Evidence Record
IP HII EDVA 00483 Doc. 0155
1. Intervenor ARG is a Delaware limited liability company with its principal place of business located in Tucson, Arizona.
DISTIL analysis
DISTIL Run
Profile
Standard
Version
1
Doc Type
Complaint in Intervention
Total Nodes
33
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
Complaint in Intervention The ARG Group, LLC via The Stine Law Firm, PLLC Federal court litigation; interpleader action involving government subcontract payments February 2022 - March 2026
active_litigationmonetary_claimgovernment_contractsmultiple_jurisdictions
Analytical Frame
Legal claim for contractual payment from interpleaded funds
Analytical Summary
The ARG Group, LLC filed this Complaint in Intervention in an ongoing interpleader action in the Eastern District of Virginia, asserting a claim to at least $14,118,618.61 from funds that HII Mission Technologies interpleaded after disputes arose over payments owed to Cyberlux Corporation under a government subcontract for K8 drones. ARG claims it entered a valid distribution agreement with Cyberlux in February 2022 entitling it to 20% of product sales proceeds, and that ARG's substantial business development efforts—including introducing key military contacts, facilitating trade show participation, and providing technical support—were instrumental in securing the HII subcontract that generated the disputed payments. Despite Cyberlux receiving an initial payment of $38,700,600 and a final payment of $25,769,369.03, ARG alleges Cyberlux has paid only $375,000 of the amounts owed, prompting ARG to file a separate breach of contract action in North Carolina and now seek intervention to claim its contractual share directly from the interpleaded funds.
Key Points
- ARG claims 20% distribution rights under February 2022 agreement with Cyberlux for sales of advanced lighting and drone products
- ARG asserts it was instrumental in securing HII subcontract worth $64.5M through business development, military introductions, and technical support
- Cyberlux received $38.7M initial payment and $25.8M final payment but paid ARG only $375,000 of claimed amounts
- ARG calculates entitlement to $14,118,618.61 including prejudgment interest on amounts withheld for over 31 months
- HII originally named ARG as interpleader defendant but excluded ARG from amended complaint despite ARG's documented claim
- Parallel North Carolina breach of contract action filed by ARG against Cyberlux seeking treble damages
Stage 2
Core — Entities, Events, Claims
24 nodes
ENT-001
Entity
The ARG Group, LLC
Delaware limited liability company with principal place of business in Tucson, Arizona. Service-Disabled Veteran-Owned Small Business providing sales and tactical distribution services of advanced technology equipment to Department of Defense, Federal Law Enforcement Agencies, and US Allies.
Page 1, 2 — Intervenor ARG is a Delaware limited liability company with its principal place of business located in Tucson, Arizona. ARG is a Service-Disabled Veteran-Owned Small Business and is a leading provider of sales and tactical distribution services of advanced technology equipment to the Department of Defense, Federal Law Enforcement Agencies, and US Allies.
ENT-002
Entity
Cyberlux Corporation
Defendant corporation that develops, manufactures, and sells Advanced Lighting Solutions, solar power solutions, and Unmanned Aircraft Systems products including BrightEye, Watchdog Tactical Illumination Systems, and FlightEye UAS products.
Page 2 — Defendant Cyberlux Corporation ("Cyberlux") develops, manufactures, and sells Advanced Lighting Solutions ("ALS") for portable and fixed use, certain solar power solutions, and Unmanned Aircraft Systems ("UAS") products including UAS hardware and software solutions. Cyberlux's products include, but are not limited to, the BrightEye and Watchdog Tactical Illumination Systems, other various LED and solar products, and the FlightEye UAS products including FlightEye drone hardware and the Flight GDN software operating platform and related product offerings
ENT-003
Entity
HII Mission Technologies Corp.
Plaintiff in underlying interpleader action that interpleaded funds owed to Cyberlux under government subcontract.
Page 1 — Plaintiff HII Mission Technologies Corp.'s ("HII") First Amended Complaint for Interpleader
ENT-004
Entity
Mark Schmidt
CEO of Cyberlux who communicated acknowledgment of ARG's payment entitlements via Signal messages and other communications.
Page 3 — Indeed, on multiple occasions, Cyberlux's CEO Mark Schmidt expressly acknowledged, via Signal messages and other forms of communication, that ARG was entitled to 20% of the proceeds from sales of the Products (including drones) regardless of who the prime was on the contract.
ENT-005
Entity
Cyberlux Corporation and The ARG Group, LLC Distributor Partner Agreement
Valid and binding contract executed February 28, 2022 establishing distribution partnership with 20% discount/profit allocation to ARG.
Page 3 — On February 28, 2022, ARG and Cyberlux entered into a valid and binding "Cyberlux Corporation and The ARG Group, LLC Distributor Partner Agreement" (the "Contract"). Pursuant to the terms of the Contract, ARG agreed to secure customer orders and facilitate the sale of Cyberlux's Products and Cyberlux agreed to provide ARG with a 20% discount off the GSA pricing for the Products. In accordance with paragraph 4A of the Contract, ARG and Cyberlux also agreed that the proceeds from sales of the Products would be allocated with 80% payable to Cyberlux and 20% payable to ARG.
ENT-006
Entity
K8 Drone
Primary unmanned aircraft product manufactured and sold by Cyberlux pursuant to subcontract with HII; subject of business development and technical redesign efforts.
Page 4 — One of the primary Products Cyberlux and ARG planned to market and sell was the K8 Drone, which was manufactured and sold pursuant to the Subcontract (the "Subcontract") between Cyberlux and HII that is the subject of HII's Amended Complaint. To enhance the K8 Drone's appeal and functionality, ARG assembled a specialized team, including members of the U.S. Army, to help redesign its firing mechanism
ENT-007
Entity
Major General Cameron Holt
Military contact brought in by ARG to develop pathway for Foreign Military Sales/Financing deal; provided detailed roadmap for K8 FMS to Ukraine.
Page 5 — ARG also brought in Major General Cameron Holt to assist with developing a pathway to secure a Foreign Military Sales ("FMS") or Foreign Military Financing ("FMF") deal. On August 7, 2022, General Holt provided ARG with an eight-page roadmap titled "Accelerating FlightEye K8 FMS to Ukraine", which outlined the necessary steps, requirements, and government offices involved in advancing the sale of the K8 drones.
ENT-008
Entity
Fairwinds Technologies, LLC
Entity introduced to Cyberlux through ARG's facilitation at SOFIC trade show in Tampa; connection led to addition of Ferd Irizarry to Cyberlux Board of Advisors.
Page 4, 5 — This strategic introduction enabled Cyberlux to connect with critical military and defense stakeholders and ultimately led to a meeting with intervenor Fairwinds Technologies, LLC ("Fairwinds"). Through the connection with Fairwinds, Cyberlux was introduced to Ferd Irizarry, who would join Cyberlux's Board of Advisors.
ENT-009
Entity
North Carolina Action
Breach of contract lawsuit filed by ARG in Superior Court for County of Durham, North Carolina on April 24, 2025, Case No. 25CV004246-310, alleging multiple claims against Cyberlux and seeking treble damages.
Page 7 — Because Cyberlux was in material breach of the Contract and engaged in other wrongful conduct, on April 24, 2025, ARG brought a Complaint in the Superior Court for the County of Durham, North Carolina, Case No. 25CV004246-310 (the "North Carolina Action"), alleging claims for breach of contract, unjust enrichment/quantum meruit (in the alternative to the breach of contract claim), breach of contract implied in fact, conversion, and unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1, et. seq.
EVT-001
Event
Execution of Distributor Partner Agreement
ARG and Cyberlux entered into binding contract on February 28, 2022 establishing distribution partnership with 20/80 profit split on product sales.
Page 3 — On February 28, 2022, ARG and Cyberlux entered into a valid and binding "Cyberlux Corporation and The ARG Group, LLC Distributor Partner Agreement" (the "Contract").
EVT-002
Event
SOFIC Trade Show Facilitation
ARG facilitated Cyberlux's participation in SOFIC trade show in Tampa, bringing key military and defense contacts that led to critical business relationships.
Page 4, 5 — To launch the K8 Drone into the marketplace, ARG facilitated Cyberlux's participation in key trade shows, creating valuable opportunities to generate exposure and drive sales. At one particular trade show that ARG Group advised Cyberlux to attend (SOFIC in Tampa), ARG brought its key contacts, including representatives from USASOC, Global Ordnance, the Ukrainian Army, PRG, as well as Air Force and Navy EOD units.
EVT-003
Event
Foreign Military Sales Roadmap Delivery
On August 7, 2022, Major General Holt provided ARG with eight-page roadmap titled 'Accelerating FlightEye K8 FMS to Ukraine' outlining steps for foreign military sales.
Page 5 — On August 7, 2022, General Holt provided ARG with an eight-page roadmap titled "Accelerating FlightEye K8 FMS to Ukraine", which outlined the necessary steps, requirements, and government offices involved in advancing the sale of the K8 drones.
EVT-004
Event
HII Initial Payment to Cyberlux
Cyberlux received $38,700,600 initial payment from HII under subcontract for K8 Unmanned Aircraft Systems but did not remit ARG's contractual 20% share.
Page 6 — As a direct result of ARG's efforts pursuant to the Contract, ARG was instrumental in securing for Cyberlux the Subcontract between Cyberlux and HII for Cyberlux to supply K8 Unmanned Aircraft Systems, resulting in Cyberlux receiving $38,700,600 up front (the "Initial Payment") and $25,769,369.03 as final payment (the "Final Payment") from HII. Although Cyberlux received the Initial Payment from HII, it did not remit payment to ARG.
EVT-005
Event
HII Final Payment to Cyberlux
Cyberlux received $25,769,369.03 as final payment from HII under the subcontract.
Page 6 — resulting in Cyberlux receiving $38,700,600 up front (the "Initial Payment") and $25,769,369.03 as final payment (the "Final Payment") from HII.
EVT-006
Event
Filing of North Carolina Breach of Contract Action
ARG filed complaint in Durham County Superior Court on April 24, 2025 alleging breach of contract, unjust enrichment, conversion, and unfair trade practices against Cyberlux.
Page 7 — Because Cyberlux was in material breach of the Contract and engaged in other wrongful conduct, on April 24, 2025, ARG brought a Complaint in the Superior Court for the County of Durham, North Carolina, Case No. 25CV004246-310 (the "North Carolina Action"), alleging claims for breach of contract, unjust enrichment/quantum meruit (in the alternative to the breach of contract claim), breach of contract implied in fact, conversion, and unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1, et. seq.
EVT-007
Event
May 20, 2025 Stakeholder Notice to HII
ARG's counsel sent letter to HII's counsel asserting ARG as interested stakeholder in payments owed to Cyberlux, attaching contract and North Carolina complaint.
Page 8 — On May 20, 2025, counsel for ARG sent a letter to Clark J. Belote, Esq., counsel for HII in this action, which advised Mr. Belote of ARG's "claims to funds held or to be held by HII on behalf of or for the benefit of [Cyberlux]" pursuant to the Subcontract at issue in this action, and further advised that "ARG hereby asserts it is an interested stakeholder in any payment due and owed to Cyberlux by HII because Cyberlux has not satisfied debts due and owed to ARG, in whole or in part, under a valid and enforceable contract."
EVT-008
Event
HII Original Interpleader Complaint Filing
HII filed original complaint for interpleader on June 24, 2025 naming ARG as interpleader defendant/claimant based on its asserted contractual claim to funds.
Page 8 — On June 24, 2025, HII filed its original Complaint for Interpleader and properly named ARG as an interpleader defendant/claimant because ARG has claimed a right or interest in the interpleaded funds. More specifically, the original Complaint alleges that, "[b]y letter dated April 28, 2025 (attached as Exhibit 10), ARG Group asserted it is 'an interested stakeholder in any payment due and owed to Cyberlux by HII because Cyberlux has not satisfied debts due and owed to ARG, in whole or in part, under a valid and enforceable contract[.]'".
EVT-009
Event
HII Amended Complaint Excluding ARG
HII filed amended complaint for interpleader on August 4, 2025 removing ARG as party, claiming ARG had not articulated colorable legal basis for claim to disputed funds.
Page 9, 10 — On August 4, 2025, HII filed the Amended Complaint, which did not include ARG as an interpleader defendant/claimant. In an August 4, 2025 email to ARG's counsel, Mr. Belote confirmed that ARG "is no longer a party to the case because, in HII's view, it has not articulated a colorable legal basis to claim an interest in the Disputed Funds (as defined therein), as opposed to holding a general claim against Cyberlux"
EVT-010
Event
Filing of Complaint in Intervention
ARG filed this Complaint in Intervention on March 6, 2026 pursuant to Federal Rule of Civil Procedure 24 and motion to intervene.
Page 11 — Dated: March 6, 2026 Respectfully submitted, /s/ Stephen J. Stine, Esq.
CLM-001
Claim
ARG Entitlement to 20% of Initial Payment
ARG claims entitlement to $7,740,120 (20% of $38,700,600 initial payment) plus prejudgment interest of $1,599,624.80 for 31 months at 8%, totaling $9,339,744.80 through April 15, 2026.
Page 6 — In accordance with the Contract, ARG is entitled to 20% of the $38,700,600 Initial Payment, which is $7,740,120. ARG has not been paid its 20% of the Initial Payment for over 31 months (as of April 15, 2026). Prejudgment interest at 8% for 31 months on the $7,740,120 Initial Payment is $1,599,624.80 ($51,600.80/month). Therefore, through April 15, 2026, ARG is owed $9,339,744.80 from the Initial Payment.
CLM-002
Claim
ARG Entitlement to 20% of Final Payment
ARG claims entitlement to $5,153,873.81 (20% of $25,769,369.03 final payment) plus prejudgment interest to be calculated.
Page 6 — ARG also is entitled to 20% of the $25,769,369.03 Final Payment, which is $5,153,873.81, plus prejudgment interest which cannot be calculated at this time.
CLM-003
Claim
Total ARG Claim Amount
ARG claims total entitlement of at least $14,118,618.61 from interpleaded funds after subtracting $375,000 in partial payments made by Cyberlux.
Page 6, 7 — After subtracting the $375,000 in partial payments made by Cyberlux, through April 15, 2026, in total, ARG is entitled to at least $14,118,618.61 from the Initial Payment and Final Payment, including additional prejudgment interest on the Initial Payment as this case progresses and all prejudgment interest on the Final Payment.
CLM-004
Claim
ARG Instrumental in Securing HII Subcontract
ARG claims it was instrumental in securing the Cyberlux-HII subcontract for K8 drones through its business development efforts, military introductions, and technical support.
Page 6 — As a direct result of ARG's efforts pursuant to the Contract, ARG was instrumental in securing for Cyberlux the Subcontract between Cyberlux and HII for Cyberlux to supply K8 Unmanned Aircraft Systems
CLM-005
Claim
Expanded Profit-Sharing Agreement
ARG claims Cyberlux CEO acknowledged via Signal messages that ARG was entitled to 20% of product sales proceeds regardless of who originated the transaction, and 30% if Cyberlux sold directly.
Page 3 — As a result of ARG's substantial assistance, and as confirmed by Cyberlux and ARG's course of performance and written communications, Cyberlux agreed to share profits with ARG on sales of the Products regardless of whether ARG or Cyberlux originated the transaction. Indeed, on multiple occasions, Cyberlux's CEO Mark Schmidt expressly acknowledged, via Signal messages and other forms of communication, that ARG was entitled to 20% of the proceeds from sales of the Products (including drones) regardless of who the prime was on the contract. Mr. Schmidt also confirmed in writing that if Cyberlux sold the Products directly without a prime, ARG and Cyberlux would split the 20%, so ARG would receive 30% of the proceeds.
Stage 3
In Situ — Quotations, Tells, Tensions, Questions
5 nodes
QUO-001
Quotation
HII Email Explaining ARG Exclusion
HII's counsel stated in August 4, 2025 email that ARG was excluded from amended complaint because it had not articulated colorable legal basis to claim interest in disputed funds.
Page 9, 10 — In an August 4, 2025 email to ARG's counsel, Mr. Belote confirmed that ARG "is no longer a party to the case because, in HII's view, it has not articulated a colorable legal basis to claim an interest in the Disputed Funds (as defined therein), as opposed to holding a general claim against Cyberlux"
TEN-001
Tension
HII Position Reversal on ARG's Standing
HII initially named ARG as proper interpleader defendant/claimant in June 2025 original complaint, then excluded ARG from August 2025 amended complaint claiming ARG lacked colorable legal basis.
Page 8, 9, 10 — On June 24, 2025, HII filed its original Complaint for Interpleader and properly named ARG as an interpleader defendant/claimant because ARG has claimed a right or interest in the interpleaded funds. Thus, HII agreed that ARG had a legitimate claim to the interpleaded funds and was a proper party to this action, otherwise it would not have included ARG as an interpleader defendant/claimant in the original Complaint. On August 4, 2025, HII filed the Amended Complaint, which did not include ARG as an interpleader defendant/claimant. In an August 4, 2025 email to ARG's counsel, Mr. Belote confirmed that ARG "is no longer a party to the case because, in HII's view, it has not articulated a colorable legal basis to claim an interest in the Disputed Funds (as defined therein), as opposed to holding a general claim against Cyberlux", which is directly contradicted by what HII alleged in the original Complaint.
TEN-002
Tension
Partial Payment vs. Full Amount Owed
Cyberlux made only $375,000 in partial payments to ARG while acknowledging it owes the full claimed amount but refusing to pay the remaining balance.
Page 6 — In acknowledgment of ARG's contributions and its obligations under the Contract, Cyberlux has made $375,000 in partial payments to ARG and admitted that it owes ARG the amounts claimed, but it has refused to pay the remaining amounts owed ARG.
QST-001
Question
Validity of Expanded Profit-Sharing Agreement
Whether Signal messages and course of performance established binding modification to written contract expanding ARG's entitlement beyond written 20% distribution terms.
Page 3 — As a result of ARG's substantial assistance, and as confirmed by Cyberlux and ARG's course of performance and written communications, Cyberlux agreed to share profits with ARG on sales of the Products regardless of whether ARG or Cyberlux originated the transaction. Indeed, on multiple occasions, Cyberlux's CEO Mark Schmidt expressly acknowledged, via Signal messages and other forms of communication, that ARG was entitled to 20% of the proceeds from sales of the Products (including drones) regardless of who the prime was on the contract.
QST-002
Question
Causation Between ARG Efforts and HII Subcontract
Whether ARG's business development activities were sufficiently causally connected to securing the HII subcontract to support contractual entitlement claim.
Page 6 — As a direct result of ARG's efforts pursuant to the Contract, ARG was instrumental in securing for Cyberlux the Subcontract between Cyberlux and HII for Cyberlux to supply K8 Unmanned Aircraft Systems
Stage 4
Interpretive — Inferences, Omissions, Patterns
4 nodes
INF-001
Inference
ARG Business Partner Role Beyond Distributor
ARG's extensive business development efforts, military introductions, technical support, and board advisor recruitment suggest role evolved beyond standard distributor to quasi-business partner.
Page 3, 4 — ARG played an integral role in the growth and success of Cyberlux's enterprise and functioned, in effect, as a business partner. ARG's efforts were critical to Cyberlux's success by introducing Cyberlux to key business contacts and purchasers of the Products and to individuals who could further support Cyberlux's business interests, providing comprehensive operational support, establishing test sites, facilitating the integration of complex firing mechanisms, generating valuable business leads, and advising on technical specifications and cost data
INF-002
Inference
HII Strategic Position Management
HII's reversal from naming ARG as proper interpleader claimant to excluding ARG suggests strategic litigation positioning rather than changed factual assessment.
Page 8, 9, 10 — On June 24, 2025, HII filed its original Complaint for Interpleader and properly named ARG as an interpleader defendant/claimant because ARG has claimed a right or interest in the interpleaded funds. Thus, HII agreed that ARG had a legitimate claim to the interpleaded funds and was a proper party to this action, otherwise it would not have included ARG as an interpleader defendant/claimant in the original Complaint. On August 4, 2025, HII filed the Amended Complaint, which did not include ARG as an interpleader defendant/claimant. which is directly contradicted by what HII alleged in the original Complaint. In a subsequent email to HII's counsel, ARG's counsel advised HII's counsel of the contradiction in HII's position, but HII's counsel did not reconsider his position.
OMI-001
Omission
No Defense of Partial Payment Adequacy
Document does not provide Cyberlux's explanation for why $375,000 partial payment was made or why it represents appropriate compensation given admitted debt.
Page 6 — In acknowledgment of ARG's contributions and its obligations under the Contract, Cyberlux has made $375,000 in partial payments to ARG and admitted that it owes ARG the amounts claimed, but it has refused to pay the remaining amounts owed ARG.
OMI-002
Omission
Signal Message Content Not Detailed
While ARG claims to possess hundreds of pages of Signal communications supporting its claims, specific message content and context are not provided in complaint.
Page 5 — ARG possesses hundreds of pages of Signal app communications between itself and Cyberlux, as well as separate group conversations including Larry Isely, which demonstrate ARG's involvement in guiding Cyberlux through key technical and operational matters.
Extracted text
12 pages · 19084 charactersFiling Header
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division
HII MISSION TECHNOLOGIES CORP.,
)
Plaintiff,
) ) )
Case No. 3:25-cv-483
)
V.
)
)
CYBERLUX CORP., et al.,
) )
Defendants.
)
)
COMPLAINT IN INTERVENTION OF THE ARG GROUP, LLC
In accordance with Federal Rule of Civil Procedure 24 and its Motion to Intervene, Intervenor The ARG Group, LLC ("ARG"), by and through its undersigned counsel of record, respectfully submits this Complaint in Intervention, and states as follows:
PARTIES
1.
Intervenor ARG is a Delaware limited liability company with its principal place of business located in Tucson, Arizona.
2.
Upon information and belief, the allegations regarding the parties as set forth in paragraphs 3 through 11 of Plaintiff HII Mission Technologies Corp.'s ("HII") First Amended Complaint for Interpleader (the "Amended Complaint", ECF 41) accurately describe the parties named in the Amended Complaint.
JURISDICTION AND VENUE
3.
ARG accepts the allegations regarding jurisdiction and venue set forth in paragraphs 12 through 16 of HII's Amended Complaint (ECF 41).
STATEMENT OF FACTS
4.
ARG asserts through this Complaint in Intervention its interest in the funds that HII has interpleaded in this case. As set forth below, ARG has an interest in the interpleaded funds and seeks a judgment and payment in the amount of at least $14,118,618.61 from the Initial Payment and Final Payment (defined below), including additional prejudgment interest on the Initial Payment as this case progresses and all prejudgment interest on the Final Payment, in satisfaction of that interest.
ARG's Contract With Cyberlux
5.
ARG is a Service-Disabled Veteran-Owned Small Business and is a leading provider of sales and tactical distribution services of advanced technology equipment to the Department of Defense, Federal Law Enforcement Agencies, and US Allies. ARG has a global reach across North and South America and Europe and is focused on delivering advanced technology solutions to the warfighter, including drone capabilities and advanced technology products for special operators. ARG serves the Special Operations Command, the U.S. Air Force, the National Guard Bureau, Homeland Security/Customs and Border Protection, and Federal Law Enforcement.
6.
Defendant Cyberlux Corporation ("Cyberlux") develops, manufactures, and sells Advanced Lighting Solutions ("ALS") for portable and fixed use, certain solar power solutions, and Unmanned Aircraft Systems ("UAS") products including UAS hardware and software solutions. Cyberlux's products include, but are not limited to, the BrightEye and Watchdog Tactical Illumination Systems, other various LED and solar products, and the FlightEye UAS products including FlightEye drone hardware and the Flight GDN software operating platform and related product offerings (all collectively, the "Products").
7.
In February 2022, ARG initiated discussions with Cyberlux about ways it could support the advancement and commercialization of Cyberlux's Products, including the sale of drones.
8.
On February 28, 2022, ARG and Cyberlux entered into a valid and binding "Cyberlux Corporation and The ARG Group, LLC Distributor Partner Agreement" (the "Contract").
9.
Pursuant to the terms of the Contract, ARG agreed to secure customer orders and facilitate the sale of Cyberlux's Products and Cyberlux agreed to provide ARG with a 20% discount off the GSA pricing for the Products.
10.
In accordance with paragraph 4A of the Contract, ARG and Cyberlux also agreed that the proceeds from sales of the Products would be allocated with 80% payable to Cyberlux and 20% payable to ARG.
11.
ARG played an integral role in the growth and success of Cyberlux's enterprise and functioned, in effect, as a business partner.
12.
As a result of ARG's substantial assistance, and as confirmed by Cyberlux and ARG's course of performance and written communications, Cyberlux agreed to share profits with ARG on sales of the Products regardless of whether ARG or Cyberlux originated the transaction. Indeed, on multiple occasions, Cyberlux's CEO Mark Schmidt expressly acknowledged, via Signal messages and other forms of communication, that ARG was entitled to 20% of the proceeds from sales of the Products (including drones) regardless of who the prime was on the contract. Mr. Schmidt also confirmed in writing that if Cyberlux sold the Products directly without a prime, ARG and Cyberlux would split the 20%, so ARG would receive 30% of the proceeds. This agreement recognized ARG's foundational role in enabling Cyberlux's access to those business opportunities.
ARG's Performance Under The Contract
13.
Following the commencement of the partnership and execution of the Contract, ARG quickly became a critical driver of Cyberlux's growth, actively contributing to business development, expanding market reach, and accelerating the deployment of key product lines.
14.
ARG's efforts were critical to Cyberlux's success by introducing Cyberlux to key business contacts and purchasers of the Products and to individuals who could further support Cyberlux's business interests, providing comprehensive operational support, establishing test sites, facilitating the integration of complex firing mechanisms, generating valuable business leads, and advising on technical specifications and cost data, each of which was essential to the effective functioning and growth of Cyberlux's operations.
15.
One of the primary Products Cyberlux and ARG planned to market and sell was the K8 Drone, which was manufactured and sold pursuant to the Subcontract (the "Subcontract") between Cyberlux and HII that is the subject of HII's Amended Complaint. See ECF 41, 11 17-30.
16.
To enhance the K8 Drone's appeal and functionality, ARG assembled a specialized team, including members of the U.S. Army, to help redesign its firing mechanism, with the goal of boosting both sales and marketability for Cyberlux.
17.
To launch the K8 Drone into the marketplace, ARG facilitated Cyberlux's participation in key trade shows, creating valuable opportunities to generate exposure and drive sales. At one particular trade show that ARG Group advised Cyberlux to attend (SOFIC in Tampa), ARG brought its key contacts, including representatives from USASOC, Global Ordnance, the Ukrainian Army, PRG, as well as Air Force and Navy EOD units. This strategic introduction enabled Cyberlux to connect with critical military and defense stakeholders and ultimately
led to a meeting with intervenor Fairwinds Technologies, LLC ("Fairwinds"). Through the connection with Fairwinds, Cyberlux was introduced to Ferd Irizarry, who would join Cyberlux's Board of Advisors. The creation of the Board of Advisors was directly initiated by ARG's recommendation.
18.
ARG also brought in Major General Cameron Holt to assist with developing a pathway to secure a Foreign Military Sales ("FMS") or Foreign Military Financing ("FMF") deal.
19.
On August 7, 2022, General Holt provided ARG with an eight-page roadmap titled "Accelerating FlightEye K8 FMS to Ukraine", which outlined the necessary steps, requirements, and government offices involved in advancing the sale of the K8 drones.
20.
By November 2022, Cyberlux added retired Army Sergeant Major Marty Moore to its Board of Advisors. Sergeant Major Moore was a contact of Jeremy Shrock, whom ARG had brought in specifically to assist with lead development and the design of the K8 Drone's firing mechanism. At that point, Cyberlux's Board of Advisors included Major General Holt, Sergeant Major Moore, and Brigadier General Irizarry, all of whom were introduced to Cyberlux directly or indirectly through ARG's efforts and network.
21.
ARG possesses hundreds of pages of Signal app communications between itself and Cyberlux, as well as separate group conversations including Larry Isely, which demonstrate ARG's involvement in guiding Cyberlux through key technical and operational matters. These communications show that ARG played a central role in navigating the integration of the K8 drone firing mechanism, developing specification sheets, and compiling cost data necessary to advance the K8 drone project.
22.
As a result of ARG's substantial assistance, including establishing key business contacts and facilitating operations, Cyberlux agreed to share profits with ARG on sales regardless of
which party originated the transaction. This agreement recognized ARG's foundational role in enabling Cyberlux's access to those business opportunities.
23.
As a direct result of ARG's efforts pursuant to the Contract, ARG was instrumental in securing for Cyberlux the Subcontract between Cyberlux and HII for Cyberlux to supply K8 Unmanned Aircraft Systems, resulting in Cyberlux receiving $38,700,600 up front (the "Initial Payment") and $25,769,369.03 as final payment (the "Final Payment") from HII. To be clear, the K8 Drone was manufactured and sold pursuant to the Subcontract that is the subject of HII's Amended Complaint. See ECF 41, 11 17-30.
The Amounts Owed ARG Under The Contract
24.
Although Cyberlux received the Initial Payment from HII, it did not remit payment to ARG. 25. In accordance with the Contract, ARG is entitled to 20% of the $38,700,600 Initial Payment, which is $7,740,120. ARG has not been paid its 20% of the Initial Payment for over 31 months (as of April 15, 2026). Prejudgment interest at 8% for 31 months on the $7,740,120 Initial Payment is $1,599,624.80 ($51,600.80/month). Therefore, through April 15, 2026, ARG is owed $9,339,744.80 from the Initial Payment.
26.
ARG also is entitled to 20% of the $25,769,369.03 Final Payment, which is $5,153,873.81, plus prejudgment interest which cannot be calculated at this time.
27.
In acknowledgment of ARG's contributions and its obligations under the Contract, Cyberlux has made $375,000 in partial payments to ARG and admitted that it owes ARG the amounts claimed, but it has refused to pay the remaining amounts owed ARG.
28.
After subtracting the $375,000 in partial payments made by Cyberlux, through April 15, 2026, in total, ARG is entitled to at least $14,118,618.61 from the Initial Payment and Final
Payment, including additional prejudgment interest on the Initial Payment as this case progresses and all prejudgment interest on the Final Payment.
29.
ARG fully complied with its obligations under the Contract and there are no set-offs or counterclaims against the amount owed to ARG.
30.
ARG has repeatedly demanded that Cyberlux pay all amounts owed ARG, but Cyberlux has failed and/or refused to do so.
The North Carolina Action
31.
Because Cyberlux was in material breach of the Contract and engaged in other wrongful conduct, on April 24, 2025, ARG brought a Complaint in the Superior Court for the County of Durham, North Carolina, Case No. 25CV004246-310 (the "North Carolina Action"), alleging claims for breach of contract, unjust enrichment/quantum meruit (in the alternative to the breach of contract claim), breach of contract implied in fact, conversion, and unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1, et. seq. For relief, ARG seeks at least $14,118,618.61 from the Initial Payment and Final Payment, including additional prejudgment interest on the Initial Payment as the case progresses and all prejudgment interest on the Final Payment, treble damages pursuant to N.C. Gen. Stat. § 75-16, all attorneys' fees and costs pursuant to the Contract, N.C. Gen. Stat. § 75-16.1, any other applicable statute, and/or other equitable power of the Court, post-judgment interest, and such other and further relief as the Court may deem appropriate.
32.
In the North Carolina Action, Cyberlux filed an Answer and the case is at issue.
33.
On or about February 25, 2026, ARG and Cyberlux executed an "Amendment No. 1 to Distributor Partner Agreement [the Contract]" (the "Amendment"), which permits ARG to file its Motion to Intervene in this action.1
ARG's Proper Inclusion In The Original Complaint For Interpleader
34.
On May 20, 2025, counsel for ARG sent a letter to Clark J. Belote, Esq., counsel for HII in this action, which advised Mr. Belote of ARG's "claims to funds held or to be held by HII on behalf of or for the benefit of [Cyberlux]" pursuant to the Subcontract at issue in this action, and further advised that "ARG hereby asserts it is an interested stakeholder in any payment due and owed to Cyberlux by HII because Cyberlux has not satisfied debts due and owed to ARG, in whole or in part, under a valid and enforceable contract." To support ARG's claims, ARG's counsel attached, inter alia, the Contract and the complaint in the North Carolina Action. That same day, ARG's counsel also sent a letter to Charles Watts of Cyberlux again demanding all amounts owed pursuant to the Contract and claimed in the North Carolina Action.
35.
On June 24, 2025, HII filed its original Complaint for Interpleader and properly named ARG as an interpleader defendant/claimant because ARG has claimed a right or interest in the interpleaded funds. See ECF 1 at 111, 10. More specifically, the original Complaint alleges that, "[b]y letter dated April 28, 2025 (attached as Exhibit 10), ARG Group asserted it is 'an interested stakeholder in any payment due and owed to Cyberlux by HII because Cyberlux has not satisfied debts due and owed to ARG, in whole or in part, under a valid and enforceable contract[.]'". Id. at 1 67.
1
If the Court grants ARG's Motion to Intervene, then ARG intends to move to stay and/or voluntarily dismiss the North Carolina Action.
36.
Thus, HII agreed that ARG had a legitimate claim to the interpleaded funds and was a proper party to this action, otherwise it would not have included ARG as an interpleader defendant/claimant in the original Complaint. See ECF 132 at 1, n. 2 (In granting Thin Air Gear, LLC's ("TAG") Motion to Intervene, the Court stated, "[n]otably, HII's original complaint named TAG as an interpleader creditor-defendant").
HII's Improper Exclusion Of ARG From The Amended Complaint For Interpleader
37.
On July 14, 2025, Mr. Belote sent a letter to ARG's counsel advising, inter alia, that HII would be filing an Amended Complaint for Interpleader and requesting confirmation whether ARG asserts an interest in, or claim to, the Payment Receivable (defined in this letter as additional amounts held by HII that may otherwise be or become payable to Cyberlux under the Subcontract or otherwise interpleaded in this case). Mr. Belote sought this confirmation and supporting information by July 23, 2025.
38.
As requested, on July 14, 2025, ARG's counsel sent a letter to Mr. Belote that confirmed ARG's interest and entitlement to its portion of the Payment Receivable and provided information and documents that supported ARG's claim for $15,272,447.30 of the Payment Receivable.
39.
On August 4, 2025, HII filed the Amended Complaint, which did not include ARG as an interpleader defendant/claimant. See ECF 41.
40.
In an August 4, 2025 email to ARG's counsel, Mr. Belote confirmed that ARG "is no longer a party to the case because, in HII's view, it has not articulated a colorable legal basis to claim an interest in the Disputed Funds (as defined therein), as opposed to holding a general claim against Cyberlux", which is directly contradicted by what HII alleged in the original
Complaint. In a subsequent email to HII's counsel, ARG's counsel advised HII's counsel of the contradiction in HII's position, but HII's counsel did not reconsider his position.
41.
As of the date of this filing, HII and Cyberlux have not paid ARG the amounts owed pursuant to the Contract, the North Carolina Action, or otherwise
COUNT I - JUDGMENT IN INTERPLEADER PURSUANT TO 28 U.S.C. § 1335 AND 28 U.S.C. § 2361
42.
ARG re-alleges and incorporates by reference each allegation set forth above as if fully set forth herein.
43.
Pursuant to 28 U.S.C. § 1335 and 28 U.S.C. § 2361, the Court has authority to enter judgment distributing the interpleaded funds as appropriate or as justice so demands.
44.
Based upon the Statement of Facts alleged above, ARG is entitled to a judgment directing that the Court pay ARG at least $14,118,618.61 from the Initial Payment and Final Payment, including additional prejudgment interest on the Initial Payment as this case progresses and all prejudgment interest on the Final Payment, plus applicable post-judgment interest and all attorneys' fees and costs incurred in the prosecution of this Complaint in Intervention from the interpleaded funds.
PRAYER FOR RELIEF/AD DAMNUM
WHEREFORE, ARG requests that Judgment be entered in ARG's favor as follows:
1.
A Judgment directing that ARG is awarded at least $14,118,618.61 from the Initial Payment and Final Payment, including additional prejudgment interest on the Initial Payment as this case progresses and all prejudgment interest on the Final Payment from the interpleaded funds;
2.
All reasonable attorneys' fees and costs (including expert witness fees and other costs of litigation) incurred in the prosecution of this Complaint in Intervention;
3.
Post-judgment interest as permitted by law; and
4.
Such other and further relief as the Court deems just and proper.
Dated: March 6, 2026
Respectfully submitted,
/s/ Stephen J. Stine, Esq. Stephen J. Stine, Esq. (VSB# 66738) Stephen L. Neal, Jr., Esq. (VSB# 87064) THE STINE LAW FIRM, PLLC 3900 Jermantown Rd., Suite 300 Fairfax, VA 22030-4900 Office Phone: 703.934-4647, Ext. 326
Cell Phone: (703) 501-5366 Fax: (703) 991-6559 Email: stine@stinelaw.com
sneal@stinelaw.com
Counsel for The ARG Group, LLC
CERTIFICATE OF SERVICE
I hereby certify that on this 6th day of March, 2026, a true and correct copy of the foregoing was served via CM/ECF, upon all counsel of record.
Respectfully submitted, /s/ Stephen J. Stine, Esq. Stephen J. Stine, Esq. (VSB# 66738) Stephen L. Neal, Jr., Esq. (VSB# 87064) THE STINE LAW FIRM, PLLC 3900 Jermantown Rd., Suite 300 Fairfax, VA 22030-4900
Office Phone: 703.934-4647, Ext. 326 Cell Phone: (703) 501-5366 Fax: (703) 991-6559 Email: stine@stinelaw.com
sneal@stinelaw.com
Counsel for The ARG Group, LLC
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