Cover
Cover | 6 Months Ended |
Jun. 30, 2023 | |
Cover [Abstract] | |
Document Type | POS AM |
Amendment Flag | true |
Amendment Description | to include financial information from the 10-K filed |
Entity Registrant Name | DARKPULSE, INC. |
Entity Central Index Key | 0000866439 |
Entity Tax Identification Number | 87-0472109 |
Entity Incorporation, State or Country Code | DE |
Entity Address, Address Line One | 815 Walker Street |
Entity Address, Address Line Two | Suite 1155 |
Entity Address, City or Town | Houston |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 77002 |
City Area Code | (800) |
Local Phone Number | 436-1436 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 48,573 | $ 2,060,332 |
Accounts receivable, net | 134,132 | 2,952,293 |
Inventory | 32,077 | 23,825 |
Contract assets | 0 | 1,439,844 |
Due from related party | 837,662 | 318,025 |
Prepaid expenses and other current assets | 159,815 | 180,530 |
TOTAL CURRENT ASSETS | 1,212,260 | 6,974,849 |
NON-CURRENT ASSETS: | ||
Property and equipment, net | 905,688 | 1,933,871 |
Operating lease right-of-use assets | 1,071,661 | 2,724,226 |
Patents, net | 242,361 | 267,875 |
Notes receivable, related party | 1,468,985 | 1,049,248 |
Investment in related party | 1,500,000 | 1,500,000 |
Joint venture | 20,764 | 46,724 |
Intangible assets, net | 0 | 390,330 |
Goodwill | 0 | 6,462,153 |
Other assets, net | 167,752 | 689,869 |
TOTAL NON-CURRENT ASSETS | 5,377,210 | 15,064,296 |
TOTAL ASSETS | 6,589,470 | 22,039,145 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 16,055,090 | 10,736,373 |
Contract liabilities | 0 | 2,215,212 |
Loss provision for contracts in progress | 0 | 945,928 |
Convertible notes, net | 324,866 | 378,263 |
Notes payable, current | 2,000,000 | 2,000,000 |
Derivative liability | 236,736 | 306,467 |
Loan payable, current | 468,067 | 472,700 |
Loan payable, related party | 361,747 | 361,747 |
Secured debenture, current | 137,406 | 136,353 |
Operating lease liabilities - current | 136,410 | 512,373 |
Other current liabilities | 74,352 | 472,217 |
TOTAL CURRENT LIABILITIES | 19,794,672 | 18,537,633 |
NON-CURRENT LIABILITIES: | ||
Secured debenture | 961,844 | 954,474 |
Loan payable | 306,098 | 328,508 |
Operating lease liabilities - non-current | 1,015,512 | 2,547,524 |
TOTAL NON-CURRENT LIABILITIES | 2,283,454 | 3,830,506 |
TOTAL LIABILITIES | 22,078,126 | 22,368,139 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIT: | ||
Common stock, par value $0.0001, 20,000,000,000 shares authorized, 7,459,909,231 and 6,427,495,360 shares issued as of June 30, 2023 and December 31, 2022, respectively | 745,992 | 642,740 |
Treasury stock at cost, 100,000 shares at June 30, 2023 and December 31, 2022 | (1,000) | (1,000) |
Additional paid-in capital | 49,114,351 | 44,602,052 |
Non-controlling interests | 1,308,873 | 2,119,566 |
Accumulated other comprehensive income (loss) | (1,995,755) | (1,137,902) |
Accumulated deficit | (64,662,001) | (46,555,334) |
TOTAL STOCKHOLDERS' DEFICIT | (15,488,656) | (328,994) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 6,589,470 | 22,039,145 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock, Value, Issued | 1 | 1 |
Series D Convertible Preffered Stock [Member] | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred Stock, Value, Issued | $ 883 | $ 883 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 20,000,000,000 | 20,000,000,000 |
Common Stock, Shares, Issued | 7,459,909,231 | 6,427,495,360 |
Treasury stock shares | 100,000 | 100,000 |
Series A Preferred Stock [Member] | ||
Preferred stock - par value | $ 0.01 | $ 0.01 |
Preferred stock - shares authorized | 100 | 100 |
Preferred stock - shares issued | 100 | 100 |
Preferred stock - shares outstanding | 100 | 100 |
Series D Convertible Preffered Stock [Member] | ||
Preferred stock - par value | $ 0.01 | $ 0.01 |
Preferred stock - shares authorized | 100,000 | 100,000 |
Preferred stock - shares issued | 88,235 | 88,235 |
Preferred stock - shares outstanding | 88,235 | 88,235 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
REVENUES | $ 412,769 | $ 4,435,043 | $ 1,950,602 | $ 6,453,376 |
COST OF REVENUES | 1,184,848 | 3,965,910 | 2,411,640 | 6,314,477 |
GROSS PROFIT (LOSS) | (772,079) | 469,133 | (461,038) | 138,899 |
OPERATING EXPENSES: | ||||
Selling, general and administrative | 615,508 | 1,102,404 | 1,513,368 | 2,080,613 |
Salaries, wages and payroll taxes | 578,900 | 1,376,176 | 2,126,108 | 3,348,244 |
Bad debt expense | 57,480 | 0 | 2,422,457 | 0 |
Professional fees | 255,690 | 1,480,599 | 3,206,388 | 3,018,702 |
Depreciation and amortization | 220,749 | 7,405 | 451,983 | 236,019 |
Impairment expense | 0 | 0 | 6,925,137 | 0 |
TOTAL OPERATING EXPENSES | 1,728,326 | 3,966,584 | 16,645,441 | 8,683,578 |
OPERATING LOSS | (2,500,405) | (3,497,451) | (17,106,479) | (8,544,679) |
OTHER INCOME (EXPENSE): | ||||
Interest expense | (39,647) | (852) | (157,062) | (518,606) |
Loss on deconsolidation | (1,642,795) | 0 | (1,642,795) | 0 |
Change in fair market of derivative liabilities | 16,334 | 42,049 | 16,334 | 167,156 |
Loss on equity investment | (74,028) | 0 | (139,084) | 0 |
Gain on the forgiveness of debt | 106,794 | 0 | 106,794 | 35,750 |
Restructuring costs | 0 | (501,431) | 0 | (501,431) |
Foreign currency exchange rate variance | 15,651 | (227,887) | 4,932 | (208,033) |
TOTAL OTHER INCOME (EXPENSE) | (1,617,691) | (688,121) | (1,810,881) | (1,025,164) |
Net loss | (4,118,096) | (4,185,572) | (18,917,360) | (9,569,843) |
Net loss attributable to non-controlling interests | 30,997 | 234,725 | 810,693 | 348,406 |
Net loss attributable to DarkPulse, Inc. | $ (4,087,099) | $ (3,950,847) | $ (18,106,669) | $ (9,221,437) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Earnings Per Share, Basic | $ 0 | $ 0 | $ 0 | $ 0 |
Earnings Per Share, Diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted Average Number of Shares Outstanding, Basic | 7,445,611,222 | 5,480,767,991 | 7,202,813,171 | 5,385,964,474 |
Weighted Average Number of Shares Outstanding, Diluted | 7,445,611,222 | 5,480,767,991 | 7,202,813,171 | 5,385,964,474 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
NET LOSS | $ (4,118,096) | $ (4,185,572) | $ (18,917,360) | $ (9,569,843) |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation | (395,508) | (737,874) | (857,853) | (219,569) |
COMPREHENSIVE LOSS | $ (4,513,604) | $ (4,923,446) | $ (19,775,213) | $ (9,789,412) |
CONDSENSED CONSOLIDATED STATEME
CONDSENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) | Preferred Stock Series A [Member] | Preferred Stock Series D [Member] | Common Stock [Member] | Treasury Stock, Common [Member] | Additional Paid-in Capital [Member] | Noncontrolling Interest [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2021 | $ 883 | $ 519,782 | $ (1,000) | $ 20,248,703 | $ 2,358,227 | $ (284,463) | $ (11,276,490) | $ 11,565,642 | |
Beginning balance, shares at Dec. 31, 2021 | 88,235 | 5,197,821,885 | 100,000 | ||||||
Conversion of convertible notes | |||||||||
Common stock issued for cash | $ 20,012 | 7,679,988 | 7,700,000 | ||||||
Common stock issued for cash, shares | 200,121,061 | ||||||||
Foreign currency adjustment | (219,569) | (219,569) | |||||||
Net loss | (5,384,270) | (5,384,270) | |||||||
Ending balance, value at Mar. 31, 2022 | $ 883 | $ 539,794 | $ (1,000) | 27,928,691 | 2,358,227 | (504,032) | (16,660,760) | 13,661,803 | |
Ending balance, shares at Mar. 31, 2022 | 88,235 | 5,397,942,951 | 100,000 | ||||||
Beginning balance, value at Dec. 31, 2021 | $ 883 | $ 519,782 | $ (1,000) | 20,248,703 | 2,358,227 | (284,463) | (11,276,490) | 11,565,642 | |
Beginning balance, shares at Dec. 31, 2021 | 88,235 | 5,197,821,885 | 100,000 | ||||||
Net loss | (9,569,843) | ||||||||
Ending balance, value at Jun. 30, 2022 | $ 883 | $ 559,417 | $ (1,000) | 32,824,942 | 2,358,227 | (1,241,906) | (20,846,332) | 13,654,232 | |
Ending balance, shares at Jun. 30, 2022 | 100 | 88,235 | 5,594,116,746 | 100,000 | |||||
Beginning balance, value at Mar. 31, 2022 | $ 883 | $ 539,794 | $ (1,000) | 27,928,691 | 2,358,227 | (504,032) | (16,660,760) | 13,661,803 | |
Beginning balance, shares at Mar. 31, 2022 | 88,235 | 5,397,942,951 | 100,000 | ||||||
Common stock issued for cash | $ 19,250 | 4,696,625 | 4,715,875 | ||||||
Common stock issued for cash, shares | 192,448,404 | ||||||||
Common stock issued for TerraData acquisition | $ 373 | 199,627 | 200,000 | ||||||
Common stock issued for TerraData acquisition, shares | 3,725,386 | ||||||||
Stock based compensation | (1) | ||||||||
Stock based compensation, shares | 100 | ||||||||
Foreign currency adjustment | (737,874) | (737,874) | |||||||
Net loss | (4,185,572) | (4,185,572) | |||||||
Ending balance, value at Jun. 30, 2022 | $ 883 | $ 559,417 | $ (1,000) | 32,824,942 | 2,358,227 | (1,241,906) | (20,846,332) | 13,654,232 | |
Ending balance, shares at Jun. 30, 2022 | 100 | 88,235 | 5,594,116,746 | 100,000 | |||||
Beginning balance, value at Dec. 31, 2022 | $ 1 | $ 883 | $ 642,740 | $ (1,000) | 44,602,052 | 2,119,566 | (1,137,902) | (46,555,334) | (328,994) |
Beginning balance, shares at Dec. 31, 2022 | 100 | 88,235 | 6,427,395,360 | 100,000 | |||||
Common stock issued for cash, net of fees | $ 53,167 | 2,034,634 | 2,087,801 | ||||||
Common stock issued for cash net of fees, shares | 531,671,500 | ||||||||
Issuance of common stock for legal settlement | $ 29,700 | 1,960,200 | 1,989,900 | ||||||
Issuance of common stock for legal settlement, shares | 297,000,000 | ||||||||
Foreign currency adjustment | (462,345) | (462,345) | |||||||
Net loss | (779,696) | (14,019,568) | (14,799,264) | ||||||
Ending balance, value at Mar. 31, 2023 | $ 1 | $ 883 | $ 725,607 | $ (1,000) | 48,596,886 | 1,339,870 | (1,600,247) | (60,574,902) | (11,512,902) |
Ending balance, shares at Mar. 31, 2023 | 100 | 88,235 | 7,256,066,860 | 100,000 | |||||
Beginning balance, value at Dec. 31, 2022 | $ 1 | $ 883 | $ 642,740 | $ (1,000) | 44,602,052 | 2,119,566 | (1,137,902) | (46,555,334) | (328,994) |
Beginning balance, shares at Dec. 31, 2022 | 100 | 88,235 | 6,427,395,360 | 100,000 | |||||
Net loss | (18,917,360) | ||||||||
Ending balance, value at Jun. 30, 2023 | $ 1 | $ 883 | $ 745,992 | $ (1,000) | 49,114,351 | 1,308,873 | (1,995,755) | (64,662,001) | (15,488,656) |
Ending balance, shares at Jun. 30, 2023 | 100 | 88,235 | 7,459,909,231 | 100,000 | |||||
Beginning balance, value at Mar. 31, 2023 | $ 1 | $ 883 | $ 725,607 | $ (1,000) | 48,596,886 | 1,339,870 | (1,600,247) | (60,574,902) | (11,512,902) |
Beginning balance, shares at Mar. 31, 2023 | 100 | 88,235 | 7,256,066,860 | 100,000 | |||||
Common stock issued for cash | $ 20,384 | 517,465 | 537,849 | ||||||
Common stock issued for cash, shares | 203,842,371 | ||||||||
Foreign currency adjustment | (395,508) | (395,508) | |||||||
Net loss | (30,997) | (4,087,099) | (4,118,096) | ||||||
Effect of deconsolidation of Optilan UK | |||||||||
Ending balance, value at Jun. 30, 2023 | $ 1 | $ 883 | $ 745,992 | $ (1,000) | $ 49,114,351 | $ 1,308,873 | $ (1,995,755) | $ (64,662,001) | $ (15,488,656) |
Ending balance, shares at Jun. 30, 2023 | 100 | 88,235 | 7,459,909,231 | 100,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (18,917,360) | $ (9,569,843) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 451,983 | 236,020 |
Loss on equity investment | 139,084 | 0 |
Issuance of common stock for legal settlement | 1,989,900 | 0 |
Impairment of goodwill and intangible assets | 6,925,137 | 0 |
Bad debt expense | 2,422,457 | 0 |
Loss on deconsolidation | 1,642,795 | 0 |
Operating lease expense | 31,087 | (215,135) |
Gain on forgiveness of debt | (53,397) | (35,750) |
Change in fair market of derivative liabilities | (69,731) | (167,156) |
Restructuring costs | 0 | 501,431 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 80,303 | 550,803 |
Inventory | (8,252) | (805,960) |
Contract assets | (73,048) | (218,371) |
Prepaid expenses and other assets | 20,715 | (173,891) |
Contract liabilities | 323,471 | 1,264,350 |
Loss provision for contracts in progress | 15,968 | (370,564) |
Accounts payable and accrued expenses | 2,699,960 | (3,120,422) |
Operating lease liabilities, net | (30,372) | 315,285 |
Other current liabilities | (74,087) | (755,854) |
Net cash used in operating activities | (2,483,389) | (12,565,057) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (102,350) | (438,429) |
Investment in joint venture | (113,124) | 0 |
Issuance of note receivable, related party | (419,737) | 0 |
Advances to related party | (519,637) | 0 |
Deposits | 0 | (64,980) |
Net cash used in investing activities | (1,154,848) | (503,409) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock, net of fees | 2,625,650 | 12,415,875 |
Net repayments of loan payable | (27,043) | 0 |
Net cash provided by financing activities | 2,598,607 | 12,415,875 |
Net change in cash | (1,039,630) | (652,591) |
Effect of exchange rate on cash | (972,129) | (493,587) |
Cash at beginning of period | 2,060,332 | 3,658,846 |
Cash at end of period | 48,573 | 2,512,668 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 47,948 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-cash financing and investing activities: | ||
Stock issued for acquisition of TerraData | $ 0 | $ 200,000 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business DarkPulse, Inc. (“DPI” or “Company”) is a technology-security company incorporated in 1989 as Klever Marketing, Inc. (“Klever”). Its’ wholly-owned subsidiary, DarkPulse Technologies Inc. (“DPTI”), originally started as a technology spinout from the University of New Brunswick, Fredericton, Canada. The Company’s security and monitoring systems will initially be delivered in applications for border security, pipelines, the oil and gas industry and mine safety. Current uses of fiber optic distributed sensor technology have been limited to quasi-static, long-term structural health monitoring due to the time required to obtain the data and its poor precision. The Company’s patented BOTDA dark-pulse sensor technology allows for the monitoring of highly dynamic environments due to its greater resolution and accuracy. The Company’s subsidiaries consist of Optilan HoldCo 3 Limited, a company headquartered in Coventry, United Kingdom (“Optilan”) whose focus is in telecommunications, energy, rail, critical network infrastructure, pipeline integrity systems, renewables and security; Remote Intelligence, LLC, a company headquartered in Pennsylvania who provides unmanned aerial drone and unmanned ground crawler (UGC) services to a variety of clients from industrial mapping and ecosystem services, to search and rescue, to pipeline security; Wildlife Specialists, LLC, a company headquartered in Pennsylvania who provides clients with comprehensive wildlife and environmental assessment, planning, and monitoring services; TerraData Unmanned, PLLC, a company headquartered in Florida who custom manufactures NDAA compliant drones and unmanned ground crawlers to meet the needs of its customers; and TJM Electronics West, Inc., a company headquartered in Arizona who is a U.S. manufacturer and tester of advanced electronics, cables and sub-assemblies specializing in advanced package and complex CCA and hardware. Liquidation/winding up of Optilan (UK) Limited On May 3, 2023, Eversheds Sutherland (International) LLP, a creditor of Optilan (UK) Limited, filed a petition to wind up (“Winding up Petition”) Optilan (UK) Limited, a wholly owned subsidiary of the Company’s Subsidiary, Optilan HoldCo 3 Limited, and the matter was due to be heard in the Portsmouth Combined Court Centre on June 28, 2023. On June 28, 2023, the High Court of Justice in the United Kingdom issued a winding-up order for the liquidation and winding up of the affairs of Optilan (UK) Limited (“Optilan Liquidation”). In conjunction with the order, the court appointed the Official Receiver’s Office (“OR”) to take the appointment as liquidator of Optilan (UK) Limited and take control of Optilan (UK) Limited’s assets. At the same time the court appointed the OR to take the appointment as liquidator of Optilan (UK) Limited. The OR has taken control of Optilan (UK) Limited’s assets. To date the ORs Office has initiated contact with Optilan but we still wait to receive details of the individual who will be taking the role of OR. On July 3, 2023, Optilan (UK) Limited received a letter from The Insolvency Service, an executive agency sponsored by the Department for Business and Trade located in the U.K. Pursuant to the letter of The Insolvency Services, the Company was required to provide information relating to Optilan (UK) Limited to the Official Receiver’s Office (a government body of Plymouth, the United Kingdom) and attend an interview with staff of the Official Receiver’s Office to review the prospect of recovering the assets of Optilan (UK) Limited for the benefit of creditors. The interview occurred July 18, 2023. The Company is an Unsecured creditor of Optilan (UK) Limited and is at risk of losing any repayment of obligations due from Optilan (UK) Limited because there are several intercompany relationships between the Company and Optilan (UK) Limited, the financial impact of any future claims and liabilities may not be known for several months. The Company has approximately $19.4 million intercompany payables due from Optilan (UK), which will increase the Company liabilities for any obligations not repaid. The Company expects the remaining assets held by Optilan (UK) Limited to be fully impaired and reported as Loss on Deconsolidation during the second quarter of 2023 as a result of the winding-up order for liquidation. At the time of this filing the Company is still evaluating the full effects of the winding-up order for liquidation and the material adverse effects it will have on the Company’s continued operations and ability to meet future obligations. On August 9, 2023, Evelyn Partners was appointed Joint Liquidator. Quarter Ended March 31 Accounting Analysis The Company performed an analysis of the trade receivables related to Optilan (UK) Limited and determined that an additional $ 2,422,457 As a result of the Optilan Liquidation, management determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s reporting unit may not be recoverable as of March 31, 2023. The qualitative assessment was primarily due to the customer contracts held by Optilan (UK) Limited at March 31, 2023 and the associated revenue projections by the UK subsidiary that is subject to the potential winding up. As such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $ 6,925,137 356,260 6,568,877 0 Quarter Ended June 30 Accounting Analysis Optilan (UK) Limited became subject to the control of a government and was appointed an administrator. In this situation, when the parent ceases to have a financial interest in a subsidiary and does not retain an investment in that subsidiary, the parent should deconsolidate the subsidiary and recognize a gain or loss on deconsolidation in accordance with ASC 810-10-40-5. In addition, ASC 810-10-40-3A states when a parent deconsolidates a subsidiary or derecognizes a group of assets, the parent no longer controls the subsidiary's assets and liabilities or the group of assets. The parent therefore shall derecognize the assets, liabilities, and equity components related to that subsidiary or group of assets. The equity components will include any noncontrolling interest as well as amounts previously recognized in accumulated other comprehensive income. If the subsidiary or group of assets being deconsolidated or derecognized is a foreign entity (or represents the complete or substantially complete liquidation of the foreign entity in which it resides), then the amount of accumulated other comprehensive income that is reclassified and included in the calculation of gain or loss shall include any foreign currency translation adjustment related to that foreign entity. Upon the liquidation, on June 28, 2023, the Company derecognized Optilan UK’s assets and liabilities and recorded a loss on consolidation of $1,642,795, which was recognized in other income (expenses) in the consolidated statements of operations. Included in the loss on consolidation of $1,642,795 are the gains on intercompany receivables and payables and currency translation adjustment $12,721,532 and $1,545,008 respectively, offset by the net loss of $12,623,745 which is the impairment of investments and intercompany receivables no longer expected to be collected. In addition, the allowance of $2,422,457 was recorded against receivables that have been deemed uncollectible. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) and the rules and regulations of the U.S Securities and Exchange Commission for Interim Financial Information. The condensed consolidated financial statements of the Company include the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of June 30, 2023, and the results of operations for six months and cash flows for the six months ended June 30, 2023 and 2022 have been included. The Company evaluates its relationships with other entities to identify whether they are variable interest entities (“VIE”) as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation Unaudited Interim Financial Information The accompanying unaudited condensed consolidated balance sheet as of June 30, 2023, the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 and of cash flows for the six months ended June 30, 2023 and 2022 have been prepared by the Company, pursuant to the rules and regulations of the SEC for the interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the consolidated results for the interim periods presented and of the consolidated financial condition as of the date of the interim consolidated balance sheet. The results of operations are not necessarily indicative of the results expected for the year ending December 31, 2023. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022 included in the Company’s Annual Form 10-K filed with SEC on June 23, 2023. Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, assumptions used to calculate derivative liabilities, revenue recognition and impairment of long-lived assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Cash The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. To reduce its risk associated with the failure of such a financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. Accounts Receivable Accounts receivable and contract assets include amounts billed to customers under the terms and provisions of the contracts. Most billings are determined based on contractual terms. As is common practice in the industry, the Company classifies all accounts receivable and contract assets, including retainage, as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on those contracts may extend beyond one year. Contract assets include amounts billed to customers under retention provisions in construction contracts. Such provisions are standard in the Company’s industry and usually allow for a portion of progress billings on the contract price, typically 5-10%, to be withheld by the customer until after the Company has completed work on the project. Billings for such retention balances at each balance sheet date are finalized and collected after project completion. Generally, unbilled amounts will be billed and collected within one year. The Company determined that there are no material amounts due past one year and no material amounts billed but not expected to be collected within one year. Each month, the Company reviews its receivables on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or perceived collection issues. Any balances that are eventually deemed uncollectible are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of both June 30, 2023 and December 31, 2022, the Company determined that the allowance for doubtful accounts was $ 0 3,320,983 Accounts receivable includes retainage amounts for the portion of the contract price earned by us for work performed but held for payment by the customer as a form of security until we reach certain construction milestones or complete the project. As of June 30, 2023 and December 31, 2022, retainage receivable was $ 0 824,777 Foreign Currency Translation The Company’s reporting currency is U.S. Dollars. The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, British Pound (“GBP”) as the functional currency, as well as the Turkish lira, Emirates Dirham, Azerbajani Manat and Indian Rupee. The accounts of one of the Company’s subsidiaries are maintained using the appropriate local currency, Canadian Dollar (“CAD”) as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders' equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations as foreign currency exchange variance. The relevant translation rates are as follows: for the six months ended June 30, 2023 closing rate at 1 1.232546 1.32585 The relevant translation rates are as follows: for the six months ended June 30, 2022 closing rate at 1.216007 1.299973 1.2872 Long-Lived Assets and Goodwill The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived Assets. Indefinite-lived intangible assets established in connection with business combinations consist of the tradename. The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company accounts for goodwill and intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other As a result of the Optilan Liquidation as described in Note 1, management determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s reporting unit may not be recoverable. The qualitative assessment was primarily due to the customer contracts held by Optilan (UK) Limited and the associated revenue projections by the UK subsidiary that is subject to the potential winding up. As such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $ 6,925,137 356,260 6,568,877 0 Property and Equipment Property and equipment are carried at historical cost less accumulated depreciation. Depreciation is based on the estimated service lives of the depreciable assets and is calculated using the straight-line method. Expenditures that increase the value or productive capacity of assets are capitalized. Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they are removed from service. When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Repairs and maintenance are expensed as incurred. The estimated useful lives of property and equipment are generally as follows: Schedule of estimated useful lives Years Office furniture and fixtures 4 Plant and equipment 4-8 Leasehold Improvements 10 Motor vehicles 3 Revenue Recognition The Company’s revenues are generated primarily from the sale of our services, which consist primarily of advanced technology solutions for integrated communications and security systems, as well as habitat management. The Company’s sales of products are primarily generated from our TJM subsidiaries. Sales of products and services are separate from one another. At contract inception, we assess the goods and services promised in the contract with customers and identify a performance obligation for each. To determine the performance obligation, we consider all products and services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices. The timing of satisfaction of the performance obligation is not subject to significant judgment. We measure revenue as the amount of consideration expected to be received in exchange for transferring goods and services. We recognize service revenues as the performance obligations are met, which is generally as milestones are satisfied over time. We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met. The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. The five-step model is applied to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company considers each individual sale of service contract to be its own performance obligation. Services in the contract are highly interdependent and interrelated, and the successful completion of each milestone is necessary for the overall success of the contract. Therefore, each milestone is not separately identifiable from other promises in the contract, and not distinct and ultimately not individual performance obligations. The Company records revenue over time using the input measure as it is the most faithful depiction of an entity’s performance because it directly measures the value of the goods and services transferred to the customer. The Company utilizes the Right to Invoice for these contracts, as the pricing structure is based on various milestones that are specified in the contract. These milestones include Construction Phase Plan, Start of the construction phase, installation phase, site surveys, fiber splicing, recoveries, and closeouts. There are specified payments associated with these milestones in the contract, and the value allocated is commensurate with work done. In the event that there are advances such as upfront retainers and not based on the value, those are recorded as contract liabilities. Cost of Revenues Cost of revenues consists primarily of materials and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer service and third-party original equipment manufacturer costs to provide continuing support to our customers. Cost of revenues also includes direct labor attributable to revenue service arrangements. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company has not experienced any losses related to its cash and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Leases The Company accounts for its leases under ASC 842, Leases In calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. Fair Value of Financial Instruments The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, Fair Value Measurements and Disclosures. Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company’s derivative liability is a Level 3 liability measured at fair value on a recurring basis. See Note 10. Non-controlling Interests Non-controlling interests are classified as a separate component of equity in the Company's consolidated balance sheets and statements of changes in stockholders’ equity. Net income (loss) and comprehensive income (loss) attributable to non-controlling interests are reflected separately from consolidated net income (loss) and comprehensive income (loss) in the consolidated statements of comprehensive income (loss) and statements of changes in stockholders’ equity. Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the controlling and non-controlling interests. In addition, when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value of the retained interest will be recorded as a gain or loss. The Company has non-controlling interests via its subsidiaries TerraData, Remote Intelligence and Wildlife Specialists. During the six months ended June 30, 2023 and 2022, the Company recorded a loss of $ 810,693 348,406 Comprehensive Loss Comprehensive loss includes net loss well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. During the six months ended June 30, 2023 and 2022, the Company’s only element of other comprehensive loss was foreign currency translation. Loss Per Common Share The Company accounts for earnings per share pursuant to ASC 260, Earnings per Share Schedule of antidilutive shares June 30, 2023 2022 Convertible notes 50,369,362 87,775,272 Series D preferred stock 176,470 176,470 50,545,832 87,951,742 Recent Accounting Pronouncements In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging Financial Instruments, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326). Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable. |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND GOING CONCERN | NOTE 3 – LIQUIDITY AND GOING CONCERN The Company generated net losses of $ 18,917,360 $ 9,569,843 2,483,389 12,565,057 18,582,414 64,662,001 48,573 Lastly, the Optilan Liquidation no longer raises serious concerns about the viability of the Optilan (UK) Limited entity. Optilan (UK) Limited and its subsidiaries are not controlled by DarkPulse, Inc. The Company will require additional funding during the next twelve months to finance the growth of its current operations and achieve its strategic objectives. These factors, as well as the uncertain conditions that the Company faces relative to capital raising activities, create substantial doubt as to the Company’s ability to continue as a going concern. The Company is seeking to raise additional capital principally through private placement offerings and is targeting strategic partners in an effort to finalize the development of its products and begin generating revenues. The ability of the Company to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements or expansion of its operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Management is actively pursuing additional sources of financing sufficient to generate enough cash flow to fund its operations for twelve months from the issuance date of these consolidated financial statements. However, management cannot make any assurances that such financing will be secured. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 4 – REVENUE The following table is a summary of the Company’s timing of revenue recognition for the three and six months ended June 30, 2023 and 2022: Schedule of timing of revenue recognition Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Services and products transferred at a point in time $ 76,120 $ 1,405,335 $ 764,548 $ 2,089,167 Services and products transferred over time 336,649 3,029,708 1,186,054 4,364,209 Total revenue $ 412,769 $ 4,435,043 $ 1,950,602 $ 6,453,376 The Company disaggregates revenue by source and geographic destination to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Revenue by source consisted of the following for the three and six months ended June 30, 2023 and 2022: Schedule of revenue by source Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Products $ 137,342 $ 712,449 $ 257,514 $ 1,110,076 Services 275,427 3,722,594 1,693,088 5,343,300 Total revenue $ 412,769 $ 4,435,043 $ 1,950,602 $ 6,453,376 Revenue by geographic destination consisted of the following for the three and six months ended June 30, 2023 and 2022: Schedule of revenue by geographic destination Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 North America $ 155,386 $ 373,062 $ 374,652 $ 534,434 United Kingdom 207,404 – 1,389,667 – Rest of world 49,979 4,061,981 186,283 5,918,942 Total revenue $ 412,769 $ 4,435,043 $ 1,950,602 $ 6,453,376 Contracts Contract revenue is recognized over time using the cost-to-cost measure of progress for fixed price contracts. The cost-to-cost measure of progress best depicts the continuous transfer of control of goods or services to the customer. The contractual terms provide that the customer compensates the Company for services rendered. Contract costs include all direct materials, labor and subcontracted costs, as well as indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and the costs of capital equipment. The cost estimation and review process for recognizing revenue over time under the cost-to-cost method is based on the professional knowledge and experience of the Company’s project managers, engineers and financial professionals. Management reviews estimates of total contract transaction price and total project costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of expected variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and profit recognition. Changes in these factors could result in revisions to revenue and costs of revenue in the period in which the revisions are determined on a prospective basis, which could materially affect the Company’s consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are determined. Performance Obligations A performance obligation is a contractual promise to transfer a distinct good or service to the customer and is the unit of account under Accounting Standards Codification (“ASC”) Topic 606. The transaction price of a contract is allocated to distinct performance obligations and recognized as revenue when or as the performance obligations are satisfied. The Company’s contracts often require significant integrated services and, even when delivering multiple distinct services, are generally accounted for as a single performance obligation. Contract amendments and change orders are generally not distinct from the existing contract due to the significant integrated service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. The majority of the Company’s performance obligations are completed within one year. When more than one contract is entered into with a customer on or close to the same date, the Company evaluates whether those contracts should be combined and accounted for as a single contract as well as whether those contracts should be accounted for as more than one performance obligation. This evaluation requires significant judgment and is based on the facts and circumstances of the various contracts, which could change the amount of revenue and profit recognition in a given period depending upon the outcome of the evaluation. Contract Assets and Liabilities The Company bill its customers based on contractual terms, including, milestone billings based on the completion of certain phases of the work. Sometimes, billing occurs after revenue recognition, resulting in unbilled revenue, which is accounted for as a contract asset. Sometimes the Company receives advances payments from our customers before revenue is recognized, resulting in deferred revenue, which is accounted for as a contract liability. Contract assets in the consolidated balance sheets represents costs and estimated earnings in excess of billings, which arise when revenue has been recorded but the amount has not been billed. As of June 30, 2023, contract assets were $ 0 Contract liabilities on June 30, 2023 are $0 upon the deconsolidation related to the Optilan liquidation. Variable Consideration Transaction pricing for the Company’s contracts may include variable consideration, such as unapproved change orders, claims, incentives and liquidated damages. Management estimates variable consideration for a performance obligation utilizing estimation methods that best predict the amount of consideration to which the Company will be entitled. Variable consideration is included in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Management’s estimates of variable consideration and determination of whether to include estimated amounts in transaction price are based on past practices with the customer, specific discussions, correspondence or preliminary negotiations with the customer, legal evaluations and all other relevant information that is reasonably available. The effect of a change in variable consideration on the transaction price of a performance obligation is typically recognized as an adjustment to revenue on a cumulative catch-up basis. To the extent unapproved change orders, claims and liquidated damages reflected in transaction price are not resolved in the Company’s favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 5 – ACCOUNTS RECEIVABLE Accounts receivable consisted of the following as of June 30, 2023 and December 31, 2022: Schedule of accounts receivable June 30, December 31, 2023 2022 Accounts receivable $ 134,132 $ 6,273,276 Less: Allowance for doubtful accounts – (3,320,983 ) Accounts receivable, net $ 134,132 $ 2,952,293 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following as of : Schedule of property, plant and equipment June 30, December 31, 2023 2022 Property and equipment $ 1,300,521 $ 3,942,421 Leasehold improvements 46,934 46,934 Property and equipment at cost 1,347,455 3,989,355 Less - accumulated depreciation (441,767 ) (2,055,484 ) Property and equipment, net $ 905,688 $ 1,933,871 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following is a summary of activity of goodwill for the six months ended June 30, 2023: Schedule of changes in carrying amount of goodwill Goodwill Balances at December 31, 2022 $ 6,462,153 Impairment of goodwill pertaining to Optilan (6,568,877 ) Foreign exchange translation 106,724 Balances at June 30, 2023 $ – Intangible Assets, Net On January 1, 2023, the Company revised the estimated useful life of the trade name intangible asset from 25 10 34,063 25,514 During the three months ended March 31, 2023, the Company recorded impairment of the trade name of $ 356,260 0 390,330 Patents - Intrusion Detection Intellectual Property The following is a summary of the DPTI patents: Schedule of patents June 30, December 31, 2023 2022 Patents $ 904,269 $ 904,269 Less: accumulated amortization (661,908 ) (636,394 ) Patents, net $ 242,361 $ 267,875 For the six months ended June 30, 2023 and 2022, the Company amortized $ 25,514 25,514 |
JOINT VENTURE
JOINT VENTURE | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
JOINT VENTURE | NOTE 8 – JOINT VENTURE On September 9, 2022, the Company entered into a Joint Venture Agreement with Neural Signals Inc, (“NSI”), for the purpose of developing, marketing and selling products and services based on the patents issued to NSI. The parties established the Joint Venture, Neural Logistics Inc., under a separate entity to conduct business. The Company has 50 During the six months ended June 30, 2023, the Company contributed $ 113,124 139,084 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following as of June 30, 2023 and December 31, 2022: Schedule of accounts payable and accrued expenses June 30, December 31, 2023 2022 Accounts payable $ 14,474,333 $ 8,677,648 Accrued liabilities 1,580,757 2,058,725 Total accounts payable and accrued expenses $ 16,055,090 $ 10,736,373 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 10 – DEBT Convertible Notes As of both June 30, 2023 and December 31, 2022, there was $ 324,866 and $ 378,263 of convertible debt outstanding and a derivative liability of $ 236,736 and $ 306,467 . As of June 30, 2023, all outstanding convertible debt is default. Notes Payable On July 14, 2021, the Company entered a Securities Purchase Agreement (the “ GS SPA 2,000,000 GS Note July 14, 2022 6 2,000,000 Loans Payable The Company’s RI and WS subsidiaries have various loans including Small Business Association (“SBA”) Economic Injury Disaster Loan (“EIDL’) loans, lines of credit and other advances. The loans bear interest with varying rates up to 9.25% per annum. The following is a summary of the loans payable at June 30, 2023 and December 31, 2022: Schedule of loans payable June 30, December 31, 2023 2022 RI - line of credit $ 99,971 $ 99,971 RI - Short-term loans 41,279 43,899 WS - line of credit 200,000 200,000 WS- Short-term loans 126,816 128,830 Loan payable, current $ 468,067 $ 472,700 RI - SBA EIDL $ 102,597 $ 102,597 RI - long-term loans 84,748 86,041 WS - SBA EIDL 26,307 26,307 WS - long-term loans 92,446 113,564 Loan payable, non-current $ 306,098 $ 328,508 |
SECURED DEBENTURE
SECURED DEBENTURE | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
SECURED DEBENTURE | NOTE 11 – SECURED DEBENTURE DPTI issued a convertible Debenture to the University (see Note 1) in exchange for the Patents assigned to the Company, in the amount of Canadian $1,500,000, or US$1,491,923 on December 16, 2010, the date of the Debenture. On April 24, 2017 DPTI issued a replacement secured term Debenture in the same CAD 1,500,000 amount as the original Debenture. The interest rate is the Bank of Canada Prime overnight rate plus 1% per annum. The Debenture had an initial required payment of CAD 42,000 (US$33,385) due on April 24, 2018 for reimbursement to the University of its research and development costs, and this has been paid. Interest-only maintenance payments are due annually starting after April 24, 2018. Payment of the principal begins on the earlier of (a) three years following two consecutive quarters of positive earnings before interest, taxes, depreciation and amortization, (b) six years from April 24, 2017, or (c) in the event DPTI fails to raise defined capital amounts or secure defined contract amounts by April 24 in the years 2018, 2019, and 2020. The Company has raised funds in excess of the amount required for 2020, 2019 and 2018. The principal repayment amounts will be due quarterly over a six year period in the amount of Canadian Dollars 62,500. Based on the exchange rate between the Canadian Dollar and the U.S. Dollar on December 31, 2018, the quarterly principal repayment amounts will be US$48,447. The Debenture is secured by the Patents assigned by the University to DPTI by an Assignment Agreement on December 16, 2010. DPTI has pledged the Patents, and granted a lien on them pursuant to an Escrow Agreement dated April 24, 2017, between DPTI and the University. The Debenture was initially recorded at the $1,491,923 equivalent U.S. Dollar amount of Canadian 1,500,000 as of December 16, 2010, the date of the original Debenture. The liability is being adjusted quarterly based on the current exchange value of the Canadian dollar to the U.S. dollar at the end of each quarter. The adjustment is recorded as unrealized gain or loss in the change of the value of the two currencies during the quarter. The Debenture also includes a provision requiring DPTI to pay the University a 2% royalty on sales of any and all products or services which incorporate the Patents for a period of five years from April 24, 2018. To date, no royalties have been paid. For the six months ended June 30, 2023, and 2022, the Company recorded interest expense of $ 28,875 24,854 As of June 30, 2023 and December 31, 2022, the debenture liability totaled $ 1,099,250 1,090,827 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
LEASES | NOTE 12 – LEASES The following was included in our balance sheet as of June 30, 2023 and December 31, 2022: Schedule of operating leases June 30, December 31, Operating leases 2023 2022 Assets ROU operating lease assets $ 1,071,661 $ 2,724,226 Liabilities Current portion of operating lease 136,410 512,373 Operating lease, net of current portion 1,015,512 2,547,524 Total operating lease liabilities $ 1,151,922 $ 3,059,897 The weighted average remaining lease term and weighted average discount rate at June 30, 2023 and December 31, 2022 were as follows: Schedule of weighted average remaining lease term and weighted average discount rate June 30, December 31, Operating leases 2023 2022 Weighted average remaining lease term (years) 8.00 7.25 Weighted average discount rate 6.00 6.00 Operating Leases On January 12, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Mumbai, India. This three-year agreement commenced January 12, 2021 with an annual rent of approximately $ 50,000 On May 27, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Warwick, United Kingdom. This ten-year agreement commenced May 27, 2021 with an annual rent of approximately $ 85,000 On August 31, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Tempe, Arizona. This five-year agreement commenced August 31, 2021 with an annual rent of approximately $ 192,000 On October 20, 2021, the Company’s newly acquired subsidiary entered into an operating lease agreement to rent office space in Warwick, United Kingdom. This ten-year agreement commenced October 20, 2021 with an annual rent of approximately $ 200,000 On March 9, 2022, the Company entered into an operating lease agreement to rent office space in Houston, Texas. This ten-year agreement commenced March 9. 2022 with an annual rent of approximately $ 81,000 On June 28, 2023 the company recognized a gain on deconsolidation of $1,775,869 related to Optilan (UK) and its subsidiaries leases. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 6 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS' DEFICIT: | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 13 - STOCKHOLDERS' EQUITY (DEFICIT) Preferred Stock In accordance with the Company’s bylaws, the Company has authorized a total of 2,000,000 0.01 88,335 88,335 Common Stock In accordance with the Company’s bylaws, the Company has authorized a total of 20,000,000,000 0.0001 7,459,909,231 6,427,495,360 7,459,909,231 6,427,395,360 2023 Transactions On May 27, 2022 we entered an Equity Financing Agreement (the “ 2022 EFA RRA Registration Statement The RRA provides that we shall (i) use our best efforts to file with the SEC a Registration Statement within 45 days of the date of the GHS Registration Rights Agreement; and (ii) have the Registration Statement declared effective by the SEC within 30 days after the date the GHS Registration Statement is filed with the SEC, but in no event more than 90 days after the GHS Registration Statement is filed. Below is a table of all puts made by the Company under the 2022 EFA during 2023: Schedule of equity financing agreement Date of Put Number of Common Shares Issued Total Proceeds, Net of Discounts Effective Price per Share Net Proceeds 1/12/2023 64,130,435 $ 400,000 $ 0.006237 $ 370,975 1/17/2023* 11,441,647 100,000 $ 0.008740 100,000 1/24/2023 77,733,861 400,000 $ 0.005146 370,975 2/3/2023 61,173,706 300,000 $ 0.004904 277,975 2/17/2023 75,447,571 300,000 $ 0.003976 277,975 3/1/2023 83,113,044 324,000 $ 0.003898 300,295 3/16/2023 93,165,852 254,232 $ 0.002729 235,410 3/30/2023 65,465,384 166,903 $ 0.002549 154,195 4/11/2023 67,462,162 203,554 $ 0.003017 188,279 4/28/2023 91,796,875 235,000 $ 0.002560 208,550 6/26/2023 44,583,334 214,000 $ 0.004800 141,020 735,513,871 $ 2,897,689 $ 2,625,649 * Issued shares pursuant to an individual stock purchase agreement with an unrelated investor (not under 2022 EFA) In January 2023, the Company entered into a settlement of a dispute between certain stockholders in which the Company decided, during the period ended June 30, 2023, to issue shares to settle the dispute. In January 2023, the Company issued 297,000,000 1,989,900 |
COMMITMENTS & CONTINGENCIES
COMMITMENTS & CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS & CONTINGENCIES | NOTE 14 - COMMITMENTS & CONTINGENCIES Potential Royalty Payments The Company, in consideration of the terms of the debenture to the University of New Brunswick, shall pay to the University a two percent royalty on sales of any and all products or services, which incorporate the Company's patents for a period of five years from April 24, 2018. Legal Matters DarkPulse, Inc. v. Twitter, Inc. As disclosed in greater detail in the Company’s Form 10-Q, filed October 24, 2022, the Company is actively investigating potential claims against the MIKEWOOD and BullMeechum3 Twitter accounts. There are no material updates to this matter. Carebourn Capital, L.P. v. DarkPulse, Inc. As disclosed in greater detail in the Company’s Form 10-Q, filed October 24, 2022, the Company remains in active litigation with Carebourn Capital, L.P. (“Carebourn”) in Minnesota state court. The following discloses the material updates for this matter. On April 21, 2023, the Minnesota state court granted the Company’s motion for partial summary judgment on its affirmative defenses. Specifically, the Court found that Carebourn is an unregistered dealer, acting in violation of Section 15(a) of the Securities Exchange Act of 1934 and, thus, the contracts between the Company and Carebourn are now void pursuant to Section 29(b) of the Exchange Act. On July 24, 2023, the Company moved for summary judgment against Carebourn on its counterclaims for damages under the Minnesota Uniform Securities Act. Oral arguments were held on the Company’s motion on August 22, 2023. The Company is currently awaiting a decision from the Minnesota state court. More Capital, LLC v. DarkPulse, Inc. et al On July 24, 2023, the Company moved for summary judgment against More on its affirmative defenses asserted under the Securities Exchange Act of 1934 (“Exchange Act”) and counterclaims for damages under the Minnesota Uniform Securities Act. Oral arguments on the Company’s motion are scheduled for September 14, 2023. The Company remains committed to actively litigating its affirmative defenses and claims for relief under the Securities Exchange Act of 1934 and Minnesota Uniform Securities Act. Carebourn Capital et al v. Standard Registrar and Transfer et al On May 20, 2022, Carebourn Capital, L.P. (“Carebourn”) and More Capital, LLC (“More,” and together with Carebourn, the “Noteholder Plaintiffs”) commenced an action against (i) Standard Registrar and Transfer Co., Inc. (“Standard”), (ii) Amy Merrill (“Merrill”) (Standard and Merrill, together, the “TA Defendants”), (iii) DarkPulse, Inc., (iv) Dennis O’Leary (“O’Leary”), (v) Thomas Seifert (“Seifert”), (vi) Carl Eckel (“Eckel”), (vii) Anthony Brown (“Brown”), and (viii) Faisal Farooqui (“Farooqui”) (DarkPulse, O’Leary, Seifert, Eckel, Brown, and Farooqui, collectively, the “DPLS Defendants ”) in the United States District Court for the District of Utah. The Noteholder Plaintiffs’ complaint alleges the DPLS Defendants violated the Racketeer Influenced and Corrupt Organizations (RICO) Act, are liable for attorneys’ fees pursuant to the Company’s breach of securities contracts between the Company and, separately, Carebourn and More, and engaged in civil conspiracy, fraudulent concealment, tortious interference with economic relations and conversion against the Noteholder Plaintiffs. Thereafter, the TA Defendants and DPLS Defendants separately moved to dismiss the Noteholder Plaintiffs’ complaint. On February 10, 2023, the Court denied both motions without prejudice and stayed the action pending the conclusion of enforcement action commenced by the U.S. Securities and Exchange Commission against Carebourn and its principal, Chip Rice, in the U.S. District Court for the District of Minnesota. The Company contends that the Noteholder Plaintiffs’ lawsuit is duplicative of the first-filed lawsuits commenced by the Noteholder Plaintiffs’ in Minnesota state court. The Company intends to vigorously defend itself against the Noteholder Plaintiffs’ lawsuit. Th e The Company intends to vigorously defend itself against the Noteholder Plaintiffs’ lawsuit. DarkPulse, Inc. v. FirstFire Global Opportunities Fund, LLC, and Eli Fireman As disclosed in greater detail in the Company’s Form 10-Q, filed October 24, 2022, the Company remains in active litigation with FirstFire Global Opportunities Fund, LLC (“FirstFire”), and Eli Fireman (“Fireman”) (FirstFire and Fireman together, the “FirstFire Parties”). The following discloses the material updates for this matter. On January 17, 2023, the Court granted the FirstFire Parties’ motion to dismiss the Company’s complaint. Also on January 17, 2023, the Company appealed the trial court’s decision to the United States Court of Appeals for the Second Circuit. Briefing is currently taking place on the Company’s appeal. The Company’s opening memorandum in support of its appeal was filed on May 1, 2023. On July 31, 2023, the FirstFire Parties filed their memorandum in opposition. On August 21, 2023, the Company filed its reply memorandum. As of the date hereof, oral arguments are not scheduled for the appeal. The Company remains committed to actively litigating its claims for relief under the Securities Exchange Act of 1934 and Racketeer Influenced and Corrupt Organizations (RICO) Act. DarkPulse, Inc. v. EMA Financial, LLC et al As disclosed in greater detail in the Company’s Form 10-Q, filed October 24, 2022, the Company remains in active litigation with EMA Financial, LLC (“EMA”), EMA Group, Inc. (“EMA Group”), and Felicia Preston (“Preston”) (EMA, EMA Group, and Preston together, the “EMA Parties”). The following discloses the material updates for this matter. On March 1, 2023, the Court granted the EMA Parties’ motion to dismiss the Company’s claims asserted under the Securities Exchange Act of 1934, but denied dismissal of the Company’s claim asserted under the Racketeer Influenced and Corrupt Organizations (RICO) Act. On or about May 15, 2023, the Company and the EMA Parties reached an understanding of settlement, which was subsequently memorialized. The action was subsequently dismissed on or about June 14, 2023. The Company views this matter as closed. DarkPulse, Inc. v. Brunson Chandler & Jones, PLLC et al On July 8, 2022, the Company commenced litigation against Brunson Chandler & Jones, PLLC (“Brunson Firm”), and Lance B. Brunson (“Brunson,” and together with the Brunson Firm, the “Brunson Parties”) through the filing of a complaint in the United States District Court for the District of Utah. The Company is alleging that the Brunson Parties have committed professional negligence and breach of contract. On March 2, 2023, the Brunson Parties filed an answer, affirmative defenses, and counterclaims to the Company’s complaint, wherein the Brunson Firm alleged claims for (i) breach of contract against the Company, (ii) breach of contract against the Company’s subsidiary, DarkPulse Technologies, Inc., and (iii) quantum meruit. On June 5, 2023, the Company filed its answer and affirmative defenses to the Brunson Firm’s counterclaims. The Company remains committed to litigating its claims and affirmative defenses against the Brunson Parties. The parties are currently engaged in discovery in this matter. The Company remains committed to vigorously litigating its claims for relief and defenses against the Brunson Parties. DarkPulse, Inc., et al v. Crown Bridge Partners, LLC, et al On September 23, 2022, the Company commenced an action along with two other plaintiffs (“Crown Bridge Plaintiffs”) against Crown Bridge Partners, LLC, Soheil Ahdoot, and Sepas Ahdoot (“Crown Bridge Defendants”) in the United States District Court for the Southern District of New York alleging violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act. On January 13, 2023, the Crown Bridge Defendants filed a motion to dismiss. As of May 16, 2023, the Crown Bridge Defendants’ motion to dismiss was fully submitted to the court. As of the date hereof, no decision has been made on the motion. As of the date hereof, the court has not yet rendered its decision on the Crown Bridge Defendants’ motion to dismiss. The Company remains committed to actively litigating its RICO claims against the Crown Bridge Defendants. Benner et al v. DarkPulse, Inc. et al On March 29, 2023, J. Merlin Benner, Phillip J. Benner, Benjamin P. Benner, Jonas M. Benner, and Angelica M. Benner (collectively, the “Benner Parties”) commenced an action in the United States District Court for the Southern District of Texas against the Company and its Chief Executive Officer, Dennis O’Leary, individually, alleging (i) the Company is in breach of contracts between the Company and the Benner Parties as it concerns Remote Intelligence, LLC and Wildlife Specialists, LLC, (ii) violation of Texas Uniform Fraudulent Transfer Act by the Company, and (iii) defamation by Mr. O’Leary. On June 30, 2023, the Company and Mr. O'Leary filed their Answer to the Benner Parties' Complaint. The Company intends to vigorously defend itself against the Benner Parties’ lawsuit. The Company remains in active litigation with J. Merlin Benner, Phillip J. Benner, Benjamin P. Benner, Jonas M. Benner, and Angelica M. Benner (collectively, the “Benner Parties”) in the United States District Court for the Southern District of Texas. The following discloses the material updates for this matter. The parties are currently engaged in discovery in this matter. GS Capital Partners, LLC v. DarkPulse, Inc. On June 2, 2023, GS Capital Partners, LLC (“GS Capital”) commenced an action in the Supreme Court for New York County against the Company through the filing of motion for summary judgment in lieu of a complaint. The motion claims that the Company is in breach of a convertible promissory note, dated July 14, 2021, and accompanying securities purchase agreement, dated the same. The motion claims that GS Capital is entitled to an award of $2,407,671, plus prejudgment interest and attorney’s fees, costs and disbursements. On July 27, 2023, the Company moved to set aside the default judgment entered in favor of GS Capital and against the Company on July 25, 2023. GS Capital’s opposition thereto is due on or before August 31, 2023. Thereafter, DarkPulse’s reply is due on or before September 6, 2023. Oral arguments are currently not scheduled on the Company’s motion. The Company intends to vigorously defend itself against GS Capital. 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include a) affiliates of the Company; b) Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. During the six months ended June 30, 2023 and 2022, certain executives of the Company received 120,000 0 Remote Intelligence and Wildlife Specialists Loan Payables RI has a loan payable with the former majority shareholder, who is a shareholder in the Company after the acquisition of 60% of RI’s membership interests. The loan is unsecured, non-interest bearing and due on demand. As of both June 30, 2023 and December 31, 2022, the outstanding balance was $ 226,247 WS has a loan payable with the former majority shareholder, who is a shareholder in the Company after the acquisition of 60% of WS’s membership interests. The loan is unsecured, non-interest bearing and due on demand. As of both June 30, 2023 and December 31, 2022, the outstanding balance was $ 135,500 SPAC Transaction On October 12, 2022, the Company entered into and closed the Purchase Agreement (the “Agreement”) pursuant to which the Company purchased 2,623,120 4,298,496 1,500,000 As of June 30, 2023 and December 31, 2022, the Company’s $ 1,500,000 In addition to the payment of the Purchase Price, the Company also assumed the following obligations: (i) responsibility for all of SPAC’s public company reporting obligations, (ii) the right to provide an extension payment and extend the deadline of the SPAC to complete an initial business combination from 15 months from August 9, 2021 to 18 months for an additional $1,150,000, and (iii) all other obligations and liabilities of the Original Sponsor related to the SPAC. The principal balance of this note shall be payable by GSD on the earlier to occur of: (i) the date on which GSD consummates its initial business combination (the “Business Combination”) and (ii) the date that the winding up of GSD is effective. The note does not bear interest. On February 7, 2023 and March 9, 2023, GSD issued a non-convertible promissory note in the aggregate principal amount of $ 167,894 1,468,985 1,049,248 As of June 30, 2023 and December 31, 2022, the Company has $837,662 and $318,025, respectively, owed from GSD and included as due from related party on the consolidated balance sheet. These advances were made to pay for certain expenses on behalf of the SPAC, as well as $90,000 in accrued management fees. The advances are unsecured, non-interest bearing and due on demand. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS On August 7, 2023, the Company entered into a convertible note for a principal of $57,750. The note bears interest at a rate of 10% per annum and matures after one year. Following 180 days from the note, the noteholder may convert at a discount of 39%. The company had reserved a sufficient number of shares of Common Stock 342,725,409 for issuance upon full conversion of the Note in accordance with the terms. Subsequent to period end the company issued 80,036,058 shares to a third party in exchange for cash in accordance with its equity financing agreement. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and 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 June 30, 2023, and the results of operations for six months and cash flows for the six months ended June 30, 2023 and 2022 have been included. The Company evaluates its relationships with other entities to identify whether they are variable interest entities (“VIE”) as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying unaudited condensed consolidated balance sheet as of June 30, 2023, the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022 and of cash flows for the six months ended June 30, 2023 and 2022 have been prepared by the Company, pursuant to the rules and regulations of the SEC for the interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements have been prepared on a basis consistent with the audited consolidated financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the consolidated results for the interim periods presented and of the consolidated financial condition as of the date of the interim consolidated balance sheet. The results of operations are not necessarily indicative of the results expected for the year ending December 31, 2023. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022 included in the Company’s Annual Form 10-K filed with SEC on June 23, 2023. |
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, assumptions used to calculate derivative liabilities, revenue recognition and impairment of long-lived assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. |
Cash | Cash The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. To reduce its risk associated with the failure of such a financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. |
Accounts Receivable | Accounts Receivable Accounts receivable and contract assets include amounts billed to customers under the terms and provisions of the contracts. Most billings are determined based on contractual terms. As is common practice in the industry, the Company classifies all accounts receivable and contract assets, including retainage, as current assets. The contracting cycle for certain long-term contracts may extend beyond one year, and accordingly, collection of retainage on those contracts may extend beyond one year. Contract assets include amounts billed to customers under retention provisions in construction contracts. Such provisions are standard in the Company’s industry and usually allow for a portion of progress billings on the contract price, typically 5-10%, to be withheld by the customer until after the Company has completed work on the project. Billings for such retention balances at each balance sheet date are finalized and collected after project completion. Generally, unbilled amounts will be billed and collected within one year. The Company determined that there are no material amounts due past one year and no material amounts billed but not expected to be collected within one year. Each month, the Company reviews its receivables on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or perceived collection issues. Any balances that are eventually deemed uncollectible are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of both June 30, 2023 and December 31, 2022, the Company determined that the allowance for doubtful accounts was $ 0 3,320,983 Accounts receivable includes retainage amounts for the portion of the contract price earned by us for work performed but held for payment by the customer as a form of security until we reach certain construction milestones or complete the project. As of June 30, 2023 and December 31, 2022, retainage receivable was $ 0 824,777 |
Foreign Currency Translation | Foreign Currency Translation The Company’s reporting currency is U.S. Dollars. The accounts of one of the Company’s subsidiaries is maintained using the appropriate local currency, British Pound (“GBP”) as the functional currency, as well as the Turkish lira, Emirates Dirham, Azerbajani Manat and Indian Rupee. The accounts of one of the Company’s subsidiaries are maintained using the appropriate local currency, Canadian Dollar (“CAD”) as the functional currency. All assets and liabilities are translated into U.S. Dollars at balance sheet date, shareholders' equity is translated at historical rates and revenue and expense accounts are translated at the average exchange rate for the year or the reporting period. The translation adjustments are reported as a separate component of stockholders’ equity, captioned as accumulated other comprehensive (loss) gain. Transaction gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the statements of operations as foreign currency exchange variance. The relevant translation rates are as follows: for the six months ended June 30, 2023 closing rate at 1 1.232546 1.32585 The relevant translation rates are as follows: for the six months ended June 30, 2022 closing rate at 1.216007 1.299973 1.2872 |
Long-Lived Assets and Goodwill | Long-Lived Assets and Goodwill The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10-35, Property, Plant and Equipment, Impairment or Disposal of Long-lived Assets. Indefinite-lived intangible assets established in connection with business combinations consist of the tradename. The impairment test for identifiable indefinite-lived intangible assets consists of a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company accounts for goodwill and intangible assets in accordance with ASC 350, Intangibles – Goodwill and Other As a result of the Optilan Liquidation as described in Note 1, management determined that certain events and circumstances occurred that indicated that the carrying amount of the Company’s reporting unit may not be recoverable. The qualitative assessment was primarily due to the customer contracts held by Optilan (UK) Limited and the associated revenue projections by the UK subsidiary that is subject to the potential winding up. As such, the Company compared the fair value of the reporting unit to the carrying amounts and recorded an impairment loss of $ 6,925,137 356,260 6,568,877 0 |
Property and Equipment | Property and Equipment Property and equipment are carried at historical cost less accumulated depreciation. Depreciation is based on the estimated service lives of the depreciable assets and is calculated using the straight-line method. Expenditures that increase the value or productive capacity of assets are capitalized. Fully depreciated assets are retained in the property and equipment, and accumulated depreciation accounts until they are removed from service. When property and equipment are retired, sold or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Repairs and maintenance are expensed as incurred. The estimated useful lives of property and equipment are generally as follows: Schedule of estimated useful lives Years Office furniture and fixtures 4 Plant and equipment 4-8 Leasehold Improvements 10 Motor vehicles 3 |
Revenue Recognition | Revenue Recognition The Company’s revenues are generated primarily from the sale of our services, which consist primarily of advanced technology solutions for integrated communications and security systems, as well as habitat management. The Company’s sales of products are primarily generated from our TJM subsidiaries. Sales of products and services are separate from one another. At contract inception, we assess the goods and services promised in the contract with customers and identify a performance obligation for each. To determine the performance obligation, we consider all products and services promised in the contract regardless of whether they are explicitly stated or implied by customary business practices. The timing of satisfaction of the performance obligation is not subject to significant judgment. We measure revenue as the amount of consideration expected to be received in exchange for transferring goods and services. We recognize service revenues as the performance obligations are met, which is generally as milestones are satisfied over time. We generally recognize product revenues at the time of shipment, provided that all other revenue recognition criteria have been met. The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. The five-step model is applied to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize revenue in the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company considers each individual sale of service contract to be its own performance obligation. Services in the contract are highly interdependent and interrelated, and the successful completion of each milestone is necessary for the overall success of the contract. Therefore, each milestone is not separately identifiable from other promises in the contract, and not distinct and ultimately not individual performance obligations. The Company records revenue over time using the input measure as it is the most faithful depiction of an entity’s performance because it directly measures the value of the goods and services transferred to the customer. The Company utilizes the Right to Invoice for these contracts, as the pricing structure is based on various milestones that are specified in the contract. These milestones include Construction Phase Plan, Start of the construction phase, installation phase, site surveys, fiber splicing, recoveries, and closeouts. There are specified payments associated with these milestones in the contract, and the value allocated is commensurate with work done. In the event that there are advances such as upfront retainers and not based on the value, those are recorded as contract liabilities. |
Cost of Revenues | Cost of Revenues Cost of revenues consists primarily of materials and overhead costs incurred internally and amounts incurred to contract manufacturers to produce our products, airtime and other implementation costs incurred to install our products and train customer personnel, and customer service and third-party original equipment manufacturer costs to provide continuing support to our customers. Cost of revenues also includes direct labor attributable to revenue service arrangements. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company has not experienced any losses related to its cash and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. |
Leases | Leases The Company accounts for its leases under ASC 842, Leases In calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures its financial assets and liabilities in accordance with the requirements of FASB ASC 820, Fair Value Measurements and Disclosures. Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date and includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company’s derivative liability is a Level 3 liability measured at fair value on a recurring basis. See Note 10. |
Non-controlling Interests | Non-controlling Interests Non-controlling interests are classified as a separate component of equity in the Company's consolidated balance sheets and statements of changes in stockholders’ equity. Net income (loss) and comprehensive income (loss) attributable to non-controlling interests are reflected separately from consolidated net income (loss) and comprehensive income (loss) in the consolidated statements of comprehensive income (loss) and statements of changes in stockholders’ equity. Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the controlling and non-controlling interests. In addition, when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value of the retained interest will be recorded as a gain or loss. The Company has non-controlling interests via its subsidiaries TerraData, Remote Intelligence and Wildlife Specialists. During the six months ended June 30, 2023 and 2022, the Company recorded a loss of $ 810,693 348,406 |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. During the six months ended June 30, 2023 and 2022, the Company’s only element of other comprehensive loss was foreign currency translation. |
Loss Per Common Share | Loss Per Common Share The Company accounts for earnings per share pursuant to ASC 260, Earnings per Share Schedule of antidilutive shares June 30, 2023 2022 Convertible notes 50,369,362 87,775,272 Series D preferred stock 176,470 176,470 50,545,832 87,951,742 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging Financial Instruments, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC 326). Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives | Schedule of estimated useful lives Years Office furniture and fixtures 4 Plant and equipment 4-8 Leasehold Improvements 10 Motor vehicles 3 |
Schedule of antidilutive shares | Schedule of antidilutive shares June 30, 2023 2022 Convertible notes 50,369,362 87,775,272 Series D preferred stock 176,470 176,470 50,545,832 87,951,742 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of timing of revenue recognition | Schedule of timing of revenue recognition Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Services and products transferred at a point in time $ 76,120 $ 1,405,335 $ 764,548 $ 2,089,167 Services and products transferred over time 336,649 3,029,708 1,186,054 4,364,209 Total revenue $ 412,769 $ 4,435,043 $ 1,950,602 $ 6,453,376 |
Schedule of revenue by source | Schedule of revenue by source Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Products $ 137,342 $ 712,449 $ 257,514 $ 1,110,076 Services 275,427 3,722,594 1,693,088 5,343,300 Total revenue $ 412,769 $ 4,435,043 $ 1,950,602 $ 6,453,376 |
Schedule of revenue by geographic destination | Schedule of revenue by geographic destination Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 North America $ 155,386 $ 373,062 $ 374,652 $ 534,434 United Kingdom 207,404 – 1,389,667 – Rest of world 49,979 4,061,981 186,283 5,918,942 Total revenue $ 412,769 $ 4,435,043 $ 1,950,602 $ 6,453,376 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Schedule of accounts receivable June 30, December 31, 2023 2022 Accounts receivable $ 134,132 $ 6,273,276 Less: Allowance for doubtful accounts – (3,320,983 ) Accounts receivable, net $ 134,132 $ 2,952,293 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Schedule of property, plant and equipment June 30, December 31, 2023 2022 Property and equipment $ 1,300,521 $ 3,942,421 Leasehold improvements 46,934 46,934 Property and equipment at cost 1,347,455 3,989,355 Less - accumulated depreciation (441,767 ) (2,055,484 ) Property and equipment, net $ 905,688 $ 1,933,871 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill | Schedule of changes in carrying amount of goodwill Goodwill Balances at December 31, 2022 $ 6,462,153 Impairment of goodwill pertaining to Optilan (6,568,877 ) Foreign exchange translation 106,724 Balances at June 30, 2023 $ – |
Schedule of patents | Schedule of patents June 30, December 31, 2023 2022 Patents $ 904,269 $ 904,269 Less: accumulated amortization (661,908 ) (636,394 ) Patents, net $ 242,361 $ 267,875 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Schedule of accounts payable and accrued expenses June 30, December 31, 2023 2022 Accounts payable $ 14,474,333 $ 8,677,648 Accrued liabilities 1,580,757 2,058,725 Total accounts payable and accrued expenses $ 16,055,090 $ 10,736,373 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of loans payable | Schedule of loans payable June 30, December 31, 2023 2022 RI - line of credit $ 99,971 $ 99,971 RI - Short-term loans 41,279 43,899 WS - line of credit 200,000 200,000 WS- Short-term loans 126,816 128,830 Loan payable, current $ 468,067 $ 472,700 RI - SBA EIDL $ 102,597 $ 102,597 RI - long-term loans 84,748 86,041 WS - SBA EIDL 26,307 26,307 WS - long-term loans 92,446 113,564 Loan payable, non-current $ 306,098 $ 328,508 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Schedule of operating leases | Schedule of operating leases June 30, December 31, Operating leases 2023 2022 Assets ROU operating lease assets $ 1,071,661 $ 2,724,226 Liabilities Current portion of operating lease 136,410 512,373 Operating lease, net of current portion 1,015,512 2,547,524 Total operating lease liabilities $ 1,151,922 $ 3,059,897 |
Schedule of weighted average remaining lease term and weighted average discount rate | Schedule of weighted average remaining lease term and weighted average discount rate June 30, December 31, Operating leases 2023 2022 Weighted average remaining lease term (years) 8.00 7.25 Weighted average discount rate 6.00 6.00 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS' DEFICIT: | |
Schedule of equity financing agreement | Schedule of equity financing agreement Date of Put Number of Common Shares Issued Total Proceeds, Net of Discounts Effective Price per Share Net Proceeds 1/12/2023 64,130,435 $ 400,000 $ 0.006237 $ 370,975 1/17/2023* 11,441,647 100,000 $ 0.008740 100,000 1/24/2023 77,733,861 400,000 $ 0.005146 370,975 2/3/2023 61,173,706 300,000 $ 0.004904 277,975 2/17/2023 75,447,571 300,000 $ 0.003976 277,975 3/1/2023 83,113,044 324,000 $ 0.003898 300,295 3/16/2023 93,165,852 254,232 $ 0.002729 235,410 3/30/2023 65,465,384 166,903 $ 0.002549 154,195 4/11/2023 67,462,162 203,554 $ 0.003017 188,279 4/28/2023 91,796,875 235,000 $ 0.002560 208,550 6/26/2023 44,583,334 214,000 $ 0.004800 141,020 735,513,871 $ 2,897,689 $ 2,625,649 * Issued shares pursuant to an individual stock purchase agreement with an unrelated investor (not under 2022 EFA) |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Bad debt expense | $ 57,480 | $ 0 | $ 2,422,457 | $ 0 |
Impairment of goodwill | 0 | $ 0 | 6,925,137 | $ 0 |
Optilan (UK) [Member] | ||||
Bad debt expense | 2,422,457 | |||
Impairment of goodwill | 6,925,137 | |||
Intangible assets, net including goodwill | $ 0 | 0 | ||
Optilan (UK) [Member] | Indefinite Lived Asset [Member] | ||||
Impairment of goodwill | 356,260 | |||
Optilan (UK) [Member] | Goodwill [Member] | ||||
Impairment of goodwill | $ 6,568,877 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details - Estimated useful lives) | 6 Months Ended |
Jun. 30, 2023 | |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 4 |
Plant And Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 4-8 |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 |
Motor Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 50,545,832 | 87,951,742 |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 50,369,362 | 87,775,272 |
Series D Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 176,470 | 176,470 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Allowance for doubtful accounts | $ 0 | $ 0 | $ 3,320,983 | ||
Retainage receivable | 0 | 0 | $ 824,777 | ||
Impairment expense | 0 | $ 0 | 6,925,137 | $ 0 | |
Net loss attributable to non-controlling interests | 30,997 | $ 234,725 | 810,693 | $ 348,406 | |
Optilan (UK) [Member] | |||||
Impairment expense | 6,925,137 | ||||
Intangible assets, net including goodwill | $ 0 | 0 | |||
Optilan (UK) [Member] | Indefinite Lived Asset [Member] | |||||
Impairment expense | 356,260 | ||||
Optilan (UK) [Member] | Goodwill [Member] | |||||
Impairment expense | $ 6,568,877 | ||||
United Kingdom, Pounds | |||||
Foreign currency translation rates | 1 | 1.216007 | 1 | 1.216007 | |
Foreign currency translation rates during the period | 1.232546 | 1.299973 | |||
Canada, Dollars | |||||
Foreign currency translation rates | 1.32585 | 1.2872 | 1.32585 | 1.2872 |
LIQUIDITY AND GOING CONCERN (De
LIQUIDITY AND GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Profit loss | $ 4,118,096 | $ 14,799,264 | $ 4,185,572 | $ 5,384,270 | $ 18,917,360 | $ 9,569,843 | |
Net cash used in operating activities | 2,483,389 | $ 12,565,057 | |||||
Working capital | 18,582,414 | 18,582,414 | |||||
Accumulated deficit | 64,662,001 | 64,662,001 | $ 46,555,334 | ||||
Cash | $ 48,573 | $ 48,573 |
REVENUE (Details - Timing of re
REVENUE (Details - Timing of revenue recognition) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 412,769 | $ 4,435,043 | $ 1,950,602 | $ 6,453,376 |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 76,120 | 1,405,335 | 764,548 | 2,089,167 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 336,649 | $ 3,029,708 | $ 1,186,054 | $ 4,364,209 |
REVENUE (Details - Revenue by s
REVENUE (Details - Revenue by source) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 412,769 | $ 4,435,043 | $ 1,950,602 | $ 6,453,376 |
Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 137,342 | 712,449 | 257,514 | 1,110,076 |
Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 275,427 | $ 3,722,594 | $ 1,693,088 | $ 5,343,300 |
REVENUE (Details - Revenue by g
REVENUE (Details - Revenue by geographic destination) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 412,769 | $ 4,435,043 | $ 1,950,602 | $ 6,453,376 |
North America [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 155,386 | 373,062 | 374,652 | 534,434 |
UNITED KINGDOM | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 207,404 | 0 | 1,389,667 | 0 |
Rest Of World [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 49,979 | $ 4,061,981 | $ 186,283 | $ 5,918,942 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 0 | $ 1,439,844 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable | $ 134,132 | $ 6,273,276 |
Less: Allowance for doubtful accounts | 0 | (3,320,983) |
Accounts receivable, net | $ 134,132 | $ 2,952,293 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 1,347,455 | $ 3,989,355 |
Accumulated depreciation | (441,767) | (2,055,484) |
Property, Plant and Equipment, Net | 905,688 | 1,933,871 |
Property, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,300,521 | 3,942,421 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 46,934 | $ 46,934 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details - Schedule of changes in carrying amount of goodwill) | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 6,462,153 |
Impairment of goodwill pertaining to Optilan | (6,568,877) |
Foreign exchange translation | 106,724 |
Ending balance | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details - Schedule of patents) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents | $ 904,269 | $ 904,269 |
Less: accumulated amortization | (661,908) | (636,394) |
Patents, net | $ 242,361 | $ 267,875 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jan. 02, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of patent | $ 34,063 | $ 25,514 | ||
Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of patent | 25,514 | $ 25,514 | ||
Optilan Liquidation [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of trade value | 356,260 | |||
Optilan Liquidation [Member] | Trade Name [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Carrying value of intangible assets | $ 0 | $ 390,330 | ||
Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible asset estimated useful life | 25 years | |||
Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible asset estimated useful life | 10 years |
JOINT VENTURE (Details Narrativ
JOINT VENTURE (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 09, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||
Contributed joint venture | $ 113,124 | $ 0 | |||
Loss on equity investment | $ 74,028 | $ 0 | $ 139,084 | $ 0 | |
Neural Signals Inc [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50% |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 14,474,333 | $ 8,677,648 |
Accrued liabilities | 1,580,757 | 2,058,725 |
Total accounts payable and accrued expenses | $ 16,055,090 | $ 10,736,373 |
DEBT (Details - Loans payable)
DEBT (Details - Loans payable) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Loan payable, current | $ 468,067 | $ 472,700 |
Loan payable, non-current | 306,098 | 328,508 |
R I Line Of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Loan payable, current | 99,971 | 99,971 |
R I Short Term Loans [Member] | ||
Debt Instrument [Line Items] | ||
Loan payable, current | 41,279 | 43,899 |
W S Line Of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Loan payable, current | 200,000 | 200,000 |
W S Short Term Loans [Member] | ||
Debt Instrument [Line Items] | ||
Loan payable, current | 126,816 | 128,830 |
R I S B A E I D L [Member] | ||
Debt Instrument [Line Items] | ||
Loan payable, non-current | 102,597 | 102,597 |
R I Long Term Loans [Member] | ||
Debt Instrument [Line Items] | ||
Loan payable, non-current | 84,748 | 86,041 |
W S S B A E I D L [Member] | ||
Debt Instrument [Line Items] | ||
Loan payable, non-current | 26,307 | 26,307 |
W S Long Term Loans [Member] | ||
Debt Instrument [Line Items] | ||
Loan payable, non-current | $ 92,446 | $ 113,564 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | Jul. 14, 2021 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Securities Financing Transaction [Line Items] | ||||
Convertible Notes Payable, Current | $ 324,866 | $ 378,263 | ||
Derivative Liability, Current | $ 236,736 | 306,467 | ||
G S Spa Note [Member] | ||||
Securities Financing Transaction [Line Items] | ||||
Debt face amount | $ 2,000,000 | |||
Maturity Date | Jul. 14, 2022 | |||
Debt stated interest rate | 6% | |||
Debt face amount | $ 2,000,000 | $ 2,000,000 |
SECURED DEBENTURE (Details Narr
SECURED DEBENTURE (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |||
Interest expense | $ 28,875 | $ 24,854 | |
Debenture liability | $ 1,099,250 | $ 1,090,827 |
LEASES (Details - Balance sheet
LEASES (Details - Balance sheet) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
ROU operating lease assets | $ 1,071,661 | $ 2,724,226 |
Liabilities | ||
Current portion of operating lease | 136,410 | 512,373 |
Operating lease, net of current portion | 1,015,512 | 2,547,524 |
Total operating lease liabilities | $ 1,151,922 | $ 3,059,897 |
LEASES (Details - Other Informa
LEASES (Details - Other Information) | Jun. 30, 2023 | Dec. 31, 2022 |
Leases | ||
Weighted average remaining lease term (years) | 8 years | 7 years 3 months |
Weighted average discount rate | 6% | 6% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | Mar. 09, 2022 | Oct. 20, 2021 | Aug. 31, 2021 | May 27, 2021 | Jan. 12, 2021 |
Leases | |||||
Annual rent | $ 81,000 | $ 200,000 | $ 192,000 | $ 85,000 | $ 50,000 |
STOCKHOLDERS' EQUITY (DEFICIT_2
STOCKHOLDERS' EQUITY (DEFICIT) (Details) - USD ($) | 6 Months Ended | ||||||||||||
Jun. 26, 2023 | Apr. 28, 2023 | Apr. 11, 2023 | Mar. 30, 2023 | Mar. 16, 2023 | Mar. 02, 2023 | Feb. 17, 2023 | Feb. 03, 2023 | Jan. 24, 2023 | Jan. 17, 2023 | [1] | Jan. 12, 2023 | Jun. 30, 2023 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Number of shares sold | 735,513,871 | ||||||||||||
Total Proceeds, Net of Discounts | $ 2,897,689 | ||||||||||||
Net Proceeds | $ 2,625,649 | ||||||||||||
Equity Financing Agreement [Member] | |||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||
Number of shares sold | 44,583,334 | 91,796,875 | 67,462,162 | 65,465,384 | 93,165,852 | 83,113,044 | 75,447,571 | 61,173,706 | 77,733,861 | 11,441,647 | 64,130,435 | ||
Total Proceeds, Net of Discounts | $ 214,000 | $ 235,000 | $ 203,554 | $ 166,903 | $ 254,232 | $ 324,000 | $ 300,000 | $ 300,000 | $ 400,000 | $ 100,000 | $ 400,000 | ||
Effective Price per Share | $ 0.004800 | $ 0.002560 | $ 0.003017 | $ 0.002549 | $ 0.002729 | $ 0.003898 | $ 0.003976 | $ 0.004904 | $ 0.005146 | $ 0.008740 | $ 0.006237 | ||
Net Proceeds | $ 141,020 | $ 208,550 | $ 188,279 | $ 154,195 | $ 235,410 | $ 300,295 | $ 277,975 | $ 277,975 | $ 370,975 | $ 100,000 | $ 370,975 | ||
[1]Issued shares pursuant to an individual stock purchase agreement with an unrelated investor (not under 2022 EFA) |
STOCKHOLDERS' EQUITY (DEFICIT_3
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) - USD ($) | 1 Months Ended | ||
Jan. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 20,000,000,000 | 20,000,000,000 | |
Common stock par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares issued | 7,459,909,231 | 6,427,495,360 | |
Common stock, shares outstanding | 7,459,909,231 | 6,427,395,360 | |
Stock Issued For Settlement Of Dispute [Member] | |||
Class of Stock [Line Items] | |||
Stock Issued During Period, Shares, Other | 297,000,000 | ||
Stock Issued During Period, Value, Other | $ 1,989,900 | ||
Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |
Preferred stock, par value | $ 0.01 | $ 0.01 | |
Preferred stock, shares issued | 88,335 | 88,335 | |
Preferred stock, shares outstanding | 88,335 | 88,335 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Mar. 09, 2023 | Feb. 07, 2023 | Oct. 12, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Purchase price | $ 1,500,000 | $ 1,500,000 | ||||
Aggregate principal amount | $ 167,894 | $ 167,894 | ||||
Purchase Agreement [Member] | ||||||
Purchase price | $ 1,500,000 | |||||
Purchase Agreement [Member] | Common Class B [Member] | ||||||
Stock purchased, shares | 2,623,120 | |||||
Purchase Agreement [Member] | Private Placement Warrants [Member] | ||||||
Warrants purchased, shares | 4,298,496 | |||||
Remote Intelligence [Member] | ||||||
Loans Payable | 226,247 | 226,247 | ||||
Wildlife Specialists [Member] | ||||||
Loans Payable | 135,500 | 135,500 | ||||
S P A C [Member] | ||||||
Loans Payable | 1,468,985 | $ 1,049,248 | ||||
Optilan [Member] | ||||||
Noninterest Expense Directors Fees | $ 120,000 | $ 0 |