Exhibit A
1. For common equity, describe any dividend, voting and preemption rights.
DISTIL analysis
- Judgment creditors request receiver appointment in Harris County case 2024-48085
- Cyberlux allegedly amended credit line to $12.3M and factored HII receivables for ~$5M in April 2025
- Cyberlux anticipates receiving over $20M from HII settlement signed February 27, 2025
- Cyberlux paying default interest rates on credit facility
- Q1 2025 financials show $26M negative working capital, $49.3M current liabilities, $2.1M quarterly loss
- Company financial statements include going concern warnings and liquidity crisis disclosures
Extracted text
51 pages · 118851 charactersSMG LAW FIRM OF SHAWN M. GRADY, PLLC
5/19/2025 1:15 PM Marilyn Burgess - District Clerk Harris County SHAWN M.PORPANPY100997993 By: Shanelle Taylor Filed: 5/19/2025 1:15 PM Direct (832) 692-4542 shawn@gradycollectionlaw.com
MPLICAN BOARD OF CERTIFICATION
Board Certified in Creditor's Rights Law
May 19, 2025
Honorable Judge Michael Gomez 129th Judicial District Court Harris County, Texas
Cause No. 2024-48085, Atlantic Wave Holdings, LLC and Secure Community, LLC vs. Cyberlux Corporation and Mark D. Schmidt, individually; In the 129th Judicial District Court, Harris County, Texas
Dear Judge Gomez:
I write to provide a supplemental update to our letter to the Court dated May 15, 2025. Late in the day on May 15, 2025 Judgement Debtors filed their Q1 2025 financial disclosure, a copy of which I have attached. (See Attached Exhibit 1)
In their disclosure they state:
"In April 2025, the Company amended its line of credit increasing the limit under the agreement to $12.3 million and extending the term through July 2025" Page 46, Annual Report For the quarter ending March 31, 2025 (attached).
and:
"Payments received from customers under these specific purchase orders are required to be remitted to the lender." Page 44, Note M, Annual Report For the quarter ending March 31, 2025 (attached).
A few weeks ago in April after Judgement Debtors removed this matter for the second time, it appears Judgment Debtors again factored their receivable from Hunting Ingals Industries (HII) for an approximate additional $5,000,000. This A/R has been at the center of the current collection litigation. Upon information and belief, Judgment Debtors will be receiving a payment in excess of $20,000,000 from HII any day now as a result of a Settlement Agreement between Judgement Debtors and HI, signed on February 27, 2025. Also, their disclosure statement states they are paying a "default interest rate", which will further reduce the amount of the settlement payment.
It is not known how much of this additional loan Judgement Debtors have received as yet.
As the Court may recall, Judgment Creditors believed and were concerned Judgment Debtors would attempt to further remove assets from the reach of their Creditors. Specifically, Judgment Debtors had, during the collection's litigation, factored receivables in an attempt to place those funds out of reach of Judgement Creditors. We now learn they have done this once again.
For the reasons within our May 15, 2025 letter and the additional information provided herein, we respectfully ask that the Court enter the Order appointing Receiver to prevent Judgement Debtors from further dissipating assets.
Yours very truly, /s/ Shawn M. Grady State Bar No. 24076411
Unofficial Copy Office of Marilyn Burgess District Clerk
Unofficial Copy Office of Marilyn Burgess District Clerk
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
Annual Report For the quarter ending March 31, 2025 (the "Reporting Period")
mix ofson reso shal Unofficial Ceny Officeof Matlan Burgess Districta. el
The number of shares outstanding of our Common Stock was:
6,162,620,150 as of March 31, 2025 (Current Reporting Period Date or More Recent Date) 5,993,363,945 as of December 31, 2024 (Most Recently Completed Fiscal Year End)
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: :selected: No:
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 Control4 of the company has occurred during this reporting period: :unselected: Yes:
:selected: NoG
(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.
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.
Current State and Date of Incorporation or Registration: State of Nevada, Mag 17, 2000.
Standing in this jurisdiction: (e.g. active, default, inactive): Active.
Prior Incorporation Information for the issuer and any predecessorsduring the past five years:
None.
Describe any trading suspension or halt orders issued by the SEC or FINRA concerning the issuer or its predecessors since inception:
None.
List any stock split, dividend, recapitalization, merger, acquisition, spin-off, or reorganization either currently anticipated or that occurred within the past 12 months:
Effective April 2, 2024, the Company effected a repurchase of 4,300,000 shares of its Series B Convertible Preferred Shares. See Item 2 - Issuance History, below.
On May 8, 2024, the Company issued 6,745 shares of its Common Stock to the former holders of its Series A Convertible Preferred Shares at a conversion rate of 250 shares of Common Stock per Series A share.
Address of the issuer's principal executive office:
Address of the issuer's principal place of business: :selected: Check if principal executive office and principal place of business are the same address:
Has the issuer or any of its predecessors been in bankruptcy, receivership, or any similar proceeding in the past five years?
No: :selected:
Yes: :unselected: If Yes, provide additional details below:
norcia Carry offres of Marilyn Burgess District Check
Name:
Standard Registrar and Transfer Company, Inc.
Phone:
801-571-8844
Email:
amy@standardregistrar.com
Address:
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:
CYBLZ
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 date:
March 31, 2025
Total shares outstanding:
6,162,620,150
as of date:
March 31, 2025
Total number of shareholders of record;
as of date:
March 31, 2025
Please provide the above-referenced information for all other publicly quoted or traded securities of the issuer.
None.
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 that do not have a trading symbol). Use the fields below to provide the information, as applicable, for all other authorized OD outstanding equity securities.
Exact title and class of the security:
Series B Convertible Preferred Stock
Par or stated value:
$0.001
Total shares authorized:
99,000,000
as of date:
March 31, 2025
Total shares outstanding:
86,000,000
as of date:
March 31, 2025
Total number of shareholders of record:
as of date:
March 31, 2025
Exact title and class of the security:
Series C Convertible Preferred Stock
Par or stated value:
$0.001
Total shares authorized:
150,000
as of date:
March 31, 2025
Total shares outstanding:
150,000
as of date:
March 31, 2025
Total number of shareholders of record:
as of date:
March 31, 2025
Please provide the above-referenced information for all other classes of authorized or outstanding equity securities.
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:
No special rights attach to the Common Stock.
Series A Convertible Preferred Stock: Effective November 27, 2024, the Company filed a Certificate of Withdrawal of the Certificate of Designation. Consequently, the Company no longer has a 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 Designation 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 Series B share.
Conversion. The Certificate of Designation for the Series B originally provided that each Series B share 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 Designation to provide for conversion of each share of Series B into 200 shares of the Company's Common Stock.
Liquidation. The Certificate of Designation 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 Series B share 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 Series B Preferred share 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 shall not be entitled to any further payment.
Dividends. None declared by the Board of Directors. If determined by the Board, holders of record of the Series C 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 Series C shares are non-voting.
Conversion The Series C shares are convertible, at the option of the holder, into shares of Common Stock one year from issuance. The number of Common Stock shares to be issued per Series C share is calculatedby dividing $25.20 by the 10 DMA (daily moving average), adjusted for the 200) reverse split effected in 2010. That formula computes as: ($25.20/10DMA)/200.
Liquidation. Liquidation rights for the Series C are the same as for the Series B.
None.
None.
The goal of this section is to provide disclosure with respect to each event that resulted in any changes to the total shares outstanding of any class of the issuer's securities in the past two completed fiscal years and any subsequent interim period.
Disclosure under this item shall include, in chronological order, all offerings and issuances of securities, including debt convertible into equity securities, whether private or public, and all shares, or any other securities or options to acquire such securities, issued for services. Using the tabular format below, please describe these events.
Indicate by check mark whether there were any changes to the number of outstanding shares within the past two completed fiscal years: No: :unselected: Yes: :selected: (If yes, you must complete the table below)
Shares Outstanding Opening Balance:
Date 12/31/2022 Common: 5,787,666,363
Preferred: A: 26.9806* B: 70,500,000
C: 150,000
Right-click the rows below and select "Insert" to add rows as needed.
Date of Transaction
Transaction type (e.g., new issuance, cancellation shares returned to treasury)
Number of Shares Issued (or cancelled)
Class of Securities
Value of shares issued ($/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. *** You must disclose the control person(s) for any entities listed,
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.
3/7/2025
New
21,153,846
Common
$0.0013
No
Jeryl S Rawls Revocable Trust
Conversion of debt and accrued interest
Restricted
4(a)(2)
3/7/2025
New
48,076,923
Common
$0.0013
No
Giorgios Bakatasias
Conversion of debt and accrued interest
Restricted
4(a)(2)
3/7/2025
New
62,500,000
Common
No
Fly-Rite LLC
Conversion of debt and accrued interest
Restricted
4(a)(2)
1/17/2025
New
10,781,250
Common
$0.0016
No
John W Dixon
Conversion of debt and accrued interest
Restricted
4(a)(2)
1/17/2025
New
26,744,186
Common
$0.0043
No
Andras Forgacs
Conversion of debt and accrued interest
Restricted
4(a)(2)
12/09/2024
New
47,619,048
Common
$0.0021
No
Christopher Whitehead
Conversion of debt and accrued interest
Restricted
4(a)(2)
05/08/2024
New
Common
$0.001
Yes
John G. Hule
Conversion of Series A Preferred
Restricted
4(a)(2)
05/08/2024
New
Common
$0.001
Yes
Ward I. Snyder
Conversion of Series A Preferred
Restricted
4(a)(2)
05/08/2024
New
Common
$0.001
Yes
Charles O'Brien
Conversion of Series A Preferred
Restricted
4(a)(2)
05/08/2024
New
1,250
Common
$0.001
Yes
Neal M. Goldstein
Conversion of Series A Preferred
Restricted
4(a)(2)
05/08/2024
New
Common
$0.001
Yes
David W. Eckert
Conversion of Series A Preferred
Restricted
4(a)(2)
05/08/2024
New
1,000
Common
$0.001
Yes
Christina Crossman
Conversion of Series A Preferred
Restricted
4(a)(2)
05/08/2024
New
2,500
Common
$0.001
Yes
Lon E. Bell
Conversion of Series A Preferred
Restricted
4(a)(2)
05/06/2024
New
2,500,000
Common
$0.001
Yes
Matthew Weaver
Employment Agreement
Restricted
05/06/2024
New
10,000,000
Common
$0.001
Yes
Martin Moore
Employment Agreement
Restricted
05/06/2024
New
2,500,000
Common
$0.001
Yes
Robert Ossman
Consulting Agreement
Restricted
05/06/2024
New
12,500,000
Common
$0.001
Obie Castellano
Consulting Agreement
Restricted
05/06/2024
New
15,000,000
Common
$0.001
Yes
Elgin Davidson
Employment Agreement
Restricted
05/06/2024
New
5,000,000
Common
$0.001
Yes
Chris Barter
Employment Agreement
Restricted
05/06/2024
New
6,666,667
Common
$0.00375
Yes
Wesley King
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
362,319
Common
$0.0138
Yes
Wesley King
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
9.090,909
Common
$0.0011
Yes
Vaughan Graves
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
1,000,000
Common
$0.00250
Yes
Ken Lewis
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
3,703,704
Common
$0.00135
Yes
Jack Moore
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
4,545,454
Common
$0.0011
Yes
Sidney H. Evans, Jr.
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
4,545,454
Common
$0.0011
Yes
Sidney H. Evans, Jr.
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
7,000,000
Common
$0.001
Yes
Ronald Corlew
Loan and Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
2,272,727
Common
$0.0011
Yes
Lola Green Keyes
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
10,000,000
Common
$0.001
Yes
John Mullins
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
13,846,154
Common
$0.001
Yes
Charles Coote, Jr.
Loan Agreement
Restricted
4(a)(2)
05/06/2024
New
4,550,000
Common
$0.0011
Yes
Bernard C. Randolph, Jr.
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
1,666,667
Common
$0.003
Yes
Ronald Childs
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
333,334
Common
$0.003
Yes
Alvin Campbell
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
2,000,000
Common
$0.005
Yes
Wayne Martin
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
1,000,000
Common
HALVLEKEN $0.005
Robert E. Dawson, Jr.
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
1,666,667
Common
$0.005
Yes
Lasheena Culberson
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
2,000,000
Commons
$0.005
Yes
Johnny May
Stock Purchase Agreement
Restricted
4(a)(2)
05/06/2024
New
1,000,000
Common
$0.005
Yes
Albert Granger
Stock Purchase Agreement
Restricted
4(a)(2)
04/02/2024
Return to Treasury
-4,300,000
Series B
$0.001
Yes
David D. Downing
Repurchase by Company
Restricted
4(a)(2)
03/26/2024
New
10,000,000
Common
$0.001
Yes
JMH Consulting Group, Inc./ Ferdinand Irizarry
Consulting Agreement
Restricted
4(a)(2)
02/28/2024
New
3,000,000
Series B
$0.001
Yes
Bill Maadarani
Management Incentive
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
$0.25
RB Capital Partners Inc./ Brett Rosen, Deborah Rosen
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
Phillip Tucker
Catalyst Machineworks Acquisition Agreement
Restricted
4(a)(2)
07/10/2023
New
5,000,000
Common
0.05
Yes
Neill Whiteley
Catalyst Machineworks 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
Affidaýìť of Løst 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
Igof 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
es
Back Forty Strategies, LLC/ LTG Paul Ostrowski
Advisory Board Agreement Terms
Restricted
4(a)(2)
04/19/2023
New
10,000,000
Common
3.001
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
Restricted
4(a)(2)
Agreement Terms
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)
Shares Outstanding on Date of This Report:
Ending Balance:
Date 03/31/25
Common: 6,162,620,150
Preferred: A: 0
B: 86,000,000
C: 150,000
Example: A company with a fiscal year end of December 31st 2024, in addressing this item for its Annual Report, would include any events that resulted in changes to any class of its outstanding shares from the period beginning on January 1, 2023 through December 31, 2024 pursuant to the tabular format above.
Any additional material details, including footnotes to the table are below:
Subsequent Events. Pursuant to a settlement agreement among the Company, Roman Investments PR, LLC, Rosewood Theater LLC, and related parties, on or about April 10, 2025, (a) Roman Investments PR, LLC returned 62,500,000 shares of Common Stock and (b) Rosewood Theater LLC returned 41,700,000 shares of Common Stock to the Company's Treasury in respect of convertible notes heretofore converted but as to which notices of conversion had not been provided. In connection with the same settlement, the Company has agreed to issue 240,000,000 restricted shares of Common Stock to Assure Global LLC, being a net incremental issuance of 135,800 shares of Common Stock.
The following is a complete list of the Company's Convertible Debt which includes all promissory notes, convertible notes, convertible debentures, or any other debt instruments convertible into a class of the issuer's equity securities. The table includes all issued or outstanding convertible debt at any time during the last complete fiscal year and any interim period between the last fiscal year end and the date of this Certification.
Check this box to confirm the Company had no Convertible Debt issued or outstanding at any point during this period. :unselected:
Date of Note Issuance
Principal Amount at Issuance ($)
Outstanding Balance ($) (include accrued interest)*
Maturity Date
Conversion Terms (e.g., pricing mechanism for determining conversion of instrument to shares)
# Shares Converted to Date"
# of Potential Shares to be Issued Upon Conversion5
Name of Noteholder You must disclose the control person(s) for any entities listed
Reason for Issuance (e.g., Loan, Services, etc.)
10/22/2021
1,500,000
1,491,671
11/08/2023
$0.25 Conversion per share ***
5,966,684
RB Capital Partners Brett Rosen Deborah Rosen
Loan
11/08/2021
1,500,000
1,751,918
11/22/2023
$0.25 Conversion per share ***
7.007,672
RB Capital Partners Brett Rosen Deborah Rosen
Loan
11/22/2021
1,500,000
11/22/2023
$0.25 Conversion per share
6,618,740
RB Capital Partners Brett Rosen Deborah Rosen
Loan
05/23/2022
500,000
571,507
05/23/2024
$0.25 Conversion per share ***
2,286,028
RB Capital Partners Brett Rosen Deborah Rosen
Loan
07/12/2022
250,000
284,041
07/12/2024
$0.10 Conversion per share ***
1,136,164
RB Capital Partners Brett Rosen Deborah Rosen
Loan
09/29/2022
100,000
110,630
09/29/2025
$0.0049 Conversion per share or 85% of 10 Day Moving Average
22,577,551
Bilal Maadarani
Loan
09/29/2022
100,000
110,466
09/29/2025
$0.0032 Conversion per share or 85% of 10 Day Moving Average
34,520,625
Eris Cali
Loan
09/29/2022
100,000
110,164
09/29/2025
$0.0036 Conversion per share or 85% of
30,601,111
Eris Cali
Loan
09/29/2022
100,000
09/29/2025
$0.0036 Conversion per share or 85% of 10 Day Moving Average
Bilal Maadarani
Loan
01/22/2023
100,000
110,808
01/22/2027
$0.0052 Conversion Price per share
21,309,230
Bassam Pharaon
Loan
04/06/2023
100,000
109,866
04/06/2026
$0.0035 Conversion per share
31,390,283
Matt Jones
Loan
05/09/2023
100,000
05/09/2024
$0.0043 Conversion per share
26,744,186
Andras Forgacs
Loan
05/22/2023
100,000
109,414
05/22/2026
$0.0026 Conversion per share or 85% of 10 Day Moving Average
32,670.647
Robert Miller
Loan
6/12/2023
100,000
6/12/2026
85% of 10 Day Moving Average
47,619,048
Christopher Whitehead
Loan
06/14/2023
25,000
06/14/2024
$0.0013 Conversion per share 32
21,153,846
Jeryl S. Rawls Revocable Trust
Loan
06/15/2023
15,000
06/15/2024
$0.0016 Conversion per share
10,781,250
John W. Dixon FLP
Loan
07/23/2023
50,000
07/23/2024
$0.0013 Conversion per share
48,076,923
Giorgios Bakatsias
Loan
07/23/2023
125,000
07/23/2024
$0.0013 Conversion per share
31,250,000
Fly Rite LLC Barbara Settle
Loan
07/23/2023
125,000
07/23/2024
$0.0013 Conversion per share
31,250,000
Hayek Ventures, LLC ** William G. Settle
Loan
08/26/2023
2,500
08/26/2024
$0.0016 Conversion per share
1,810,625
Charles Yessaian
Loan
08/26/2023
2,500
2,895
08/26/2024
$0.0016 Conversion per share
1,809375
Ferdinand Irizarry
Loan
09/13/2023
2,000,000
2,092,753
09/13/2026
90% of 15 Day VWAP
632,802,494
Datron Holdings, Inc. Arthur Barter
Acquisition note
09/13/2023
2,000,000
2,154,589
09/13/2026
85% of 15 Day VWAP
689,823,890
Datron Holdings, Inc. Arthur Barter
Acquisition note
06/13/2024
100,000
102,450
06/13/2026
$0.0019 Conversion per share
53,921,052
John W. Dixon FLP
Loan
Any additional material details, including footnotes to the table are below:
* Interest accrued from date of funding, which, in some cases, post-date note issuance dates.
** Hayek Ventures, LLC assigned its shares upon conversion of the convertible note reflected above to Fly Rite LLC.
*** The outstanding convertible notes issued to RB Capital Partners, Inc. are the subject of current litigation. The parties are in settlement negotiations, and believe that they have an agreement in principle, which is being finalized. [The settlement contemplates outstanding notes being paid in cash.]
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.
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 Global Integration Services (GIS). The Company generates revenues from the sale of products and services through its Business Units.
During 2025, the Company is pursuing additional global opportunities related to each of its business units, including new opportunities in Ukraine with NATO-member security assistance funding. As of March 31, 2025, Cyberlux's order backlog is approximately $45 million with a robust order pipeline, across the three business units.
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. This 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.
The Cyberlux UAS team of aircraft engineers, fabricators, and test pilots has advanced the business unit from its position as a worldwide leader in the FPV aircraft industry to worldwide leader in the military sector, delivering UAS solutions under multiple Department of Defense and U.S. foreign military sales contracts. Cyberlux's investment in innovative and novel Defense Industry UAS products has created market-changing solutions favored by end-users. Driven by an initial $79 million UAS contract award by US NAVY for the Ukrainian warfighter, the UAS business unit expanded rapidly in 2023 and 2024 and now has dedicated business unit management, 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 productquality and delivery.
UAS has continued to evolve as a key component of the overall Cyberlux growth strategy, including strategic relationships such as the OKSI partnership announced in July 2024. Manufacturing ISO9000 processes perfected in the Datron manufacturing facility have been integrated into day-to-day UAS operations, enhancing overall product offerings. This progress has led to the introduction of NDAA-compliant platforms, aligning with the Company's goal of advancing towards Blue List Aircraft status. The UAS unit is currently engaged with multiple USSOCOM units to develop, test, and field specific UAS capabilities, including FPV and non-FPV platforms. We anticipate significant progress during 2025 on these initiatives within the U.S. Department of Defense.
With the introduction of the Cyberlux X Series platforms in the second quarter of 2024, the UAS business unit has expanded the product line to include expanded capabilities, including electronic warfare resilience, multiple communication and waveform platform support, autonomous flight and targeting, increased logistics delivery capacity, increased range and operation time, and extreme weather tolerance. These capabilities are now available to U.S. allied partner nations as part of Cyberlux's global sales objectives and initiatives, with multiple proposals under consideration as of the first quarter of 2025.
UAS personnel continue to work closely with U.S. Special Operations partners to share unique knowledge regarding Counter-UAS, Offensive & Defensive tactics, Electronic Warfare, and UAS adaptations. Cyberlux UAS capabilities have been demonstrated during training exercises such as the Joint Forces Training Center at Camp Shelby and events like SOF TE 24-3 and TE 25-1 Artic Warrior. The Cyberlux Business Development team continues to drive technological integration on the X platform, which in turn drives the Company's innovative UAS capabilities to address the most difficult and challenging global adversarial environments. These integrations have enabled Automatic Target Recognition (ATR), Non-RF travel, AI anti-jam radio enhancements, GPS capability in GPS denied environments, TAG GPS that works in GPS denied environment, and Automated Flight. In addition, the UAS team has begun development of next-generation munitions capability and expects significant progress over the next six months in 2025.
For the quarter ended March 31, 2025 and as announced at Special Operations Forces (SOF) Week, Cyberlux UAS completed the development of its new Group 1 rotary wing UAS specifically tailored for the U.S. Special Operations community. This cutting-edge platform is engineered to carry heavier payloads for longer durations, while maintaining optimal performance in dense electronic warfare (EW) environments. In addition, Cyberlux UAS and Trellis Ware Technologies, Inc. formed a strategic partnership to integrate Trellis Ware's new low-latency, anti-jam waveform for uncrewed systems into Cyberlux's latest heavy-lift Group 1 rotary-wing UAS platform. This partnership marks a significant step forward in enabling First Person View (FPV) operations in contested electromagnetic environments. Further, Cyberlux UAS advanced its efforts with OKSI (Optical Knowledge Systems, Inc.) under a new strategic partnership to enhance UAS operations in GPS- and radio frequency (RF)-denied environments. This collaboration integrates OKSI's cutting-edge OMNISCIENCE™M autonomy suite into Cyberlux's latest UAS platforms, delivering robust navigation and target acquisition capabilities without reliance on traditional GPS or RF communications.
As background, when originally demonstrated in Ukraine in July of 2022, the K8 was designed as a complementary product to the existing Ukrainian drone warfare doctrine. By May 2024, the war environment had changed significantly. In fact, Cyberlux superseded its original K8 drones with newer aircraft configurations The Ukrainian conflict continues to drive the rapid evolution of the global UAS industry.
On August 29, 2023, Cyberlux Corporation's UAS Business Unit was awarded a contract of $78.9 million from its prime vendor Huntington Ingalls Industries (HII) to deliver Cyberlux K8 Unmanned Aircraft Systems to the U.S. Government for deployment to the Ukrainian warfighter end-user. The Company produced a substantial number of the Cyberlux K8 systems under the terms of the contract during the fourth quarter of 2023.
On December 22 2023, HII issued a Stop Work Order (SWO) requiring the Company to pause Cyberlux K8 production. On May 17, 2024, Cyberlux was informed by HII, under strict Non-Disclosure Agreement (NDA) requirements, that the U.S. government was 'terminating for convenience' their contract with HII for the Cyberlux K8 deliveries. Because the Cyberlux subcontract with HII was a 'firm fixed price, fixed quantity' contract under commercial terms, the contract went through the procurement resolution process which will result in the delivery of all remaining related inventory and work-in-process.
On February 28, 2025, Cyberlux entered into a contract modification agreement to complete the contract previously terminated for convenience, and shipments thereunder have resumed.
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 costs.
Datron has re-established its global distribution network reach, focusing on strengthening its international Foreign Military Sales (FMS) presence during 2024. The DMC team has expanded the international sales team, led by sales directors for the Middle East, Africa, Asia Pacific, and Latin America regions. DMC has increased outreach and support for customers across all key geographic markets. As the only other U.S. manufacturer of military-grade radio communication equipment besides L3Harris, Datron is positioned as a premier U.S. manufacturer of defense technology, with ISO 9001 accreditation, and rigorous commitment to maintaining high-quality standards across its operations. Furthermore, the Datron operations team has expanded its UAS manufacturing capabilities by internally producing important components for the UAS platforms and providing operational support for the Cyberlux Advance Lighting Systems, which further enhances the Cyberlux supply chain resilience while ensuring product quality and reliability.
In 2024, DMC successfully rolled out multiple cost-reduction initiatives across its flagship radio lines, increasing competitiveness and value for its global customers. These efforts have improved overall product affordability without compromising performance or reliability.
DMC has secured significant new business in both Latin America and Asia-Pacific markets, reinforcing its global footprint and confirming strong demand for its tactical communications solutions. In parallel, the Company has made strategic investments in next- generation product development through internal R&D initiatives and key partnerships, expanding DMC's technology roadmap and enhancing its ability to meet evolving customer needs.
The DMC team has successfully integrated its tactical communications products into a new, customer-driven Battle Management System (BMS), enhancing operational efficiency and situational awareness. Additionally, DMC has implemented key improvements to our HF data line, ensuring more reliable and faster data transmission. Moving forward, DMC is committed to delivering customer-driven requirements to develop next-generation radio system's that will serve the evolving needs of modern military operations.
Tactically, Datron's bookings are continuing to rise globally with over $36 million in order pipeline, of which most will ship during 2025. Datron is continuing to negotiate multi-year proposals for locally manufacturing radios with four U.S. allied partner nations in the Middle East and Africa. We expect go/no go decisions during the third quarter of 2025.
For the quarter ended March 31, 2025, the Datron Military Communications team completed the development of a new series of MESH/MANET radio systems that significantly expand the Datron product portfolio by delivering high-speed data at the tactical edge. These systems are available in body-worn, base station, and OEM board form factors, enabling seamless integration into autonomous ground vehicles, UAS capability, and other advanced
platforms requiring a datalink, such as ISR (intelligence, surveillance and reconnaissance) sensors, ground acoustic sensors and advanced communications capabilities.
Cyberlux Global Integration Services (GIS) plays a key role in engaging foreign and U.S. customers at the ground level, understanding their global requirements, and providing comprehensive tactical/operational customer solutions. As Cyberlux's global solutions action arm, Global Integration Services provides U.S. customers and global allied nations with subject matter expertise in various aspects of military capabilities. Through this process, Cyberlux GIS develops specific defense technology solutions based on foreign military customer requirements, specializing in diverse aspects of warfare, across a wide array of missions.
In a broader context, GIS is engaging with foreign allies and U.S. domestic customers at the tactical unit level, understanding their challenges and requirements, in order to provide comprehensive tactical and operational solutions. The business unit focuses both on the end- user level and the multiple tiers of stakeholders within the Ministry of Defense. The GIS team is highly experienced at capturing comprehensive requirements and gaining first mover advantage in order to deliver best-in-class solutions, regardless of the range of customer needs. Globally, GIS is concentrating on comprehensive border security solutions, including product integration, global delivery, capability training, and field service and support. From the GIS customer activity, Cyberlux's research and development for future products is highly targeted and driven by global requirements.
As announced on October16, 2024, the GIS business unit is already playing a key role in delivering the next phase of Cyberlux growth, starting with a $22.7 million contract through Canadian partners as the U.S. prime contractor to provide aircraft instrument landing systems (ILS) for F-16 aircraft support. During fourth quarter 2024, GIS fulfilled $19.9 million of the $225 million contact. GIS anticipates additional ILS orders during the third quarter of 2025.
Global Integration Services is specifically focused on delivering border security solutions to U.S. allied partner nations. With the strength of the Cyberlux relationships across the Europe, the Middle East and Africa, GIS is developing Foreign Military Sales (FMS) border security solutions for U.S. allied nations.
For the quarter ended March 31, 2025, the Global Integration Services team expanded the Foreign Military Sales (FMS) border security solutions programs to include three additional U.S. allies, for a total of seven partner nations under program development. With its focus on border security solutions for U.S. allied partners across the Middle East and Africa, GIS anticipates funding decisions to occur during the fourth quarter of 2025.
Additionally, the GIS business unit is duly licensed to operate as a broker of any U.S .- approved military asset to aid foreign allied governments. This allows GIS to conduct substantial integrated solution transactions involving large equipment (such as tanks and
airplanes) and best-in-class integrated solutions. GIS expects to announce significant capability partnerships during 2025 in support of the integrated services mission.
The use of the Company's available capital to support growth has been important over the last several years, while cash flows from operations has been uneven. As discussed elsewhere herein, the Company is highly focused on growing its pipeline of projects while seeking to ensure product development and timely delivery on such contracts. The Company anticipates that as predictable cash flow improves, it will be able to use its capital resources to build necessary infrastructure and shareholder value.
The Company continues to aspire to resume SEC registration and be quoted or listed at a higher-level market. We have been unable to commit the steps, including an audit by a PCAOB registered firm, required to accomplish this goal because of funding limitations and insufficient infrastructure tools/personnel/availability- We have focused all available resources on fulfilling existing sales orders and growing our sales pipeline. We have used outsourced resources (such as Eisner Advisory LLC) and fractional financial professionals to help support our accounting and financial reporting needs. We expect to identify, and then commence the implementation, of the tasks required for us to be able to produce the items required for SEC registration as soon as practicable, subject to adequate resources being available to support such activities. We anticipate that in connection with an "uplisting," a restructuring of Cyberlux's capitalization would be required, and reflected in an amendment to our Articles of Incorporation.
The Company has a stated intention to seek to establish a stock buy-back plan. Of course, there first needs to be sufficient operational cash flow to support this. The Company also wants to incentivize its employees and align them to the Company's interests though stock awards. The Company anticipates implementing a stock option plan to incentivize employees as soon as practicable.
Due to insider information rules, it is complex for officers and other insiders of the Company to buy or sell shares in the open market. Consequently, the Company has no plans that encourage purchases or sales of Company stock by insiders As noted above, however, the Company, itself, hopes to be able to instigate a buy-back plan when its balance sheet and cash flow would support such a program.
The Company's investor relations web page is updated frequently to address recent developments and provide transparency. In addition, if there is a material development, or sufficient indicated shareholder interest on a particular matter, the Company may issue a press release, which then is also available through the OTCM website. The Company balances its compliance and non-disclosure obligations with its desire to provide information to all its shareholders. We carefully avoid providing information to any shareholder (other than insiders who need to know such information in order to perform their jobs) unless it is available to all shareholders. Therefore, shareholders are encouraged to review the FAQs on
the Company's website investor relations page periodically. If a shareholder has a specific question it would like the Company to address, it should send an email to IR_CYBL@cyberlux.com. The questions are reviewed on an ongoing basis, and when there is significant interest on a particular topic, or the Company otherwise finds a question to be pertinent, the FAQs are updated.
Cyberlux operates though Cyberlux Corporation, and its subsidiary Datron World Communications, Inc.
The Company offers the products and services of its Unmanned Aircraft Solutions (UAS), Datron Military Communications (DMC), and Global Integration Services (GIS) to U.S. government agencies, including USSOCOM, USNAVY) USCENTCOM, USEUCOM, USAFRICOM, and USINDOPACOM and allied foreign nations. These transactions are often facilitated by relationships with various prime vendors such as 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.
Global Integration Services (GIS): Integrated defense technology solutions, with a focus on comprehensive border security solutions, to solve U.S. and foreign allied military customer requirements across various aspects of warfare, through product integration, global delivery, capability training, and field service and support. This extends to brokered capabilities including critical aspects of military capability training, munitions, heavy and light weapons, Soldier Systems, communications, battlefield technology integration, cyber, maritime operations, air operations, and unmanned aircraft systems operations and tactics training.
The goal of this section is to provide investors 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. Describe the location of office space, data centers, principal plants, and other property of the issuer and describe the condition of the properties. Specify if the assets, properties, or facilities are owned or leased and the terms of their leases. If the issuer does not have complete ownership or control of the property, describe the limitations on the ownership.
The Company maintains its principal headquarters office at 800 Park Offices Drive, Suite 3209, Research Triangle Park, NC 27709. This is a leased office suite for headquarters staff, renewed annually.
The UAS division 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, which was renegotiated to expire November 30, 2025.
Company subsidiary Datron has its office and manufacturing facility at 995 Joshua Way, Vista CA 92081. This is a 47,174 square foot facility with a renewable five-year lease, expiring December 2026.
Using the table below, please provide information, as of the period end date of this report, regarding all officers and 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 investors 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.
Individual Name (First, Last) or Entity Name (Include names of control person(s) if a corporate entity)
Position/Company Affiliation (ex: CEO, 5% Control person)
City and State (Include Country if outside U.S.)
Number of Shares Owned (List common, preferred, warrants and options separately)
Class of Shares Owned
Percentage of Class of Shares Owned (undiluted)
Mark D. Schmidt
President Chief Executive Officer Director Chairman
Durham, NC
230,642 47,000,000
Common Series B
Less than 1% 54.65%
David D. Downing
Chief Financial Officer Director
Edinboro, PA
42,500 1,000,000
Common Series B
Less than 1% 1.16%
John W. Ringo
Secretary Director
Atlanta, GA
123,783
Common
Less than 1%
Aaron Goodman
Chief of Staff Director
Waccabuc, NY
70,000,000 2,5000,000
Common Series B
1.2% 2.91%
Larry J. Isely
Chief Operating Officer
Denton, TX
2,500,000
Series B
2.91%
Bill Maadarani
Chief Revenue Officer
Dearborn, MI
3,000,000
Series B
3.49%
Montague Capital Partners LLC (Denis Kalenja)
Strategic Consultant
Miami, FL
21,000,000 179,500,000
Series ₿ Common
24.42% 3.019%
Recovery Fund USA, LLC (Jamie Rand)
Lutz, FL
148,000
Series C
98.667%
Confirm that the information in this table matches your public company profile on www.QTCMarkets.com. If any updates are needed to your public company profile, log in to www.OTCIQ.com to update your company profile.
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:
None.
None.
Been the subject of a finding, disciplinary order or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, a state securities regulator of a violation of federal or state securities or commodities law, or a foreign regulatory body or court, which finding or judgment has not been reversed, suspended, or vacated;
None.
None.
None.
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 to 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.
Kralja Con k * a
A complaint was filed in August of 2022, in the Circuit Court for the city of Richmond, VA by 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 was settled in June of 2023, and the Company is currently in full compliance with the terms of that settlement agreement. Nonetheless, Atlantic Wave has since filed a new lawsuit against Cyberlux in the same courtz alleging breach of that settlement agreement. In response, Cyberlux has asserted multiple counterclaims, including first to breach, usury, and abuse of process, along with several affirmative defenses. Cyberlux believes that the claims brought by Atlantic Wave are without merit and is confident it will prevail on its counterclaims and in defending against the allegations. In addition, Atlantic Wave and Secure Community filed lawsuits in California and Texas in an attempt to enforce the settled judgement without proof of breach. These parties have also filed 19 garnishment actions against various business partners and prior business partners. The aggressiveness of these plaintiffs in seeking to enforce an order that was subsequently settled in another jurisdiction has not met with success. Recently, Cyberlux served Atlantic Wave and Secure Community with an action to enjoin these judicial filings and any further filings to enforce that settled matter particularly since Cyberlux is in compliance with the settlement agreement in question. We expect the injunctive action to be successful as well as the counterclaims, and that we will be able to resolve this dispute under the terms of that settlement agreement in the near future.
As set forth in Item 3 above, and discussed in Note G to the financial statements, Cyberlux issued convertible promissory notes to RB Capital Partners, Inc. ("RB Capital") with maturity dates through July 2024. As reflected above, in February 2024, RB Capital converted $1,654,685, including accrued interest into 6,618,740 shares of Common Stock.
On August 14, 2024, RB Capital filed a complaint in the United States District Court for the Southern District of California seeking payment of the notes and attorneys' fees. Cyberlux moved to have the matter settled by arbitration. The court granted our motion to move the matter into arbitration for the converted note, but retained jurisdiction as to the other notes. The parties have entered into an agreement in principle, currently being reduced to a final, binding settlement agreement. Cyberlux will provide an update once this is finalized, but the agreement in principle provides for the cash repayment of the remaining outstanding notes.
A complaint was filed on November 7th, 2024, by Aerotek Inc., in Wake County, North Carolina Superior Court, against Datron World Communications, Inc., and Cyberlux Corporation, alleging breach of contract. An answer has yet to be filed in this matter, but plaintiff has demanded $204,705.45, plus attorney fees. No further action has been taken in this matter and the parties are discussing an amicable resolution of the matter.
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.
Provide the name, address, telephone number and email address of each of the following outside providers. You may add additional space as needed.
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, update your company profile.
Securities Counsel
Name: Carl P. Ranno
Firm: Law Office of Carl P. Ranno Address 1: 2733 East Vista Drive
Address 2; 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 1: 733 Third Avenue
Address 2: New York, NY 10017 Phone: 732-243-7140
Email: john.pennett@eisneramper.com
Investor Relations
Name:
Brennan Smith
Firm:
Flying V Group, Inc.
Address 1:
Address 2:
Irvine, CA 92614
Phone:
949-940-8884
Email:
bsmith@flyingvgroup.com
All other means of Investor Communication:
X (Twitter):
https://x.com/CyberluxC
Discord:
None
https://www.linkedin.com/company/cyberlux@corporation/
Facebook:
None
Other:
https://cyberlux.com/about/#faq
official Copy Officedet Marilyn Burgées District Clerk
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.
Name:
Jennifer E.D. Clarke, Esq.
Firm:
Tjong & Hsia LLP
Nature of Services
Legal Counsel
Address 1:
Address 2:
New York, NY 10111
Phone:
516-801-1700
jclarke@tjonghsia.com
Name:
Edward W. Gray Jr., Partner
Firm:
Thompson Coburn LLP
Nature of Services:
Legal Counsel
Address 1:
Address 2:
Washington, DC 20006-1167
Phone:
202-585-6910
Email:
egray@thompsoncoburn.com
A. This Disclosure Statement was prepared by (name of individual):
Name:
Mark Schmidt
Title:
President and CEO
Relationship to Issuer:
President and CEO
B. The following financial statements were prepared in accordance with: :unselected: IFRS :selected: U.S. GAAP
C. The following financial statements were prepared by (name of individual):
Name: David D. Downing
Title: Chief Financial OfficerC
Relationship to Issuer: Principal Financial Accounting Officer
Tod CallOfmich aleCOffyEnice Of Marian Burgass District Cleri
Describe the qualifications of the person or persons who prepared the financial statements6:
The financial statements are prepared by the CFO of the Company with consultation to our accounting advisors as requested.
Provide the following qualifying financial statements:
o Audit letter, if audited; :unselected:
o Balance Sheet; :unselected:
o Statement of Income :unselected:
o Statement of Cash Flows; :unselected:
o Statement of Retained Earnings (Statement of Changes in Stockholders' Equity) :unselected:
o Financial Notes :unselected:
· Financial statements must be published together with this disclosure statement as one document.
· Financial statements must be "machine readable". Do not publish images/scans of financial statements.
· Financial statements must be presented with comparative financials against the prior FYE or period, as applicable.
· Financial statements must be prepared in accordance with U.S. GAAP or International Financial Reporting Standards (IFRS) but are not required to be audited.
Cyberlux Corporation and Subsidiary Condensed Consolidated Balance Sheet March 31, 2025 and December 31, 2024 (Unaudited)
March 31, 2025
December 31, 2024
Assets
Current assets:
Cash and cash equivalents
$1,590,551
$4,952,219
Accounts receivable, net of allowance for doubtful accounts
4,141,366
Clerk
4,925,887
Inventory
16,595,873
15,788,873
Other current assets
702,000
1,177,000
Total current assets
23,022,790 PasTier
26,843,979
Other Assets:
Property and equipment, net of accumulated depreciation
443,460
496,792
Right of use asset, net
1,075,076
1,118,490
Intangible assets, net of accumulated amortization
7,829,722
8,371,722
Other investment
200,000
200,000
Total Assets
$32,578,048 Burgess
$37,030,983
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable
$2,845,001
$3,971,581
Accrued interest
3,110,122
2,781,198
Borrowings under line of credit Marilyn
6,950,000
6,950,000
Notes payable, related parties
2,623,756
2,516,756
Notes payable, non-related parties
5,618,435
5,918,435
Datron acquisition notes payable, net of discount of
3,854,167
3,791,667
Liability for common stock to be issued
10,000
10,000
Customer deposits
76,000
1,905,000
Accrued liabilities
24,197,194
23,783,268
Total current liabilities Office
49,284,675
51,627,905
Long-term liabilities:
Lease liabilities and other
1,204,059
1,413,143
Total long-term liabilities
1,204,059
1,413,143
Commitments and contingencies Copy
Stockholders' deficit:
Class A Preferred shares, O shares issued and outstanding as of
March 31, 2025 and December 31, 2024 Incial
-
Class B Preferred shares, 86,000,000 shares issued and
147,000
outstanding as of March 31, 2025 and December 31, 2024
147,000
Class C Preferred shares, 150,000 shares issued and CES
outstanding as of March 31, 2025 and December 31, 2024 DUL
Common stock, $0.001 par value, 7 billion shares authorized,
6,162,620,150 and 5,993,363,945 shares issued and outstanding
As of March 31, 2025 and December 31, 2024, respectively.
7,819,275
7,650,019
Treasury stock
(1,181,000)
(1,181,000)
Additional paid-in capital
21,672,881
21,672,881
Accumulated deficit
(46,368,992)
(44,299,115)
Deficiency in stockholders' equity
(17,910,686)
(16,010,065)
$32,578,048 $ 37,030,983
The accompanying notes are an integral part of these financial statements.
Unofficial Copy Office of Marilyn Burgess District Clerk
Cyberlux Corporation and Subsidiary Condensed Consolidated Statements of Operations Quarters ended March 31, 2025 and 2024(Unaudited)
Revenue
$ 5,091,669
$ 5,113,375
Cost of goods sold
(3,660,516)
(3,290,387)
Gross profit
1,431,153
1,822,988
Operating Expenses:
Marketing and advertising
344,723
371,999°
Depreciation and amortization
602,332
614,97
Research and development
157,000
315,001 0, District Clerk
General and administrative expenses
2,053,797
4,717881
Total operating expenses
3,157,852
0,091,855 Burgess
Loss from operations
(1,726,699)
(4,196,867)
Other income/ (expense):
Interest income and other
7,045
7,378
Other income, net
148,949
-
Interest expense
(499,172)
(307,367)
Subtotal
(343,178)
(299,989)
Net Loss before income taxes
(2,069.877) theNlyn
(4,496,856)
Income tax provision
of =
=
Net loss available to common stockholders
(2,069,877) Office
$(4,496,856)
Loss per share
Weighted-average common Shares outstanding - basic and diluted Inofficial Copy
6,038,498,957
5,773,335,291
Loss per share - basic and diluted
$(0.00)
$(0.001)
The accompanying notes are an integral part of these financial statements.
Cyberlux Corporation and Subsidiary Condensed Consolidated Statement of Cash Flows Quarters ended March 31, 2025 and 2024(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss available to common stockholders
$ (2,069,877)
$ (4,496,856)
Adjustments to reconcile net income (loss) to cash flow from operations
Issuance of common stock in exchange for services or to debtholders
DistrictClerk
90,000
Noncash interest expense
62,500
62,500
Other non-cash items
(361,254
-
Amortization and depreciation
602,332
615,537
Changes in assets and liabilities
Accounts receivable
₹784,521
504,204
Inventories
(807,000)
(443,976)
Prepaid expenses
475,000
(2,440)
Right of use asset
43,414
42,000
Accounts payable
(1,126,580)
178,883
Accrued liabilities
413,936
420,350
Customer deposits
(1,829,000) Burgess
35,828
Lease liabilities and other
(210,084)
147,611
Accrued interest
551,424
175,836
Net cash provided by (used in) operating activities CASH FLOWS FROM Marilyn
(3,470,668)
(2,670,523)
INVESTING ACTIVITIES:
Expenditures for fixed assets
(6,000)
-
Net cash used in investing activities
(6,000)
-
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds (payments) from borrowings of
(25,000)
100,000
Net proceeds (payments) from notes payable, related parties
140,000
-
Net cash provided by (used in) financing activities office
115,000
100,000
Net increase (decrease) in cash and cash equivalents
(3,361,668)
(2,570,523)
Cash and cash equivalents at beginning of period
4,952,219
3,198,280
Cash and cash equivalents at end of period
$1,590,551
$627,757
SUPPLEMENTAL DISCLOSURES: copy
Interest paid
$20,000
-
NON-CASH ACTIVITIES:
Conversion of Debt and accrued interest for common stock
$280,500
1,654,685
Conversion of accrued interest to notes payable - related parties Unaficial
$132,000
-
The accompanying notes are an integral part of these financial statements.
Cyberlux Corporation and Subsidiary Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) Quarters ended March 31, 2025 and 2024(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
86,000,000
$147,000
150,000
$150
5,993,363,945
$7,650,019
$(1,181,000)
$21,672,881 CION
$(44,299,115)
$(16,010,065)
Stock issued for
169,256,295
169,256
169,256
conversion of debt and accrued interest
Listrict
Net income
(2,069,877)
(2,069,877)
Balance March 31, 2025
86,000,000
$147,000
150,000
$150
6,162,620,240
$7,819,275
$(1,181,000)
$19,889,914
$(46,368,992)
$(18,010,686)
Burgess
Balance December 31, 2023
87,300,000
$144,000
150,000
$150
5,728,914,810
$7385,577
$(1,176,700)
19,889,914
$(39,999,351)
$13,756,410)
Stock issued for services
3,000,000
90,000,
90,000
90,000
Conversion of debt and accrued interest to shares
6,618,740 Marilyn
6,618
1,648,067
1,645,685
Net loss
(44,496,856)
(4,496,856)
Balance March 31, 2024
90,300,000
$144,000
150,000
$150 Unofficial Copy Office Tel
5,825,533,550
$7,482,195
$(1,181,000)
$21,537,981
$(44,496,207)
$(16,508,581)
The accompanying notes are an integral part of these financial statements.
Cyberlux Corporation (the "Company" or "Cyberlux") was incorporated on May 17, 2000, under the laws of the State of Nevada. The Company was 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 in most periods since inception. Consequently, its operations have been subject to all risks inherent in the establishment of a new business enterprise.
During the quarters ended March 31, 2025 and 2024, the following significant transactions impacted the Company:
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, the Company had remaining advance payments for the purchase of such systems from the DoD of approximately $23,145,000 included on the consolidated balance sheet as customer deposits and deferred revenue. In the second and third quarters of 2024, the Company recognized approximately $54 and $4 million, respectively, of revenue pursuant to this contract
On May 17, 2024, Cyberlux was informed by HII, under strict Non-Disclosure Agreement (NDA) requirements, that the U.S. government was 'terminating for convenience' their contract with HII for the K8 drone. Because the Cyberlux subcontract with HII is a 'firm fixed price, fixed quantity' contract under commercial terms, the contract went through the procurement resolution process. In light of these developments, in December 2024 the Company has reversed a portion of the revenue (and related costs of goods sold) recognized in the second and third quarter of 2024.
On February 28, 2025, Cyberlux entered into a contract modification agreement to complete the contract previously terminated for convenience, and shipments thereunder have resumed.
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, 2025, the Company incurred accumulated losses of approximately $46,600,000. The Company's current liabilities exceed its current assets by approximately $26 million. The Company's current liabilities were approximately $49,500,000 as of March
31, 2025, including amounts at issue in claims by several vendors who have instituted lawsuits or other collection efforts. Resolution and collection of amounts potentially due under the DoD contract has caused liquidity issues to the Company. While these factors, among others, may indicate that the Company would be unable to continue as a going concern, management is confident that business performance in 2025 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 development of 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.
A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows:
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 alldisclosures required by accounting principles generally accepted in the United States ("GAAP"). The information as of and for the quarters ended March 31, 2025 and 2024, and as of December 31, 2024 is unaudited.
The Company follows ASC 280 "Segment Reporting". The Company operates as a single segment - industrial products.
The accompanying consolidated financial statements and related notes to the consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
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.
The Company considers all highly liquid debt instruments purchased with a maturity date of six months or less to be cash equivalents.
Accounts receivable balances are predominantly comprised of amounts currently due from customers. Accounts receivable are presented on our consolidated balance sheets net of the allowance for credit losses. The Company uses judgment in estimating this allowance and considers historical collections, current credit status, or contractual provisions, following the provisions of Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Lossés (Topic 326): Measurement of Credit Losses on Financial Instruments. No allowance for credit losses was required at March 31, 2025 and December 31, 2024.
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 holdings may be more than the FDIC insurance limit. At March 31, 2025 and December 31, 2024, the Company did not have a significant allowance for doubtful receivables.
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 at March 31, 2025 and 2024 primarily relates to the products being built for the DoD as noted in Note A1 above.
Components of inventories as of March 31, 2025 and 2024 are as follows:
March 2025
December 2024
Component parts
$ 5,738,465
$ 4,470,465
Work in progress and finished goods
12,262,408
12,730,408
18,000,873
17,200,873
Less: allowance for obsolete inventory
(1,405,000)
(1,412,000)
$ 16,595,873
$ 15,788,873
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
Office equipment
Leasehold improvements
Lessor of 5 years of life of lease
Tooling
Manufacturing equipment
Patents are amortized on a straight-line basis oyer 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 March 31, 2025 and December 31, 2024, management has determined that these assets are not impaired.
The Company recognizes revenue under Financial Accounting Standards Board's Accounting Standards Codification ("AS(2) 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.
The Company expenses all costs of marketing and advertising as incurred. Marketing and advertising costs totaled approximately $345,000 and $372,000 for the quarters ended March 31, 2025 and 2024, respectively.
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 $157,000 and $315,000 on research and product development for the quarters ended March 31, 2025 and 2024, respectively.
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.
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 of the underlying stock.
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 fax planning strategies. When the Company changes its determination as to the amount of deferred fax 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 March 31, 2025 and December 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 quarters ended March 31, 2025 and 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.
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 quarters ended March 31, 2025 and 2024, the number of shares excluded from diluted net loss per share included approximately 1.6 billion shares of common shares which would be issued upon the conversion of notes payable and approximately 17.2 billion shares which would be issued upon the conversion of preferred stock based upon the conversion rates in effect on March 31, 2025 and 2024 - 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.
Certain reclassifications have been made in prior year's financial statements to conform to classifications used in the current year.
Property, plant, and equipment at March 31, 2025 and December 31. 2024 are as follows:
March 2025
December 2024
Furniture and fixtures
$ 932,599
$ 932,599
Machinery and equipment
6,691,023
6,691,023
Leasehold improvements
618,989
618,989
Vehicles
218,000
218,000
Subtotal
8,460,611
8,460,611
Less: accumulated depreciation
(8,017,151)
(7,963,819)
$ 443,460
$ 496,792
During the quarters ended March 31, 2025 and 2024, depreciation expense charged to operations was approximately $53,000 and $95,000, respectively.
Intangible assets at March 31, 2025 and December 31, 2024 are as follows:
March 2025
December 2024
Patents
$ 469,783
$ 469,783
Technology
10,663,000
10,663,000
Total
11,132,783
11,132,783
Less: accumulated depreciation
(3,303,061)
(2,761,061)
$ 7,829,722
$ 8,371,722
During the quarters ended March 31, 2025 and 2024, amortization expense charged to operations was approximately $542,000 and $520,000, respectively. During 2023 and 2024, certain fully amortized patents and technology intangible assets were written off. Annual amortization expense of intangibles will approximate $2,100,000 for each of the next 3.7 years.
On September 16, 2023, the Company acquired 100% of the outstanding stockof 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 (S)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 during 2025.
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 N.
Current liabilities as of March 31, 2025 and December 31, 2024are as follows:
March 2025
December 2024
Accrued payroll, payroll taxes and other
$2,039,410
$ $1,942,410
Accrued vendors
18,272,711
17,941,784
Accrued income taxes
1,358,073
1,358,073
Commissions payable
2,527,000
2,541,000
Total
$24,197,194
$ $23,783,268
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. During the quarter ended March 31, 2025, notes
payable and accrued interest aggregating $284,750 were converted into 169,256,205 shares of common stock.
Interest expense for the quarters ended March 31, 2025 and 2024 was approximately $499,000 and $307,000, respectively, including amortization of debt discount related to the Datron acquisition notes payable of $63,000 and $62,000 in the quarters ended March 31, 2025 and 2024, respectively. Accrued interest related to such notes was approximately $2,589,000 and $2,514,000 at March 31, 2025 and December 31, 2024, respectively.
At December 31, 2024 and 2023, the notes payable to non-related parties consist of the following:
Balance outstanding -
Balance outstanding -
Interest
Due date
Conversion terms
March 2025
December
rate
Datron acquisition -note 1
$2,000,000
$2,000,000
September
90% VWAP
Datron acquisition -note 2
2,000,000
2,000,000
5%
September
85% VWAP
Less: unamortized debt
(145,833)
discount
Carrying value
$3,854,167
$3.791.667
Notes payable RB Capital
$3,500,000
$3,500,000
5%
July 2024
TBD
Others :unselected:
2,118,435
2,418,435
5%
Various
$895,000 is convertible
Total short-term debt
$5,618,435
$5,918,435
at various terms
In September 2023, the Company recognized a debt discount of approximately $500,000 representing the discount provided on the Datron acquisition notes. Such discount is being accreted to interest expense over the term of the note and amounted to approximately $63,000 and $63,000 of interest expense during the quarters ended March 31, 2025 and March 31, 2024, respectively. The remaining debt discount of approximately $146,000 will be accreted into interest expense over the next 0.7 years.
In February 2024, a portion ($1,500,000) 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. During 2023, $250,000 of principal was repaid. See litigation section of Note K for further discussion.
From time to time, the Company's principal officers have advanced funds (and received periodic repayments) 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, of which $65,000 was repaid in 2024. Approximately $132,000 of accrued interest was converted into notes payable during the first quarter of 2025 by two officers of the Company. There is no scheduled repayment terms for most of these notes.
Loans from Officers
Officer
Principal Due March 31, 2025
Interest Rate
Principal Due December 31, 2024
David Downing
$1,297,606
10%
$1,229,606
Mark Schmidt and family
598,133
10%
524,133
John Ringo
405,361
10%
405,361
All others
322,656
10%
357,656
Total
$2,623,756
$2,516,756
The Company has authorized 7,000,000,000 shares of common stock, with a par value of $.001 per share. As of March 31, 2025 and December 31, 2024, the Company had 6162,620,150 and 5,993,363,945 shares outstanding, respectively.
At March 31, 2025 and December 31, 2024, the Company had additional outstanding obligations to issue approximately 10 million common shares, in respect of agreements entered into from 2021 through March 2025. The Company has recorded a liability to recognize the obligation.
Among other provisions of the Certificates of Designation of the Series B and C, 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.
There are 99,000,000 shares of Series B Preferred authorized, and 86,000,000 shares of Series B issued and outstanding as of March 31, 2025 and December 31, 2024. The conversion ratio is 200:1.
The holders of the Series B shall have the right to vote, separately as a single class, at a meeting of the holders of the Series B or by such holders' written consent or at any annual or special meeting of the stockholders of the Company 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 with respect to dividends or upon the liquidation dissolution, or winding up of the Company, and (ii) any agreement or other corporate action which would adversely affect the powers, rights, or preferences of the holders of the Series B.
The holders of record of the Series B 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 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 shall have been declared and paid. These dividends are not recorded until declared by the Company. As of March 31, 2025 and
December 31, 2024, the liquidation preference of the Series B is approximately $295 million and $292.4 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 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 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 shall not be entitled to any further payment.
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 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 shareholders have exercised their conversion right and there are 150,000 Series C shares issued and outstanding on March 31, 2025 and December 31, 2024.
The holders of record of the Series C 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 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 March 31, 2025 and December 31, 2024, the liquidation preference of the Series C is approximately $3.6 million, and $3.6 million, respectively, including dividends in arrears.
The Company has borrowed money from related parties from time to time - See Note G. At March 31, 2025 and December 31, 2024, the Company had amounts due to related party noteholders and shareholders of approximately $4,100,000 and $4,000,000, respectively.
The Company leases facilities under operating leases with expiration dates at December 31, 2026 and November 30, 2025. Combined monthly rent is approximately $96,000 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 Company 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 March 31, 2025 and December 31, 2024
March 2025
December 2024
Total undiscounted operating
lease payments
$1,560,000
$1,847,756
Less: Imputed interest
(355,941)
(434,343)
Present value of operating lease liabilities
$1,204,059
$1,413,143
Weighted average remaining
lease term in years
1.50
1.75
Discount rate
11.75%
11.75%
The Right of Use Asset at March 31, 2025 of approximately $1,075,000 will be amortized over the 1.5 years remaining average lease terms. Rent expense was approximately $300,000 and $190,000 for the quarters ended March 31, 2025 and 2024, respectively.
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.
A complaint was filed in August of 2022, in the Circuit Court for the city of Richmond, VA by 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 was settled in June of 2023, and the Company is currently in full compliance with the terms of that settlement agreement. Nonetheless, Atlantic Wave has since filed a new lawsuit against Cyberlux in the same court, alleging breach of that settlement agreement. In response, Cyberlux has asserted multiple counterclaims, including first to breach, usury, and abuse of process, along with several affirmative defenses. Cyberlux believes that the claims brought by Atlantic
Wave are without merit and is confident it will prevail on its counterclaims and in defending against the allegations. In addition, Atlantic Wave and Secure Community filed lawsuits in California and Texas in an attempt to enforce the settled judgement without proof of breach. These parties have also filed 19 garnishment actions against various business partners and prior business partners. The aggressiveness of these plaintiffs in seeking to enforce an order that was subsequently settled in another jurisdiction has not met with success. Recently, Cyberlux served Atlantic Wave and Secure Community with an action to enjoin these judicial filings and any further filings to enforce that settled matter particularly since Cyberlux is in compliance with the settlement agreement in question. We expect the injunctive action to be successful as well as the counterclaims, and that we will be able to resolve this dispute under the terms of that settlement agreement in the near future.
As set forth in Note G above, Cyberlux issued convertible promissory notes to RB Capital Partners, Inc. ("RB Capital") with maturity dates through July 2024. As reflected above, RB Capital converted $1,654,685, including accrued interest into 6,618,740 shares of Common Stock. On August 14, 2024, RB Capital filed a complaint in the United States District Court for the Southern District of California seeking payment of the notes and attorneys' fees. Cyberlux moved to have the matter settled by arbitration. The court granted our motion to move the matter into arbitration for the converted note, but retained jurisdiction as to the other notes. The parties have entered an agreement in principle, currently being reduced to a final, binding settlement agreement. Cyberlux will provide an update once this is finalized, but the agreement in principle provides for the cash repayment of the remaining outstanding notes.
A complaint was filed on November 7th, 2024, by Aerotek Inc., in Wake County, North Carolina Superior Court, against Datron World Communications, Inc., and Cyberlux Corporation, alleging breach of contract. An answer has yet to be filed in this matter, but plaintiff has demanded $204,705.45 plus attorney fees.
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.
Ea
In March 2024, as amended in April 2024, the Company amended its one-year purchase order financing arrangement providing up to $7 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. During the year ended December 31, 2024, the Company borrowed $6.95 million against this facility. Interest accrued at March 31, 2025 was approximately $521,000. Interest expense for the quarter ended March 31, 2025 and 2024 was approximately $253,000 and $0, respectively. The line of credit matured in March 2025 and the Company was in default under the agreement as of March 31, 2025 which triggered default interest. In April 2025, the Company amended the agreement to, among other items, extend the term (see "Note O - Subsequent Events" for additional information).
The Company had no significant current income taxes due in the three months ended March 31, 2025 and 2024 because of the losses generated in each period.
At December 31, 2024, the Company had Federal net operating loss (NOL) carryforwards of approximately $26 million. The federal NOL carryforwards began to expire in 2024. Of the total Federal net operating losses, the amounts incurred after 2017 of approximately $18 million will carry forward indefinitely. Sections 382 and 383 of the Internal Revenue Code, and similar state regulations, contain provisions that may limit the NOL carryforwards available to be used to offset income in any given year upon the occurrence of certain events, including changes in the ownership interests of significant stockholders. In the event of a cumulative change in ownership in excess of 50% over a three-year period, the amount of the NOL carryforwards that the Company may utilize in any year may be limited. Although the Company has not undertaken a formal analysis, an ownership change may have occurred prior to December 31, 2024, which would reduce the NOL available for use in future periods.
Deferred tax assets resulting from the net operating losses and certain temporary differences were partially offset by a deferred tax liability resulting from a basis differencein the intangible assets of Datron. In accordance with ASC 740, the Company recorded a valuation allowance to fully offset the gross deferred tax asset because it is not "more likely than not" that the Company will realize future benefits associated with these deferred tax assets at December 31, 2024.
Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company's financial statements as of March 31, 2025 or December 31, 2024. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date. No tax audits were commenced or were in process for the taxable periods that ended March 31, 2025 or December 31, 2024. No tax related interest or penalties were incurred during the three months ended March 31, 2025 or 2024.
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, except as noted below.
Pursuant to a settlement agreement among Cyberlux, Roman Investments PR, LLC, Rosewood Theater LLC, and related parties, on or about April 10, 2025, (a) Roman Investments PR, LLC returned 62,500,000 shares and (b) Rosewood Theater LLC returned 41,700,000 shares of Common Stock to the Company's Treasury in respect of convertible notes heretofore converted but as to which notices of conversion had not been provided and (c) the Company agreed to pay the outstanding principal and interest, and settled other related party claims for approximately $2.5 million. In connection with the same settlement, the Company has agreed to issue 240,000,000 restricted shares to Assure Global LLC, reflecting a net incremental issuance of 135,800 shares of Common Stock.
Effective March 31, 2025, the line of credit (discussed in Note M, above) matured, and default interest was imposed. In April 2025, the Company amended the agreement to, among other items, extend the term through July 28, 2025, but the Company is incurring default interest through the term of such amendment.
In April 2025, the Company amended its line of credit increasing the limit under the agreement to $12.3 million and extending the term through July 2025.
Issuer Certification
Principal Executive Officer:
The issuer shall include certifications by the chief executive officer and chief financial officer of the issuer (or any other persons with different titles but having the same responsibilities) in each Quarterly Report or Annual Report.
The certifications shall follow the format below:
I, Mark D. Schmidt, certify that:
5/15/2025 /s/ Mark D. Schmidt
Principal Financial Officer.
I, David D. Downing certify that:
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