Context source · CXF-S-546520C532D2

HII clarification of Atlantic Wave security amount and priority — April–May 2025 exchange

SHA-256 546520c532d2860d3662…9 pages · 1 MB

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claimallegation

The August 4, 2025 federal Exhibit 7 contains an April 24–May 19 email chain. Walton’s April 24 and May 6 messages identify an initial and s

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EXHIBIT 7 Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 1 of 9 PageID# 540

claimallegation

Belote asks what amount Atlantic Wave contends is secured, contrasting more than $7,774,000 claimed in the April 24 letter with a minimum $9

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3 dwalton@bellnunnally.com T: 214.740.1445 | F: 214.740.5745 2323 Ross Avenue, Suite 1900 | Dallas, Texas 75201 LinkedIn | Facebook | Twitter | View Bio www.bellnunnally.com IMPORTANT \ CONFIDENTIAL: This message contains information from the law firm of Bell Nunnally & Martin LLP that may be subject to the attorney-client privilege or work product doctrine, or may be otherwise confidential and exempt from disclosure under applicable law. Unless expressly stated otherwise, nothing contained in this message should be construed as a digital or electronic signature, nor is this message intended to reflect an intention to make an agreement by electronic means. DO NOT COPY OR FORWARD TO UNAUTHORIZED PERSONS. If you are not the intended recipient or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution, copying or forwarding of this communication is strictly prohibited. Unauthorized interception of this message may be in violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2510, et seq. If you have received this communication in error, please notify us immediately at our telephone number: (214) 740-1400. From: Belote, Clark J. <clark.belote@kaufcan.com> Sent: Thursday, May 15, 2025 1:52 PM To: Chap Petersen <jcp@petersenfirm.com>; David A. Walton <dwalton@bellnunnally.com> Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds [IMAN-IMANACTIVE.FID760274] This Message has originated outside your organization. Chap, not exactly. In addition to the judgment lien, my understanding is that AW contends that it has a separate security interest in Cyberlux’s accounts, which AW contends it perfected with the UCC-1 filing in the attached. The June 28, 2023 Amended Final Order Judgment says: “That the parties have agreed to a security interest and lien interest in all property of Defendants in favor of Plaintiffs until all sums are paid, and such security interest may be further memorialized through the filing of appropriate UCC-1 forms and the filing of appropriate Liens.” I wanted to understand whether Atlantic Wave contends that its debt or claims against Cyberlux are secured in an amount over and above the $1.44mm on the face of the garnishment summons. The answer may be no. But, it would be helpful for HII to understand Atlantic Wave’s position. Thanks Clark J. Belote Kaufman & Canoles, P.C. clark.belote@kaufcan.com T. (757) 624.3109 F. (888) 360.9092 150 W. Main Street, Suite 2100 Norfolk, VA 23510 www.kaufCAN.com LinkedIn From: Chap Petersen <jcp@petersenfirm.com> Sent: Thursday, May 15, 2025 2:32 PM To: Belote, Clark J. <clark.belote@kaufcan.com>; David A. Walton <dwalton@bellnunnally.com> Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds [IMAN-IMANACTIVE.FID760274] Clark: Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 4 of 9 PageID# 543

claimallegation

Walton’s May 19 9:56 AM reply expressly asserts secured claims above the $1.44 million summons, citing settlement provisions on breach-relat

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2 Just to clarify one more thing: does AW contend that its claimed security interest in the accounts receivable of Cyberlux has priority over the claimed security interest of Legalist in Cyberlux’s accounts receivable? Clark J. Belote Kaufman & Canoles, P.C. clark.belote@kaufcan.com T. (757) 624.3109 F. (888) 360.9092 150 W. Main Street, Suite 2100 Norfolk, VA 23510 www.kaufCAN.com LinkedIn From: David A. Walton <dwalton@bellnunnally.com> Sent: Monday, May 19, 2025 9:56 AM To: Belote, Clark J. <clark.belote@kaufcan.com>; willwelter@aol.com Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com>; Chap Petersen <jcp@petersenfirm.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds Clark: Please feel free to further discuss this issue with Will Welter, copied on this email. You are authorized to speak with him directly, as needed. Put simply, yes, Atlantic Wave’s position is it has a security interest in debts or claims against Cyberlux over and above the $1.44mm on the face of the garnishment summons. The settlement agreement between Cyberlux and Atlantic Wave provides for more than just the actual amount owed under the Amended Final Order and Judgment, for example, it provides Atlantic Wave the right to repayment of attorneys’ fees and costs in any action caused by a breach of the settlement agreement, and damages associated with the failure to bring Cyberlux’s stock to Pink Current status and to remedy the caveat emptor classification on such stock. Moreover, the settlement agreement explicitly provides: “Defendants [Cyberlux & Schmidt] agree and grant to Plaintiff [Atlantic Wave & Secure Community] a full security interest and lien interest in all of Defendants’ assets, including but not limited to IP, subsidiaries, contractual rights, accounts receivables, drone sales, etc., which may, in Plaintiff’s sole discretion, be memorialized through the filing of UCC-1 forms and Liens.” Atlantic Wave contends that Cyberlux has defaulted on the settlement agreement in several respects as set forth in prior communications and filings, which permits Atlantic Wave to enforce the security interest (authorized by the settlement agreement) against Cyberlux on the collateral or assets described in the UCC-1 forms. Attached are those UCC-1 forms that were filed in Virginia, Texas, and North Carolina. Please feel free to call me at your convenience to discuss. Take care, David David A. Walton | Partner Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 3 of 9 PageID# 542

claimallegation

After Belote asks whether Atlantic Wave claims priority over Legalist, Walton answers yes at 2:41 PM on May 19. He asserts perfection by Jul

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1 Mohamed Khalil, Ahmed From: David A. Walton <dwalton@bellnunnally.com> Sent: Monday, May 19, 2025 2:41 PM To: Belote, Clark J.; willwelter@aol.com Cc: David M. Keithly; Evan Sherwood; Freling, Scott; Chap Petersen Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds Attachments: 2024.04.01_Legalist UCC-1 (North Carolina)-Cyberlux.pdf; 2024.07.15_Legalist UCC-1 (North Carolina)-Schmidt.pdf Clark: Yes, Atlantic Wave contends it has priority over Legalist. Atlantic Wave perfected its security interest in July 2023, at the latest, in Virginia, Texas, and North Carolina, whereas the file-stamps on Legalist’s UCC-1 forms, attached hereto, are in April 2024 (as to Cyberlux) and July 2024 (as to Schmidt) in North Carolina only. Moreover, upon information and belief, the basis of Legalist’s security interest did not and could not arise until April 2024 at the earliest when Cyberlux sold receivables from the drone contract to Legalist—that is, more than eight months after Atlantic Wave had perfected its security interest. Take care, David David A. Walton | Partner dwalton@bellnunnally.com T: 214.740.1445 | F: 214.740.5745 2323 Ross Avenue, Suite 1900 | Dallas, Texas 75201 LinkedIn | Facebook | Twitter | View Bio www.bellnunnally.com IMPORTANT \ CONFIDENTIAL: This message contains information from the law firm of Bell Nunnally & Martin LLP that may be subject to the attorney-client privilege or work product doctrine, or may be otherwise confidential and exempt from disclosure under applicable law. Unless expressly stated otherwise, nothing contained in this message should be construed as a digital or electronic signature, nor is this message intended to reflect an intention to make an agreement by electronic means. DO NOT COPY OR FORWARD TO UNAUTHORIZED PERSONS. If you are not the intended recipient or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution, copying or forwarding of this communication is strictly prohibited. Unauthorized interception of this message may be in violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2510, et seq. If you have received this communication in error, please notify us immediately at our telephone number: (214) 740-1400. From: Belote, Clark J. <clark.belote@kaufcan.com> Sent: Monday, May 19, 2025 1:15 PM To: David A. Walton <dwalton@bellnunnally.com>; willwelter@aol.com Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com>; Chap Petersen <jcp@petersenfirm.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds [IMAN-IMANACTIVE.FID760274] This Message has originated outside your organization. Thank you, David. Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 2 of 9 PageID# 541

claimallegation

Attached Exhibit A identifies CYBERLUX CORPORATION as debtor and Legalist SPV III, LP as secured party, collateral All assets. The visually

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[Overprinted exhibit filing headers; black redactions in upper-left header area.] File Number: 20240038686M Date Filed: 4/1/2024 7:44:00 PM Elaine F. Marshall NC Secretary of State UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS A. NAME & PHONE OF CONTACT AT FILER (optional) Corporation Service Company B. E-MAIL CONTACT AT FILER (optional) SPRFiling@cscglobal.com C. SEND ACKNOWLEDGMENT TO: (Name and Address) Corporation Service Company 801 Adlai Stevenson Drive Springfield, IL 62703 THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1. DEBTOR'S NAME: Provide only one Debtor name (1a or 1b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 1b, leave all of item 1 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 1a. ORGANIZATION'S NAME OR CYBERLUX CORPORATION 1b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 800 Park Offices Dr., Ste. 3209 Research Triangle NC 27709 USA 2. DEBTOR'S NAME: Provide only one Debtor name (2a or 2b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 2b, leave all of item 2 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 2a. ORGANIZATION'S NAME OR 2b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 3. SECURED PARTY'S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTY): Provide only one Secured Party name (3a or 3b) 3а. ORGANIZATION'S NAME Legalist SPV III, LP OR 3b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) I SUFFIX 3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 58 West Portal Ave. #747 San Francisco CA 94127 USA 4. COLLATERAL: This financing statement covers the following collateral: All assets 5. Check only if applicable and check only one box: Collateral is held in a Trust (see UCC1Ad, item 17 and Instructions) being administered by a Decedent's Personal Representative ba. Check only if applicable and check only one box: 6b. Check only if applicable and check only one box: Public-Finance Transaction Manufactured-Home Transaction A Debtor is a Transmitting Utility Agricultural Lien Non-UCC Filing 7. ALTERNATIVE DESIGNATION (if applicable): Lessee/Lessor Consignee/Consignor Seller/Buyer Bailee/Bailor Licensee/Licensor 8. OPTIONAL FILER REFERENCE DATA: 2797 73186 FILING OFFICE COPY - UCC FINANCING STATEMENT (Form UCC1) (Rev. 04/20/11) International Association of Commercial Administrators (IACA)

claimallegation

Attached Exhibit B names debtor SCHMIDT, MARK, D. and Legalist SPV III, LP, collateral All assets. Its visually checked North Carolina stamp

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[Overprinted exhibit filing headers; black redactions in upper-left header area.] File Number: 20240084460A Date Filed: 7/15/2024 8:27:00 AM Elaine F. Marshall NC Secretary of State UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS A. NAME & PHONE OF CONTACT AT FILER (optional) Corporation Service Company B. E-MAIL CONTACT AT FILER (optional) SPRFiling@cscglobal.com C. SEND ACKNOWLEDGMENT TO: (Name and Address) Corporation Service Company 801 Adlai Stevenson Drive Springfield, IL 62703 THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1. DEBTOR'S NAME: Provide only one Debtor name (1a or 1b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 1b, leave all of item 1 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 1a. ORGANIZATION'S NAME OR 1b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX SCHMIDT MARK D. 1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 1134 Fearrington Post Pittsboro NC 27312 USA 2. DEBTOR'S NAME: Provide only one Debtor name (2a or 2b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 2b, leave all of item 2 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 2a. ORGANIZATION'S NAME OR 2b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME (S)/INITIAL(S) SUFFIX 2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 3. SECURED PARTY'S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTY): Provide only one Secured Party name (3a or 3b) 3а. ORGANIZATION'S NAME Legalist SPV III, LP OR 3b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) I SUFFIX 3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 58 West Portal Ave. #747 San Francisco CA 94127 USA 4. COLLATERAL: This financing statement covers the following collateral: All assets 5. Check only if applicable and check only one box: Collateral is held in a Trust (see UCC1Ad, item 17 and Instructions) being administered by a Decedent's Personal Representative ba. Check only if applicable and check only one box: 6b. Check only if applicable and check only one box: Public-Finance Transaction Manufactured-Home Transaction A Debtor is a Transmitting Utility Agricultural Lien Non-UCC Filing 7. ALTERNATIVE DESIGNATION (if applicable): Lessee/Lessor Consignee/Consignor Seller/Buyer Bailee/Bailor Licensee/Licensor 8. OPTIONAL FILER REFERENCE DATA: 2879 27331 FILING OFFICE COPY - UCC FINANCING STATEMENT (Form UCC1) (Rev. 04/20/11) International Association of Commercial Administrators (IACA)

entityobservation

David A. Walton

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1 Mohamed Khalil, Ahmed From: David A. Walton <dwalton@bellnunnally.com> Sent: Monday, May 19, 2025 2:41 PM To: Belote, Clark J.; willwelter@aol.com Cc: David M. Keithly; Evan Sherwood; Freling, Scott; Chap Petersen Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds Attachments: 2024.04.01_Legalist UCC-1 (North Carolina)-Cyberlux.pdf; 2024.07.15_Legalist UCC-1 (North Carolina)-Schmidt.pdf Clark: Yes, Atlantic Wave contends it has priority over Legalist. Atlantic Wave perfected its security interest in July 2023, at the latest, in Virginia, Texas, and North Carolina, whereas the file-stamps on Legalist’s UCC-1 forms, attached hereto, are in April 2024 (as to Cyberlux) and July 2024 (as to Schmidt) in North Carolina only. Moreover, upon information and belief, the basis of Legalist’s security interest did not and could not arise until April 2024 at the earliest when Cyberlux sold receivables from the drone contract to Legalist—that is, more than eight months after Atlantic Wave had perfected its security interest. Take care, David David A. Walton | Partner dwalton@bellnunnally.com T: 214.740.1445 | F: 214.740.5745 2323 Ross Avenue, Suite 1900 | Dallas, Texas 75201 LinkedIn | Facebook | Twitter | View Bio www.bellnunnally.com IMPORTANT \ CONFIDENTIAL: This message contains information from the law firm of Bell Nunnally & Martin LLP that may be subject to the attorney-client privilege or work product doctrine, or may be otherwise confidential and exempt from disclosure under applicable law. Unless expressly stated otherwise, nothing contained in this message should be construed as a digital or electronic signature, nor is this message intended to reflect an intention to make an agreement by electronic means. DO NOT COPY OR FORWARD TO UNAUTHORIZED PERSONS. If you are not the intended recipient or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution, copying or forwarding of this communication is strictly prohibited. Unauthorized interception of this message may be in violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2510, et seq. If you have received this communication in error, please notify us immediately at our telephone number: (214) 740-1400. From: Belote, Clark J. <clark.belote@kaufcan.com> Sent: Monday, May 19, 2025 1:15 PM To: David A. Walton <dwalton@bellnunnally.com>; willwelter@aol.com Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com>; Chap Petersen <jcp@petersenfirm.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds [IMAN-IMANACTIVE.FID760274] This Message has originated outside your organization. Thank you, David. Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 2 of 9 PageID# 541

entityobservation

Clark J. Belote

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2 Just to clarify one more thing: does AW contend that its claimed security interest in the accounts receivable of Cyberlux has priority over the claimed security interest of Legalist in Cyberlux’s accounts receivable? Clark J. Belote Kaufman & Canoles, P.C. clark.belote@kaufcan.com T. (757) 624.3109 F. (888) 360.9092 150 W. Main Street, Suite 2100 Norfolk, VA 23510 www.kaufCAN.com LinkedIn From: David A. Walton <dwalton@bellnunnally.com> Sent: Monday, May 19, 2025 9:56 AM To: Belote, Clark J. <clark.belote@kaufcan.com>; willwelter@aol.com Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com>; Chap Petersen <jcp@petersenfirm.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds Clark: Please feel free to further discuss this issue with Will Welter, copied on this email. You are authorized to speak with him directly, as needed. Put simply, yes, Atlantic Wave’s position is it has a security interest in debts or claims against Cyberlux over and above the $1.44mm on the face of the garnishment summons. The settlement agreement between Cyberlux and Atlantic Wave provides for more than just the actual amount owed under the Amended Final Order and Judgment, for example, it provides Atlantic Wave the right to repayment of attorneys’ fees and costs in any action caused by a breach of the settlement agreement, and damages associated with the failure to bring Cyberlux’s stock to Pink Current status and to remedy the caveat emptor classification on such stock. Moreover, the settlement agreement explicitly provides: “Defendants [Cyberlux & Schmidt] agree and grant to Plaintiff [Atlantic Wave & Secure Community] a full security interest and lien interest in all of Defendants’ assets, including but not limited to IP, subsidiaries, contractual rights, accounts receivables, drone sales, etc., which may, in Plaintiff’s sole discretion, be memorialized through the filing of UCC-1 forms and Liens.” Atlantic Wave contends that Cyberlux has defaulted on the settlement agreement in several respects as set forth in prior communications and filings, which permits Atlantic Wave to enforce the security interest (authorized by the settlement agreement) against Cyberlux on the collateral or assets described in the UCC-1 forms. Attached are those UCC-1 forms that were filed in Virginia, Texas, and North Carolina. Please feel free to call me at your convenience to discuss. Take care, David David A. Walton | Partner Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 3 of 9 PageID# 542

entityobservation

Will Welter

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2 Just to clarify one more thing: does AW contend that its claimed security interest in the accounts receivable of Cyberlux has priority over the claimed security interest of Legalist in Cyberlux’s accounts receivable? Clark J. Belote Kaufman & Canoles, P.C. clark.belote@kaufcan.com T. (757) 624.3109 F. (888) 360.9092 150 W. Main Street, Suite 2100 Norfolk, VA 23510 www.kaufCAN.com LinkedIn From: David A. Walton <dwalton@bellnunnally.com> Sent: Monday, May 19, 2025 9:56 AM To: Belote, Clark J. <clark.belote@kaufcan.com>; willwelter@aol.com Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com>; Chap Petersen <jcp@petersenfirm.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds Clark: Please feel free to further discuss this issue with Will Welter, copied on this email. You are authorized to speak with him directly, as needed. Put simply, yes, Atlantic Wave’s position is it has a security interest in debts or claims against Cyberlux over and above the $1.44mm on the face of the garnishment summons. The settlement agreement between Cyberlux and Atlantic Wave provides for more than just the actual amount owed under the Amended Final Order and Judgment, for example, it provides Atlantic Wave the right to repayment of attorneys’ fees and costs in any action caused by a breach of the settlement agreement, and damages associated with the failure to bring Cyberlux’s stock to Pink Current status and to remedy the caveat emptor classification on such stock. Moreover, the settlement agreement explicitly provides: “Defendants [Cyberlux & Schmidt] agree and grant to Plaintiff [Atlantic Wave & Secure Community] a full security interest and lien interest in all of Defendants’ assets, including but not limited to IP, subsidiaries, contractual rights, accounts receivables, drone sales, etc., which may, in Plaintiff’s sole discretion, be memorialized through the filing of UCC-1 forms and Liens.” Atlantic Wave contends that Cyberlux has defaulted on the settlement agreement in several respects as set forth in prior communications and filings, which permits Atlantic Wave to enforce the security interest (authorized by the settlement agreement) against Cyberlux on the collateral or assets described in the UCC-1 forms. Attached are those UCC-1 forms that were filed in Virginia, Texas, and North Carolina. Please feel free to call me at your convenience to discuss. Take care, David David A. Walton | Partner Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 3 of 9 PageID# 542

entityobservation

Chap Petersen

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3 dwalton@bellnunnally.com T: 214.740.1445 | F: 214.740.5745 2323 Ross Avenue, Suite 1900 | Dallas, Texas 75201 LinkedIn | Facebook | Twitter | View Bio www.bellnunnally.com IMPORTANT \ CONFIDENTIAL: This message contains information from the law firm of Bell Nunnally & Martin LLP that may be subject to the attorney-client privilege or work product doctrine, or may be otherwise confidential and exempt from disclosure under applicable law. Unless expressly stated otherwise, nothing contained in this message should be construed as a digital or electronic signature, nor is this message intended to reflect an intention to make an agreement by electronic means. DO NOT COPY OR FORWARD TO UNAUTHORIZED PERSONS. If you are not the intended recipient or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution, copying or forwarding of this communication is strictly prohibited. Unauthorized interception of this message may be in violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2510, et seq. If you have received this communication in error, please notify us immediately at our telephone number: (214) 740-1400. From: Belote, Clark J. <clark.belote@kaufcan.com> Sent: Thursday, May 15, 2025 1:52 PM To: Chap Petersen <jcp@petersenfirm.com>; David A. Walton <dwalton@bellnunnally.com> Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds [IMAN-IMANACTIVE.FID760274] This Message has originated outside your organization. Chap, not exactly. In addition to the judgment lien, my understanding is that AW contends that it has a separate security interest in Cyberlux’s accounts, which AW contends it perfected with the UCC-1 filing in the attached. The June 28, 2023 Amended Final Order Judgment says: “That the parties have agreed to a security interest and lien interest in all property of Defendants in favor of Plaintiffs until all sums are paid, and such security interest may be further memorialized through the filing of appropriate UCC-1 forms and the filing of appropriate Liens.” I wanted to understand whether Atlantic Wave contends that its debt or claims against Cyberlux are secured in an amount over and above the $1.44mm on the face of the garnishment summons. The answer may be no. But, it would be helpful for HII to understand Atlantic Wave’s position. Thanks Clark J. Belote Kaufman & Canoles, P.C. clark.belote@kaufcan.com T. (757) 624.3109 F. (888) 360.9092 150 W. Main Street, Suite 2100 Norfolk, VA 23510 www.kaufCAN.com LinkedIn From: Chap Petersen <jcp@petersenfirm.com> Sent: Thursday, May 15, 2025 2:32 PM To: Belote, Clark J. <clark.belote@kaufcan.com>; David A. Walton <dwalton@bellnunnally.com> Cc: David M. Keithly <dkeithly@tocounsel.com>; Evan Sherwood <ESherwood@cov.com>; Freling, Scott <sfreling@cov.com> Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds [IMAN-IMANACTIVE.FID760274] Clark: Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 4 of 9 PageID# 543

entityobservation

CYBERLUX CORPORATION

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[Overprinted exhibit filing headers; black redactions in upper-left header area.] File Number: 20240038686M Date Filed: 4/1/2024 7:44:00 PM Elaine F. Marshall NC Secretary of State UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS A. NAME & PHONE OF CONTACT AT FILER (optional) Corporation Service Company B. E-MAIL CONTACT AT FILER (optional) SPRFiling@cscglobal.com C. SEND ACKNOWLEDGMENT TO: (Name and Address) Corporation Service Company 801 Adlai Stevenson Drive Springfield, IL 62703 THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1. DEBTOR'S NAME: Provide only one Debtor name (1a or 1b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 1b, leave all of item 1 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 1a. ORGANIZATION'S NAME OR CYBERLUX CORPORATION 1b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 800 Park Offices Dr., Ste. 3209 Research Triangle NC 27709 USA 2. DEBTOR'S NAME: Provide only one Debtor name (2a or 2b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 2b, leave all of item 2 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 2a. ORGANIZATION'S NAME OR 2b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 3. SECURED PARTY'S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTY): Provide only one Secured Party name (3a or 3b) 3а. ORGANIZATION'S NAME Legalist SPV III, LP OR 3b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) I SUFFIX 3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 58 West Portal Ave. #747 San Francisco CA 94127 USA 4. COLLATERAL: This financing statement covers the following collateral: All assets 5. Check only if applicable and check only one box: Collateral is held in a Trust (see UCC1Ad, item 17 and Instructions) being administered by a Decedent's Personal Representative ba. Check only if applicable and check only one box: 6b. Check only if applicable and check only one box: Public-Finance Transaction Manufactured-Home Transaction A Debtor is a Transmitting Utility Agricultural Lien Non-UCC Filing 7. ALTERNATIVE DESIGNATION (if applicable): Lessee/Lessor Consignee/Consignor Seller/Buyer Bailee/Bailor Licensee/Licensor 8. OPTIONAL FILER REFERENCE DATA: 2797 73186 FILING OFFICE COPY - UCC FINANCING STATEMENT (Form UCC1) (Rev. 04/20/11) International Association of Commercial Administrators (IACA)

entityobservation

Legalist SPV III, LP

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[Overprinted exhibit filing headers; black redactions in upper-left header area.] File Number: 20240038686M Date Filed: 4/1/2024 7:44:00 PM Elaine F. Marshall NC Secretary of State UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS A. NAME & PHONE OF CONTACT AT FILER (optional) Corporation Service Company B. E-MAIL CONTACT AT FILER (optional) SPRFiling@cscglobal.com C. SEND ACKNOWLEDGMENT TO: (Name and Address) Corporation Service Company 801 Adlai Stevenson Drive Springfield, IL 62703 THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1. DEBTOR'S NAME: Provide only one Debtor name (1a or 1b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 1b, leave all of item 1 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 1a. ORGANIZATION'S NAME OR CYBERLUX CORPORATION 1b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 800 Park Offices Dr., Ste. 3209 Research Triangle NC 27709 USA 2. DEBTOR'S NAME: Provide only one Debtor name (2a or 2b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 2b, leave all of item 2 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 2a. ORGANIZATION'S NAME OR 2b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX 2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 3. SECURED PARTY'S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTY): Provide only one Secured Party name (3a or 3b) 3а. ORGANIZATION'S NAME Legalist SPV III, LP OR 3b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) I SUFFIX 3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 58 West Portal Ave. #747 San Francisco CA 94127 USA 4. COLLATERAL: This financing statement covers the following collateral: All assets 5. Check only if applicable and check only one box: Collateral is held in a Trust (see UCC1Ad, item 17 and Instructions) being administered by a Decedent's Personal Representative ba. Check only if applicable and check only one box: 6b. Check only if applicable and check only one box: Public-Finance Transaction Manufactured-Home Transaction A Debtor is a Transmitting Utility Agricultural Lien Non-UCC Filing 7. ALTERNATIVE DESIGNATION (if applicable): Lessee/Lessor Consignee/Consignor Seller/Buyer Bailee/Bailor Licensee/Licensor 8. OPTIONAL FILER REFERENCE DATA: 2797 73186 FILING OFFICE COPY - UCC FINANCING STATEMENT (Form UCC1) (Rev. 04/20/11) International Association of Commercial Administrators (IACA)

entityobservation

SCHMIDT

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[Overprinted exhibit filing headers; black redactions in upper-left header area.] File Number: 20240084460A Date Filed: 7/15/2024 8:27:00 AM Elaine F. Marshall NC Secretary of State UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS A. NAME & PHONE OF CONTACT AT FILER (optional) Corporation Service Company B. E-MAIL CONTACT AT FILER (optional) SPRFiling@cscglobal.com C. SEND ACKNOWLEDGMENT TO: (Name and Address) Corporation Service Company 801 Adlai Stevenson Drive Springfield, IL 62703 THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1. DEBTOR'S NAME: Provide only one Debtor name (1a or 1b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 1b, leave all of item 1 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 1a. ORGANIZATION'S NAME OR 1b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) SUFFIX SCHMIDT MARK D. 1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 1134 Fearrington Post Pittsboro NC 27312 USA 2. DEBTOR'S NAME: Provide only one Debtor name (2a or 2b) (use exact, full name; do not omit, modify, or abbreviate any part of the Debtor's name); if any part of the Individual Debtor's name will not fit in line 2b, leave all of item 2 blank, check here and provide the Individual Debtor information in item 10 of the Financing Statement Addendum (Form UCC1Ad) 2a. ORGANIZATION'S NAME OR 2b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME (S)/INITIAL(S) SUFFIX 2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 3. SECURED PARTY'S NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED PARTY): Provide only one Secured Party name (3a or 3b) 3а. ORGANIZATION'S NAME Legalist SPV III, LP OR 3b. INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)/INITIAL(S) I SUFFIX 3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 58 West Portal Ave. #747 San Francisco CA 94127 USA 4. COLLATERAL: This financing statement covers the following collateral: All assets 5. Check only if applicable and check only one box: Collateral is held in a Trust (see UCC1Ad, item 17 and Instructions) being administered by a Decedent's Personal Representative ba. Check only if applicable and check only one box: 6b. Check only if applicable and check only one box: Public-Finance Transaction Manufactured-Home Transaction A Debtor is a Transmitting Utility Agricultural Lien Non-UCC Filing 7. ALTERNATIVE DESIGNATION (if applicable): Lessee/Lessor Consignee/Consignor Seller/Buyer Bailee/Bailor Licensee/Licensor 8. OPTIONAL FILER REFERENCE DATA: 2879 27331 FILING OFFICE COPY - UCC FINANCING STATEMENT (Form UCC1) (Rev. 04/20/11) International Association of Commercial Administrators (IACA)

entityobservation

Atlantic Wave Holdings, LLC

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5 www.kaufCAN.com LinkedIn From: David A. Walton <dwalton@bellnunnally.com> Sent: Tuesday, May 6, 2025 7:51 PM To: Belote, Clark J. <clark.belote@kaufcan.com> Cc: David M. Keithly <dkeithly@tocounsel.com>; willwelter@aol.com Subject: RE: Atlantic Wave_Letter to HII re Claim to Funds Importance: High Clark: Attached is a supplemental letter on behalf of Atlantic Wave Holdings, LLC, concerning its claim to funds held on behalf of or for the benefit of Cyberlux Corporation. Please do not hesitate to contact me with any questions. Take care, David David A. Walton | Partner dwalton@bellnunnally.com T: 214.740.1445 | F: 214.740.5745 2323 Ross Avenue, Suite 1900 | Dallas, Texas 75201 LinkedIn | Facebook | Twitter | View Bio www.bellnunnally.com IMPORTANT \ CONFIDENTIAL: This message contains information from the law firm of Bell Nunnally & Martin LLP that may be subject to the attorney-client privilege or work product doctrine, or may be otherwise confidential and exempt from disclosure under applicable law. Unless expressly stated otherwise, nothing contained in this message should be construed as a digital or electronic signature, nor is this message intended to reflect an intention to make an agreement by electronic means. DO NOT COPY OR FORWARD TO UNAUTHORIZED PERSONS. If you are not the intended recipient or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution, copying or forwarding of this communication is strictly prohibited. Unauthorized interception of this message may be in violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2510, et seq. If you have received this communication in error, please notify us immediately at our telephone number: (214) 740-1400. From: David A. Walton Sent: Thursday, April 24, 2025 4:03 PM To: clark.belote@kaufcan.com Cc: David M. Keithly <dkeithly@tocounsel.com>; willwelter@aol.com Subject: Atlantic Wave_Letter to HII re Claim to Funds Clark: Attached is a letter on behalf of Atlantic Wave Holdings, LLC, concerning its claim to funds held on behalf of or for the benefit of Cyberlux Corporation. Please do not hesitate to contact me with any questions. Take care, David David A. Walton | Partner Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 6 of 9 PageID# 545

inferenceinference

The exchange provides evidence of HII counsel actively testing both the scope and rank of Atlantic Wave’s claim. Walton’s affirmative answer

The exchange provides evidence of HII counsel actively testing both the scope and rank of Atlantic Wave’s claim. Walton’s affirmative answers establish the asserted position but do not resolve the legal consequences of the filings.

omissiongap

The initial and supplemental letters and Atlantic Wave UCC forms referenced in the chain are absent; only two Legalist financing notices acc

The initial and supplemental letters and Atlantic Wave UCC forms referenced in the chain are absent; only two Legalist financing notices accompany it.

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EXHIBIT 7 Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 1 of 9 PageID# 540

otherattribution

Complete supplied 9-page source reviewed at SHA-256 546520c532d2860d3662110493b7fe797831dd4aaee8f36ffcf07c0bcf9fb0d6. Source assertions, ori

Complete supplied 9-page source reviewed at SHA-256 546520c532d2860d3662110493b7fe797831dd4aaee8f36ffcf07c0bcf9fb0d6. Source assertions, original visual features, filing/communication context and identified missing attachments are retained. Exact version_95798745bda645fdba3f5a1008b64ae5; SHA256 546520c532d2860d3662110493b7fe797831dd4aaee8f36ffcf07c0bcf9fb0d6. All nine pages read; material email dropouts and UCC stamps visually checked. Source bytes and original extraction unchanged.

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EXHIBIT 7 Case 3:25-cv-00483-JAG Document 41-7 Filed 08/04/25 Page 1 of 9 PageID# 540

questionquestion

What operative security agreements, Atlantic Wave filings and governing-law analysis establish which claims attach to these receivables and

What operative security agreements, Atlantic Wave filings and governing-law analysis establish which claims attach to these receivables and their priority?

distillateattribution

CONNECT

Reviewed relationships

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

Attached Exhibit A identifies CYBERLUX CORPORATION as debtor and Legalist SPV III, LP as secured party, collateral All assets. The visually checked North Carolina stamp is file 20240038686M, April 1, 2024 at 7:44 PM. Corporation Service Company is the filer, not the lender.supportsThe North Carolina statement bears file number20240038686M, filed April1,2024 at7:44PM, names the same corporate debtor and Legalist SPV III, LP, and describes All assets. Corporation Service Company is filer/acknowledgement recipient, not the secured creditor. The original extraction misread the file number; the visible stamp controls the readable correction.

Same North Carolina file 20240038686M and date; duplicate instrument representation, not independent security proof.

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Issuer asserts full compliance with AWH settlement, contests new claims and predicts success on counterclaims/injunction; reports RB agreement in principle awaiting binding completion and Aerotek$204,705.45 demand with no answer yet filed. These conflict in posture with creditor accusations and do not establish favourable rulings. Repeated litigation notes are the same issuer account.qualifiesWalton’s May 19 9:56 AM reply expressly asserts secured claims above the $1.44 million summons, citing settlement provisions on breach-related fees, stock-status damages and all assets. He alleges defaults permitting enforcement and says Virginia, Texas and North Carolina UCC forms are attached. Those Atlantic Wave forms are not included here; the exhibit ends with two Legalist forms. He authorises direct discussion with Will Welter.

Issuer claims compliance while creditor counsel asserts defaults and expanded security; both positions retained pending instruments/performance records.

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Paragraph 7 grants plaintiffs a full security and lien interest in all defendants’ assets, including IP, subsidiaries, contractual rights, receivables and drone sales, with optional UCC memorialisation. Paragraph 8 requires requested negotiation/payment updates and documents only to the extent not classified or restricted, with confidentiality cross-reference printed as paragraph 12 although confidentiality appears at 13. The visible highlight/underline cannot be attributed to a particular annotator.supportsWalton’s May 19 9:56 AM reply expressly asserts secured claims above the $1.44 million summons, citing settlement provisions on breach-related fees, stock-status damages and all assets. He alleges defaults permitting enforcement and says Virginia, Texas and North Carolina UCC forms are attached. Those Atlantic Wave forms are not included here; the exhibit ends with two Legalist forms. He authorises direct discussion with Will Welter.

Actual paragraph7 supports counsel’s description of all-assets grant, without deciding perfected priority or claim coverage.

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After Belote asks whether Atlantic Wave claims priority over Legalist, Walton answers yes at 2:41 PM on May 19. He asserts perfection by July 2023 in Virginia, Texas and North Carolina, contrasts Legalist’s April and July 2024 North Carolina stamps, and on information and belief says Legalist’s interest could not arise before April 2024 receivables sales. These are advocacy positions, not proof of attachment, governing jurisdiction or priority.qualifiesExhibit4 filed April15,2026 contains Nevada receipt and acknowledgement for UCC1 number2024395945-0, work orderW2024040101722, filed April1,2024 at11:49AM (receipt11:49:44). Receipt records approval and$30 filing plus$0.75 service fee. The filer Legalist Inc. is distinct from the named secured party Legalist SPV III, LP.

Walton describes North Carolina-only Legalist stamps; source67 also contains a Nevada April 1 filing. Preserve limited email attachment scope rather than global absence conclusion.

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Belote asks what amount Atlantic Wave contends is secured, contrasting more than $7,774,000 claimed in the April 24 letter with a minimum $912,000 judgment balance. Petersen points to the garnishment summons. Belote distinguishes a separate claimed security interest from the judgment lien and asks whether it exceeds the summons’ approximately $1.44 million. His questions seek clarification; they do not concede priority or enforceability.supportsCounsel adds fees exceeding $592,000 and stock damages exceeding $6,017,250, calculated from 195 million shares at $0.0308577, and asserts a composite claim exceeding $7,774,000. The stock calculation yields $6,017,251.50, consistent with the stated lower bound. This combines judgment and contested claims rather than a single adjudicated balance.

Belote expressly refers to April 24 amounts; supports responsive discussion of letter content, not agreement with those amounts.

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