the company's control.
- Cyberattacks and security breaches could adversely impact brand, reputation, business, operating results, and financial condition.
- Disruptions in technology could adversely impact brand, reputation, business, operating results, and financial condition.
- There is no assurance that the company will achieve profitability or that its revenue and business models will be successful.
- The company requires additional capital, which may not be available or may require stockholder approval, leading to potential dilution.
- Future development and growth of technology and product offerings are subject to unpredictable factors, potentially involving third parties.
- Inability to protect intellectual property rights could adversely impact business, operating results, and financial condition.
- The company's former wholly owned subsidiary, Optilan (UK) Limited, is in liquidation, posing a risk of losing significant repayment obligations.
- The company may be adversely affected by natural disasters, pandemics, and other catastrophic events.
- The company's marketing efforts may not be successful, harming its business and results of operations.
- Management controls all corporate activities and can approve transactions without the approval of other stockholders, potentially not aligning with minority stockholder interests.
- Acquisitions may disrupt operations and harm operating results.
- The company faces a risk of business failure due to the inherent difficulties and uncertainties in technology development.
- Failure to manage growth and associated demands on resources could adversely impact the business.
- The company may be affected by fluctuations in currency exchange rates.
- Changes in U.S. and foreign tax laws could adversely impact financial position and operating results.
- The company is heavily reliant on its CEO, Dennis O'Leary, and his departure could disrupt the business.
- Failure to recruit and retain key management, technical, and sales personnel could negatively affect the business.
- Employee or service provider misconduct or error could subject the company to legal liability, financial losses, and regulatory sanctions.
- Offers or availability for sale of a substantial number of shares of common stock may cause the price to decline.
- The company's stock may be traded infrequently and in low volumes, making it difficult to sell shares.
- Legislative and regulatory actions may increase costs and impact business, financial condition, or results of operations.
- The company is subject to litigation, including individual and class action lawsuits, and regulatory audits.
- The company's intellectual property rights are valuable, and any inability to protect them could adversely impact the business.
Future Outlook
The company expects to submit a Purchase Order to Sanmina Corp for manufacturing of its BOTDA sensor system hardware during Q2 2026, subject to working capital availability and final engineering specifications. The company is actively seeking additional capital and strategic partners to fund operations and accelerate sales and marketing efforts.
Management Comments
- Dennis O'Leary, Chairman and CEO, certified that the report complies with SEC requirements and fairly presents the company's financial condition.
- Management believes that its patented BOTDA technology offers significant advantages over existing systems, enabling entry into new market opportunities.
- Management is actively pursuing additional sources of financing to fund operations for the next twelve months.
Industry Context
StockSavvy.ai notes that the optical sensing market is projected to reach $29 billion by 2026, with a CAGR of 9-11%. DarkPulse aims to compete in this growing market with its BOTDA technology, differentiating itself from competitors using traditional bright-pulse technology.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Audit Committee | The company currently does not have a functioning Audit Committee. | This is a deficiency in corporate governance, as an audit committee is crucial for financial oversight. | |
| Code of Ethics | The company has not adopted a formal, written code of ethics due to a small number of members of management. | Lack of a formal code of ethics can lead to ambiguity in ethical conduct and decision-making. | |
| Insider Trading Policy | The company does not maintain insider trading policies and procedures due to a limited number of management members and resources. | Absence of an insider trading policy increases the risk of non-compliance with securities laws and potential for insider trading violations. | |
| Internal Control Over Financial Reporting | Material weaknesses identified, including limited segregation of duties, lack of an audit committee, insufficient documentation of internal controls, and inadequate corporate governance for accounting of agreements. | 2025-12-31 | These weaknesses indicate a reasonable possibility that material misstatements in financial statements may not be prevented or detected on a timely basis, impacting the reliability of financial reporting. |
Legal Proceedings
- Carebourn Capital, L.P. v. DarkPulse, Inc.: Company was awarded damages, attorneys fees, and costs totaling $387,693.48, which remain unsatisfied.
- More Capital, LLC v. DarkPulse, Inc. et al: Company was awarded damages, attorneys fees, and costs totaling $412,048.64, which remain unsatisfied.
- Carebourn Capital et al v. Standard Registrar and Transfer et al: Court ordered Noteholders and their counsel to pay $70,840 to the Company; payment remains outstanding.
- DarkPulse, Inc. v. FirstFire Global Opportunities Fund, LLC, et al: Company's appeal resulted in remand to the District of Delaware; a motion for reconsideration is pending.
- DarkPulse, Inc., et al v. Crown Bridge Partners, LLC, et al: Second Circuit vacated District Court's dismissal and remanded for further proceedings; summary judgment motions are pending.
Related Party Transactions
- Remote Intelligence and Wildlife Specialists have loan payables to former majority shareholders who are also shareholders in DarkPulse, Inc. These loans are unsecured, non-interest bearing, and due on demand.
- As of December 31, 2025 and 2024, the outstanding balance for RI's loan was $226,247.
- As of December 31, 2025 and 2024, the outstanding balance for WS's loan was $135,500.
Stakeholder Impact
- Shareholders may experience dilution due to future issuances of common or preferred stock for capital raising purposes.
- Investors may lose their entire investment due to the speculative nature of the business and the risk of business failure.
- The company's reliance on its CEO, Dennis O'Leary, could disrupt operations if he departs.
- The concentration of voting power with the CEO may limit minority stockholders' ability to influence corporate affairs.
- The company's financial condition and ability to continue as a going concern may impact the value of shareholder investments.
Next Steps
- Submit a Purchase Order to Sanmina Corp for full manufacturing of the BOTDA sensor system hardware during Q2 2026 (subject to conditions).
- Continue to seek additional capital through private placements and strategic partnerships.
- Implement additional corporate governance and control measures to strengthen the control environment.
- Continue to develop and commercialize its proprietary fiber optic sensing devices.
- Actively litigate claims for relief against the FirstFire Defendants and pursue collection of awarded amounts from Carebourn and More Capital.
Key Dates
| Date | Description |
|---|---|
| 2025-01-01 | Fiscal year start |
| 2025-12-31 | Fiscal year end |
| 2026-04-14 | Filing date of the Form 10-K |
| 2025-10-01 | Start of fourth fiscal quarter |
| 2025-12-31 | End of fourth fiscal quarter |
| 2024-12-31 | Prior fiscal year end |
| 2023-12-31 | Prior fiscal year end |
| 2024-01-01 | Start of fiscal year 2024 |
| 2024-12-31 | End of fiscal year 2024 |
| 2022-09-09 | Neural Signals Inc. acquisition date |
| 2025-09-05 | Promissory note maturity date |
| 2025-11-24 | Promissory note maturity date |
| 2025-12-03 | Promissory note maturity date |
| 2024-09-10 | Optilan India Pvt Ltd and Optilan Communication & Security Systems Ltd acquisition closing date |
| 2024-09-11 | Optilan India Pvt Ltd and Optilan Communication & Security Systems Ltd acquisition closing date |
| 2024-11-05 | Equity Financing Agreement date |
| 2023-01-10 | Equity Financing Agreement date |
| 2023-01-12 | Equity Financing Agreement date |
| 2023-01-16 | Equity Financing Agreement date |
| 2023-01-17 | Equity Financing Agreement date |
| 2023-01-23 | Equity Financing Agreement date |
| 2023-01-24 | Equity Financing Agreement date |
| 2023-02-02 | Equity Financing Agreement date |
| 2023-02-03 | Equity Financing Agreement date |
| 2023-02-16 | Equity Financing Agreement date |
| 2023-02-17 | Equity Financing Agreement date |
| 2023-02-28 | Equity Financing Agreement date |
| 2023-03-01 | Equity Financing Agreement date |
| 2023-03-15 | Equity Financing Agreement date |
| 2023-03-16 | Equity Financing Agreement date |
| 2023-03-29 | Equity Financing Agreement date |
| 2023-03-30 | Equity Financing Agreement date |
| 2023-04-10 | Equity Financing Agreement date |
| 2023-04-11 | Equity Financing Agreement date |
| 2023-04-27 | Equity Financing Agreement date |
| 2023-04-28 | Equity Financing Agreement date |
| 2023-06-25 | Equity Financing Agreement date |
| 2023-06-26 | Equity Financing Agreement date |
| 2023-07-02 | Equity Financing Agreement date |
| 2023-07-03 | Equity Financing Agreement date |
| 2023-07-09 | Equity Financing Agreement date |
| 2023-07-10 | Equity Financing Agreement date |
| 2023-09-04 | Equity Financing Agreement date |
| 2023-09-05 | Equity Financing Agreement date |
| 2023-11-06 | Equity Financing Agreement date |
| 2023-11-07 | Equity Financing Agreement date |
| 2023-11-05 | Equity Financing Agreement date |
| 2023-11-08 | Equity Financing Agreement date |
| 2023-11-13 | Equity Financing Agreement date |
| 2023-11-14 | Equity Financing Agreement date |
| 2023-11-21 | Equity Financing Agreement date |
| 2023-11-22 | Equity Financing Agreement date |
| 2023-11-28 | Equity Financing Agreement date |
| 2023-11-29 | Equity Financing Agreement date |
| 2023-11-27 | Equity Financing Agreement date |
| 2023-11-30 | Equity Financing Agreement date |
| 2023-11-28 | Equity Financing Agreement date |
| 2023-12-01 | Equity Financing Agreement date |
| 2023-12-01 | Equity Financing Agreement date |
| 2023-12-10 | Equity Financing Agreement date |
| 2023-12-11 | Equity Financing Agreement date |
| 2023-12-26 | Equity Financing Agreement date |
| 2023-12-27 | Equity Financing Agreement date |
| 2024-01-07 | Equity Financing Agreement date |
| 2024-01-08 | Equity Financing Agreement date |
| 2024-02-28 | Equity Financing Agreement date |
| 2024-02-29 | Equity Financing Agreement date |
| 2024-08-18 | Equity Financing Agreement date |
| 2024-08-19 | Equity Financing Agreement date |
| 2023-01-01 | Start of fiscal year 2023 |
| 2023-12-31 | End of fiscal year 2023 |
| 2025-01-05 | Equity Financing Agreement date |
| 2025-01-06 | Equity Financing Agreement date |
| 2025-01-13 | Equity Financing Agreement date |
| 2025-01-14 | Equity Financing Agreement date |
| 2025-01-23 | Equity Financing Agreement date |
| 2025-01-24 | Equity Financing Agreement date |
| 2025-01-29 | Equity Financing Agreement date |
| 2025-01-30 | Equity Financing Agreement date |
| 2025-02-06 | Equity Financing Agreement date |
| 2025-02-07 | Equity Financing Agreement date |
| 2025-02-17 | Equity Financing Agreement date |
| 2025-02-18 | Equity Financing Agreement date |
| 2025-02-27 | Equity Financing Agreement date |
| 2025-02-28 | Equity Financing Agreement date |
| 2025-03-09 | Equity Financing Agreement date |
| 2025-03-10 | Equity Financing Agreement date |
| 2025-03-17 | Equity Financing Agreement date |
| 2025-03-18 | Equity Financing Agreement date |
| 2025-03-27 | Equity Financing Agreement date |
| 2025-03-28 | Equity Financing Agreement date |
| 2025-04-03 | Equity Financing Agreement date |
| 2025-04-04 | Equity Financing Agreement date |
| 2025-04-13 | Equity Financing Agreement date |
| 2025-04-14 | Equity Financing Agreement date |
| 2025-04-22 | Equity Financing Agreement date |
| 2025-04-23 | Equity Financing Agreement date |
| 2025-04-30 | Equity Financing Agreement date |
| 2025-05-01 | Equity Financing Agreement date |
| 2025-05-08 | Equity Financing Agreement date |
| 2025-05-09 | Equity Financing Agreement date |
| 2025-05-20 | Equity Financing Agreement date |
| 2025-05-21 | Equity Financing Agreement date |
| 2025-05-29 | Equity Financing Agreement date |
| 2025-05-30 | Equity Financing Agreement date |
| 2025-06-09 | Equity Financing Agreement date |
| 2025-06-10 | Equity Financing Agreement date |
| 2025-06-19 | Equity Financing Agreement date |
| 2025-06-20 | Equity Financing Agreement date |
| 2025-07-01 | Equity Financing Agreement date |
| 2025-07-02 | Equity Financing Agreement date |
| 2025-07-20 | Equity Financing Agreement date |
| 2025-07-21 | Equity Financing Agreement date |
| 2025-08-21 | Equity Financing Agreement date |
| 2025-08-22 | Equity Financing Agreement date |
| 2025-09-03 | Equity Financing Agreement date |
| 2025-09-04 | Equity Financing Agreement date |
| 2025-09-11 | Equity Financing Agreement date |
| 2025-09-12 | Equity Financing Agreement date |
| 2025-09-22 | Equity Financing Agreement date |
| 2025-09-23 | Equity Financing Agreement date |
| 2025-09-29 | Equity Financing Agreement date |
| 2025-10-02 | Equity Financing Agreement date |
| 2025-10-09 | Equity Financing Agreement date |
| 2025-10-10 | Equity Financing Agreement date |
| 2025-10-27 | Equity Financing Agreement date |
| 2025-10-28 | Equity Financing Agreement date |
| 2025-11-10 | Equity Financing Agreement date |
| 2025-11-11 | Equity Financing Agreement date |
| 2025-11-27 | Equity Financing Agreement date |
| 2025-11-28 | Equity Financing Agreement date |
| 2025-12-08 | Equity Financing Agreement date |
| 2025-12-09 | Equity Financing Agreement date |
| 2025-12-17 | Equity Financing Agreement date |
| 2025-12-18 | Equity Financing Agreement date |
| 2025-01-01 | Start of fiscal year 2025 |
| 2025-12-31 | End of fiscal year 2025 |
| 2024-09-11 | Sale Agreement for Optilan India and Optilan Communications & Security Systems Ltd completed |
| 2023-06-28 | Winding-up order issued for Optilan (UK) Limited |
| 2023-08-09 | Evelyn Partners LLP appointed Joint Liquidator for Optilan (UK) Limited |
| 2024-01-23 | Business Combination Agreement with Global System Dynamics, Inc. terminated |
| 2017-04-24 | Secured Debenture issued |
| 2018-04-24 | Royalty payment period for University of New Brunswick patents began |
| 2026-02-01 | Expected Purchase Order submission to Sanmina Corp (subject to conditions) |
| 2024-04-14 | Number of shares of common stock outstanding as of this date |
| 2025-06-30 | Date for aggregate market value calculation of voting and non-voting stock |
| 2026-04-14 | Date of Form 10-K filing |
Recommendation
sellThe company exhibits significant financial distress, including substantial net losses, a severe liquidity crunch, and identified material weaknesses in internal controls. While revenue has increased, it has not translated into profitability, and the company's ability to continue as a going concern is in doubt. The lack of product sales for its core technology and the ongoing legal battles further heighten the risk profile, making it a speculative investment with a high probability of further decline.
Keywords
DarkPulse, 10-K, Annual Report, BOTDA, Fiber Optic Sensing, Technology, Security Systems, Infrastructure Monitoring, Financial Results, Going Concern, Capital Raise, DPLS
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