Evidence Record

Declaration of William Welter in Support of Opposition of Plaintiffs’ Opposition to Defendants’ Motion to Vacate Sister-State Judgment

1. I am the Managing Director of Atlantic Wave Holdings, LLC ("Atlantic Wave") and Secure Community, LLC ("Secure Community") (collectively, "Plaintiffs"). I have personal knowledge of the matters stated herein and, if called upon...

Type: declaration
Court: SDCAL
Case: Atlantic Wave / Cyberlux litigation
Pages: 56
Lines: 3567
SHA-256: 755a15f784e8

DISTIL analysis

DISTIL Run

Profile

Standard

Version

Doc Type

Declaration in Support of Opposition to Motion

Total Nodes

Node Legend

Entity (ENT)

Event (EVT)

Claim (CLM)

Anchor (ANC)

Omission (OMI)

Tension (TEN)

Tell (TEL)

Inference (INF)

Hypothesis (HYP)

Stage 1

Index

Orientation · No nodes

Document Classification

Declaration in Support of Opposition to Motion William Welter, Managing Director, Atlantic Wave Holdings/Secure Community Federal court litigation, judgment enforcement, collection proceedings 2022-2024, filed May 20, 2024

financial_distresscross_jurisdictional_enforcementmisrepresentation_allegationsasset_dissipation_risk

Analytical Frame

Creditor enforcement action against allegedly financially distressed corporate defendant

Analytical Summary

William Welter, Managing Director of Atlantic Wave Holdings and Secure Community, submitted a declaration opposing Defendants' motion to vacate a sister-state judgment from Virginia. The judgment stems from a consent agreement that Defendants Cyberlux Corporation and Mark D. Schmidt signed, then allegedly defaulted on by making late payments and refusing to disclose drone sales information. Plaintiffs domesticated the Virginia judgment in California to pursue collection against Cyberlux's subsidiary Datron World Communications in Vista, CA, while simultaneously pursuing garnishment in Virginia. Welter alleges Defendants misrepresented facts to Virginia courts, attempted to pressure banks to release garnished funds prematurely, and face dire financial circumstances with dramatically declining net income and growing accumulated deficits. He expresses concern about rapid asset dissipation given Defendants' apparent attempts to sell the company and refusal to provide sales information.

Key Points

Defendants signed Virginia consent judgment but defaulted on payment and disclosure obligations
Cyberlux subsidiary Datron World Communications in Vista, CA is described as the company's only tangible asset
Virginia garnishment proceedings successfully segregated funds in Defendants' bank accounts
Defendants allegedly misrepresented settlement negotiation timeline and payment status to Virginia court
Cyberlux Q1 2024 financials show net income decline from $325,570 to -$4,496,850 loss and accumulated deficit increase to $44,296,707
Defendants approached at least one company about selling or merging Cyberlux

Stage 2

Core — Entities, Events, Claims

19 nodes

ENT-001

Entity

William Welter

William Welter, Managing Director of Atlantic Wave Holdings, LLC and Secure Community, LLC, declarant with personal knowledge of matters stated.

Page 2 — I, William Welter, declare and state as follows: I am the Managing Director of Atlantic Wave Holdings, LLC ("Atlantic Wave") and Secure Community, LLC ("Secure Community") (collectively, "Plaintiffs"). I have personal knowledge of the matters stated herein

ENT-002

Entity

Atlantic Wave Holdings, LLC

Atlantic Wave Holdings, LLC, a Virginia limited liability company, plaintiff and judgment creditor seeking to enforce Virginia judgment.

Page 1 — ATLANTIC WAVE HOLDINGS, LLC, a Virginia limited liability company, and SECURE COMMUNITY, LLC, a Virginia limited Liability company, Plaintiffs

ENT-003

Entity

Secure Community, LLC

Secure Community, LLC, a Virginia limited liability company, plaintiff and judgment creditor alongside Atlantic Wave Holdings.

Page 1 — ATLANTIC WAVE HOLDINGS, LLC, a Virginia limited liability company, and SECURE COMMUNITY, LLC, a Virginia limited Liability company, Plaintiffs

ENT-004

Entity

Cyberlux Corporation

Cyberlux Corporation, a Nevada corporation, defendant and judgment debtor facing financial distress and collection actions.

Page 1 — CYBERLUX CORPORATION, a Nevada Corporation, Defendant

ENT-005

Entity

Mark D. Schmidt

Mark D. Schmidt, individual defendant alongside Cyberlux Corporation, also serves as President and CEO of Cyberlux.

ENT-006

Entity

Datron World Communications

Datron World Communications, Cyberlux's subsidiary located in Vista, California, described as the company's only tangible asset.

Page 2 — The collection action was initiated in California because Cyberlux's subsidiary, and to our knowledge, its only tangible asset, Datron World Communications, is located in Vista, California.

EVT-001

Event

Virginia consent judgment entry

Virginia Court entered a consent judgment that Defendants Cyberlux Corporation and Mark D. Schmidt willingly agreed to and signed.

EVT-002

Event

Default on payment and disclosure obligations

Defendants defaulted on payment and disclosure obligations under the parties' agreement by making late payments and refusing to provide drone sales information despite multiple requests.

Page 2 — Defendants have defaulted on their payment and disclosure obligations under the parties' agreement by making late payments and refusing to provide information about drone sales, despite multiple requests from Plaintiffs before filing suit

EVT-003

Event

Domestication of Virginia judgment in California

Plaintiffs domesticated the Virginia judgment in California to enforce the debt owed, targeting Cyberlux's subsidiary in Vista, California.

Page 2 — leading to the domestication of the Virginia judgment in California to enforce the debt owed. The collection action was initiated in California because Cyberlux's subsidiary, and to our knowledge, its only tangible asset, Datron World Communications, is located in Vista, California.

EVT-004

Event

Filing error and federal removal

Plaintiffs attempted to correct an initial filing error, but Defendants refused to stipulate to dismissal and instead removed the case to federal court and filed counterclaims.

Page 2 — Plaintiffs' attempted to correct the initial filing error, but Defendants refused to stipulate to the dismissal of the incorrectly filed complaint. Instead, Defendants removed the case to federal court and filed counterclaims.

EVT-005

Event

Virginia garnishment proceedings

Plaintiffs initiated garnishment proceedings in Virginia in parallel attempt to collect on judgment, successfully segregating funds in Defendants' bank accounts.

Page 2 — Plaintiffs also initiated proceedings in Virginia to garnish Defendants' bank accounts in a parallel attempt to collect on the judgment. After moving to dismiss the incorrectly filed complaint and domesticating the Virginia judgment in California, Plaintiffs learned that their Virginia garnishment efforts were effective in segregating funds held in Defendants' bank accounts.

EVT-006

Event

May 15, 2024 Early Neutral Evaluation

During Early Neutral Evaluation before the Court on May 15, 2024, parties were advised that Defendants stated a hearing date was set for the following week in Virginia matter.

EVT-007

Event

Ex parte attempts to release garnished funds

Defendants made ex parte attempts to release garnished funds and attempted to pressure bank employees into releasing funds prematurely.

Page 3 — Defendants have made ex parte attempts to release the garnished funds and have attempted to pressure bank employees into releasing the funds prematurely.

CLM-001

Claim

No hearing date set in Virginia

Welter claims no hearing date has been set in Virginia matter and Defendants have not filed any moving papers, contrary to what Defendants stated during Early Neutral Evaluation.

Page 3 — No hearing date as been set in that case. Defendants have not even filed any moving papers in that matter.

CLM-002

Claim

Misrepresentation about settlement timing

Defendants misrepresented to Virginia Court that settlement agreement was negotiated after judgment was entered, when they knew it was entered before judgment and merged into same.

Page 3 — Additionally Defendants misrepresented to the Virginia Court that: a) The settlement agreement was negotiated after the judgment was entered when they knew the settlement agreement was entered before the judgment was entered and merged into same

CLM-003

Claim

Misrepresentation about payment status

Defendants misrepresented to Virginia Court that they had made all payments and were current, when they knew they had refused to disclose substantial drone sales.

Page 3 — b) that Defendants had made all payment and were current when they knew they, among other things, refused to disclose they had sold a substantial amount of drones.

CLM-004

Claim

Dire financial situation

Defendants' Q1 2024 financial disclosures reveal dire financial situation with net income declining from $325,570 to -$4,496,850 loss and accumulated deficit growing from $39,999,350 to $44,296,707.

Page 3 — Defendants' recent financial disclosures appear to reveal a dire financial situation. According to their Q1 disclosure, Defendants' net income has dramatically declined, and their accumulated deficit has significantly increased. Specifically, as of December 31, 2023, Defendants reported a net income of $325,570, which ballooned to a staggering $4,496,850 loss by March 31, 2024. Additionally, their accumulated deficit grew from $39,999,350 to $44,296,707 over the same period.

CLM-005

Claim

Attempting to sell company

Defendants have publicly acknowledged precarious financial condition by suggesting for first time they might need to sell company, and approached at least one company for selling or merging Cyberlux.

Page 3 — Defendants have publicly acknowledged their precarious financial condition by suggesting for the first time that they might need to sell the company... I was also made aware that Defendants have approached at least one company for the purposes of selling or merging Cyblerlux.

CLM-006

Claim

Concern about asset dissipation

Due to financial instability, attempts to sell company, and refusal to provide drone sales information, Plaintiffs are highly concerned about Defendants rapidly diverting corporate assets that could satisfy the judgment.

Page 3, 4 — Due to Defendants' financial instability, their attempts to sell the company and their refusal to provide information about the number of drones sold, Plaintiffs are highly concerned about Defendants rapidly diverting corporate assets that could be used to satisfy the Virginia judgment. Despite numerous requests from Plaintiffs for such information, Defendants have consistently ignored these requests.

Stage 3

In Situ — Quotations, Tells, Tensions, Questions

8 nodes

QUO-001

Quotation

Email from Rob Caudle objecting to hearing

Rob Caudle's email objecting to improper oral motion hearing: 'I object to any hearing on Friday, May 10, 2024 at 10:00am, especially on an oral motion upon which there has been no notice of what the issues are.'

Page 7 — I object to any hearing on Friday, May 10, 2024 at 10:00am, especially on an oral motion upon which there has been no notice of what the issues are. In addition, counsel for PNC Bank, Charles Gavin, has not been included in any of this. Mr. Robinson's assertion that I have not made my self available are without merit.

QUO-002

Quotation

Cyberlux going concern statement

From Cyberlux financial statement: 'While these factors among others may indicate that the Company will be unable to continue as a going concern, management is confident that business performance in 2024 will ensure the Company is an ongoing growth business for the foreseeable future.'

Page 43 — While these factors among others may indicate that the Company will be unable to continue as a going concern, management is confident that business performance in 2024 will ensure the Company is an ongoing growth business for the foreseeable future.

TEN-001

Tension

Discrepancy between claimed hearing and reality

Tension between Defendants' representation during Early Neutral Evaluation that hearing was set in Virginia and the actual absence of any scheduled hearing or filed papers.

Page 3 — During the parties' May 15, 2024 Early Neutral Evaluation before this Court, we were advised that Defendants had stated that there was a hearing date set for last week in the Virginia matter. No hearing date as been set in that case. Defendants have not even filed any moving papers in that matter.

TEN-002

Tension

Conflict between consent and default

Tension between Defendants willingly signing consent judgment and subsequently defaulting on payment and disclosure obligations under that same agreement.

Page 2 — The judgment at issue stems from a consent judgment entered by a Virginia Court, which Defendants Cyberlux Corporation and Mark D. Schmidt ("Defendants") willingly agreed to and signed off on, indicating their explicit agreement to its terms. Defendants have defaulted on their payment and disclosure obligations under the parties' agreement by making late payments and refusing to provide information about drone sales

TEN-003

Tension

Management confidence vs. financial indicators

Stark tension between management's expressed confidence in ongoing growth and objective financial indicators showing dramatic losses and accumulated deficits.

Page 3, 43 — Defendants' net income has dramatically declined, and their accumulated deficit has significantly increased. Specifically, as of December 31, 2023, Defendants reported a net income of $325,570, which ballooned to a staggering $4,496,850 loss by March 31, 2024... While these factors among others may indicate that the Company will be unable to continue as a going concern, management is confident that business performance in 2024 will ensure the Company is an ongoing growth business

QST-001

Question

Amount of garnished funds

What is the actual amount segregated in garnishment proceedings and will it be sufficient to cover outstanding Virginia judgment balance?

Page 2 — Plaintiffs learned that their Virginia garnishment efforts were effective in segregating funds held in Defendants' bank accounts. Plaintiffs do not know the amount segregated or whether it will be sufficient to cover the outstanding balance on the Virginia Judgment.

QST-002

Question

Extent of undisclosed drone sales

How substantial were the drone sales that Defendants allegedly refused to disclose, and what impact does this have on amounts owed under the judgment?

Page 2, 3 — Defendants have defaulted on their payment and disclosure obligations under the parties' agreement by making late payments and refusing to provide information about drone sales, despite multiple requests from Plaintiffs before filing suit... that Defendants had made all payment and were current when they knew they, among other things, refused to disclose they had sold a substantial amount of drones.

QST-003

Question

Identity of potential acquirer

Which company or companies has Cyberlux approached for potential sale or merger, and how advanced are those discussions?

Page 3 — I was also made aware that Defendants have approached at least one company for the purposes of selling or merging Cyblerlux.

Stage 4

Interpretive — Inferences, Omissions, Patterns

6 nodes

INF-001

Inference

Strategic litigation tactics

Defendants' refusal to stipulate to dismissal of incorrectly filed complaint and immediate removal to federal court with counterclaims suggests strategic litigation tactics to delay collection efforts.

INF-002

Inference

Pattern of misrepresentation to courts

Multiple alleged misrepresentations to Virginia court (settlement timing, payment status, hearing schedule) suggest pattern of providing false information to judicial system.

Page 3 — Defendants misrepresented to the Virginia Court that: a) The settlement agreement was negotiated after the judgment was entered when they knew the settlement agreement was entered before the judgment was entered and merged into same and b) that Defendants had made all payment and were current when they knew they, among other things, refused to disclose they had sold a substantial amount of drones... During the parties' May 15, 2024 Early Neutral Evaluation before this Court, we were advised that Defendants had stated that there was a hearing date set for last week in the Virginia matter. No hearing date as been set in that case.

INF-003

Inference

Imminent insolvency risk

Combination of dramatic quarterly loss, growing accumulated deficit, going concern warnings, and attempts to sell company strongly suggests imminent insolvency or restructuring.

Page 3 — Defendants' net income has dramatically declined, and their accumulated deficit has significantly increased. Specifically, as of December 31, 2023, Defendants reported a net income of $325,570, which ballooned to a staggering $4,496,850 loss by March 31, 2024. Additionally, their accumulated deficit grew from $39,999,350 to $44,296,707... Defendants have publicly acknowledged their precarious financial condition by suggesting for the first time that they might need to sell the company.

INF-004

Inference

Datron as primary recovery target

Plaintiffs' specific targeting of California jurisdiction and description of Datron as Cyberlux's 'only tangible asset' indicates belief that this subsidiary represents the primary or sole source of recovery.

OMI-001

Omission

Original Virginia judgment amount

Declaration does not state the total amount of the Virginia judgment being enforced, making it difficult to assess proportionality of collection efforts or significance of financial distress.

Page 2 — The judgment at issue stems from a consent judgment entered by a Virginia Court... leading to the domestication of the Virginia judgment in California to enforce the debt owed... Plaintiffs do not know the amount segregated or whether it will be sufficient to cover the outstanding balance on the Virginia Judgment.

OMI-002

Omission

Nature of underlying dispute

Declaration provides no detail about the underlying business relationship, contract terms, or nature of the dispute that led to the Virginia judgment, limiting contextual understanding.

Extracted text

56 pages · 119317 characters

Filing Header

David M. Keithly, State Bar No. 292101 dkeithly@mortensontaggart.com Sara K. Ross, State Bar No. 346153 sross@mortensontaggart.com

MORTENSON TAGGART ADAMS LLP 300 Spectrum Center Drive, Suite 1200 Irvine, California 92618 Telephone: (949) 774-2224 Facsimile: (949) 774-2545

Attorneys for Plaintiffs ATLANTIC WAVE HOLDINGS, LLC and SECURE COMMUNITY, LLC

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

ATLANTIC WAVE HOLDINGS, LLC, a Virginia limited liability company, and SECURE COMMUNITY, LLC, a Virginia limited Liability company, Plaintiffs, VS. CYBERLUX CORPORATION, a Nevada Corporation,

Defendant.

CASE NO. 3:24-cv-00482-RBM-VET Honorable Ruth Bermudez Montenegro

Declaration

DECLARATION OF WILLIAM WELTER IN SUPPORT OF OPPOSITION OF PLAINTIFFS' OPPOSITION TO DEFENDANTS' MOTION TO VACATE SISTER- STATE JUDGMENT

[Filed concurrently with Opposition to Motion to Vacate Sister-State Judgment; Declaration of David Keithly and Declaration of James Sadigh]

DATE: June 3, 2024

NO ORAL ARGUMENT UNLESS ORDERED BY THE COURT

Case No. 3:24-cv-00196-RBM-VET

DECLARATION OF WILLIAM WELTER

I, William Welter, declare and state as follows:

I am the Managing Director of Atlantic Wave Holdings, LLC ("Atlantic Wave") and Secure Community, LLC ("Secure Community") (collectively, "Plaintiffs"). I have personal knowledge of the matters stated herein and, if called upon as a witness, I could and would competently testify thereto.

The judgment at issue stems from a consent judgment entered by a Virginia Court, which Defendants Cyberlux Corporation and Mark D. Schmidt ("Defendants") willingly agreed to and signed off on, indicating their explicit agreement to its terms.

Defendants have defaulted on their payment and disclosure obligations under the parties' agreement by making late payments and refusing to provide information about drone sales, despite multiple requests from Plaintiffs before filing suit, leading to the domestication of the Virginia judgment in California to enforce the debt owed. The collection action was initiated in California because Cyberlux's subsidiary, and to our knowledge, its only tangible asset, Datron World Communications, is located in Vista, California.

Plaintiffs' attempted to correct the initial filing error, but Defendants refused to stipulate to the dismissal of the incorrectly filed complaint. Instead, Defendants removed the case to federal court and filed counterclaims.

Plaintiffs also initiated proceedings in Virginia to garnish Defendants' bank accounts in a parallel attempt to collect on the judgment. After moving to dismiss the incorrectly filed complaint and domesticating the Virginia judgment in California, Plaintiffs learned that their Virginia garnishment efforts were effective in segregating funds held in Defendants' bank accounts. Plaintiffs do not know the amount segregated or whether it will be sufficient to cover the outstanding balance on the Virginia Judgment.

During the parties' May 15, 2024 Early Neutral Evaluation before this Court, we were advised that Defendants had stated that there was a hearing date set for last week in the Virginia matter.

No hearing date as been set in that case. Defendants have not even filed any moving papers in that matter. Additionally Defendants misrepresented to the Virginia Court that: a) The settlement agreement was negotiated after the judgment was entered when they knew the settlement agreement was entered before the judgment was entered and merged into same and b) that Defendants had made all payment and were current when they knew they, among other things, refused to disclose they had sold a substantial amount of drones. Defendants have made ex parte attempts to release the garnished funds and have attempted to pressure bank employees into releasing the funds prematurely. Attached hereto as Exhibit A is a true and correct copy of an email exchange between Defendants' attorney, Jimmy Robinson, and court personnel in the Virginia garnishment matter.

Defendants' recent financial disclosures appear to reveal a dire financial situation. According to their Q1 disclosure, Defendants' net income has dramatically declined, and their accumulated deficit has significantly increased. Specifically, as of December 31, 2023, Defendants reported a net income of $325,570, which ballooned to a staggering $4,496,850 loss by March 31, 2024. Additionally, their accumulated deficit grew from $39,999,350 to $44,296,707 over the same period. Defendants have publicly acknowledged their precarious financial condition by suggesting for the first time that they might need to sell the company. A true and correct copy of Defendant Cyberlux's most recent financial statement is attached hereto as Exhibit B.

I was also made aware that Defendants have approached at least one company for the purposes of selling or merging Cyblerlux.

10.

Due to Defendants' financial instability, their attempts to sell the company and their refusal to provide information about the number of drones sold, Plaintiffs are highly concerned about Defendants rapidly diverting corporate assets

MORTENSON TAGGART ADAMS LLP

that could be used to satisfy the Virginia judgment. Despite numerous requests from Plaintiffs for such information, Defendants have consistently ignored these requests.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. This declaration was executed on May 20, 2024, at Tappahannock, VA.

/s/ William Welter William Welter Managing Director Atlantic Wave Holdings, LLC Secure Community, LLC

Exhibit A

From: robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>

To: willwelter@aol.com <willwelter@aol.com>

Sent: Wednesday, May 8, 2024 at 01:15:37 PM PDT

Subject: Fw: Atlantic Wave v Cyberlux et. al - CL22-3882-00

See emails below

Robert Keith Caudle, III Caudle and Caudle, P.C. 1910 Byrd Avenue, Suite 118 Richmond, VA 23230 p: 804-358-4961 f: 804-353-1036 robcaudle@caudleandcaudle.com

The following may apply to you. This communication is an attempt to collect a debt. Any information obtained will be used for that purpose. Caudle and Caudle, P.C. is acting as a debt collector.

This email message and all attachments are intended only for the named recipient and may contain information that is personal and confidential, subject to attorney-client privilege, the work-product doctrine, or other privileges. If you received this message in error or if you are not the intended recipient, please call my office immediately at 804- 358-4961. You are hereby notified that any dissemination, distribution, or copy of this communication is strictly prohibited. Thank you.

From: robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>

Sent: Wednesday, May 8, 2024 1:42 PM

To: Robinson, Jr., Jimmy F. < jimmy.robinson@ogletree.com>; Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Cc: Gills, Sandy D. < sandy.gills@ogletreedeakins.com>; O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Subject: Re: Atlantic Wave v Cyberlux et. al - CL22-3882-00

Correction:

Please ad vise that the hearing will not take place this Friday May 10, 2024 at 1:00pm.

Rob Caudle

Robert Keith Caudle, III Caudle and Caudle, P.C. 1910 Byrd Avenue, Suite 118 Richmond, VA 23230 p: 804-358-4961 f: 804-353-1036 robcaudle@caudleandcaudle.com

The following may apply to you. This communication is an attempt to collect a debt. Any information obtained will be used for that purpose. Caudle and Caudle, P.C. is acting as a debt collector.

From: robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>

Sent: Wednesday, May 8, 2024 1:37 PM To: Robinson, Jr., Jimmy F. < jimmy.robinson@ogletree.com>; Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Cc: Gills, Sandy D. < sandy.gills@ogletreedeakins.com>; O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Subject: Re: Atlantic Wave v Cyberlux et. al - CL22-3882-00

I object to any hearing on Friday, May 10, 2024 at 10:00am, especially on an oral motion upon which there has been no notice of what the issues are. In addition, counsel for PNC Bank, Charles Gavin, has not been included in any of this. Mr. Robinson's assertion that I have not made my self available are without merit.

Please ad vise that the hearing will not take place this Friday May 10, 2024 at 10:00am.

Rob Caudle

Robert Keith Caudle, III Caudle and Caudle, P.C. 1910 Byrd Avenue, Suite 118 Richmond, VA 23230 p: 804-358-4961 f: 804-353-1036 robcaudle@caudleandcaudle.com

The following may apply to you. This communication is an attempt to collect a debt. Any information obtained will be used for that purpose. Caudle and Caudle, P.C. is acting as a debt collector.

From: Robinson, Jr., Jimmy F. < jimmy.robinson@ogletree.com>

Sent: Wednesday, May 8, 2024 1:31 PM To: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Cc: robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>; Gills, Sandy D. <sandy.gills@ogletreedeakins.com>; O'Brien, Kelly S. - Circuit Court

<Kelly.O'Brien@rva.gov> Subject: Re: Atlantic Wave v Cyberlux et. al - CL22-3882-00

Good afternoon Ms. Thomas-

We will attend Friday at 1pm. Thank you and we will have an oral motion before Judge McClenney. Mr. Caudle has consistently made himself unavailable. Someone from his office should be able to attend. We will plan accordingly.

Thank you, JfR

Please excuse all typos and grammatical errors inasmuch as this message was sent from my iphone. Thank you.

On May 8, 2024, at 1:26 PM, Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> wrote:

[Caution: Email received from external source]

Good afternoon,

Judge McClenney is available Friday, May 10, 2024 at 1:00 p.m., but based on this email

Mr. Caudle is not available. Please notify the Court once the motion is filed.

Thanks,

Phyllis Thomas Administrative Assistant to Judge Jacqueline S. McClenney Circuit Court of the City of Richmond

400

North 9th Street Richmond, VA 23219 (804)646-6512 (804)646-6210 (fax)

From: robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com> Sent: Wednesday, May 08, 2024 1:24 PM To: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov>; Robinson, Jr., Jimmy F. < jimmy.robinson@ogletree.com> Cc: Gills, Sandy D. < sandy.gills@ogletreedeakins.com>; O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Subject: Re: Atlantic Wave v Cyberlux et. al - CL22-3882-00

You don't often get email from robcaudle@caudleandcaudle.com. Learn why this is important CAUTION: This message is from an external sender - Do not open attachments or click links unless you recognize the sender's address and know the content is safe.

Ms. Thomas,

I am not available at all this week as I am out on a planned vacation

Thursday and Friday of this week. In addition, I have not received any motion from Mr. Robinson regarding any issue in this case and would need sufficient time to do research, respond, and bring witnesses if necessary.

Rob Caudle

Robert Keith Caudle, III Caudle and Caudle, P.C. 1910 Byrd Avenue, Suite 118 Richmond, VA 23230 p: 804-358-4961 f: 804-353-1036 robcaudle@caudleandcaudle.com

The following may apply to you. This communication is an attempt to collect a debt. Any information obtained will be used for that purpose. Caudle and Caudle, P.C. is acting as a debt collector.

From: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Sent: Wednesday, May 8, 2024 1:07 PM To: Robinson, Jr., Jimmy F. < jimmy.robinson@ogletree.com> Cc: Gills, Sandy D. < sandy.gills@ogletreedeakins.com>; robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>; O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Subject: RE: Atlantic Wave v Cyberlux et. al - CL22-3882-00

Good afternoon,

I'm checking with Judge McClenney for available date/time this week.

Phyllis Thomas Administrative Assistant to Judge Jacqueline S. McClenney Circuit Court of the City of Richmond

400

North 9th Street Richmond, VA 23219 (804)646-6512 (804)646-6210 (fax)

From: Robinson, Jr., Jimmy F. < jimmy.robinson@ogletree.com> Sent: Tuesday, May 07, 2024 2:59 PM To: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Cc: Gills, Sandy D. < sandy.gills@ogletreedeakins.com>; robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>; O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Subject: RE: Atlantic Wave v Cyberlux et. al - CL22-3882-00

You don't often get email from jimmy.robinson@ogletree.com. Learn why this is important

CAUTION: This message is from an external sender - Do not open attachments or click links unless you recognize the sender's address and know the content is safe.

Good morning Ms. Thomas-

Does Judge McClenney have any availability this week?

JfR

Jimmy F. Robinson, Jr. | Ogletree Deakins Riverfront Plaza - West Tower, 901 East Byrd Street, Suite 1300 | Richmond, VA 23219 I Telephone: 804-663-2336 jimmy.robinson@ogletree.com | www.ogletree.com | Bio

From: Robinson, Jr., Jimmy F. Sent: Tuesday, April 30, 2024 12:31 PM To: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Cc: Gills, Sandy D. < sandy.gills@ogletreedeakins.com>; robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>; O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Subject: RE: Atlantic Wave v Cyberlux et. al - CL22-3882-00

Good morning Ms. Thomas-

Are you able to provide any update on the scheduling of a hearing with Judge McClenney?

Thanks, JfR

From: Robinson, Jr., Jimmy F. Sent: Monday, April 29, 2024 1:16 PM To: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Cc: Gills, Sandy D. < sandy.gills@ogletreedeakins.com>; robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>; O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Subject: RE: Atlantic Wave v Cyberlux et. al - CL22-3882-00

Ms. Thomas-

I am not sure if Judge McClenney is allowing virtual hearings but if she is and given

the emergency nature of the hearing, we will make ourselves available via Zooms or Teams at a time that works for Judge McClenney. A zooms or teams call may also better accommodate Mr. Caudle's schedule.

Best, JfR

From: Robinson, Jr., Jimmy F. Sent: Monday, April 29, 2024 12:09 PM

To: robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com>; O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Cc: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov>; Gills, Sandy D. < sandy.gills@ogletreedeakins.com> Subject: RE: Atlantic Wave v Cyberlux et. al - CL22-3882-00

Good morning again Ms. Thomas-

Cyberlux is available and is flexible to try to accommodate Mr. Caudle's schedule. We can also be available as early as 2:30pm this afternoon if Judge McClenney has anytime available this afternoon, or first thing tomorrow or late tomorrow afternoon.

Best, JfR

From: robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com> Sent: Monday, April 29, 2024 12:02 PM To: O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov>; Robinson, Jr., Jimmy F. < Jimmy.Robinson@ogletreedeakins.com> Cc: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov>; Gills, Sandy D. < sandy.gills@ogletreedeakins.com> Subject: Re: Atlantic Wave v Cyberlux et. al - CL22-3882-00

[Caution: Email received from external source]

I am unavailable at that time as I have a trial at that time.

Robert Keith Caudle, III Caudle and Caudle, P.C. 1910 Byrd Avenue, Suite 118 Richmond, VA 23230 p: 804-358-4961 f: 804-353-1036 robcaudle@caudleandcaudle.com

The following may apply to you. This communication is an attempt to collect a debt. Any information obtained will be used for that purpose. Caudle and Caudle, P.C. is acting as a debt collector.

From: O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Sent: Monday, April 29, 2024 11:56 AM To: jimmy.robinson@ogletree.com <jimmy.robinson@ogletree.com>; robcaudle caudleandcaudle.com <robcaudle@caudleandcaudle.com> Cc: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov>; sandy.gills@ogletreedeakins.com <sandy.gills@ogletreedeakins.com> Subject: RE: Atlantic Wave v Cyberlux et. al - CL22-3882-00

Good morning, counselors:

Ms. Thomas received the below inquiry from Mr. Robinson. Judge McClenney is available tomorrow, April 30, 2024, at 1:00 p.m. if all of the parties are available. Accordingly, counsel for the Plaintiff/Judgment Creditor is copied on this e-mail. Please "reply all" with your availability. Thank you.

Sincerely,

Kelly O'Brien

Law Clerk to Judge Jacqueline S. McClenney Circuit Court for the City of Richmond 13th Judicial Circuit 400 North 9th Street Richmond, VA 23219

CAUTION: THIS IS A RESTRICTED EMAIL ACCOUNT OF A JUDGE'S LAW CLERK. If you are an attorney or party with a case pending before this Court, you may only use this email to: (1) provide courtesy copies of pleadings and briefs already filed with the Clerk of the Court; (2) address non-substantive administrative matters; or (3) respond to inquiries initiated by the law clerk. Emailing this law clerk on substantive matters, arguing your position on any matter, or seeking legal advice is strictly prohibited. Any email sent to this account must be copied to all other counsel or opposing self-represented litigants.

From: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Sent: Monday, April 29, 2024 11:24 AM To: O'Brien, Kelly S. - Circuit Court <Kelly.O'Brien@rva.gov> Subject: FW: Atlantic Wave v Cyberlux et. al - CL22-3882-00

From: Robinson, Jr., Jimmy F. < jimmy.robinson@ogletree.com> Sent: Monday, April 29, 2024 11:22 AM To: Thomas, Phyllis Y. - Circuit Court Judges Office <Phyllis. Thomas@rva.gov> Cc: Gills, Sandy D. < sandy.gills@ogletreedeakins.com> Subject: Atlantic Wave v Cyberlux et. al - CL22-3882-00

You don't often get email from jimmy.robinson@ogletree.com. Learn why this is important

CAUTION: This message is from an external sender - Do not open attachments or click links unless you recognize the sender's address and know the content is safe.

Good morning Ms. Thomas-

Matter:

Atlantic Wave v Cyberlux et. al - CL22-3882-00

Request:

Does Judge McClenney have availability for an emergency hearing this

afternoon or

tomorrow morning?

My name is Jimmy Robinson - an attorney with Ogletree Deakins representing the Defendants, Cyberlux Corporation and Mark Schmidt in the above referenced matter.

· This matter has closed and a final judgment was entered back on June 28, 2023.

· After that judgment the parties entered into a settlement agreement and have been in compliance with that agreement.

· Surprisingly, there has been a notice of lien and writ of fari facies filed holding significant funds in Cyberlux's accounts.

. Cyberlux' position is that the notice and writ are improper and are asking for an emergency hearing to suspend the notice of lien and writ until the parties can be heard in full by Judge McClenney.

· My phone number is 804-306-7500. If Judge McClenney has availability, I will file a very quick motion that outlines the information in this email.

Best, JfR

This transmission is intended only for the proper recipient(s). It is confidential and may contain attorney-client privileged information. If you are not the proper recipient, please notify the sender immediately and delete this message. Any unauthorized review, copying, or use of this message is prohibited.

Exhibit B

Disclosure Statement Pursuant to the Pink Basic Disclosure Guidelines

Cyberlux Corporation 800 Park Offices Drive, Suite 3209 Research Triangle, NC 27709 984-363-6894 www.cyberlux.com info@cyberlux.com NIC code: 3674

Quarterly Report For the Period Ending: March 31, 2024 (the "Reporting Period")

Outstanding Shares

The number of shares outstanding of our Common Stock was: 5,825,533,550 as of March 31, 2024 5,728,914,810 as of December 31, 2023

Shell Status

Indicate by check mark whether the company is a shell company (as defined in Rule 405 of the Securities Act of 1933, Rule 12b-2 of the Exchange Act of 1934 and Rule 15c2-11 of the Exchange Act of 1934): :unselected: Yes: No: :selected:

Indicate by check mark whether the company's shell status has changed since the previous reporting period: :unselected: Yes: No: :selected:

Change in Control

Indicate by check mark whether a Change in Control1 of the company has occurred over this reporting period: :unselected: Yes: No: :selected:

"Change in Control" shall mean any events resulting in:

(i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becoming the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities;

(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company's assets;

(iii) A change in the composition of the Board occurring within a two (2)-year period, as a result of which fewer than a majority of the directors are directors immediately prior to such change; or

(iv) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

1) Name and address(es) of the issuer and its predecessors (if any)

In answering this item, provide the current name of the issuer any names used by predecessor entities, along with the dates of the name changes.

The name of the issuer is Cyberlux Corporation. ("Cyberlux," "Company," "we" or "us"). The Company has no predecessor.

The state of incorporation or registration of the issuer and of each of its predecessors (if any) during the past five years; Please also include the issuer's current standing in its state of incorporation (e.g., active, default, inactive):

The issuer was incorporated in the State of Nevada and its current standing is active.

Describe any trading suspension orders issued by the SEC concerning the issuer or its predecessors since inception: None

List any stock split, stock dividend, recapitalization, merger, acquisition, spin-off, or reorganization either currently anticipated or that occurred within the past 12 months:

None

The address(es) of the issuer's principal executive office:

800

Park Offices Drive, Suite 3209 Research Triangle, NC 27709

The address(es) of the issuer's principal place of business:

Check if principal executive office and principal place of business are the same address: :selected:

Has the issuer or any of its predecessors been in bankruptcy, receivership, or any similar proceeding in the past five years?

No: :selected: :unselected: Yes: If Yes, provide additional details below:

2) Security Information

Transfer Agent

Name:

Standard Registrar and Transfer Company, Inc.

Phone:

801-571-8844

Email:

amy@standardregistrar.com

Address:

440

E 400 S Suite 200, Salt Lake City, UT 84111

Publicly Quoted or Traded Securities:

The goal of this section is to provide a clear understanding of the share information for its publicly quoted or traded equity securities. Use the fields below to provide the information, as applicable, for all outstanding classes of securities that are publicly traded/quoted.

Trading symbol:

CYBL

Exact title and class of securities outstanding:

Common

CUSIP:

23247M205

Par or stated value:

$0.001

Total shares authorized:

7,000,000,000

as of:

March 31, 2024

Total shares outstanding:

5,825,533,550

as of:

March 31, 2024

Number of shares in the Public Float2

5,261,569,963

as of:

March 31, 2024

Total number of shareholders of record:

as of:

March 31, 2024

All additional class(es) of publicly quoted or traded securities (if any):

None

Other classes of authorized or outstanding equity securities:

The goal of this section is to provide a clear understanding of the share information for its other classes of authorized or outstanding equity securities (e.g., preferred shares). Use the fields below to provide the information, as applicable, for all other authorized or outstanding equity securities.

Exact title and class of securities outstanding:

Preferred Series A

CUSIP:

None

Par or stated value:

$0.001

Total shares authorized:

as of:

March 31, 2024

Total shares outstanding:

26.9806*

as of:

March 31, 2024

Total number of shareholders of record:

as of:

March 31, 2024

* Please see Note H to the Financial Statements below, in respect of the automatic conversion of all shares of Series A Preferred of the Company. The Company has issued (after March 31, 2024) or will be issuing 6,745 shares of common stock to these shareholders.

"Public Float" shall mean the total number of unrestricted shares not held directly or indirectly by an officer, director, any person who is the beneficial owner of more than 10 percent of the total shares outstanding (a "control person"), or any affiliates thereof, or any immediate family members of officers, directors and control persons.

Exact title and class of securities outstanding:

Preferred Series B

CUSIP:

None

Par or stated value:

$0.001

Total shares authorized:

100,000,000

as of:

March 31, 2024

Total shares outstanding:

90,300,000

as of:

March 31, 2024

Total number of shareholders of record:

as of:

March 31, 2024

Exact title and class of securities outstanding:

Preferred Series C

CUSIP:

None

Par or stated value:

$0.001

Total shares authorized:

150,000

as of:

March 31, 2024

Total shares outstanding:

150,000

as of:

March 31, 2024

Total number of shareholders of record:

as of:

March 31, 2024

Security Description:

The goal of this section is to provide a clear understanding of the material rights and privileges of the securities issued by the company. Please provide the below information for each class of the company's equity securities, as applicable:

For common equity, describe any dividend, voting and preemption rights. No special rights attach to the Common Stock.

For Preferred Stock, describe the dividend, voting, conversion, and liquidation rights as well as redemption or sinking fund provisions.

Series A Preferred Stock:

Dividends. None declared by the Board of Directors. If the Board declared a dividend, it would be paid in Common Stock on a semi-annual basis.

Voting Rights. The Certificate of Designations for the Series A provides that holders of the Series A Preferred would have the right to vote on any of the following matters: (I) the creation, authorization, or issuance of any class or series of shares ranking on a parity with or senior to the Series A Preferred with respect to dividends or upon the liquidation, dissolution, or winding up of the Corporation, and (ii) any agreement or other corporate action which would adversely affect the powers, rights, or preferences of the holders of the Series A Preferred.

Conversion. The Certificate of Designations for the Series A provides conversion price of $.10 per shares is subject to certain anti-dilution provisions. Each share of Series A Preferred is convertible for 250 shares of the Company's common stock. The Company may, and has determined to, affect the conversion.

Liquidation. The Certificate of Designations for the Series A provides that upon dissolution or winding up of the Company, whether voluntary or involuntary, and after payment of any senior liquidation preferences of any series of Preferred Stock and before any distribution or payment is made with respect to any Common Stock,

holders of each share of the Series A Preferred shall be entitled to be paid an amount equal in the greater of (a) the face value denominated thereon subject to adjustment for stock splits, stock dividends, reorganizations, reclassification or other similar events plus, in the case of each share, an amount equal to all dividends accrued or declared but unpaid thereon, computed to the date payment thereof is made available, or (b) such amount per share of the Series A Preferred immediately prior to such liquidation, dissolution or winding up, or (c) the liquidation preference of $5,000.00 per share, and the holders of the Series A Preferred shall not be entitled to any further payment.

Series B Convertible Preferred Stock.

Dividends. None declared by the Board of Directors. If the Board declared a dividend, it would be paid in Common Stock on a semi-annual basis.

Voting rights. The Certificate of Designations for the Series B originally provided for voting rights of 10 votes per Series B Preferred share. In 2010, the Board of Directors of the Company voted to amend the Certificate of Designations to provide for 200 votes per share of Series B Preferred.

Conversion. The Certificate of Designations for the Series B originally provided that Series B Convertible Preferred stock was convertible into 10 shares of common stock, subject to certain anti-dilution adjustments. In 2010, the Board of Directors of the Company voted to amend the Certificate of Designations to provide for conversion of each share of Series B Preferred into 200 shares of the Company's common stock.

Liquidation. The Certificate of Designations for the Series B provides that upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, and after payment of any senior liquidation preferences of any series of Preferred Stock and before any distribution or payment is made with respect to any Common Stock, holders of each share of the Series B Preferred shall be entitled to be paid an amount equal in the greater of (a) the face value denominated thereon subject to adjustment for stock splits, stock dividends, reorganizations, reclassification or other similar events plus, in the case of each share, an amount equal to all dividends accrued (at a rate of 12% per annum) or declared but unpaid thereon, computed to the date payment thereof is made available, or (b) such amount per share of the Series B Preferred immediately prior to such liquidation, dissolution or winding up, or (c) the liquidation preference of $1.00 per share, and the holders of the Series B Preferred shall not be entitled to any further payment.

Series C Convertible Preferred Stock.

Dividends. None declared by the Board of Directors. If determined by the Board, holders of record of the Series C Preferred shall be entitled to receive cumulative dividends at the rate of five percent per annum (5%), compounded quarterly, on the face value ($25.00 per share) and would be paid in cash.

Voting rights. The shares of the Series C Preferred are non-voting.

Conversion The shares of the Series C Preferred are convertible, at the option of the holder, into common shares one year from issuance. The number of common shares to be issued per Series C share is calculated by dividing $25.20 by the 10 DMA (daily moving average), adjusted for the 200:1 reverse split effected in 2010. That formula computes as: ($25.20/10DMA)/200.

Liquidation. Liquidation rights for Series C are the same as Series B.

Describe any other material rights of Common or Preferred stockholders.

None

Describe any material modifications to rights of holders of the company's securities that have occurred over the reporting period covered by this report.

None

3) Issuance History

The goal of this section is to provide disclosure with respect to each event that resulted in any changes to the total shares outstanding of any class of the issuer's securities in the past two completed fiscal years and any subsequent interim period.

Disclosure under this item shall include, in chronological order, all offerings and issuances of securities, including debt convertible into equity securities, whether private or public, and all shares, or any other securities or options to acquire such securities, issued for services. Using the tabular format below, please describe these events.

A) Changes to the Number of Outstanding Shares

Indicate by check mark whether there were any changes to the number of outstanding shares within the past two completed fiscal years: :unselected: No:

:selected: Yes: (If yes, you must complete the table below)

Check this box to indicate there were no changes to the number of outstanding shares within the past two completed fiscal years and any subsequent periods: :unselected:

Shares Outstanding as of Second Most Recent Fiscal Year End:

Opening Balance

Date 12/31/2021

Common:

5,751,417,345

*Right-click the rows below and select "Insert" to add rows as needed.

Preferred: A: 26.9806*

B: 100,000,000

C: 150,000

Date of Transaction

Transaction type (e.g., new issuance, cancellatio n, shares returned to treasury)

Number of Shares Issued (or cancelled)

Class of Securities

Value of shares issued ($/per share) at Issuance

Were the shares issued at a discount to market price at the time of issuance? (Yes/No)

Individual/ Entity Shares were issued to (entities must have individual with voting / investment control disclosed).

Reason for share issuance (e.g., for cash or debt conversion) OR Nature of Services Provided

Restricted or Unrestricted as of this filing.

Exemp tion or Registr ation Type.

03/26/2024

New

10,000,000

Common

$0.001

Yes

JMH Consulting Group, Inc./ Ferdinand Irizarry

Consulting Agreement

Restricted

4(a)(2)

02/15/2024

New

5,000,000

Common

$0.001

Yes

Ed Gordon

Employment

Restricted

02/15/2024

New

10,000,000

Common

$0.001

Yes

Roger Gillespie

Employment

Restricted

02/15/2024

New

5,000,000

Common

$0.001

Yes

Tina Flores

Employment

Restricted

02/15/2024

New

10,000,000

Common

$0.001

Yes

Lisa Courtemanche

Employment

Restricted

02/15/2024

New

10,000,000

Common

$0.001

Yes

Benny Bajoyo

Employment

Restricted

02/15/2024

New

5,000,000

Common

$0.001

Yes

Edward Rouzbehani

Employment

Restricted

02/15/2024

New

5,000,000

Common

$0.001

Yes

Milo Pence

Employment

Restricted

02/15/2024

New

5,000,000

Common

$0.001

Yes

Joseph Parent

Employment

Restricted

02/15/2024

New

5,000,000

Common

$0.001

Yes

Stacy Mason

Employment

Restricted

02/15/2024

New

5,000,000

Common

$0.001

Yes

Kevin Laughton

Employment

Restricted

02/15/2024

New

5,000,000

Common

$0.001

Yes

Patrick Irwin

Employment

Restricted

02/15/2024

New

10,000,000

Common

$0.001

Yes

Bruno Haineault

Employment

Restricted

02/14/2024

New

6,618,740

Common

$0.001

Yes

RB Capital Partners Inc./ Brett Rosen, Deborah Braun

Conversion of loan obligation

Restricted

4(a)(2)

10/13/2023

New

10,000,000

Common

0.001

Yes

Kasey Cooper

Advisory Board Agreement Terms

Restricted

4(a)(2)

07/10/2023

New

5,000,000

Common

0.05

Yes

Catalyst Machineworks / Phillip Tucker

Acquisition Agreement

Restricted

4(a)(2)

07/10/2023

New

5,000,000

Common

0.05

Yes

Catalyst Machineworks / Neill Whiteley

Acquisition Agreement

Restricted

4(a)(2)

07/07/2023

New

10,000,000

Common

0.001

Yes

Matt Jones

Advisory Board Agreement Terms

Restricted

4(a)(2)

06/21/2023

New

9,000,000

Series B

0.001

Yes

Mark D. Schmidt, President and CEO

Management Incentive and Voting Control / Hostile Takeover Protection

Restricted

4(a)(2)

06/21/2023

New

5,000,000

Series B

0.001

Yes

Larson J. Isely, EVP, CTO, and GM-UAS

Management Incentive and Voting Control / Hostile Takeover Protection

Restricted

4(a)(2)

05/22/2023

New

25,000,000

Common

0.001

Yes

Kreatx SHPK/ Enor Nakuçi Lejdi Koçi

Business Separation Agreement Terms

Restricted

4(a)(2)

05/18/2023

Return to Treasury

-20,000,000

Series B

0.001

Yes

Richard P. Brown

Affidavit of Lost Certificates / Returned to Treasury in 2010 but Transfer Agent never received.

Restricted

4(a)(2)

05/18/2023

New

10,000,000

Common

0.001

Yes

Igor Stanisavljev

Termination Agreement Terms

Restricted

4(a)(2)

05/18/2023

New

10,000,000

Common

0.001

Yes

Chris Damvakaris

Termination Agreement Terms

Restricted

4(a)(2)

05/11/2023

New

15,000,000

Common

0.001

Yes

Back Forty Strategies, LLC/ LTG Paul Ostrowski

Advisory Board Agreement Terms

Restricted

4(a)(2)

04/19/2023

New

10,000,000

Common

0.001

Yes

Julio Cordoba

Settlement Agreement

Restricted

4(a)(2)

04/05/2023

New

248,447

Common

0.001

Yes

Angela Gooding

Stock Purchase Agreement

Restricted

4(a)(2)

03/23/2023

New

12,000,000

Common

0.001

Yes

Jeremy Shrock

Teaming Agreement Terms

Restricted

4(a)(2)

03/23/2023

New

12,000,000

Common

0.001

Yes

Spencer Peterson

Teaming Agreement Terms

Restricted

4(a)(2)

03/23/2023

New

2,000,000

Common

0.001

Yes

Lukas Zuvac

Teaming Agreement Terms

Restricted

4(a)(2)

03/23/2023

New

5,000,000

Common

0.001

Yes

Troy Williams

Teaming Agreement Terms

Restricted

4(a)(2)

03/16/2023

New

5,000,000

Common

0.001

Yes

Rezart Spahia

Acquisition Representation Agreement Terms

Restricted

4(a)(2)

01/20/2023

New

5,000,000

Common

0.001

Yes

Bernard Bell

Stock Purchase Agreement

Restricted

4(a)(2)

01/20/2023

New

30,000,000

Series B

0.001

Yes

Montague Capital Partners LLC/ Denis Kalenja

Stock Purchase Agreement

Restricted

4(a)(2)

01/19/2023

Return to Treasury

-7,200,000

Series B

0.001

Yes

Returned Executive Mgmt Stock / David Downing

Outstanding Series B Share Reduction

Restricted

4(a)(2)

12/27/2022

New

10,000,000

Common

0.001

Yes

Cameron Holt

Advisory Board Agreement Terms

Restricted

4(a)(2)

12/27/2022

New

20,000,000

Common

0.001

Yes

Michael N. Porter

Employment Agreement Terms

Restricted

4(a)(2)

12/27/2022

New

10,000,000

Common

0.001

Yes

Martin Moore

Advisory Board Agreement Terms

Restricted

4(a)(2)

12/27/2022

New

10,000,000

Common

0.001

Yes

Robert Bret Velicovich

Advisory Board Agreement Terms

Restricted

4(a)(2)

12/22/2022

New

20,000,000

Common

0.0025

Yes

Aaron Goodman

Stock Purchase Agreement

Restricted

4(a)(2)

12/06/2022

New

62,500,000

Common

0.0016

Yes

Roman Investments PR, LLC / Roman Vinfield

Settlement of debt obligation

Unrestricted

4(a)(2)

11/22/2022

New

41,700,000

Common

0.012

Yes

Roman Investments PR, LLC / Roman Vinfield

Equity incentive to debt holder

Restricted

4(a)(2)

11/08/2022

New

15,000,000

Common

0.0025

Yes

Roman Investments PR, LLC / Roman Vinfield

Equity incentive to debt holder

Restricted

4(a)(2)

11/08/2022

New

15,000,000

Common

0.0025

Yes

Rosewood Theater, LLC / Michael Sinensky

Equity incentive to debt holder

Restricted

4(a)(2)

08/15/2022

New

200,000,000

Common

0.00125

RB Capital Partners, Inc. / Brett Rosen/ Deborah Braun

Equity incentive to debt holder

Unrestricted

4(a)(2)

07/15/2022

New

10,000,000

Common

0.05

Catalyst Machineworks / Phillip Tucker

Acquisition Agreement

Restricted

4(a)(2)

07/15/2022

New

10,000,000

Common

0.05

Catalyst Machineworks / Neill Whiteley

Acquisition Agreement

Restricted

4(a)(2)

05/05/2022 (06/14/2021 basis)

New

20,833,333

Common

0.0012

Yes

Matt Rivett

Stock Purchase Agreement

Restricted

4(a)(2)

05/04/2022

Return to Treasury

-700,000,000

Common

0.001

Yes

Certificates Cancelled For: (700,000,000) Critical Flow Capital, LLC / Brian Kraman

Shares Issued in Error from an unfulfilled financial transaction from 2014. The 700M restricted common stock shares required Management to complete complex process of legally fulfilling the consent and compliance process required by its transfer agent and the representatives of the prior shareholder to remove these shares from the Outstanding Share list.

Restricted

4(a)(2)

03/18/2022

New

2,000,000

Common

$0.001

Yes

Anthony Gonzalez

Distributor Partnership Agreement Terms

Restricted

4(a)(2)

03/16/2022

New

5,882,353

Common

$0.01

Yes

North Equities USA LTD Ernest Chuang

Consulting Agreement (Public Relations Services) Terms

Restricted

4(a)(2)

02/11/2022

Return to Treasury

-20,000,000

Series B

0.001

Yes

Returned Executive Mgmt Stock / John Ringo

Outstanding Series B Share Reduction

Restricted

4(a)(2)

02/07/2022

Return to Treasury

-9,500,000

Series B

0.001

Yes

Returned Executive Mgmt Stock / Alan Ninneman

Outstanding Series B Share Reduction

Restricted

4(a)(2)

01/07/2022

New

20,833,333

Common

0.0012

Yes

Priyanka Saxena

Stock Purchase Agreement

Restricted

4(a)(2)

01/07/2022

New

20,833,333

Common

0.0012

Yes

William Ferrell

Stock Purchase Agreement

Restricted

4(a)(2)

01/07/2022

New

20,833,333

Common

0.0012

Yes

Salahuddin Siddiq

Stock Purchase Agreement

Restricted

4(a)(2)

01/07/2022

New

20,833,333

Common

0.0012

Yes

Clay DeNicola

Stock Purchase Agreement

Restricted

4(a)(2)

Shares Outstanding on Date of This Report:

Ending Balance:

Date 03/31/24

Common:

5,825,533,550

Preferred:

A: 26.9806*

B: 90,300,000

C: 150,000

For its Quarterly report, would include any events that resulted in changes to any class of its outstanding shares from the period beginning on January 1, 2022 through March 31, 2024 pursuant to the tabular format above.

Use the space below to provide any additional details, including footnotes to the table above:

B) Promissory and Convertible Notes

Indicate by check mark whether there are any outstanding promissory, convertible notes, convertible debentures, or any other debt instruments that may be converted into a class of the issuer's equity securities:

No:

:unselected:

Yes: :selected: (If yes, you must complete the table below)

Date of Note Issuance

Outstanding Balance ($)

Principal Amount at Issuance ($)

Interest Accrued ($)

Maturity Date

Conversion Terms (e.g., pricing mechanism for determining conversion of instrument to shares)

Name of Noteholder *** You must disclose the control person(s) for any entities listed

Reason for Issuance (e.g., Loan, Services, etc.)

11/08/2022

1,676,918

1,500,000

176,918

11/08/2023

$0.25 Conversion per share

RB Capital Partners Brett Rosen Deborah Braun

Loan

11/22/2021

1,679,918

1,500,00

179,918

11/22/2023

$0.25 Conversion per share

RB Capital Partners Brett Rosen Deborah Braun

Loan

05/03/2022

546,507

500,000

46,507

05/23/2024

$0.25 Conversion per share

RB Capital Partners Brett Rosen Deborah Braun

Loan

07/12/2022

271,541

250,000

21,541

07/12/2024

$0.25 Conversion per share

RB Capital Partners Brett Rosen Deborah Braun

Loan

09/29/2022

105,877

100,000

*5,877

09/29/2025

85% of VWAP

Bilal Maadarani

Loan

09/29/2022

105,630

100,000

*5,630

09/29/2025

85% of VWAP

Bilal Maadarani

Loan

09/29/2022

105,465

100,000

*5,465

09/29/2025

85% of VWAP

Bilal Maadarani

Loan

09/29/2022

105,164

100,000

*5,164

09/29/2025

85% of VWAP

Bilal Maadarani

Loan

01/22/2023

105,808

100,000

5,808

01/22/2027

85% of VWAP

Bassam Pharaon

Loan

04/06/2023

104,866

100,000

4,866

04/06/2026

$0.0035 Conversion per share

Matt Jones

Loan

05/09/2023

112,500

100,000

12,500

05/09/2024

$0.0043 Conversion per share

Andras Forgacs

Loan

05/22/2023

104,414

100,000

4,414

05/22/2026

85% of VWAP

Robert Miller

Loan

06/12/2023

104,031

100,000

4,031

06/12/2026

85% of VWAP

Christopher Whitehead

Loan

06/14/2023

28,125

25,000

3,125

06/14/2024

$0.0013 Conversion per share

Jeryl S. Rawls Revocable Trust

Loan

06/15/2023

16,875

15,000

1,875

06/15/2024

$0.0016 Conversion per share

John W. Dixon FLP

Loan

07/23/2023

62,500

50,000

12,500

07/23/2024

$0.0013 Conversion per share

Giorgios Bakatsias

Loan

08/26/2023

2,646

2,500

08/26/2024

$0.0016 Conversion per share

Charles Yessaian

Loan

08/26/2023

2,646

2,500

08/26/2024

$0.0016 Conversion per share

Ferdinand Irizarry

Loan

09/13/2023

2,032,753

2,000,000

32,753

09/13/2026

90% of VWAP

Datron Holdings, Inc. Arthur Barter

Acquisition note

09/13/2023

2,054,589

2,000,000

54,589

09/13/2026

85% of VWAP

Datron Holdings, Inc. Arthur Barter

Acquisition note

Use the space below to provide any additional details, including footnotes to the table above:

* Interest accrued from date of funding, which post-date note issuance dates.

4) Issuer's Business, Products and Services

The purpose of this section is to provide a clear description of the issuer's current operations. Ensure that these descriptions are updated on the Company's Profile on www.otcmarkets.com.

A. Summarize the issuer's business operations (If the issuer does not have current operations, state "no operations")

Founded in 2000, Cyberlux Corporation is a Defense Industry technology solutions company comprised of three primary business units: Unmanned Aircraft Solutions (UAS), Datron Military Communications (DMC), and Special Activities (SA) Business Unit. The Company generates revenues from its sale of products and services through its Business Units.

Unmanned Aircraft Solutions Business Unit

Cyberlux Unmanned Aircraft Solutions (UAS) is an innovative leader in advanced Group 1, Group 2, and Group 3 'vertical takeoff and landing' (VTOL) drones and fixed wing technology development, manufacturing, and sales. The business unit designs, manufactures, and distributes its products and airframe systems to leading 'first person viewing' (FPV) and military UAS pilots on a global basis, with sales to both U.S. government agencies and allied nations through U.S foreign military sales (FMS). Cyberlux UAS offers its customers best-in-class products and comprehensive services to satisfy the requirements of the global UAS military sector. The Cyberlux UAS team is widely recognized as the authority in the industry, offering high performance products with high quality components and superior capability, in support of warfighters worldwide.

Unmanned Aircraft Solutions Significant Business Developments

The Cyberlux UAS team of aircraft engineers, fabricators, and test pilots have advanced the business unit from its position as a world-wide leader in the FPV aircraft industry to a successful military sector UAS provider, delivering UAS solutions under multiple Department of Defense and U.S. foreign military sales contracts. Cyberlux Corporation's investment in innovative and novel Defense Industry UAS products has created market- changing solutions favored by end-users. Driven by a $79 million UAS contract award by USNAVY, the UAS business unit has grown rapidly in 2023 and now has dedicated business unit management, new engineering leadership, and a dedicated, world-class software development team to propel Cyberlux to the cutting edge of unmanned aircraft technology. In addition, Cyberlux UAS has scaled manufacturing capabilities that include in-house production of critical aircraft components, achieving improved supply chain resilience, as well as world-class control over product quality and delivery.

Datron Military Communications Business Unit

Datron World Communications, a wholly owned subsidiary of Cyberlux, is a world leader in voice and data radio communications. Datron designs, manufactures, and distributes its radio products and communications systems to leading government, military, and industrial organizations in over 100 countries worldwide through a network of local sales and service representatives. Datron Military Communications (DMC) offers its customers reliable equipment and comprehensive services to satisfy specific mission requirements. Datron is widely recognized as the "best value" supplier in the industry by offering high performance products with low overall life cycle cost.

Datron Military Communications Significant Business Developments

Datron has diligently upheld its global distribution network, focusing on strengthening its international presence. The DMC team has reinvested in the international sales team by appointing new sales directors for the Asia Pacific and Latin America regions, bolstering its outreach and support for customers in these key markets. Additionally, Datron has re- certified its ISO 9001 accreditation, underscoring its commitment to maintaining high- quality standards in its operations and manufacture. Furthermore, the Datron operations team has diversified its manufacturing capabilities by internally producing critical components for its UAS drone lines and providing operational support for the Cyberlux Advance Lighting Systems, further enhancing Cyberlux supply chain and ensuring product quality and reliability.

Special Activities Business Unit Background

The Special Activities (SA) business unit specializes in all aspects of warfare and is Cyberlux Corporation's action arm. The division provides on the ground support for a multitude of initiatives across all Cyberlux business verticals. Cyberlux Special Activities offers its customers subject matter expertise in all aspects of military training and advisement, UAS training and operations, munitions, heavy and light weapons, research and development, Soldier Systems, communications, technology integration, cyber, maritime operations, and air operations. The Special Activities team is composed of a world class staff ranging from retired Special Operations personnel to world ranked UAS Pilots, which enable Special Activities to develop scalable solutions for every client's needs, and to meet a wide array of missions. Special Activities is adaptable and performs to meet the client's business objectives with worldclass professionalism.

Special Activities Business Development

Cyberlux Special Activities has played a key role engaging our foreign and domestic customers at the ground level, understanding their challenges, and has provided comprehensive tactical/operational solutions. The division's interface with clients at the user and ground level has been critical in capturing feedback, driving Cyberlux's research and development for future products. Cyberlux Special Activities has conducted foreign UAS Pilot courses, supported numerous U.S. Special Operations Forces training and testing events, and spearheaded multiple foreign and domestic business development initiatives.

List any subsidiaries, parent company, or affiliated companies.

Cyberlux operates though Cyberlux Corporation, and its three subsidiaries:

Datron World Communications, Inc. Catalyst Machineworks, LLC, and

CMTC Drone Solutions, LLC

B. Describe the issuers' principal products or services.

The Company offers the products and services of its Unmanned Aircraft Solutions (UAS), Datron Military Communications (DMC), and Special Activities (SA) to U.S. government agencies and allied foreign nations, including USSOCOM, USNAVY, USCENTCOM, USEUCOM, USAFRICOM, and USINDOPACOM. These transactions are often facilitated by our relationships with various prime vendors such as Huntington Ingalls Industries (HII) and ADS, Inc, or through U.S. foreign military sales (FMS). The majority of the Company's products are shipped by common carrier resulting in recognition of revenues upon shipment at which time control passes to the customer.

The products and services include:

Unmanned Aircraft Solutions (UAS): Military-Grade unmanned aircraft hardware and software; advanced guidance system and targeting platforms; enhanced Intelligence,

Surveillance and Reconnaissance (ISR) capability; Infrared Night Vision and Thermal Sensor technology; Eye-in-the-Sky Monitoring; LiDAR Mapping and Perception Attainment; and Advanced Kinetic Capabilities.

Datron Military Communications (DMC): Military-Grade voice and data radio communications, including the HH3100 multiband radio line products and the PRC7700 HF radio line products; and the Cyberlux Advanced Lighting Systems products.

Special Activities (SA): Cyberlux Special Activities offers training and security services to its customers with world-class subject matter expertise in all aspects of military training and advisement, UAS training and operations, munitions, heavy and light weapons, research and development, Soldier Systems, communications, battlefield technology integration, cyber, maritime operations, air operations, and unmanned aircraft systems operations and tactics training.

5) Issuer's Facilities

The goal of this section is to provide a potential investor with a clear understanding of all assets, properties or facilities owned, used, or leased by the issuer and the extent in which the facilities are utilized.

In responding to this item, please clearly describe the assets, properties, or facilities of the issuer; give the location of the principal plants and other property of the issuer and describe the condition of the properties. If the issuer does not have complete ownership or control of the property (for example, if others also own the property or if there is a mortgage on the property), describe the limitations on the ownership.

If the issuer leases any assets, properties, or facilities, clearly describe them as above and the terms of their leases.

We maintain our principal headquarters office at 800 Park Offices Drive, Suite 3209, Research Triangle Park, NC 27709. This is a leased office suite for our headquarters staff, renewed annually.

Our Catalyst Machineworks subsidiary has its office and manufacturing facility located at 21631 Rhodes Road, Spring, TX 77388. This is a 21,450 square foot facility with a renewable three-year lease, with two years remaining.

Our Datron World Communications subsidiary has its office and manufacturing facility located at 995 Joshua Way, Vista CA 92081. This is a 47,174 square foot facility with a renewable five-year lease, with two years remaining.

6) All Officers, Directors, and Control Persons of the Company

Using the table below, please provide information, as of the period end date of this report, regarding any officers, or directors of the company, or any person that performs a similar function, regardless of the number of shares they own.

In addition, list all individuals or entities controlling 5% or more of any class of the issuer's securities. If any insiders listed are corporate shareholders or entities, provide the name and address of the person(s) beneficially owning or controlling such corporate shareholders, or the name and contact information (City, State) of an individual representing the corporation or entity. Include

Company Insiders who own any outstanding units or shares of any class of any equity security of the issuer.

The goal of this section is to provide an investor with a clear understanding of the identity of all the persons or entities that are involved in managing, controlling, or advising the operations, business development and disclosure of the issuer, as well as the identity of any significant or beneficial owners.

Names of All Officers, Directors, and Control Person

Affiliation with Company (e.g., Officer Title /Director/Owner of 5% or more)

Residential Address (City / State Only)

Number of shares owned

Share type/class

Ownership Percentage of Class Outstanding

Names of Control Person(s) if a corporate entity

Mark D. Schmidt

Officer President Chief Executive Officer Director Chairman

Durham, NC

230,642 47,000,000

Common Series B

Less than 1% 52.05%

Jon Kokkinos

Fractional CFO

Morristown, NJ

David D. Downing

CFO Director

Edinboro, PA

42,500

Common Series B

Less than 1% 5.87%

5,300,000

John W. Ringo

Secretary Director

Atlanta, GA

123,783

Common

Less than 1%

Aaron Goodman

Chief Operating Officer Director

Waccabuc, NY

70,000,000

Common

1.202%

Larry J. Isely

Chief Technology Officer

Denton, TX

5,000,000

Series B

5.54%

Bill Maadarani

Chief Revenue Officer

Dearborn, MI

3,000,000

Series B

3.32%

Lon E. Bell

None

Altadena, CA

10.0000

Series A

37%

Christina Crossman

None

Maitland, FL

4.0000

Series A

15%

Neal M. Goldstein

None

Oxnard, CA

5.0000

Series A

19%

John G. Hule

None

West Berlin, NJ

2.5806

Series A

10%

Charles O'Brien

None

Altamonte Springs, FL

1.4000

Series A

Ward L. Snyder

None

Tucson, AZ

3.0000

Series A

11%

Montague Capital Partners LLC

Strategic Consultant

Miami, FL

30,000,000

Series B

33.22%

Denis Kalenja

Recovery Fund USA, LLC

Lutz, FL

148,000

Series C

98.667%

Jamie Rand

N/A

Options

N/A

Warrants

N/A

Confirm that the information in this table matches your public company profile on www.OTCMarkets.com. If any updates are needed to your public company profile, log in to www.OTCIQ.com to update your company profile.

7) Legal/Disciplinary History

A. Identify and provide a brief explanation as to whether any of the persons or entities listed above in Section 6 have, in the past 10 years:

Been the subject of an indictment or conviction in a criminal proceeding or plea agreement or named as a defendant in a pending criminal proceeding (excluding minor traffic violations);

None

Been the subject of the entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person's involvement in any type of business, securities, commodities, or banking activities;

None

Been the subject of a finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated;

None

Named as a defendant or a respondent in a regulatory complaint or proceeding that could result in a "yes" answer to part 3 above; or

None.

Been the subject of an order by a self-regulatory organization that permanently or temporarily barred, suspended, or otherwise limited such person's involvement in any type of business or securities activities.

None

Been the subject of a U.S Postal Service false representation order, or a temporary restraining order, or preliminary injunction with respect to conduct alleged to have violated the false representation statute that applies to U.S mail.

None

B. Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the issuer or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceeding and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities.

A complaint was filed on August 22, 2022, in the Circuit Court for the city of Richmond, VA -- Atlantic Wave Holdings, LLC and Secure Community LLC v. Cyberlux Corporation and Mark D. Schmidt. regarding a contractual dispute relating to licensed BrightEye lighting product intellectual property and business development performance. That litigation settled in 2023, and the Company fully complied with the terms of the settlement agreement. Nonetheless, Atlantic Wave and Strikepoints filed a lawsuit in California state court in December, 2023. Cyberlux successfully removed that case to federal court and has filed counter claims against Atlantic Wave and Strikepoints. In a filing on March 21, 2024, the attorney for Atlantic Wave and Strikepoints acknowledged that the suit in California was erroneously filed. The parties are in discussions seeking to settle the matter out of court.

8) Third Party Service Providers

Provide the name, address, telephone number and email address of each of the following outside providers. You may add additional space as needed.

Securities Counsel (must

include Counsel preparing Attorney Letters)

Name:

Carl P. Ranno

Firm:

Law Office of Carl P. Ranno

Address:

2733

East Vista Drive Phoenix, AZ 85032

Phone:

602.493.0369

Email:

carlranno@cox.net

Accountant or Auditor

Name:

John Pennett, Partner - Accounting consultant

Firm:

Eisner Advisory Group LLC

Address:

733

Third Avenue New York, NY 10017

Phone:

732-243-7140

Email:

john.pennett@eisneramper.com

Investor Relations

Name:

Brennan Smith

Firm:

Flying V Group, Inc.

Address:

Executive Park, #260 Irvine, CA 92614

Phone:

949-940-8884

Email:

bsmith@flyingvgroup.com

All other means of Investor Communication:

Cyberlux Website, www.cyberlux.com

Other Service Providers

Provide the name of any other service provider(s) that assisted, advised, prepared, or provided information with respect to this disclosure statement. This includes counsel, broker-dealer(s), advisor(s), consultant(s), or any entity/individual that provided assistance or services to the issuer during the reporting period.

Legal Counsel

Name:

Jennifer E.D. Clarke, Esq.

Firm:

Tjong & Hsia LLP

Address:

Rockefeller Plaza, 20th Floor New York, NY 10111

Phone:

516-801-1700

Email:

jclarke@tjonghsia.com

Web:

www.tjonghsia.com

Legal Counsel

Name:

Edward W. Gray Jr., Partner

Firm:

Thompson Coburn LLP

Address:

1909

K Street N.W. Suite 600 Washington, DC 20006-1167

Phone:

202-585-6910

Email:

egray@thompsoncoburn.com

Web:

www.thompsoncoburn.com

{Remainder of page left intentionally blank}

9) Financial Statements

A. The following financial statements were prepared in accordance with: :unselected: IFRS

:selected:

U.S. GAAP

B. The following financial statements were prepared by (name of individual)3:

Name:

David D. Downing

Title:

Chief Financial Officer

Relationship to Issuer:

Principal Financial and Accounting Officer

Describe the qualifications of the person or persons who prepared the financial statements: The financial statements are prepared by the CFO of the Company with consultation to our accounting advisors as requested.

Provide the following financial statements for the most recent fiscal year or quarter. For the initial disclosure statement (qualifying for Pink Current Information for the first time), please provide reports for the two previous fiscal years and any subsequent interim periods.

(a) Audit letter, if audited;

(b) Balance Sheet;

(d) Statement of Cash Flows;

(e) Statement of Retained Earnings (Statement of Changes in Stockholders' Equity);

(f) Financial Notes

{Remainder of page left intentionally blank}

The financial statements requested pursuant to this item must be prepared in accordance with US GAAP or IFRS and by persons with sufficient financial skills.

Cyberlux Corporation and Subsidiaries Condensed Consolidated Balance Sheet December 31, 2023 and March 31, 2024 (Unaudited)

December 31, 2023

March 31, 2024

Assets

Current assets:

Cash & cash equivalents

$ 3,198,280

$ 627,757

Accounts receivable, net of allowance for doubtful accounts

1,324,699

820,495

Inventory

16,818,126

17,262,102

Other current assets

238,564

241,004

Total current assets

21,579,669

18,951,358

Other Assets:

Property and equipment, net of accumulated depreciation

1,034,033

936,696

Net assets of discontinued operations

Right of Use asset

428,555

386,555

Intangible assets, net of accumulated amortization

10,478,722

9,958,722

Investment in unconsolidated subsidiaries

200,000

Total Assets

$33,720,980

$30,435,331

Liabilities and Stockholders' Deficit

Current liabilities:

Accounts payable

$ 2,251,426

$2,430,309

Accrued interest

2,065,143

2,086,294

Notes payable, related parties

2,570,762

2,641,222

Notes payable, non-related parties

7,709,395

6,268,435

Liability for common stock to be issued

258,960

455,578

Customer deposits

23,939,171

23,974,999

Accrued liabilities

4,406,195

4,772,044

Total current liabilities

43,176,051

40,188,781

Long-term liabilities:

Datron acquisition notes payable, net of discount

3,541,667

3,604,167

Lease liabilities and other

759,671

710,864

Total long-term liabilities

4,301,338

4,315,031

Commitments and contingencies

Stockholders' deficit:

Class A Preferred shares, 0 shares issued and outstanding as of December 31, 2023 and March 31, 2024

Class B Preferred shares, 90,3,00,000 shares issued

and outstanding as of

December 31, 2023 and March 31, 2024

144,000

Class C Preferred shares, 150,000 shares issued and outstanding as of December 31, 2023 and March 31, 2024

Common stock, $0.001 par value, 7,000,000,000 shares authorized, 5,728,914,810 and 5,825,533,550 shares issued and outstanding as of December 31, 2023 and March 31, 2024, respectively.

7,385,577

7,482,195

Treasury stock

(1,176,700)

Additional paid-in capital

19,889,914

21,537,981

Accumulated deficit

(39,999,351)

(44,296,207)

Deficiency in stockholders' equity

(13,756,410)

(16,311,963)

Total liabilities and stockholders' deficit

$ 33,720,920

$ 30,435,331

The results of operations of the foreign subsidiaries are presented as a discontinued operation for all periods presented. See notes A and M. The accompanying notes are an integral part of these financial statements.

Cyberlux Corporation and Subsidiaries Condensed Statements of Operations Quarters ended March 31, 2024 and 2023 (Unaudited)

Revenue

$ 97,856

$ 5,113,375

Cost of goods sold

(114,127)

(3,290,387)

Gross profit (loss)

(16,271)

1,822,988

Operating Expenses:

Marketing and advertising

1,148

371,999

Depreciation and amortization

614,974

Research and development

15,849

315,001

General and administrative expenses

868,053

4,717,881

Total operating expenses

885,050

6,019,855

Loss from operations

(901,321)

(4,196,867)

Other income/(expense):

Interest income and other

7,378

Interest expense

(175,742)

(307,367)

Subtotal

(175,742)

(299,989)

Net Loss from continuing operations

(1,077,063)

(4,496,856)

Net income from discontinued operations

1,402,633

Net income (loss) available to common stockholders

$325,570

$(4,496,856)

Weighted-average common Shares outstanding - basic and diluted

5,435,512,025

5,773,335,291

Loss per share - basic and diluted

$0.00

$(0.001)

Cyberlux Corporation and Subsidiaries Condensed Consolidated Statement of Cash Flow Quarters ended March 31, 2024 and 2023 (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) available to common stockholders

$ 325,570

$ (4,496,856)

Adjustments to reconcile net loss to cash flow from operations

41,000

Issuance of common stock in exchange for services

90,000

Noncash interest expense

62,500

Amortization and depreciation

615,337

Changes in assets and liabilities

Accounts receivable

(755,700)

504,204

Inventories

(194,376)

(443,976)

Prepaid expenses

91,049

(2,440)

Right of use asset

42,000

Accounts payable

85,808

178,883

Accrued liabilities

379,842

420,350

Customer deposits

35,828

Other liabilities

(31,012)

147,811

Accrued interest

175,836

Net cash provided by (used in) operating activities

(476,775)

(2,670,523)

CASH FLOWS FROM INVESTING ACTIVITIES:

Expenditures for fixed assets

(7,210)

Net cash used in investing activities

(7,210)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the sale of common and preferred stock

22,800

Net proceeds (payments) from borrowings

664,000

Net proceeds (payments) from notes payable, related parties

(91,800)

100,000

Net cash provided by (used in) financing activities

595,000

100,000

Net increase/(decrease) in cash and cash equivalents

111,015

(2,570,523)

Cash and cash equivalents at beginning of period

253,105

3,198,280

Cash and cash equivalents at end of period

$1,064,120

$627,757

SUPPLEMENTAL DISCLOSURES:

Interest and income taxes paid

$ -

NON-CASH ACTIVITIES:

Conversion of Debt for common stock

$1,654,685

Cyberlux Corporation and Subsidiaries Statement of Changes in Stockholders Equity (Deficit) Quarters ended March 31, 2024 and 2023 (Unaudited)

Class B Preferred

Class C Preferred

Common Shares

Treasury Stock

Additional Paid in Capital

Accumulated Deficit

Total

Outstanding Shares

Amount

Outstanding Shares

Amount

Outstanding Shares

Amount

Balance December 31, 2022, as restated

70,500,000

$ 100,000

150,000

$ 150

5,587,666,363

$ 6,707,666

$ (1,149,500)

$ 18,634,605

$ (79,968,702)

$ (55,675,781)

Stock issued for services

41,000

Issuance of Series B shares

22,800

Net income

325,570

Balance March 31, 2023

93,300,000

$ 122,800

150,000

$ 150

5,628,666,363

$ 6,748,666

$ (1,149,500)

$ 18,634,605

$ (79,643,132)

$ (55,286,411)

Balance December 31, 2023

90,300,000

$ 144,000

150,000

$ 150

5,728,914,810

$ 7,385,577

$ (1,176,700)

$ 19,889,914

$ (39,999,351)

$ (13,756,410)

Stock issued for services

90,000,000

90,000

Conversion of debt and accrued interest to shares

6,618,740

1,654,685

Net loss

($4,496,856)

-4,496,856

Balance March 31, 2024

90,300,000

$ 144,000

150,000

$ 150

5,825,533,550

$ 7,482,195

$ (1,176,700)

$ 21,537,981

$ (44,496,207)

$ (16,508,581)

NOTE A-SUMMARY OF BUSINESS OPERATIONS

Business Operations

Cyberlux Corporation (the "Company" or "Cyberlux") was incorporated on May 17, 2000 under the laws of the State of Nevada. The Company had been focused on the development, manufacturing, and marketing of long-term portable lighting products for government, commercial and industrial users. Starting in July 2022, the Company began expanding its defense industry product offerings. While the Company has generated revenues from its sale of products, the Company has incurred sustained losses. Consequently, its operations have been subject to all risks inherent in the establishment of a new business enterprise.

During the year ended December 31, 2023, the Company refocused its operations through the following transactions:

Cyberlux and Kreatx Shpk, FBD Shpk and Havas SAS (collectively the "Foreign Subsidiaries") entered into Agreements of Business Separation, effective as of June 30, 2023, terminating the business relationship of between the parties, in exchange for certain payment and equity terms. The operations of these businesses for the period ended March 31, 2023 are presented as discontinued operations in the consolidated statement of operations. The Company recognized a loss on the disposition of these subsidiaries, as presented in the consolidated statement of operations. See Note M.

On August 29, 2023, Cyberlux Corporation was awarded a contract of $78.9 million to deliver Cyberlux K8 Unmanned Aircraft Systems as confirmed by the United States Department of Defense ("DoD") in the February 24, 2023 USAI announcement. The Company is required to comply with DoD rules and regulations with respect to the fulfillment of such contract, and the DoD may amend, delay, or cancel the contract per the contractual terms. The Company received approximately $39 million in advance payments from the DoD upon signing of the contract during 2023. During the year ended December 31, 2023, the Company shipped approximately $15 million under such contract. As of December 31, 2023 and March 31, 2024, the Company has remaining advance payments for the purchase of such systems from the DoD of approximately $23,145,000. The completion of shipment of the remaining Systems is subject to DoD acceptance of the product, including engineering and testing procedures, the timing of which is uncertain.

NOTE B - GOING CONCERN MATTERS

The accompanying statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, as of March 31, 2024, the Company incurred accumulated losses of approximately $44,000,000. The Company's current liabilities exceeded its current assets by approximately $20,000,000 as of March 31, 2024. The Company has undergone significant transformation in 2023 refocusing its business, disposing certain businesses, acquiring Datron Worldwide Communications, and receiving a significant sales order from the DoD. While these factors among others may indicate that the Company will be unable to continue as a going concern, management is confident that business performance in 2024 will ensure the Company is an ongoing growth business for the foreseeable future.

The Company is actively pursuing additional business growth through acquisitions, organic growth and new customers and products that are expected to increase the associated cash flow from operations. Obtaining additional financing to support the successful development of the Company's contemplated operations, and its transition ultimately to the attainment of profitable operations, are necessary for the Company to continue business. However, no assurance can be given that management's actions will result in profitable operations or the resolution of its liquidity problems. If the Company is unable to raise additional funds, it will need to do one or more of the following:

· Delay research and development projects;

· License third parties to develop and commercialize products or technologies that it would otherwise seek to develop and commercialize itself;

· Seek strategic alliances or business combinations;

· Attempt to sell the Company;

· Cease operations; or

· Declare bankruptcy.

The Company may continue to raise additional funding from its current investors. In addition, the Company will continue to seek funds through debt or equity financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements, or other sources of financing. However, there can be no assurances that such financing or other strategic transactions will be available on acceptable terms, or at all.

NOTE C- SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows:

Basis of presentation

The unaudited condensed consolidated financial statements contained herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, the condensed consolidated financial statements reflect all normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of operations and may not include all disclosures required by accounting principles generally accepted in the United States ("GAAP"). The information as of March 31, 2024 and December 31, 2023 is unaudited. The Company has presented the results of the Foreign Subsidiaries as a discontinued operation for all periods presented.

Principles of consolidation

The accompanying consolidated financial statements and related notes to the consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Revenue recognition

The Company recognizes revenue under Financial Accounting Standards Board's Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC 606"). The Company determines revenue recognition through the following steps:

· Step 1: Identify the contract with the customer;

· Step 2: Identify the performance obligations in the contract;

· Step 3: Determine the transaction price;

· Step 4: Allocate the transaction price to the performance obligations in the contract; and

· Step 5: Recognize revenue when the company satisfies a performance obligation.

The Company records sales of its products and services to the commercial and U.S. government agencies and foreign nation ministries of defense when the products and services are billed against the associated contracts when performance obligations with customers are satisfied. The Company's performance obligation is a promise to transfer a distinct good to the customer and each distinct good represents a single performance obligation. Such performance obligations are satisfied at a point in time and revenues are recognized when all rights and rewards of ownership are transferred. The majority of the Company's products are shipped by common carrier resulting in recognition of revenues upon shipment at which time control passes to the customer. Revenue is measured at the amount of consideration the Company expects to receive in exchange for the transferring of products. Customers may be entitled to cash discounts, typically denoted at the time of invoicing and shipping. Such amounts are considered to be variable consideration under ASC 606. An estimate for cash discounts is included in the transaction price as a component of sales and is estimated based on the satisfaction of outstanding receivables and historical performance. The Company does not have any material financing terms as payment is received shortly after the transfer of control of the products to the customer within a period of 30-60 days.

Deferred revenue arises from amounts received in advance of the culmination of the earnings process and is recognized as revenue in future periods as performance obligations are satisfied. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability.

Cash and cash equivalents

The Company considers all highly liquid debt instruments purchased with a maturity date of six months or less to be cash equivalents.

Foreign currency translation

The Company translates the foreign currency financial statements in accordance with the requirements of ASC 830, "Foreign Currency Matters." Assets and liabilities are translated at current exchange rates, and related revenue and expenses are translated at average exchange rates in effect during the period. Resulting translation adjustments are recorded as a separate component in stockholders' equity. Foreign currency translation gains and losses are included in the consolidated statement of operations, within general and administrative expenses.

Use of estimates

In preparing the Company's financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Accounts receivable

Our policy is to provide an allowance when an account becomes greater than 90 days past due. An account is charged off when it is determined by management to be uncollectible.

Inventories

Inventories are stated at the lower of cost or market determined by the average cost method. The Company provides inventory allowances based on estimates of obsolete inventories. Inventories consist of finished products available for sale to distributors and customers as well as raw materials. The work in progress inventory primarily relates to the products being built for the DoD as noted in Note A2 above.

Components of inventories as of December 31, 2023 and March 31, 2024 are as follows:

December 2023

March 2024

Component parts

$ 3,935,012

$ 4,053,472

Work in progress

14,472,404

14,612,629

Finished goods

322,873

Less: allowance for obsolete inventory

(1,912,163)

(1,404,000)

$ 16,818,126

$ 17,262,101

Property and Equipment

Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives as follows:

Furniture and fixtures

years

Office equipment

to 5 years

Leasehold improvements

Lessor of 5 years of life of lease

Tooling

years

Manufacturing equipment

years

Advertising costs

The Company expenses all costs of marketing and advertising as incurred. Marketing and advertising costs totaled approximately $372,000 and $1,000 for the quarters ended March 31, 2024 and 2023, respectively.

Research and Development

The Company accounts for research and development costs in accordance with the ASC 730 "Research and Development". Under ASC 730, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company expenditures were approximately $315,000 and $16,000 on research and product development for the quarters ended March 31, 2024 and 2023, respectively.

Reclassification

Certain reclassifications have been made in prior year's financial statements to conform to classifications used in the current year.

Fair Values

ASC 820 "Fair Value Measurements and Disclosures" ("ASC Topic 820") defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure. The Company considers its cash and cash equivalents, accounts receivable, and accounts payable to meet the definition of financial instruments, and the carrying amounts of such instruments approximated their fair values due to

the short maturities of these instruments. The Company believes the fair value of notes payable approximate its amortized cost.

The Company measures fair value as required by the ASC Topic 820, which defines fair value, establishes a framework, and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.

Level 2 - Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

Level 3 - Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date.

Concentrations of Credit Risk

Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be more than the FDIC insurance limit. The Company periodically reviews its trade receivables in determining its allowance for doubtful accounts. At December 31, 2023 and March 31, 2024, the Company did not have an allowance for doubtful receivables.

Segment reporting

The Company follows ASC 280 "Segment Reporting". The Company operates as a single segment - industrial products.

Share-based compensation

The Company has granted common shares to employees, non-employee consultants and non-employee members of our Board of Directors. The Company has also granted Class B Preferred shares to an officer of the Company. The Company measures the compensation cost associated with all share-based payments based on the grant date fair values.

Income taxes

The Company follows ASC 740 "Income Taxes" for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in

such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods.

Valuation allowances are recognized to reduce deferred tax assets to the amount that will more likely than not be realized. In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies. When the Company changes its determination as to the amount of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to income tax expense in the period in which such determination is made. The Company has reserved its deferred tax assets in all periods presented.

The Company also accounts for uncertain tax positions in accordance with ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the Company's income tax returns. As of December 31, 2023 and March 31, 2024, the Company had no uncertain tax positions which affected its financial position and its results of operations or its cash flows and will continue to evaluate for uncertain tax positions in the future. There are no interest costs or penalties provided for in the Company's consolidated financial statements for the periods ended December 31, 2023 and March 31, 2024. If at any time the Company should record interest and penalties in connection with income taxes, the interest and the penalties will be expensed within the general and administrative expenses category in the accompanying consolidated statement of operations.

Intangible assets

Patents are amortized on a straight-line basis over an estimated useful life of 7 years. Technology related assets are amortized on a straight-line basis over an estimated useful life of 5 years.

The Company evaluates all long-lived assets for impairment. Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the carrying amount is not fully recoverable, an impairment loss is recognized to reduce the carrying amount to fair value and is charged to expense in the period of impairment. As of December 31, 2023 and March 31, 2024 management has determined that these assets are not impaired.

Comprehensive Income (Loss)

The Company follows ASC 220 "Comprehensive Income". ASC 220 establishes standards for the reporting and displaying of comprehensive income and its components. Comprehensive income is defined as the change in equity of a business during a period from transactions and other events and circumstances from non-owners' sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. ASC 220 requires other comprehensive income (loss) to include foreign currency translation adjustments and unrealized gains and losses on available for sale securities.

Net income (loss) per share

Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of common shares outstanding, including common stock equivalents, during the period. For periods in which the Company reports a net loss, diluted net loss per share is the same as basic net loss per share.

For the quarter ended March 31, 2023, the number of shares excluded from diluted net loss per share included approximately 270 million shares of common shares which would be issued upon the conversion of notes payable and approximately 22 billion shares which would be issued upon the conversion of preferred stock based upon the conversion rates currently in effect - see Note H. The shares issuable upon conversion of notes payable and preferred stock are not included in the denominator since their inclusion would be anti-dilutive.

For the quarter ended March 31, 2024, the number of shares excluded from diluted net loss per share included approximately 25 billion shares of common shares which would be issued upon the conversion of notes payable and approximately 22 billion shares which would be issued upon the conversion of preferred stock based upon the conversion rates currently in effect - see Note H. The shares issuable upon conversion of notes payable and preferred stock are not included in the denominator since their inclusion would be anti-dilutive.

NOTE D - PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment at December 31, 2023 and March 31, 2024 are as follows:

December 2023

March 2024

Furniture and fixtures

$ 932,599

Engineering and test equipment

3,852,176

Tooling

1,105,511

Office and computer equipment

1,796,673

Trade show booth

56,560

Leasehold improvements

613,546

Vehicles

218,000

Subtotal

8,575,065

Less: accumulated depreciation

(7,541,031)

(7,636,369)

$ 1,034,033

$ 938,696

During the quarters ended March 31, 2024 and 2023, depreciation expense charged to operations was approximately $95,000 and $4,000, respectively.

NOTE E - INTANGIBLE ASSETS

Intangible assets at December 31, 2023 and March 31, 2024 are as follows:

December 2023

March 2024

Patents

$ 469,783

$ 342,000

Technology

10,663,000

11,187,277

Total

11,132,783

11,529,277

Less: accumulated depreciation

(654,061)

(1,570,555)

$ 10,478,722

$ 9,958,722

During the quarter ended March 31, 2024, amortization expense charged to operations was approximately $520,000. During 2023, certain fully amortized patents and technology intangible assets were written off. Annual amortization expense of intangibles will approximate $2,600,000 for the next 4 years, and then $1,300,000 thereafter.

Acquisition of Datron

On September 16, 2023, the Company acquired 100% of the outstanding stock of Datron World Communications, Inc. ("Datron"), a provider of communications solutions to government, militaries, and industrial users globally. The purchase price consisted of the payment of $3.0 million at closing, issuance of a $2.0 million note payable (1st note), the issuance of a $2.0 million note payable (2nd note) and the cancellation of a $3.5 million advance previously made to Datron.

The 1st note payable bears interest at 3% per annum and is due September 2026. The holder can elect to convert the note into shares of common stock at 90% of the VWAP after September 2024.

The 2nd note payable bears interest at 5% per annum and is due September 2026. The holder can elect to convert the note into shares of common stock at 85% of the VWAP after September 2024.

The acquisition was accounted for as an acquisition of a business, and the purchase price of approximately $10.5 million was allocated to net operating assets of $0.1 million and the remaining $10.4 million was allocated to technology based intangible assets, which will be amortized over 5 years. The Company has not yet completed the purchase price allocation and valuation of the identifiable intangible assets as required by ASC 805, but expects to have it completed for the December 31, 2024 reporting period.

Datron had significant deferred tax assets as a result of net operating loss carryforwards and certain timing assets which exceeded the deferred tax liability which would have been record as a result of the basis difference in the intangible assets resulting from the acquisition. No net deferred tax assets or liabilities were recognized from the acquisition - See Note J.

NOTE F- ACCRUED EXPENSES

Current liabilities as of December 31, 2023 and March 31, 2024 are as follows:

December 2023

March 2024

Accrued payroll, payroll taxes and other

$ 1,677,835

$ 2,043,684

Taxes and other

100,000

Commissions payable

2,628,360

Total

$ 4,406,195

$ 4,772,044

NOTE G - NOTES PAYABLE

The Company has borrowed money from affiliates and non-affiliates over the past few years. The Company has also settled certain obligations through the issuance of promissory notes and settled certain past due notes payable through cash payments or equity issuances. Interest expense for the quarters ended March 31, 2024 and 2023 was approximately $307,000 and $176,000, respectively, including amortization of debt discount of $62,000 in 2024. Accrued interest was approximately $2,065,000 and $2,086,000 at December 31, 2023 and March 31, 2024.

Non-affiliate loans

At December 31, 2023 and March 31, 2024, the notes payable to non-related parties consist of the following:

Balance outstanding

Interest

Due date

Conversion terms

at December

at March

rate

31, 2023

31, 2024

Datron acquisition -note 1

$2,000,000

September

90% VWAP

Datron acquisition -note 2

2,000,000

September 2026

85% VWAP

Less: unamortized debt

(458,333)

(395,833)

discount

Total long- term debt

$3,541,667

$3,604,167

Note payable RB Capital

$5,250,000

$3,750,000

July 2024

$0.25 per share

Others

2,459,395

2,518,435

Various

$1,140,000 is convertible at $0.0045 per share

Total short-term debt

$7.709,395

$6,268,435

The Company has recognized a debt discount of approximately $500,000 representing the discount provided on the Datron acquisition notes. Such discount will be accreted to interest expense over the term of the note and amounted to approximately $63,000 of interest expense during the quarter ended March 31, 2024. The remaining debt discount of approximately $395,000 will be accreted into interest expense over the next 2.4 years.

In February 2024, a portion of the note payable due to RB Capital in the amount of $1,654,685, including accrued interest, was converted into 6,618,740 shares of common stock.

Related party loans

From time to time, the Company's principal officers have advanced funds to the Company for working capital purposes in the form of unsecured promissory notes, accruing interest at 10% per annum, summarized as follows. In March 2024, a family member of an officer of the Company provided a loan of $100,000 to the Company. There is no scheduled repayment terms for most of these notes.

Loans from Officers

Officer

Principal Due December 31, 2023

Interest Rate

Principal Due March 31, 2024

David Downing

$1,133,606

10%

$1,133,606

Mark Schmidt and family

679,599

10%

759,168

John Ringo

405,361

10%

405,361

All others

352,195

10%

343,087

Total

$2,570,761

$2,641,222

NOTE H - STOCKHOLDER'S EQUITY

Common stock

The Company has authorized 7,000,000,000 shares of common stock, with a par value of $.001 per share. As of December 31, 2023 and March 31, 2024, the Company had 5,728,914,810 and 5,825,533,550 shares outstanding, respectively.

At December 31, 2023, 2022 and March 31, 2024, the Company had outstanding obligations to issue approximately 56 million, 32 million and 251 million, common shares, respectively, in respect of agreements entered into from 2021 through March 2024. Further, as noted below, the Company has an obligation to issue the 6,745 common shares issuable upon the mandatory conversion of the Series A preferred shares. The Company's transfer agent was instructed (after March 31, 2024) to issue such shares of common stock. The Company has recorded a liability to recognize the obligation.

Among other provisions of the Certificate of Designations of the Series B and C preferred stock, the Company is required to reserve a sufficient number of shares of common stock of the Company for the conversion of all shares of preferred stock. The Company is not currently observing this requirement.

Series A - Convertible Preferred stock

The Company has authorized 100,000,000 shares of Preferred Stock, with a par value of $.001 per share. The Company filed a Certificate of Designation creating a Series A Convertible Preferred Stock classification for 200 shares. The Series A Preferred stated conversion price of $.10 per share was subject to certain anti-dilution provisions. The Series A Preferred Stock became converted into 6,745 shares of common stock pursuant to its terms, however such common shares had not yet been issued to the shareholders as of March 31, 2024. The Company has subsequently instructing the transfer agent to issue an aggregate of 6,745 common shares to the remaining record holders of Series A Preferred stock. This obligation is included in the liability for common stock to be issued on the accompanying consolidated balance sheet.

Series B - Convertible Preferred stock

There are 100,000,000 shares of Series B Preferred authorized, and 90,300,000 shares of Series B Preferred issued and outstanding as of December 31, 2023 and March 31, 2024. A Board of Directors resolution indicates that the conversion ratio is 200:1.

The holders of the Series B Preferred shall have the right to vote, separately as a single class, at a meeting of the holders of the Series B Preferred or by such holders' written consent or at any annual or special meeting of the stockholders of the Corporation on any of the following matters: (i) the creation, authorization, or issuance of any class or series of shares ranking on a parity with or senior to the Series B Preferred with respect to dividends or upon the liquidation, dissolution, or winding up of the Corporation, and (ii) any agreement or other corporate action which would adversely affect the powers, rights, or preferences of the holders of the Series B Preferred.

The holders of record of the Series B Preferred shall be entitled to receive cumulative dividends at the rate of twelve percent per annum (12%) on the face value ($1.00 per share) when, if and as declared by the Board of Directors, if ever. All dividends, when paid, shall be payable in cash, or at the option of the Company, in shares of the Company's common stock. Dividends on shares of Series B Preferred that have not been redeemed shall be payable quarterly in arrears, when, if and as declared by the Board of Directors, if ever, on a semi-annual basis. No dividend or distribution other than a dividend or distribution paid in common stock or in any other junior stock shall be declared or paid or set aside for payment on the common

stock or on any other junior stock unless full cumulative dividends on all outstanding shares of the Series B Preferred shall have been declared and paid. These dividends are not recorded until declared by the Company. As of December 31, 2023 and March 31, 2024, the liquidation preference of the Series B preferred stock is approximately $295 million and $298 million, respectively, including dividends in arrears.

Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, and after payment of any senior liquidation preferences of any series of Preferred Stock, and before any distribution or payment is made with respect to any common stock, holders of each share of the Series B Preferred shall be entitled to be paid an amount equal in the greater of (a) the face value denominated thereon subject to adjustment for stock splits, stock dividends, reorganizations, reclassification or other similar events plus, in the case of each share, an amount equal to all dividends accrued or declared but unpaid thereon, computed to the date payment thereof is made available, or (b) such amount per share of the Series B Preferred immediately prior to such liquidation, dissolution or winding up, or (c) the liquidation preference of $1.00 per share, and the holders of the Series B Preferred shall not be entitled to any further payment.

Series C - Convertible Preferred stock

On November 13, 2006, the Company filed a Certificate of Designation creating a Series C Convertible Preferred Stock classification for 100,000 shares. This was subsequently amended on January 11, 2007 to allow the issuance of 150,000 shares.

The shares of the Series C Preferred are non-voting and convertible, at the option of the holder, into common shares after one year from issuance. The number of common shares to be issued per Series C share is calculated by dividing $25.20 by the 10 DMA (daily moving average), adjusted for the 200:1 reverse split effected in 2010. That formula computes as: ($25.20/10DMA)/200. Neither of the Series C Preferred shareholders have exercised their conversion right and there are 150,000 shares of Series C Preferred shares issued and outstanding on December 31, 2023 and March 31, 2024.

The holders of record of the Series C Preferred shall be entitled to receive cumulative dividends at the rate of five percent per annum (5%), compounded quarterly, on the face value ($25.00 per share) when, if and as declared by the Board of Directors, if ever. All dividends, when paid, shall be payable in cash, or at the option of the Company, in shares of the Company's common stock. Dividends on shares of the Series C Preferred that have not been redeemed shall be payable quarterly in arrears, when, if and as declared by the Board of Directors, if ever, at the time of conversion. These dividends are not recorded until declared by the Company. As of December 31, 2023, no dividends have been declared. As of December 31, 2023 and March 31, 2024, the liquidation preference of the Series C preferred stock is approximately $3.0 million, and $3.4 million, respectively, including dividends in arrears.

NOTE I - RELATED PARTY TRANSACTIONS

The Company has borrowed money from related parties from time to time - See Note G.

NOTE J - LEASE

The Company leases facilities under operating leases with expiration dates at December 31, 2026 through April 30, 2027. Monthly rent is approximately $32,000 per month for such facilities.

Operating leases are presented in the Company's consolidated balance sheets as right-of-use assets from leases, current lease liabilities and long-term lease liabilities. The assets and liabilities from our leases are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term using the Company's incremental borrowing rates. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. As the Company's operating leases do not provide implicit rates, the Company has utilized its incremental borrowing rate, determined based on the long-term borrowing costs of companies with similar credit profiles, to record its lease obligations. For operating leases, the Company recognizes the minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. The Company will amortize this expense over the term of the lease beginning with the lease commencement date.

The following table presents information about the amount and timing of liabilities arising from the Company's operating leases as of December 31, 2023:

Total undiscounted operating

lease payments

$859,212

Less: Imputed interest

(66,502)

Present value of operating lease

liabilities

$792,710

Weighted average remaining

lease term in years

3.0

Discount rate

11.75%

The Right of Use Asset at March 31, 2024 of approximately $387,000 will be amortized over the 2.7 years remaining under lease term. The Right of Use liability balance at March 31, 2024 was approximately $399,000. Rent expense was approximately $96,000 and $30,000 in the quarters ended March 31, 2024 and 2023, respectively.

NOTE L - COMMITMENTS AND CONTINGENCIES

Consulting Agreements

The Company has consulting agreements with outside contractors, certain of whom are also Company stockholders. The Agreements are generally for a term of 12 months from inception and renewable automatically from year to year unless either the Company or Consultant terminates such engagement by written notice.

Litigation

The Parties involved in the Atlantic Wave Holdings, LLC, and Secure Community LLC ("Plaintiff") v. Cyberlux Corporation and Mark D. Schmidt had reached a settlement of the litigation. The amounts payable pursuant the settlement agreement were included in accounts payable in the accompanying condensed consolidated financial statements, and payments are being made pursuant to the settlement agreement. The Plaintiff has initiated further complaints, but the Company believes such complaints are without merit.

The Company is subject to other legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the

final disposition of such matters should not have a material adverse effect on its consolidated financial position, results of operations or liquidity.

NOTE M - DISCONTINUED OPERATIONS

The Company acquired three electronic component companies located overseas - Kreatx Shpk, FBD Shpk and Havas SAS ("Foreign Subsidiaries") - during 2020 and 2021. The Company and these Foreign Subsidiaries entered into Agreements of Business Separation, effective as of April 1, 2023 (Kreatx) and June 30, 2023 (FBD and Havas), terminating the business relationships between the parties, in exchange for certain payment and equity terms. The operations of these businesses for the quarter ended March 31, 2023 are presented as discontinued operations in the consolidated statement of operations, summarized as follows:

For period from January 1, 2023 to March 31, 2023

Revenues

$6,085,560

Cost of sales

(2,960,691)

Gross profit

3,124,869

Expenses

1,722,236

Net profit

$1,402,633

NOTE O - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the consolidated financial statements were available to be issued and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements.

In March 2024, the Company entered into a one-year purchase order financing arrangement providing up to $3 million of financing subject to specific purchase orders from government customers. The advances under this agreement bear interest at the US prime rate plus 0.0164% and are collateralized by the accounts receivable, inventory and other assets related to the specific purchase orders. Payments received from customers under these specific purchase orders are required to be remitted to the lender.

10) Issuer Certification

Principal Executive Officer:

I, Mark D. Schmidt, certify that:

I have reviewed this Disclosure Statement, for Cyberlux Corporation;

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

Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.

05/13/2024

/s/ Mark D. Schmidt

Principal Financial Officer:

I, David D. Downing certify that:

I have reviewed this Disclosure Statement for Cyberlux Corporation;

05/13/2024 /s/ David Downing

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File: aw-awh-sdcal-00482-doc-012-attachment-2.pdf
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DISTIL analysis

Extracted text

Declaration of William Welter in Support of Opposition of Plaintiffs' Opposition to Defendants' Motion to Vacate Sister-State Judgment — Formatted Extract

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