Context source · CXF-S-154912720F7D

Keithly declaration — dismissal dispute and anonymous Cyberlux diligence email

SHA-256 154912720f7dbecb6bb2…6 pages · 1 MB

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claimallegation

Keithly identifies himself as plaintiffs’ counsel for Atlantic Wave and Secure Community and signs at Irvine on May 20, 2024. ECF 12-1 is fi

Keithly identifies himself as plaintiffs’ counsel for Atlantic Wave and Secure Community and signs at Irvine on May 20, 2024. ECF 12-1 is filed in 3:24-cv-00482-RBM-VET opposing vacation of a sister-state judgment; the first-page footer also prints 00196, while the caption and filing header identify 00482. The June 3 date is a motion date, not execution.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -1- Case No. 3:24-cv-00196-RBM-VET DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP David M. Keithly, State Bar No. 292101 dkeithly@mortensontaggart.com Sara K. Ross, State Bar No. 346153 sross@mortensontaggart.com MORTENSON TAGGART ADAMS LLP 300 Spectrum Center Drive, Suite 1200 Irvine, California 92618 Telephone: (949) 774-2224 Facsimile: (949) 774-2545 Attorneys for Plaintiffs ATLANTIC WAVE HOLDINGS, LLC and SECURE COMMUNITY, LLC UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA ATLANTIC WAVE HOLDINGS, LLC, a Virginia limited liability company, and SECURE COMMUNITY, LLC, a Virginia limited Liability company, Plaintiffs, vs. CYBERLUX CORPORATION, a Nevada Corporation, Defendant. CASE NO. 3:24-cv-00482-RBM-VET Honorable Ruth Bermudez Montenegro DECLARATION OF DAVID KEITHLY IN SUPPORT OF OPPOSITION OF PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION TO VACATE SISTER- STATE JUDGMENT [Filed concurrently with Opposition to Motion to Vacate Sister-State Judgment, Declaration of William Welter and Declaration of James Sadigh] DATE: June 3, 2024 NO ORAL ARGUMENT UNLESS ORDERED BY THE COURT Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.459 Page 1 of 6

claimallegation

The email says acquisition funding for Datron and Catalyst could not be confidently determined, calls CMTC an apparent Watts shell, doubts p

The email says acquisition funding for Datron and Catalyst could not be confidently determined, calls CMTC an apparent Watts shell, doubts public classified-work assertions, and infers counsel may be uninformed. It relays an Ozols filing allegation that Cyberlux sought to shield Datron and expresses reputational concern about the author’s company becoming involved. These are the unnamed author’s interpretations, not proved transactions or concealed intent.

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2 of 2 and therefore has never been awarded contracts (verifiable at usaspending.gov) 9) Neither Cyberlux, nor any of its subsidiaries hold FFL or FEL licenses with the ATF (atf.gov) The claims that the "special activities" group deals in munitions and weapons is impossible given the lack of ATF licenses. This concern extends to the fusing, detonators, and explosive payloads used on the X8 drone. Conclusions we reached based on these factual elements 1) Given the significant legal and financial issues we find that it is highly improbable that the US DOD has granted Mr Schmidt, or Mr Kalenja personal security clearances. 2) Given the significant legal and financial issues we find that it is highly improbable that the US DOD has granted Cyberlux or any of its subsidiaries Facility Clearances to execute "classified" contracts. We have been unable to verify that any facilities held by Cyberlux contain SCIFs. 3) Given the past performance history and significant legal, credibility and financial issues we find that is it highly unlikely the DOD would do any DIRECT business with Cyberlux. 4) We suspect that the 78.8m award was "factored" in order to provide working capital as the company appears to have inadequate banking relationships. This gives us the impression of impending insolvency and poor cash management. 5) FMF (foreign military funding) cases are highly regulated from a financial perspective. Most notably the use of funds awarded is auditable by the USG and restricts payments to third parties for commissions etc. Contracts may also include limitations on profits under both FAR and DFAR regulation. As such, we do not understand how Cyberlux could legally commit to paying AWH a $5k commission per drone sold to settle the debt. 6) The manner in which this contract was developed and awarded is suspicious to us. Further feedback from a customer served to, at a minimum, support our concerns. This particular award is part of a highly publicized aid package to Ukraine. 7) It is not within the normal behavior of the government to classify contract documents (purchase orders, performance contracts etc). Generally the WORK/PRODUCT is classified. 8) We have been unable to confidently determine where Cyberlux has been acquiring its funding to execute the purchase of Datron or Catalyst. 9) CMTC appears to have been a shell company started by Mr Watts 10) The strong assertions in legal and financial documents that the company is engaged in highly classified work was suspect. This open claim is contrary to the very nature of how companies who DO execute classified work behave. 11) The inconsistencies identified after finer review of the legal narrative seems to imply that Cyberlux's legal team is not being told the truth. 12) One legal filing by Mr Ozols asserted that Cyberlux was attempting to shield datron by "transferring, pledging, hypothecating, encumbering" the asset. A merger or acquisition between cyberlux and the company I advise would have made us party to this effort. This would have a negative effect on our company's reputation and standing. EXHIBIT A - 5 Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.464 Page 6 of 6

claimallegation

The email lists attachment PrimeTransactionsAndSubawards_2024-04-13_H14M34S55768219.zip. That archive and the cited public records are not e

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1 of 2 Monday, May 20, 2024 at 11:43:55 Paciﬁc Daylight TimeMonday, May 20, 2024 at 11:43:55 Paciﬁc Daylight Time Subject: Subject:Cyberlux Date: Date: Friday, April 26, 2024 at 3:37:27 PM Paciﬁc Daylight Time From: From: 49121719 To: To: David M. Keithly, Sara Ross Attachments:Attachments: PrimeTransactionsAndSubawards_2024-04-13_H14M34S55768219.zip CAUTION: This email originated from outside Mortenson Taggart Adams LLP. Exercise caution when opening attachments or clicking links, especially from unknown senders. I am an advisor to a significant defense company which was recently approached by Cyberlux. The purpose of the approach was to discuss the potential of partnership (acquisition by, or merging into) with the company I advise. We therefore conducted preliminary "lite" due diligence on Cyberlux. During the course of that investigation several issues became known to us, including the dual litigation between AWH and Cyberlux. This action is perhaps the most troubling discovery as it damaged Mr Schmidt's credibility (misuse of funds, withholding information). There are elements which I wish to share with you. These elements are verifiable through public records. 1) CYBERLUX is not currently a DIRECT supplier to the US DOD. The alleged "secret" contract for drones can be found through a recipient search at USASPENDING.GOV. The contract is for 2000 K8 drones with a per unit price of $39.4k including training. The contract is in fact a SUBCONTRACT with HII Defense (Huntington Ingall Industries). This is an FMF case for Ukraine. 2) An additional SUB contract was issued to Cyberlux by ADS (Atlantic Diving Supply) for approximately $400k for commercial variants of drones. 3) I have attached a series of files which show the all transactions between the US Government and Cyberlux. you will note that DIRECT contracts with Cyberlux ceased in 2015. The US government is required to make public all DOD contracts within 90 days of award. 4) the GSA contract (contract GS-07F-9409S) which Cyberlux, to this day, advertises on their website was cancelled by the government on 11/2/2020. This can be verified in the files attached. search term "legal contract cancellation" 5) a Dun and Bradstreet credit report revealed significant unpaid debts, judgements, and UCC's including to the IRS, NC T ax Authority and the Texas Tax Authority as well as private lenders (Sep 2023) 6) An address check of the "Special Activities" group (3rd qtr 2023 report) revealed that this address is in fact an address used by a real estate agent in Miami. 7) CMTC LLC is not registered with the US Government (sam.gov) and therefore has never been awarded contracts (verifiable at usaspending.gov) 8) Catalyst Machine W orks LLC s not registered with the US Government (sam.gov) EXHIBIT A - 4 Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.463 Page 5 of 6

claimallegation

Keithly quotes selected debt, subcontract, licence and factoring passages from the anonymous email. Repetition inside his sworn declaration

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP with the company I advise.” A true and correct copy of this email is attached hereto as Exhibit A. The email shared information that it claimed was verifiable through public records, including, but not limited to: a. “a Dun and Bradstreet credit report revealed significant unpaid debts, judgments, and UCC’s including to the IRS, NC Tax Authority and the Texas Tax Authority as well as private lenders” b. “CYBERLUX is not currently a DIRECT supplier to the US DOD. The alleged ‘secret’ contract for drones can be found through a recipient search at USASPENDING.GOV. The contract is for 2000 K8 drones with a per unit price of $39.4k including training. The contract is in fact a SUBCONTRACT with HII Defense (Huntington Ingall Industries).” c. Neither Cyberlux, nor any of its subsidiaries hold FFL or FEL licenses with the ATF (atf.gov). The claims that the ‘special activities’ group deals in munitions and weapons is impossible given the lack of ATF licenses. The concern extends to the fusing, detonators, and explosive payloads used on the X8 drone.” d. “We suspect that the 78.8m award was ‘factored’ in order to provide working capital as the company appears to have inadequate banking relationships. This gives us the impression of impending insolvency and poor cash management.” I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. This declaration was executed on May 20, 2024, at Irvine, California. David M. Keithly Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.461 Page 3 of 6

claimallegation

Keithly says he contacted defendants’ counsel February 15, 2024 to stipulate to dismissal of a complaint he calls incorrectly filed by prior

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP DECLARATION OF DAVID M. KEITHLY I, David M. Keithly, declare as follows: 1. I am an attorney licensed to practice law in the State of California and am a partner at the law firm Mortenson Taggart Adams LLP. I am one of the attorneys representing Plaintiffs Atlantic Wave Holdings, LLC and Secure Community, LLC (collectively, "Plaintiffs") in this action. I have personal knowledge of the facts set forth herein and, if called upon as a witness, I could and would competently testify thereto. 2. On February 15, 2024, I contacted Defendants' counsel to request that Defendants stipulate to allow Plaintiffs to dismiss the Complaint that had been incorrectly filed by Plaintiffs’ previous counsel in action currently pending before this court. (Case No: 3:24-cv-00196-RBM-VET.). Defendants refused to stipulate to the dismissal of the Complaint, thereby compelling Plaintiffs to incur unnecessary expenses and delays. 3. As a result of Defendants' refusal to stipulate to the dismissal of the incorrect Complaint, Plaintiffs were forced to file a motion to dismiss their own Complaint under Rule 41. This motion is now fully briefed and awaiting a decision. 4. Plaintiffs have filed a special motion to strike Defendants' amended counterclaims pursuant to California's anti-SLAPP statute. This motion is fully briefed and awaiting a decision that should dispose of Defendants' counterclaims. 5. Defendants’ bad faith litigation tactics, including their refusal to allow the dismissal of the incorrect Complaint and their attempts to delay enforcement of the judgment, have significantly increased the complexity and cost of this litigation for Plaintiffs. These tactics not only impede Plaintiffs' rightful collection efforts but also threaten the integrity of judicial proceedings. 6. On April 26, 2024, I received an anonymous email purporting to be from “an advisor to a significant defense company which was recently approached by Cyberlux . . . to discuss the potential of partnership (acquisition by, or merging into) Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.460 Page 2 of 6

claimallegation

He characterises defendants’ refusal and enforcement resistance as bad faith causing expense and delay and threatening judicial integrity. T

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP DECLARATION OF DAVID M. KEITHLY I, David M. Keithly, declare as follows: 1. I am an attorney licensed to practice law in the State of California and am a partner at the law firm Mortenson Taggart Adams LLP. I am one of the attorneys representing Plaintiffs Atlantic Wave Holdings, LLC and Secure Community, LLC (collectively, "Plaintiffs") in this action. I have personal knowledge of the facts set forth herein and, if called upon as a witness, I could and would competently testify thereto. 2. On February 15, 2024, I contacted Defendants' counsel to request that Defendants stipulate to allow Plaintiffs to dismiss the Complaint that had been incorrectly filed by Plaintiffs’ previous counsel in action currently pending before this court. (Case No: 3:24-cv-00196-RBM-VET.). Defendants refused to stipulate to the dismissal of the Complaint, thereby compelling Plaintiffs to incur unnecessary expenses and delays. 3. As a result of Defendants' refusal to stipulate to the dismissal of the incorrect Complaint, Plaintiffs were forced to file a motion to dismiss their own Complaint under Rule 41. This motion is now fully briefed and awaiting a decision. 4. Plaintiffs have filed a special motion to strike Defendants' amended counterclaims pursuant to California's anti-SLAPP statute. This motion is fully briefed and awaiting a decision that should dispose of Defendants' counterclaims. 5. Defendants’ bad faith litigation tactics, including their refusal to allow the dismissal of the incorrect Complaint and their attempts to delay enforcement of the judgment, have significantly increased the complexity and cost of this litigation for Plaintiffs. These tactics not only impede Plaintiffs' rightful collection efforts but also threaten the integrity of judicial proceedings. 6. On April 26, 2024, I received an anonymous email purporting to be from “an advisor to a significant defense company which was recently approached by Cyberlux . . . to discuss the potential of partnership (acquisition by, or merging into) Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.460 Page 2 of 6

claimallegation

Keithly says he received the attached anonymous email on April 26, 2024. The displayed sender is 49121719, addressed to Keithly and Sara Ros

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP DECLARATION OF DAVID M. KEITHLY I, David M. Keithly, declare as follows: 1. I am an attorney licensed to practice law in the State of California and am a partner at the law firm Mortenson Taggart Adams LLP. I am one of the attorneys representing Plaintiffs Atlantic Wave Holdings, LLC and Secure Community, LLC (collectively, "Plaintiffs") in this action. I have personal knowledge of the facts set forth herein and, if called upon as a witness, I could and would competently testify thereto. 2. On February 15, 2024, I contacted Defendants' counsel to request that Defendants stipulate to allow Plaintiffs to dismiss the Complaint that had been incorrectly filed by Plaintiffs’ previous counsel in action currently pending before this court. (Case No: 3:24-cv-00196-RBM-VET.). Defendants refused to stipulate to the dismissal of the Complaint, thereby compelling Plaintiffs to incur unnecessary expenses and delays. 3. As a result of Defendants' refusal to stipulate to the dismissal of the incorrect Complaint, Plaintiffs were forced to file a motion to dismiss their own Complaint under Rule 41. This motion is now fully briefed and awaiting a decision. 4. Plaintiffs have filed a special motion to strike Defendants' amended counterclaims pursuant to California's anti-SLAPP statute. This motion is fully briefed and awaiting a decision that should dispose of Defendants' counterclaims. 5. Defendants’ bad faith litigation tactics, including their refusal to allow the dismissal of the incorrect Complaint and their attempts to delay enforcement of the judgment, have significantly increased the complexity and cost of this litigation for Plaintiffs. These tactics not only impede Plaintiffs' rightful collection efforts but also threaten the integrity of judicial proceedings. 6. On April 26, 2024, I received an anonymous email purporting to be from “an advisor to a significant defense company which was recently approached by Cyberlux . . . to discuss the potential of partnership (acquisition by, or merging into) Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.460 Page 2 of 6

claimallegation

The email alleges Cyberlux is not a direct DoD supplier, describes an HII subcontract for 2,000 K8 drones at about $39,400 including trainin

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP with the company I advise.” A true and correct copy of this email is attached hereto as Exhibit A. The email shared information that it claimed was verifiable through public records, including, but not limited to: a. “a Dun and Bradstreet credit report revealed significant unpaid debts, judgments, and UCC’s including to the IRS, NC Tax Authority and the Texas Tax Authority as well as private lenders” b. “CYBERLUX is not currently a DIRECT supplier to the US DOD. The alleged ‘secret’ contract for drones can be found through a recipient search at USASPENDING.GOV. The contract is for 2000 K8 drones with a per unit price of $39.4k including training. The contract is in fact a SUBCONTRACT with HII Defense (Huntington Ingall Industries).” c. Neither Cyberlux, nor any of its subsidiaries hold FFL or FEL licenses with the ATF (atf.gov). The claims that the ‘special activities’ group deals in munitions and weapons is impossible given the lack of ATF licenses. The concern extends to the fusing, detonators, and explosive payloads used on the X8 drone.” d. “We suspect that the 78.8m award was ‘factored’ in order to provide working capital as the company appears to have inadequate banking relationships. This gives us the impression of impending insolvency and poor cash management.” I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. This declaration was executed on May 20, 2024, at Irvine, California. David M. Keithly Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.461 Page 3 of 6

claimallegation

The anonymous author alleges advertised GSA contract GS-07F-9409S was cancelled November 2, 2020, a September 2023 credit report showed unpa

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1 of 2 Monday, May 20, 2024 at 11:43:55 Paciﬁc Daylight TimeMonday, May 20, 2024 at 11:43:55 Paciﬁc Daylight Time Subject: Subject:Cyberlux Date: Date: Friday, April 26, 2024 at 3:37:27 PM Paciﬁc Daylight Time From: From: 49121719 To: To: David M. Keithly, Sara Ross Attachments:Attachments: PrimeTransactionsAndSubawards_2024-04-13_H14M34S55768219.zip CAUTION: This email originated from outside Mortenson Taggart Adams LLP. Exercise caution when opening attachments or clicking links, especially from unknown senders. I am an advisor to a significant defense company which was recently approached by Cyberlux. The purpose of the approach was to discuss the potential of partnership (acquisition by, or merging into) with the company I advise. We therefore conducted preliminary "lite" due diligence on Cyberlux. During the course of that investigation several issues became known to us, including the dual litigation between AWH and Cyberlux. This action is perhaps the most troubling discovery as it damaged Mr Schmidt's credibility (misuse of funds, withholding information). There are elements which I wish to share with you. These elements are verifiable through public records. 1) CYBERLUX is not currently a DIRECT supplier to the US DOD. The alleged "secret" contract for drones can be found through a recipient search at USASPENDING.GOV. The contract is for 2000 K8 drones with a per unit price of $39.4k including training. The contract is in fact a SUBCONTRACT with HII Defense (Huntington Ingall Industries). This is an FMF case for Ukraine. 2) An additional SUB contract was issued to Cyberlux by ADS (Atlantic Diving Supply) for approximately $400k for commercial variants of drones. 3) I have attached a series of files which show the all transactions between the US Government and Cyberlux. you will note that DIRECT contracts with Cyberlux ceased in 2015. The US government is required to make public all DOD contracts within 90 days of award. 4) the GSA contract (contract GS-07F-9409S) which Cyberlux, to this day, advertises on their website was cancelled by the government on 11/2/2020. This can be verified in the files attached. search term "legal contract cancellation" 5) a Dun and Bradstreet credit report revealed significant unpaid debts, judgements, and UCC's including to the IRS, NC T ax Authority and the Texas Tax Authority as well as private lenders (Sep 2023) 6) An address check of the "Special Activities" group (3rd qtr 2023 report) revealed that this address is in fact an address used by a real estate agent in Miami. 7) CMTC LLC is not registered with the US Government (sam.gov) and therefore has never been awarded contracts (verifiable at usaspending.gov) 8) Catalyst Machine W orks LLC s not registered with the US Government (sam.gov) EXHIBIT A - 4 Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.463 Page 5 of 6

claimallegation

The author alleges CMTC and Catalyst lack SAM registration and therefore never received government awards, and that Cyberlux subsidiaries la

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1 of 2 Monday, May 20, 2024 at 11:43:55 Paciﬁc Daylight TimeMonday, May 20, 2024 at 11:43:55 Paciﬁc Daylight Time Subject: Subject:Cyberlux Date: Date: Friday, April 26, 2024 at 3:37:27 PM Paciﬁc Daylight Time From: From: 49121719 To: To: David M. Keithly, Sara Ross Attachments:Attachments: PrimeTransactionsAndSubawards_2024-04-13_H14M34S55768219.zip CAUTION: This email originated from outside Mortenson Taggart Adams LLP. Exercise caution when opening attachments or clicking links, especially from unknown senders. I am an advisor to a significant defense company which was recently approached by Cyberlux. The purpose of the approach was to discuss the potential of partnership (acquisition by, or merging into) with the company I advise. We therefore conducted preliminary "lite" due diligence on Cyberlux. During the course of that investigation several issues became known to us, including the dual litigation between AWH and Cyberlux. This action is perhaps the most troubling discovery as it damaged Mr Schmidt's credibility (misuse of funds, withholding information). There are elements which I wish to share with you. These elements are verifiable through public records. 1) CYBERLUX is not currently a DIRECT supplier to the US DOD. The alleged "secret" contract for drones can be found through a recipient search at USASPENDING.GOV. The contract is for 2000 K8 drones with a per unit price of $39.4k including training. The contract is in fact a SUBCONTRACT with HII Defense (Huntington Ingall Industries). This is an FMF case for Ukraine. 2) An additional SUB contract was issued to Cyberlux by ADS (Atlantic Diving Supply) for approximately $400k for commercial variants of drones. 3) I have attached a series of files which show the all transactions between the US Government and Cyberlux. you will note that DIRECT contracts with Cyberlux ceased in 2015. The US government is required to make public all DOD contracts within 90 days of award. 4) the GSA contract (contract GS-07F-9409S) which Cyberlux, to this day, advertises on their website was cancelled by the government on 11/2/2020. This can be verified in the files attached. search term "legal contract cancellation" 5) a Dun and Bradstreet credit report revealed significant unpaid debts, judgements, and UCC's including to the IRS, NC T ax Authority and the Texas Tax Authority as well as private lenders (Sep 2023) 6) An address check of the "Special Activities" group (3rd qtr 2023 report) revealed that this address is in fact an address used by a real estate agent in Miami. 7) CMTC LLC is not registered with the US Government (sam.gov) and therefore has never been awarded contracts (verifiable at usaspending.gov) 8) Catalyst Machine W orks LLC s not registered with the US Government (sam.gov) EXHIBIT A - 4 Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.463 Page 5 of 6

claimallegation

The email reasons that legal and financial issues make personal and facility clearances improbable, says SCIFs could not be verified, predic

The email reasons that legal and financial issues make personal and facility clearances improbable, says SCIFs could not be verified, predicts little direct DoD business and suspects factoring of the $78.8 million award and impending insolvency. These are expressly suspicions and inability-to-verify statements, not clearance, facility or insolvency determinations.

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2 of 2 and therefore has never been awarded contracts (verifiable at usaspending.gov) 9) Neither Cyberlux, nor any of its subsidiaries hold FFL or FEL licenses with the ATF (atf.gov) The claims that the "special activities" group deals in munitions and weapons is impossible given the lack of ATF licenses. This concern extends to the fusing, detonators, and explosive payloads used on the X8 drone. Conclusions we reached based on these factual elements 1) Given the significant legal and financial issues we find that it is highly improbable that the US DOD has granted Mr Schmidt, or Mr Kalenja personal security clearances. 2) Given the significant legal and financial issues we find that it is highly improbable that the US DOD has granted Cyberlux or any of its subsidiaries Facility Clearances to execute "classified" contracts. We have been unable to verify that any facilities held by Cyberlux contain SCIFs. 3) Given the past performance history and significant legal, credibility and financial issues we find that is it highly unlikely the DOD would do any DIRECT business with Cyberlux. 4) We suspect that the 78.8m award was "factored" in order to provide working capital as the company appears to have inadequate banking relationships. This gives us the impression of impending insolvency and poor cash management. 5) FMF (foreign military funding) cases are highly regulated from a financial perspective. Most notably the use of funds awarded is auditable by the USG and restricts payments to third parties for commissions etc. Contracts may also include limitations on profits under both FAR and DFAR regulation. As such, we do not understand how Cyberlux could legally commit to paying AWH a $5k commission per drone sold to settle the debt. 6) The manner in which this contract was developed and awarded is suspicious to us. Further feedback from a customer served to, at a minimum, support our concerns. This particular award is part of a highly publicized aid package to Ukraine. 7) It is not within the normal behavior of the government to classify contract documents (purchase orders, performance contracts etc). Generally the WORK/PRODUCT is classified. 8) We have been unable to confidently determine where Cyberlux has been acquiring its funding to execute the purchase of Datron or Catalyst. 9) CMTC appears to have been a shell company started by Mr Watts 10) The strong assertions in legal and financial documents that the company is engaged in highly classified work was suspect. This open claim is contrary to the very nature of how companies who DO execute classified work behave. 11) The inconsistencies identified after finer review of the legal narrative seems to imply that Cyberlux's legal team is not being told the truth. 12) One legal filing by Mr Ozols asserted that Cyberlux was attempting to shield datron by "transferring, pledging, hypothecating, encumbering" the asset. A merger or acquisition between cyberlux and the company I advise would have made us party to this effort. This would have a negative effect on our company's reputation and standing. EXHIBIT A - 5 Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.464 Page 6 of 6

claimallegation

The author questions whether a $5,000-per-drone AWH commission could be lawful under asserted FMF, FAR and DFAR restrictions, finds the awar

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2 of 2 and therefore has never been awarded contracts (verifiable at usaspending.gov) 9) Neither Cyberlux, nor any of its subsidiaries hold FFL or FEL licenses with the ATF (atf.gov) The claims that the "special activities" group deals in munitions and weapons is impossible given the lack of ATF licenses. This concern extends to the fusing, detonators, and explosive payloads used on the X8 drone. Conclusions we reached based on these factual elements 1) Given the significant legal and financial issues we find that it is highly improbable that the US DOD has granted Mr Schmidt, or Mr Kalenja personal security clearances. 2) Given the significant legal and financial issues we find that it is highly improbable that the US DOD has granted Cyberlux or any of its subsidiaries Facility Clearances to execute "classified" contracts. We have been unable to verify that any facilities held by Cyberlux contain SCIFs. 3) Given the past performance history and significant legal, credibility and financial issues we find that is it highly unlikely the DOD would do any DIRECT business with Cyberlux. 4) We suspect that the 78.8m award was "factored" in order to provide working capital as the company appears to have inadequate banking relationships. This gives us the impression of impending insolvency and poor cash management. 5) FMF (foreign military funding) cases are highly regulated from a financial perspective. Most notably the use of funds awarded is auditable by the USG and restricts payments to third parties for commissions etc. Contracts may also include limitations on profits under both FAR and DFAR regulation. As such, we do not understand how Cyberlux could legally commit to paying AWH a $5k commission per drone sold to settle the debt. 6) The manner in which this contract was developed and awarded is suspicious to us. Further feedback from a customer served to, at a minimum, support our concerns. This particular award is part of a highly publicized aid package to Ukraine. 7) It is not within the normal behavior of the government to classify contract documents (purchase orders, performance contracts etc). Generally the WORK/PRODUCT is classified. 8) We have been unable to confidently determine where Cyberlux has been acquiring its funding to execute the purchase of Datron or Catalyst. 9) CMTC appears to have been a shell company started by Mr Watts 10) The strong assertions in legal and financial documents that the company is engaged in highly classified work was suspect. This open claim is contrary to the very nature of how companies who DO execute classified work behave. 11) The inconsistencies identified after finer review of the legal narrative seems to imply that Cyberlux's legal team is not being told the truth. 12) One legal filing by Mr Ozols asserted that Cyberlux was attempting to shield datron by "transferring, pledging, hypothecating, encumbering" the asset. A merger or acquisition between cyberlux and the company I advise would have made us party to this effort. This would have a negative effect on our company's reputation and standing. EXHIBIT A - 5 Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.464 Page 6 of 6

entityobservation

David M. Keithly

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP DECLARATION OF DAVID M. KEITHLY I, David M. Keithly, declare as follows: 1. I am an attorney licensed to practice law in the State of California and am a partner at the law firm Mortenson Taggart Adams LLP. I am one of the attorneys representing Plaintiffs Atlantic Wave Holdings, LLC and Secure Community, LLC (collectively, "Plaintiffs") in this action. I have personal knowledge of the facts set forth herein and, if called upon as a witness, I could and would competently testify thereto. 2. On February 15, 2024, I contacted Defendants' counsel to request that Defendants stipulate to allow Plaintiffs to dismiss the Complaint that had been incorrectly filed by Plaintiffs’ previous counsel in action currently pending before this court. (Case No: 3:24-cv-00196-RBM-VET.). Defendants refused to stipulate to the dismissal of the Complaint, thereby compelling Plaintiffs to incur unnecessary expenses and delays. 3. As a result of Defendants' refusal to stipulate to the dismissal of the incorrect Complaint, Plaintiffs were forced to file a motion to dismiss their own Complaint under Rule 41. This motion is now fully briefed and awaiting a decision. 4. Plaintiffs have filed a special motion to strike Defendants' amended counterclaims pursuant to California's anti-SLAPP statute. This motion is fully briefed and awaiting a decision that should dispose of Defendants' counterclaims. 5. Defendants’ bad faith litigation tactics, including their refusal to allow the dismissal of the incorrect Complaint and their attempts to delay enforcement of the judgment, have significantly increased the complexity and cost of this litigation for Plaintiffs. These tactics not only impede Plaintiffs' rightful collection efforts but also threaten the integrity of judicial proceedings. 6. On April 26, 2024, I received an anonymous email purporting to be from “an advisor to a significant defense company which was recently approached by Cyberlux . . . to discuss the potential of partnership (acquisition by, or merging into) Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.460 Page 2 of 6

entityobservation

49121719

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1 of 2 Monday, May 20, 2024 at 11:43:55 Paciﬁc Daylight TimeMonday, May 20, 2024 at 11:43:55 Paciﬁc Daylight Time Subject: Subject:Cyberlux Date: Date: Friday, April 26, 2024 at 3:37:27 PM Paciﬁc Daylight Time From: From: 49121719 To: To: David M. Keithly, Sara Ross Attachments:Attachments: PrimeTransactionsAndSubawards_2024-04-13_H14M34S55768219.zip CAUTION: This email originated from outside Mortenson Taggart Adams LLP. Exercise caution when opening attachments or clicking links, especially from unknown senders. I am an advisor to a significant defense company which was recently approached by Cyberlux. The purpose of the approach was to discuss the potential of partnership (acquisition by, or merging into) with the company I advise. We therefore conducted preliminary "lite" due diligence on Cyberlux. During the course of that investigation several issues became known to us, including the dual litigation between AWH and Cyberlux. This action is perhaps the most troubling discovery as it damaged Mr Schmidt's credibility (misuse of funds, withholding information). There are elements which I wish to share with you. These elements are verifiable through public records. 1) CYBERLUX is not currently a DIRECT supplier to the US DOD. The alleged "secret" contract for drones can be found through a recipient search at USASPENDING.GOV. The contract is for 2000 K8 drones with a per unit price of $39.4k including training. The contract is in fact a SUBCONTRACT with HII Defense (Huntington Ingall Industries). This is an FMF case for Ukraine. 2) An additional SUB contract was issued to Cyberlux by ADS (Atlantic Diving Supply) for approximately $400k for commercial variants of drones. 3) I have attached a series of files which show the all transactions between the US Government and Cyberlux. you will note that DIRECT contracts with Cyberlux ceased in 2015. The US government is required to make public all DOD contracts within 90 days of award. 4) the GSA contract (contract GS-07F-9409S) which Cyberlux, to this day, advertises on their website was cancelled by the government on 11/2/2020. This can be verified in the files attached. search term "legal contract cancellation" 5) a Dun and Bradstreet credit report revealed significant unpaid debts, judgements, and UCC's including to the IRS, NC T ax Authority and the Texas Tax Authority as well as private lenders (Sep 2023) 6) An address check of the "Special Activities" group (3rd qtr 2023 report) revealed that this address is in fact an address used by a real estate agent in Miami. 7) CMTC LLC is not registered with the US Government (sam.gov) and therefore has never been awarded contracts (verifiable at usaspending.gov) 8) Catalyst Machine W orks LLC s not registered with the US Government (sam.gov) EXHIBIT A - 4 Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.463 Page 5 of 6

inferenceinference

The evidence is strongest for receipt and litigation use of the anonymous communication; its embedded commercial and regulatory conclusions

The evidence is strongest for receipt and litigation use of the anonymous communication; its embedded commercial and regulatory conclusions require their original records and author foundation.

inferenceinference

The asserted February 15 notice concerns a later date than pre-January 30 removal communications, so it cannot by itself negate a claim of n

The asserted February 15 notice concerns a later date than pre-January 30 removal communications, so it cannot by itself negate a claim of no notice before removal.

omissiongap

The named procurement archive, credit report, registry and licence search results, contract clauses and referenced customer feedback are not

The named procurement archive, credit report, registry and licence search results, contract clauses and referenced customer feedback are not included with the email printout.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP with the company I advise.” A true and correct copy of this email is attached hereto as Exhibit A. The email shared information that it claimed was verifiable through public records, including, but not limited to: a. “a Dun and Bradstreet credit report revealed significant unpaid debts, judgments, and UCC’s including to the IRS, NC Tax Authority and the Texas Tax Authority as well as private lenders” b. “CYBERLUX is not currently a DIRECT supplier to the US DOD. The alleged ‘secret’ contract for drones can be found through a recipient search at USASPENDING.GOV. The contract is for 2000 K8 drones with a per unit price of $39.4k including training. The contract is in fact a SUBCONTRACT with HII Defense (Huntington Ingall Industries).” c. Neither Cyberlux, nor any of its subsidiaries hold FFL or FEL licenses with the ATF (atf.gov). The claims that the ‘special activities’ group deals in munitions and weapons is impossible given the lack of ATF licenses. The concern extends to the fusing, detonators, and explosive payloads used on the X8 drone.” d. “We suspect that the 78.8m award was ‘factored’ in order to provide working capital as the company appears to have inadequate banking relationships. This gives us the impression of impending insolvency and poor cash management.” I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. This declaration was executed on May 20, 2024, at Irvine, California. David M. Keithly Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.461 Page 3 of 6

otherattribution

Complete supplied 6-page source reviewed at SHA-256 154912720f7dbecb6bb2b6af238fca84f63be0bb3bbbeca6835be2966154bbd1. Source assertions, ori

Complete supplied 6-page source reviewed at SHA-256 154912720f7dbecb6bb2b6af238fca84f63be0bb3bbbeca6835be2966154bbd1. Source assertions, original visual features, filing/communication context and identified missing attachments are retained. Full six-page reading of version_7c3cfad57a2c430d913a6a397a023e06, SHA256 154912720f7dbecb6bb2b6af238fca84f63be0bb3bbbeca6835be2966154bbd1; material signature and conclusion pages visually inspected. Original source and extraction retained.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -1- Case No. 3:24-cv-00196-RBM-VET DECLARATION OF DAVID M. KEITHLY MORTENSON TAGGART ADAMS LLP David M. Keithly, State Bar No. 292101 dkeithly@mortensontaggart.com Sara K. Ross, State Bar No. 346153 sross@mortensontaggart.com MORTENSON TAGGART ADAMS LLP 300 Spectrum Center Drive, Suite 1200 Irvine, California 92618 Telephone: (949) 774-2224 Facsimile: (949) 774-2545 Attorneys for Plaintiffs ATLANTIC WAVE HOLDINGS, LLC and SECURE COMMUNITY, LLC UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA ATLANTIC WAVE HOLDINGS, LLC, a Virginia limited liability company, and SECURE COMMUNITY, LLC, a Virginia limited Liability company, Plaintiffs, vs. CYBERLUX CORPORATION, a Nevada Corporation, Defendant. CASE NO. 3:24-cv-00482-RBM-VET Honorable Ruth Bermudez Montenegro DECLARATION OF DAVID KEITHLY IN SUPPORT OF OPPOSITION OF PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION TO VACATE SISTER- STATE JUDGMENT [Filed concurrently with Opposition to Motion to Vacate Sister-State Judgment, Declaration of William Welter and Declaration of James Sadigh] DATE: June 3, 2024 NO ORAL ARGUMENT UNLESS ORDERED BY THE COURT Case 3:24-cv-00482-RBM-VET Document 12-1 Filed 05/20/24 PageID.459 Page 1 of 6

questionquestion

Who authored the email, what company and diligence work support its claims, and can the named archive and cited source records be recovered?

questionquestion

What contemporaneous communications and entered decisions resolve the dismissal and counterclaim disputes?

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CONNECT

Reviewed relationships

The canvas follows the database: source to DISTIL record, DISTIL record to knowledge object, then reviewed relationship. Position alone means nothing.

Keithly says he contacted defendants’ counsel February 15, 2024 to stipulate to dismissal of a complaint he calls incorrectly filed by prior counsel in case 00196. He says defendants refused, prompting a Rule 41 motion; he reports that motion and plaintiffs’ anti-SLAPP motion against counterclaims were fully briefed and awaiting decisions. His prediction of disposing of counterclaims is not a ruling.qualifiesWatts says neither defendant was told before removal that Atlantic Wave, Welter or counsel intended dismissal, that no dismissal was served, and that he personally was not told the filing was erroneous, unintended or unauthorised. The last assertion concerns communications to him; it does not prove the filing was authorised or what opposing counsel privately intended.

Keithly alleges February 15 notice, whereas Watts denies pre-January 30 notice; these dated propositions can coexist and do not establish a direct contradiction.

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RFAs 1–18 seek concessions about corporate/Schmidt clearance, Watts advising and OTC exclusion, HII subcontract/FM financing, ADS agreement, no direct awards since 2015, November 2, 2020 GSA cancellation, public/private debts, Miami address, CMTC/Catalyst registration and ownership, firearms licensing and SCIF absence. These are questions framed by opposing counsel; the blank answers are not stand-alone proof of those propositions or legal noncompliance.supportsThe author alleges CMTC and Catalyst lack SAM registration and therefore never received government awards, and that Cyberlux subsidiaries lack ATF FFL/FEL licences, making claimed weapons activities impossible. Absence-search scope, historical registration and licensing applicability are not established by the email; its legal and factual conclusions remain unverified.

Matching supplier registration/licensing subject matter illustrates repetition across anonymous allegations and later requested admissions, not proof or confirmed derivation.

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The anonymous author alleges advertised GSA contract GS-07F-9409S was cancelled November 2, 2020, a September 2023 credit report showed unpaid debts, tax claims and UCCs, and the Special Activities address belonged to a Miami real-estate agent. The report and supporting address records are absent.supportsWho authored the email, what company and diligence work support its claims, and can the named archive and cited source records be recovered?