The contract, the promotion, and the charged fraud.
A $78.8 million contract announced on OTC investor platforms that had been running a coordinated share distribution for two years. A federal indictment that names Cyberlux as one of six charged issuers. A company whose December 2025 cash balance is $326,958 against $64.1 million in liabilities — with the $26.4 million receivable it's claiming already subject to $49 million in competing claims.
The Rosen layer — what the indictment and SEC complaint establish
On January 16, 2026, a federal grand jury in the Southern District of California indicted Brett David Rosen (aka Brett Hackspacher), Deborah Rachel Rosen (aka Deborah Rachel Braun), and RB Capital Partners, Inc. on charges of conspiracy to commit securities fraud, securities fraud, conspiracy to launder monetary instruments, and money laundering. The indictment was unsealed January 21, 2026 — the same day the U.S. government executed eight seizure warrants targeting known financial accounts controlled by the Rosens and RB Capital.
The SEC filed a parallel civil complaint on January 21, 2026 against Brett Rosen, Deborah Braun, David M. Massey, and RB Capital Partners, Inc.
Cyberlux Corp. (OTC: CYBL) is named as one of six issuers in the charged conduct. It is named as an issuer — not as a defendant. The six issuers are: Optec International (OPTI); Sunshine Biopharma (SBFM); BlockQuarry Corp. (BLQC, formerly ISWH); Solar Integrated Roofing Corp. (SIRC); Cyberlux Corp. (CYBL); and Ilustrato Pictures International (ILUS).
The charged conspiracy period — August 10, 2020 to October 14, 2024 — encompasses the entire Operation Alpha share distribution window (July 2021–May 2022), the contract award (August 2023), the advance payment arrival (September 8, 2023), the Stop Work Order (December 22, 2023), the termination (May 2024), and the filing of the interpleader (June 2025 preceding the summary judgment deadline).
The indictment's theory is that the Rosens manipulated the stock prices of multiple microcap companies through a coordinated scheme of purchases, financing arrangements, and public promotional activity. During the charged period, the government alleges the Rosens sold over $100 million worth of stock across the six named issuers.
| Issuer | Ticker | Key RB Capital activity in charged period |
|---|---|---|
| Optec International | OPTI | Named in charged conduct |
| Sunshine Biopharma | SBFM | Named in charged conduct |
| BlockQuarry Corp. / ISW Holdings | BLQC / ISWH | Named in charged conduct |
| Solar Integrated Roofing Corp. | SIRC | 1.7B shares sold · gross $34.3M (per indictment) |
| Cyberlux Corp. | CYBL | 450M shares issued (unrestricted) · $11.6M gross proceeds · Oct 2021–Nov 2022 |
| Ilustrato Pictures International | ILUS | Named in charged conduct |
Operation Alpha — the share distribution record, 2021–2022
Cyberlux Corporation's OTC annual filings for fiscal years 2022 and 2023 document the issuance of approximately 1.6 billion common shares to more than thirty named individuals and entities between mid-2021 and end-2022. The company's own annual report uses the term "Operation Alpha" to describe this period's expansion strategy. The same term appears in the charged securities fraud context.
The distribution divides into four analytically distinct groups. Group A — the coordinated Stock Purchase Agreement cohort — received identical 20,833,333-share tranches at $0.0012 on concentrated dates across July 2021, August 2021, October 2021, and January 2022. Group C — the Rosen/RB Capital financing layer — received predominantly unrestricted shares freely tradeable at issuance.
| Group | Description | Total shares | Key recipients | Restricted |
|---|---|---|---|---|
| Group A — Coordinated SPA cohort · $0.0012 per share · 2021–2022 | ||||
| William Ferrell (@WTF_OS) | Stock Purchase Agreement | 83,333,332 | 4 tranches · Jul 21 ×2, Oct 8 2021, Jan 7 2022 | Yes |
| Priyanka Saxena | Stock Purchase Agreement | 93,333,333 | 5 tranches across the same dates | Yes |
| Salahuddin Siddiq | Stock Purchase Agreement | 62,499,999 | 3 tranches | Yes |
| Clay DeNicola | Stock Purchase Agreement | 62,499,999 | 3 tranches | Yes |
| Matt Rivett | Stock Purchase Agreement | 62,499,999 | 3 tranches | Yes |
| David McClintock, Colin Udvig, Christopher Fulkerson, Sameer Jain, and others | Stock Purchase Agreement | ~108,000,000 | Coordinated July–October 2021 | Yes |
| Group A total | ~473M | 15 named recipients · all same dates and price | All restricted | |
| Group B — Explicitly labeled PR / promotional / sales services | ||||
| Flying V Group / Brennan Smith | Public Relations Services Terms | 2,000,000 | Dec 27, 2021 · Official IR firm in OTC filings | Yes |
| North Equities USA / Ernest Chuang | Public Relations Services Terms | 5,882,353 | Mar 16, 2022 | Yes |
| Strike Group / Lane Coleman + Anthony Gonzalez | Sales Representation | 3,000,000 | Oct 2021, Mar 2022 | Yes |
| Group C — Rosen / RB Capital financing layer · predominantly unrestricted | ||||
| RB Capital Partners / Brett & Deborah Rosen | Debt Purchase Agreement | 450,000,000 | Oct 21, Nov 10, 2021; Aug 15, 2022 · UNRESTRICTED | No |
| Montague Capital / Denis Kalenja | Debt Settlement | 200,000,000 | Nov 3, 2021 · UNRESTRICTED | No |
| Rock Bay Partners / Alston Gardner | Debt Purchase Agreement | 27,637,500 | Nov 9, 2021 · UNRESTRICTED | No |
| Aggregate (Groups A–D) | ~1.6 billion | 30+ named recipients · OTC annual filings FY2022–FY2023 | ||
The contract as promotional catalyst
The August 2023 contract announcement — a $78,857,414 firm fixed-price subcontract for 2,000 drones — landed inside a promotional ecosystem that had been running for two years. The announcement implied a per-unit value of $39,429 per K8 drone. Seventeen months before the contract was signed, CEO Mark Schmidt told a colleague by Signal that the all-in cost to manufacture a K8 was $4,700.
The gap between the $4,700 production cost and the $39,429 implied contract value is the space in which the commission architecture — ARG's 20%, Fairwinds' 8%, WeShield's claim, Montague's brokerage — was built. It is also the gap that made the contract announcement a powerful promotional event for a stock trading in fractions of a cent.
$39,429 — implied per-unit value at contract award, August 2023 ($78,857,414 ÷ 2,000 units)
$34,729 — the gap per drone, across 2,000 units, before a single drone was accepted
The Schmidt iMessage was filed by ARG Group as its own sworn Exhibit B in the federal interpleader (ECF 167-1, p. ARG-0048) — in support of ARG's own commission claim. It is, by some margin, the most useful document in the case that ARG submitted in support of its own position.
The promotional ecosystem — paid promotion and disclosure
Section 17(b) of the Securities Act of 1933 makes it unlawful for any person to circulate or publish any communication that describes a security for consideration received or to be received without fully disclosing the receipt of that consideration and the amount of it. The requirement applies to both cash compensation and equity — any financial interest that benefits from the security's price rising constitutes relevant consideration.
The record documents three distinct promotional actors in the CYBL ecosystem during the Operation Alpha period. Their relationships to the issuer are drawn from court filings, OTC regulatory filings, and the Curtin v. Watts complaint.
$65,000+ received from Cyberlux in 2024 as an undisclosed paid promoter — per the Curtin Supplemental Declaration, filed under penalty of perjury, "upon information and belief." Prior investigative coverage, citing court records, reported a rate of at least $5,000 per month.
Platforms: X/Twitter (@WTF_OS), StockTwits, InvestorHub, Discord — the primary OTC investor community channels for $CYBL during the promotional period.
Disclosure identified: None. No @WTF_OS posting across any documented platform has been identified as carrying a Section 17(b) disclosure of either the stock holdings or the cash compensation.
Farrell is named in the Curtin Amended Complaint reservation of rights: "William T. Farrell (X.com alias @WTF_OS) and any other market promoters or parties paid to influence the market for Cyberlux stock."
Flying V Group is named in the Curtin Amended Complaint's reservation of rights alongside undisclosed paid social media agents, burner account operators, and Farrell. The juxtaposition — official IR listing in regulatory filings, reservation in litigation alongside undisclosed promoters — is the central structural question for this actor.
September 2021 is not a coincidence. It is the same quarter Cyberlux references "Operation Alpha" in its annual report, the same quarter RB Capital enters the CYBL funding agreement, and the same period the first Operation Alpha share tranches begin.
The legal framework
What the record shows: The considerations documented for the CYBL promotional ecosystem include: (a) 83,333,332 shares at $0.0012 to Ferrell; (b) cash compensation of $65,000+ in 2024 to Farrell; (c) 2,000,000 shares to Flying V Group/Smith; (d) 5,882,353 shares to North Equities/Chuang for PR services. No Section 17(b) disclosure is identified on any platform for any of these actors in any public filing reviewed for this investigation.
The Rosen indictment charges: The Rosens are charged under § 78j(b), 78ff, and Rule 10b-5 for their conduct with respect to CYBL and the five other named issuers. The scheme alleged involves manipulative trading, coordinated promotional activity, and the creation of false market activity.
The current state of Cyberlux — what the FY2025 filing says
The Cyberlux FY2025 annual report — filed March 31, 2026 — describes a company whose financial position is defined almost entirely by litigation. Cash on hand: $326,958. Total liabilities: $64.1 million. The largest asset on the balance sheet is a $26.4 million receivable — which is the interpleader fund against which $49 million in claims have been filed.
The same annual filing names Flying V Group as Cyberlux's investor relations firm. It does not mention the Rosen indictment or the SEC complaint. It does not mention that Cyberlux is a named issuer in charged federal securities fraud conduct. It represents a "thriving" UAS business despite having been locked out of its Spring, Texas drone manufacturing facility since May 23, 2025.