Each card carries the governed distillate name from the database. Open the quoted anchor before relying on the interpretation.
observationobservation
Texas202448085 Exhibit7; Durham25CV004246-310; May20 demand and June5 transmission.
Read the anchor · page 1
CAUSE NO. 202448085
ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT
and SECURE COMMUNITY, LLC, §
Plaintiff, Judgment-Creditor, §
§
v. § 129TH JUDICIAL COURT
§
CYBERLUX CORPORATION and §
MARK D. SCHMIDT, individually § IN AND FOR
Defendant, Judgment-Debtor. § HARRIS COUNTY, TEXAS
Exhibit 7- ARG Group, LLC
Cause No. 202448085 styled Atlantic Wave Holdings, LLC et al.
v. Cyberlux Corporation et al, in the 129th District Court in and
For Harris County, Texas UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Texas Cause202448085 Exhibit7 contains Lunghi’s June5,2025 email to Berleth transmitting May20 demand and exhibits after a call. Lunghi repo
Texas Cause202448085 Exhibit7 contains Lunghi’s June5,2025 email to Berleth transmitting May20 demand and exhibits after a call. Lunghi reports a filed complaint and Cyberlux extension motion, says no other response, seeks Texas representation and asks for a draft filing Todd mentioned. This proves displayed communication, not adjudication or receiver acceptance of ARG’s claim.
Read the anchor · page 1
CAUSE NO. 202448085
ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT
and SECURE COMMUNITY, LLC, §
Plaintiff, Judgment-Creditor, §
§
v. § 129TH JUDICIAL COURT
§
CYBERLUX CORPORATION and §
MARK D. SCHMIDT, individually § IN AND FOR
Defendant, Judgment-Debtor. § HARRIS COUNTY, TEXAS
Exhibit 7- ARG Group, LLC
Cause No. 202448085 styled Atlantic Wave Holdings, LLC et al.
v. Cyberlux Corporation et al, in the 129th District Court in and
For Harris County, Texas UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Termination provisions preserve previously incurred/surviving obligations, permit90-day notice or immediate breach termination, and provide
Termination provisions preserve previously incurred/surviving obligations, permit90-day notice or immediate breach termination, and provide automatic termination on insolvency,bankruptcy,creditor assignment or receiver/trustee appointment. Government-conflict counsel notice and negotiation precede optional30-day termination. ARG authority and no conflicting restrictions are warranted.
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800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
5
C. ARG shall have the right to use the Trademarks only in connection with the distribution
of Products and only during the period of this Agreement. ARG shall not alter, remove,
or tamper with the Trademarks or other means of identification of Products.
11. TERMINATION
A. Either party shall have the right to terminate this Agreement, in its sole discretion, upon
ninety (90) days written notice to the other. Either party to this Agreement shall further
have the right to terminate this Agreement, without any advance notice to the other, in the
event of breach of the Agreement by such other party. Such termination, in either case,
shall not extinguish obligations previously incurred under this Agreement, or obligations,
which by their nature survive such termination.
B. Upon termination of this Agreement, Cyberlux shall have the right to purchase from
ARG all Product inventory at a price equal to ARG’s cost plus freight to return the
Products to Cyberlux or its designee, such freight to be approved by Cyberlux.
C. If either party shall become insolvent, make any assignment for the benefit of creditors,
be adjudged bankrupt, or if a receiver or trustee of their property shall be appointed, this
Agreement shall thereupon automatically terminate.
D. If ARG sells or otherwise disposes of substantially all of its business relating to this
Agreement, if control of ARG is transferred, or if present management of ARG is
changed, or is no longer involved in the day-to-day supervision of ARG’s performance of
this Agreement, Cyberlux shall have the right, without prejudice to any other rights,
which Cyberlux may have, to terminate this Agreement immediately.
12. GOVERNMENT RESTRICTIONS
In the event that any provision, term, condition or object of this Agreement may be in
conflict with any law, measure, rule, court judgment (by consent or otherwise) or
regulation of the government or any department of the United States of America, legal
counsel for the party asserting such conflict shall advise the other that such a conflict, or
the reasonable possibility of such conflict, exists; then either party may propose to the
other appropriate modification of this Agreement to avoid such conflict, and the
authorized officers or representatives of the parties shall mutually negotiate for the
adjustment of such matter. In the event that such negotiation does not produce results
satisfactory to both parties, either party, at its option, may terminate this Agreement upon
thirty (30) days written notice to the other.
13. REPRESENTATIONS AND WARRANTIES
ARG represents and warrants as follows:
1. That it is an Arizona limited liability corporation, duly organized, validly existing and
in good standing with respect to the laws of its resident jurisdiction; and that it has
full power and authority to execute this Agreement and to carry on its business as it is
being conducted;
EXHIBIT "A"
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claimallegation
No agency,joint venture or partnership is created; obligations in Cyberlux’s name need consent. Entire-agreement clause requires signed writ
No agency,joint venture or partnership is created; obligations in Cyberlux’s name need consent. Entire-agreement clause requires signed writing for modification/waiver; NC law and Durham forum selected. Force majeure requires detailed notice and actual material impairment, extends performance day-for-day from notice, and excludes financial condition or negligence.
Read the anchor · page 12
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
6
2. That it has the power to enter into this Agreement and to carry out its obligations
hereunder; that, if it is a corporation or comparable legal entity, the required number
of directors have approved this Agreement and the carrying out of the transactions
contemplated hereby; that the execution and delivery of this Agreement and the
consummation of the transactions contemplated have been duly authorized; and that it
has received all governmental authorizations within its power to permit the execution
and delivery of this Agreement and the carrying out of the transactions contemplated.
3. That it is not a party to, or obligated under, any charter or bylaw, or subject to any
order or decree that will be violated by its executing and carrying out this Agreement.
4. That it will not, during the term of this Agreement, authorize anyone else or another
concern to distribute Products or utilize the Trademarks.
14. RELATIONSHIP
The parties hereby agree that no agency, joint venture, or partnership is created by this
Agreement and that ARG shall incur no obligation in the name of Cyberlux without the
prior written permission of Cyberlux.
15. ENTIRE AGREEMENT
A. The parties agree that this Agreement contains the entire understanding of the parties and
that there are no representations, warranties, promises, or undertakings other than those
contained herein.
B. No waiver or modification of any of the terms of this Agreement shall be valid unless
contained in a writing signed by both parties.
16. VALIDITY
The invalidity or unenforceability of any particular provision of this Agreement shall not
affect the other provisions hereof, and this Agreement shall be construed in all respects as
if such invalid or unenforceable provision was omitted.
17. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the laws of the State
of North Carolina of the United States of America and any dispute arising under this
Agreement shall be resolved in a Court of cognizant jurisdiction in Durham County, NC
which shall have sole personal and subject matter jurisdiction over any dispute arising
under this Agreement.
18. EXECUTION
This Agreement shall be effective as of the date first above written.
19. FORCE MAJEURE
Except as otherwise provided hereafter, each party shall be entitled to an extension of the
date of any performance required of such party under this Agreement if the failure of the
party to duly perform was solely because of a Force Majeure Event (hereafter defined);
EXHIBIT "A"
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claimallegation
Signature images appear for Mark D.Schmidt as President and Anthony Gonzalez as Managing Partner. ARG is described as Arizona in the opening
Signature images appear for Mark D.Schmidt as President and Anthony Gonzalez as Managing Partner. ARG is described as Arizona in the opening and representations but Delaware in the signature block. Neither signature authenticity nor organisational domicile is independently adjudicated by the exhibit.
Read the anchor · page 7
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
1
Cyberlux Corporation and The ARG Group, LLC
Distributor Partner Agreement
This Agreement (the “Agreement”) is made effective as of the 28th day of February 2022,
between Cyberlux Corporation (“Cyberlux”), a Nevada corporation, having its principal place
of business at 800 Park Offices Drive, Suite 3209, Research Triangle Park, NC 27709 and The
ARG Group, LLC (“ARG”), an Arizona limited liability company, having its principal place of
business at 301 Helen Street, Suite 110, Tucson, AZ 85705.
BACKGROUND FACTS
1. Cyberlux develops, manufactures, and sells Advanced Lighting Solutions (ALS) for
portable and fixed use, certain solar power solutions, and Unmanned Aircraft Systems
(UAS) products including UAS hardware and software solutions. The Cyberlux products
include, but are not limited to, the BrightEye and Watchdog Tactical Illumination
Systems, other various LED and solar products, and the FlightEye UAS products
including FlightEye drone hardware and the FlightGDN software operating platform and
related product offerings, as set forth in Exhibit A, Product and Pricing, which is attached
hereto and by this reference made a part hereof (hereafter referred to a “Products”).
2. Cyberlux is the owner of certain trademarks used in connection with the Products, such
trademarks being set forth on Exhibit B entitled Cyberlux Trademarks, which exhibit is
attached hereto and by this reference made a part hereof (singularly the “Trademark” or
collectively the “Trademarks”).
3. ARG desires to obtain from Cyberlux the non-exclusive right to sell, bid, stock and ship
the Products within the United States, North and South America, and other global regions
with business opportunities may arise, as specified herein.
4. Cyberlux desires to sell the Products to ARG for business development, sales and
fulfillment of orders as specified herein.
AGREEMENT
NOW, THEREFORE, in consideration of these premises and the mutual covenants herein
contained, the parties hereby agree as follows:
1. APPOINTMENT
Cyberlux agrees to, and hereby does, appoint ARG as a non-exclusive Business Partner
for the Products for the period of this Agreement as set forth in Paragraph 3.
EXHIBIT "A"
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claimallegation
Appendices include detailed eleven-row lighting prices/quantities, five registered and eleven pending trademark names, but UAS and infrastru
Appendices include detailed eleven-row lighting prices/quantities, five registered and eleven pending trademark names, but UAS and infrastructure product/pricing schedules expressly remain to be determined by Cyberlux ASAP. Blank UAS prices do not demonstrate absence of all UAS business or an agreed K8 price.
Read the anchor · page 14
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
8
Exhibit A
Product and Pricing
See Attached ALS, UAS and Other Product and Pricing Listings.
EXHIBIT "A"
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claimallegation
Undated iMessage screenshots headed Mark show the outgoing participant questioning the45-day forecast in light of6–12-month government sales
Undated iMessage screenshots headed Mark show the outgoing participant questioning the45-day forecast in light of6–12-month government sales. Mark calls it like the quota aspirational rather than cut-and-dry, offers adjustment, and both discuss an understanding. Outgoing participant says he will sign and send DOR; Mark says copy Porter. The screenshots do not themselves establish a later registered opportunity or formal modification.
Read the anchor · page 19
EXHIBIT "B"
1 of 5
17:25
MS
Mark >
Ok agreement sent. Let us know if
any questions
istrict Clerk
Also if you copy me on the
content I'll push the PR to close.
Roger, looking at it now...
Mark, I haven't had my lawyer
read this, and I don't think I need
to, I have one concern....
QUANTITIES AND DELIVERIES
A. In partial consideration for
ARG's appointment hereunder,
ARG agrees to deliver to
Cyberlux purchase orders for
Products with a forecast due
within 45 days of the signing
of this Agreement.
O
We both know gov sales has a
ramp-up period. My hope is that
with his Air Force program, we will
see fast sales,
however, typical gov sales are
6-12 months.
I think we have a good chance for
early sales with the Nation Guard/
IMessage
[Clerk watermark and phone-interface text are non-message context. Cropped message continuations are not reconstructed.]
claimallegation
Continuation discusses Triple Canopy and former Blackwater/SOCOM aviation contacts, possible Bogota meeting and PR review before launch. Out
Continuation discusses Triple Canopy and former Blackwater/SOCOM aviation contacts, possible Bogota meeting and PR review before launch. Outgoing participant notes agreement says Arizona LLC; no visible reply resolving that point is included. These are prospective channel discussions, not completed orders.
Read the anchor · page 21
EXHIBIT "B'
3 of 5
17:25
MS
Mark >
tImeliness.
I have been looking at my
marketing and contacts I have.
How do you feel about companies
like Triple Canopy buying your
products?
ROg
We're wide open if you have
business opportunities.
I have several past blackwaters
guys, that served with and I work
now with triple canopy. Also had
some private contractors that flew
planes and helo for SOCOM...
gonna reach out to them too
Sounds good.
Have a great week, ping me if your
guy in Bogota wants to meet.
I will. Copy me on the content
and I'll have the PR sent to you for
review and then launch
By the way, this said an Arizona
LLC....
IMessage
[Clerk watermark and phone-interface text are non-message context. Cropped message continuations are not reconstructed.]
claimallegation
Signal screenshot labelled Mark Schmidt includes a partly cropped forwarded discussion of US-funded Ukraine purchases, uncertain FMS/DLA/TLS
Signal screenshot labelled Mark Schmidt includes a partly cropped forwarded discussion of US-funded Ukraine purchases, uncertain FMS/DLA/TLS vehicles and anticipated OEM inquiries. Mark states9800starting price,no go-direct bypass, then listscost4700,CYBL2000,ARG20%1340,total8040,splitprofit1760,total9800,resultingCYBL2880/ARG2220. ARG2220 is about22.65%of9800, not a self-evident universal30%ofgross provision.
Read the anchor · page 22
ExhibitB4of5. Mark Schmidt contact labelled Verified. Forwarded top message begins outside supplied crop; visible continuation: procurement for all of the hardware flowing into the Ukraine. We’re not sure if it’s because the Ukrainians appear to be going around everybody who is providing them quotes, or if it’s just because the bulk of the funds flowing are now US funds. At any rate, the USG will be purchasing directly. We’re not sure if it will be FMS,DLA/TLS,or other existing rapid vehicles? We expect the OEMs will be receiving direct inquiries from USG entities and possibly via FMS sales. You need to make sure the drone company knows they will likely see a new flurry of inquiries, as we have been submitting data sheets and naming the OEMs with our bids.
Outgoing: Just got this. We can discuss. But let’s talk about how you quote them.1:40PM.
Incoming Mark: Yes absolutely.$9800 is the starting point,no ‘go direct’ BS.1:42PM.
Cost:$4700; CYBL:$2000; ARG20%:$1340; subtotal$8040. Split profit:$1760; total$9800. CYBL:$2880; ARG:$2220.1:56PM. [No calendar date visible.]
[Clerk watermark and phone-interface text are non-message context. Cropped message continuations are not reconstructed.]
claimallegation
Another Mark Schmidt screenshot requests a DDTC code and discusses Fairwinds contact Paul Nurkkala/ Matthew Jones, possible hundreds of dron
Another Mark Schmidt screenshot requests a DDTC code and discusses Fairwinds contact Paul Nurkkala/ Matthew Jones, possible hundreds of drones monthly and avoiding Global channel conflict. It says intent to involve the interlocutor in all Model-Kx sales. Embedded pricing table showsMSRP18,750;Global Ordnance3,750(20%);CYBLprice15,000;Anthony3,750(20%);J&L375(2%);CYBLcost5,500;CYBLmargin5,375(29%). It documents proposed pricing/channel discussion, not a Government award or measured realised margin.
Read the anchor · page 23
ExhibitB5of5. Mark Schmidt,contact Verified. Missed voice call10:21AM. Incoming: Send me the DDTC product code acronym11:52AM. Also sending you a Cyberlux email with a contact Paul NurrK had from Fairwind Technologies...look like a competitor but apparently they are active in Ukraine.12:05PM.
Table: MSRP$18,750.00; Global Ordnance$3,750.00,20%Margin; CYBLPRICE$15,000.00; Anthony$3,750.00,20%Margin; J&L$375.00,2%Margin; CYBLCost$5,500.00; CYBLMargin$5,375.00,29%Margin.
Pricing structure we discussed12:41PM.
More on the Fairwinds contact with Paul Nurkkala: So the contact is Matthew Jones from Fairwinds. He sounds like he just is well connected and helped broker a deal with someone for the sale of all of the switchblade drones that are available right now,and they want to order up to a couple hundred kamikaze drones a month. I’m sharing this so we can make sure we grab the volume if it’s not going to disrupt the Global channel. We intend to have you involved of all the Model-Kx sales so we can manage any conflict.1:04PM. Thumbs-up reaction. [No calendar date visible.]
[Clerk watermark and phone-interface text are non-message context. Cropped message continuations are not reconstructed.]
claimallegation
ExhibitC shows outgoing October1 and24,2023 messages and November14/16 requests to revisit a letter-of-credit idea, November20 travel/contac
ExhibitC shows outgoing October1 and24,2023 messages and November14/16 requests to revisit a letter-of-credit idea, November20 travel/contact request and partly cropped November22 Thanksgiving greeting. No incoming reply, commitment to provide credit, acquisition terms or growth forecast appears. Thus the screenshot supports requests being made, not the entire consequential-damages causal chain.
Read the anchor · page 24
EXHIBIT IC"
1 of 1
17:27
14
MS
Mark >
Oct 1, 2023 at 10:41
Check signal for me.
Text Message • SMS
istrict
Oct 24, 2023 at 16:23
Are you still overseas?
¡Message
Nov 14, 2023 at 08:24
Good morning. Have you had a
chance to think about the letter of
credit idea I had
Nov 16, 2023 at 09:58
Mark, let me know if we can revisit
the Letter of Credit today.
Nov 20, 2023 at 10:06
Good morning, I hope you had a
good weekend. I will be on the
road for a couple of hours today
as I'm headed to Fort Bragg, a.k.a.
Fort liberty. Let me know if you are
available.
Nov 22, 2023 at 09:32
Happy Thanksgiving, Mark! Hope
[Greeting continues outside supplied crop; not reconstructed.]
¡Message
[Clerk watermark and phone-interface text are non-message context. Cropped message continuations are not reconstructed.]
claimallegation
The May20 letter to Charles Watts concerns Durham25CV004246-310 and is prominently labelled confidential, Rule408 settlement-only. Counsel a
The May20 letter to Charles Watts concerns Durham25CV004246-310 and is prominently labelled confidential, Rule408 settlement-only. Counsel argues a valid distributor agreement plus course of performance and communications entitle ARG to20% of all HII proceeds, and alleges30% if Cyberlux sells directly without a prime. These are settlement positions; legal effect of the marking and asserted modification are not decided here.
Read the anchor · page 3
ANDERSON JONES, PLLC
421 N. BLOUNT STREET POST OFFICE BOX 20248
Raleigh, NC 27601 Raleigh, NC 27619
TELEPHONE (919) 277-2541 FACSIMILE (919) 277-2544
Construction Contracts Real Estate Collections Litigation Administrative
Employment Law OSHA Defense Business Law Workers Compensation Defense
May 20, 2025 clunghi@andersonandjones.com
*******************CONFIDENTIAL*******************
VIA EMAIL (legal_cybl@cyberlux.com)
Charles Watts
300 W. Washington St.
PO Box 3136
Greensboro, NC 27402-3136
RE: The ARG Group, LLC v. Cyberlux Corporation
Durham County Superior Court File No. 25CV004246-310
RULE 408 COMMUNICATION – NOT TO BE USED IN LITIGATION – FOR
SETTLEMENT PURPOSES ONLY
Dear Chuck:
This firm represents The ARG Group, LLC (“ARG”) in connection with its claims
against Cyberlux Corporation (“Cyberlux”) in the above-referenced matter. We write
regarding Cyberlux’s obligations to ARG under the governing Distributor Partner
Agreement and to demand immediate payment of outstanding sums owed.
On February 28, 2022, ARG and Cyberlux entered into a valid and binding
agreement titled “Cyberlux Corporation and The ARG Group, LLC Distributor
Partner Agreement” (the “Contract”). A true and accurate copy of the Contract is
attached hereto as Exhibit “A.” Under the terms of the Contract, ARG is entitled to
twenty percent (20%) of the proceeds from the sale of drones facilitated through the
relationship, with Cyberlux retaining the remaining eighty percent (80%).
Importantly, the parties’ course of performance and subsequent written
communications demonstrate that the scope of ARG’s entitlement under the
Contract expanded beyond the original distributor framework. On multiple
occasions, Cyberlux CEO Mark Schmidt expressly acknowledged—via Signal
messages and other forms of communication—that ARG was entitled to 20% of
proceeds from drone sales regardless of who the prime was on the contract. In fact,
Mr. Schmidt confirmed in writing that if Cyberlux sold directly without a prime,
ARG and Cyberlux would split the 20%, so ARG would receive 30% of the proceeds.
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Counsel says it reviewed the HII settlement under an NDA and reports initial38,700,600 and expected25,795,303.38. It calculates20% initial7,
Counsel says it reviewed the HII settlement under an NDA and reports initial38,700,600 and expected25,795,303.38. It calculates20% initial7,740,120,20months8%interest1,032,016,20%expected5,159,060.68 and subtotal13,931,196.68. The underlying settlement and bank receipts are not appended; expected proceeds are not paid proceeds.
Read the anchor · page 4
*******************CONFIDENTIAL*******************
Page 2 of 4
These statements reflect the parties’ shared understanding that ARG played a key
role in establishing sales channels and cultivating the relationships that drove K8
platform sales. Screenshots of some these communications are attached as Exhibit
“B.”
Mr. Schmidt further acknowledged ARG’s ongoing involvement and value in
managing potential conflicts and facilitating sales. These written communications
reflect a clear understanding between the parties that ARG’s role—and
corresponding compensation—would extend beyond a narrow reading of the
distributor agreement. ARG also raised concerns regarding ramp-up timelines and
deal structures. Mr. Schmidt’s responses confirm his awareness and endorsement of
ARG’s expanded role and the business opportunities it was actively pursuing in
reliance on the Contract and the parties’ ongoing course of conduct.
There is no genuine dispute that ARG was the party responsible for securing the HII
order within the meaning of the Contract, the parties’ shared intent at the time of
contracting, and the parties’ course of performance. Cyberlux’s obligation to remit
20% to ARG is not discretionary—it is both contractually and equitably mandated.
We are confident that a jury will conclude that ARG is entitled to 20% of all funds
received from HII, and that the written and verbal representations made by
Cyberlux reinforce that obligation.
Our office has reviewed the HII Termination Settlement Agreement (the “HII
Settlement”), under the protection of a fully executed Non-Disclosure Agreement.
The terms of that settlement confirm that Cyberlux has already received
$38,700,600.00 in drone-related payments from HII, and that an additional
$25,795,303.38 is anticipated.
Under the Contract, ARG’s 20% share of the HII drone proceeds is summarized as
follows:
Initial Payment (Received):
$38,700,600.00 × 20% = $7,740,120.00
Accrued Interest on Initial Payment (8% per annum for 20 months):
$7,740,120.00 × (8% ÷ 12 months) × 20 = $1,032,016.00
Final Settlement Payment (Expected):
$25,795,303.38 × 20% = $5,159,060.68
Subtotal (contractual damages including interest):
$13,931,196.68
In addition to the unpaid revenue share, Cyberlux’s failure to remit payment directly
prevented ARG from completing three planned strategic acquisitions. These
transactions were not only dependent on the anticipated cash flow under the
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
Demand adds projected two-year15% annual growth losses: QuickSilver Analytics2.5million→3,306,250 loss806,250; Thin Air Gear65% stake675,000→892,687.50 loss217,687.50; Domestic Fabrics and Blankets1million→1,322,500 loss322,500. Claimed consequential total1,346,437.50 produces demand15,277,634.18. Valuations,15%growth,foreseeability and causation are asserted modelling inputs, not proved lost transactions.
Read the anchor · page 5
*******************CONFIDENTIAL*******************
Page 3 of 4
Contract, but that dependence—and ARG’s intent to use the funds for these
acquisitions—was expressly communicated to Cyberlux. Attached as Exhibit “C” is
a true and accurate copy of one such communication, in which ARG inquires about
obtaining a letter of credit. This followed prior conversations with Mr. Schmidt,
during which ARG discussed the possibility of using a letter of credit from Cyberlux’s
lending institution to help finance the acquisition of businesses ARG intended to
purchase.
Using a conservative 15% annual growth rate over a 2-year period, the missed
acquisition damages are calculated as follows:
• Missed Acquisition 1: QuickSilver Analytics
o Initial Valuation: $2,500,000
o Future Value: $2,500,000 × (1.15)² = $3,306,250
o Loss: $3,306,250 − $2,500,000 = $806,250
• Missed Acquisition 2: Thin Air Gear (65% stake)
o Initial Valuation: $675,000
o Future Value: $675,000 × (1.15)² = $892,687.50
o Loss: $892,687.50 − $675,000 = $217,687.50
• Missed Acquisition 3: Domestic Fabrics and Blankets Corp
o Initial Valuation: $1,000,000
o Future Value: $1,000,000 × (1.15)² = $1,322,500
o Loss: $1,322,500 − $1,000,000 = $322,500
Total Consequential Damages:
$1,346,437.50
These damages reflect not only ARG’s direct financial losses, but also the long-term
economic harm and opportunity cost stemming from Cyberlux’s breach.
Total Amount Demanded
Category Amount
20% Share of Initial Payment $7,740,120.00
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
February28,2022 distributor agreement appoints ARG non-exclusively for lighting,UAS and other products. ARG undertakes best efforts in gover
February28,2022 distributor agreement appoints ARG non-exclusively for lighting,UAS and other products. ARG undertakes best efforts in government-related markets, approvals, pricing/warranty compliance and confidentiality. Three-year term renews annually absent90-day termination; post-term3-year noninterference preserves previously sold product activity.
Read the anchor · page 7
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
1
Cyberlux Corporation and The ARG Group, LLC
Distributor Partner Agreement
This Agreement (the “Agreement”) is made effective as of the 28th day of February 2022,
between Cyberlux Corporation (“Cyberlux”), a Nevada corporation, having its principal place
of business at 800 Park Offices Drive, Suite 3209, Research Triangle Park, NC 27709 and The
ARG Group, LLC (“ARG”), an Arizona limited liability company, having its principal place of
business at 301 Helen Street, Suite 110, Tucson, AZ 85705.
BACKGROUND FACTS
1. Cyberlux develops, manufactures, and sells Advanced Lighting Solutions (ALS) for
portable and fixed use, certain solar power solutions, and Unmanned Aircraft Systems
(UAS) products including UAS hardware and software solutions. The Cyberlux products
include, but are not limited to, the BrightEye and Watchdog Tactical Illumination
Systems, other various LED and solar products, and the FlightEye UAS products
including FlightEye drone hardware and the FlightGDN software operating platform and
related product offerings, as set forth in Exhibit A, Product and Pricing, which is attached
hereto and by this reference made a part hereof (hereafter referred to a “Products”).
2. Cyberlux is the owner of certain trademarks used in connection with the Products, such
trademarks being set forth on Exhibit B entitled Cyberlux Trademarks, which exhibit is
attached hereto and by this reference made a part hereof (singularly the “Trademark” or
collectively the “Trademarks”).
3. ARG desires to obtain from Cyberlux the non-exclusive right to sell, bid, stock and ship
the Products within the United States, North and South America, and other global regions
with business opportunities may arise, as specified herein.
4. Cyberlux desires to sell the Products to ARG for business development, sales and
fulfillment of orders as specified herein.
AGREEMENT
NOW, THEREFORE, in consideration of these premises and the mutual covenants herein
contained, the parties hereby agree as follows:
1. APPOINTMENT
Cyberlux agrees to, and hereby does, appoint ARG as a non-exclusive Business Partner
for the Products for the period of this Agreement as set forth in Paragraph 3.
EXHIBIT "A"
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claimallegation
Section4 gives ARG20% discount off GSA pricing, with ARG securing orders and paying Cyberlux80% of GSA invoice pricing; net30 shipment terms
Section4 gives ARG20% discount off GSA pricing, with ARG securing orders and paying Cyberlux80% of GSA invoice pricing; net30 shipment terms and expected2million annual sales follow. Section5 requires dealer-of-record email details tosales@ andMichaelPorter@, prior competing registration exception, and Cyberlux48-hour confirmation. This written reseller mechanism differs from counsel’s asserted universal proceeds share.
Read the anchor · page 8
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
2
2. ARG DUTIES
A. ARG agrees to use its best efforts to promote and to extend the sale of Products to
Department of Defense (DoD) agencies, DoD affiliated businesses, and other federal and
state government agencies or government agency affiliated businesses. ARG agrees to
obtain any approvals necessary for shipment, marketing, importation, distribution or use
of Products prior to commencement of such acts. ARG further agrees to provide the
standard pricing and warranty terms as in Exhibit A without the prior written permission
of Cyberlux. ARG will not at any time divulge any confidential information, trade
secrets, or know-how of which it may become possessed or aware with respect to
Cyberlux’s affairs in relation to this Agreement, the Products or Trademarks.
B. During the term of this Agreement, and for three (3) years subsequent to the expiration
hereof, ARG shall not interfere with the business of Cyberlux by using information
generated as a consequence of this Agreement to compete with Cyberlux, or by usurping,
interfering with or attempting to interfere with Cyberlux’s existing or prospective
contractual relations with its customers, dealers, suppliers or other distributors. The
limitations under this paragraph shall not preclude ARG from continuing to sell or offer
for sale to such customers any products that ARG has sold or offered for sale to those
customers or dealers prior to the execution of this Agreement.
3. DURATION OF AGREEMENT
This Agreement shall be for a term of three (3) years, commencing with the effective date
hereof, unless terminated sooner according to the terms hereof. Notwithstanding the
foregoing, the Agreement shall be deemed renewed for one (1) year from the date of such
renewal, with all terms and conditions hereof remaining in full force and effect, unless
either Party terminates the Agreement with 90 days notice.
4. PRICING, TERMS, AND QUOTAS
A. Pricing: With the appointment of ARG as Business Partner, Cyberlux will provide a
twenty percent (20%) discount off the GSA pricing for the Products as detailed in Exhibit
A attached. ARG will secure customer orders, Cyberlux will fulfill the customer orders
with ARG either stocking inventory or Cyberlux fulfilling directly, and ARG will pay
Cyberlux eighty percent (80%) of the GSA invoice pricing for the Products.
B. Terms: Cyberlux payment terms are net 30 from shipment date, unless ARG has prior
written agreement to different terms and conditions.
C. Quotas: Cyberlux expects ARG to generate a minimum of $2,000,000.00 in annual
Products sales across all market segments and customers. Cyberlux will provide any sales
support or assistance ARG may need to facilitate the closing of any business opportunity
generated by ARG.
5. DEALER OF RECORD PROCESS
As a Cyberlux Business Partner, ARG is entitled to declare any new business opportunity
as an exclusive ARG sales opportunity, unless another Cyberlux Business Partner has
EXHIBIT "A"
2 of 12
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
Section6 awards2million restricted shares and revenue acceleration grants:500k at3/4/5million,250k at6/7/8/9million,500k at10million,and250k each additionalmillion. It does not show delivery or achievement of these awards.
Read the anchor · page 9
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
3
previously declared the same opportunity exclusivity in prior communication to
Cyberlux.
To declare a new business opportunity as an exclusive ARG sale, ARG must email the
following information to the Cyberlux email addresses at sales@cyberlux.com and
MichaelPorter@cyberlux.com, including:
Subject: ARG Dealer of Record Registration Request
Customer Name
Department / Agency
Address, City, State
Primary Contact
Best estimate of the potential sales quantity and Cyberlux product(s)
Cyberlux will respond within 48 hours confirming the new opportunity exclusivity.
6. EQUITY INCENTIVES
A. In consideration for the appointment of ARG as Business Partner, Cyberlux will award
ARG two million (2,000,000) shares of restricted common stock as a long-term incentive
to mutually benefit both ARG and Cyberlux as ARG sales and revenue generation acerate
value the Cyberlux stock.
B. In addition, Cyberlux will offer ARG additional Revenue Acceleration Equity Incentives
as follows:
Revenue Level Achieved Restricted Stock Grant
$3,000,000 500,000
$4,000,000 500,000
$5,000,000 500,000
$6,000,000 250,000
$7,000,000 250,000
$8,000,000 250,000
$9,000,000 250,000
$10,000,000 500,000
Incremental $1,000,000 250,000 per $1,000,000 above $10,000,000 revenue
7. QUANTITIES AND DELIVERIES
A. In partial consideration for ARG’s appointment hereunder, ARG agrees to deliver to
Cyberlux purchase orders for Products with a forecast due within 45 days of the signing
of this Agreement.
B. Products are delivered ex-factory at Cyberlux’s offices in Research Triangle Park,
Durham, North Carolina or at another delivery point selected by Cyberlux and agreed to
by ARG. Cyberlux shall use reasonable efforts to fill ARG’s orders insofar as Cyberlux is
not prevented or hindered in doing so by shortages of raw materials or labor, unavoidable
mechanical failure, strikes, war, insurrection, acts of God, and the like.
EXHIBIT "A"
3 of 12
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Section7 requires purchase orders/forecast within45days, monthly rolling three-month supply forecast by firstday, periodic goals and reasona
Section7 requires purchase orders/forecast within45days, monthly rolling three-month supply forecast by firstday, periodic goals and reasonable fulfilment efforts subject to obstacles. Delivery is ex-factory or another agreed selected point. ARG warrants financial condition and supplies requested statements; checks count as payment only on cash receipt.
Read the anchor · page 9
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
3
previously declared the same opportunity exclusivity in prior communication to
Cyberlux.
To declare a new business opportunity as an exclusive ARG sale, ARG must email the
following information to the Cyberlux email addresses at sales@cyberlux.com and
MichaelPorter@cyberlux.com, including:
Subject: ARG Dealer of Record Registration Request
Customer Name
Department / Agency
Address, City, State
Primary Contact
Best estimate of the potential sales quantity and Cyberlux product(s)
Cyberlux will respond within 48 hours confirming the new opportunity exclusivity.
6. EQUITY INCENTIVES
A. In consideration for the appointment of ARG as Business Partner, Cyberlux will award
ARG two million (2,000,000) shares of restricted common stock as a long-term incentive
to mutually benefit both ARG and Cyberlux as ARG sales and revenue generation acerate
value the Cyberlux stock.
B. In addition, Cyberlux will offer ARG additional Revenue Acceleration Equity Incentives
as follows:
Revenue Level Achieved Restricted Stock Grant
$3,000,000 500,000
$4,000,000 500,000
$5,000,000 500,000
$6,000,000 250,000
$7,000,000 250,000
$8,000,000 250,000
$9,000,000 250,000
$10,000,000 500,000
Incremental $1,000,000 250,000 per $1,000,000 above $10,000,000 revenue
7. QUANTITIES AND DELIVERIES
A. In partial consideration for ARG’s appointment hereunder, ARG agrees to deliver to
Cyberlux purchase orders for Products with a forecast due within 45 days of the signing
of this Agreement.
B. Products are delivered ex-factory at Cyberlux’s offices in Research Triangle Park,
Durham, North Carolina or at another delivery point selected by Cyberlux and agreed to
by ARG. Cyberlux shall use reasonable efforts to fill ARG’s orders insofar as Cyberlux is
not prevented or hindered in doing so by shortages of raw materials or labor, unavoidable
mechanical failure, strikes, war, insurrection, acts of God, and the like.
EXHIBIT "A"
3 of 12
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation
Product-defect remedies are limited to repair/replacement, with incidental/consequential damages exclusion specifically because of product/p
Product-defect remedies are limited to repair/replacement, with incidental/consequential damages exclusion specifically because of product/part defects; product-liability recovery points to insurance and other warranties disclaimed. The source does not state a blanket exclusion of all contract consequential damages. Product changes need consent; Cyberlux IP/trademarks, improvement disclosure and limited mark use are protected.
Read the anchor · page 10
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
4
D. ARG’s performance under this Agreement shall be periodically reviewed with Cyberlux,
and ARG and Cyberlux shall periodically set goals and plan Product development and
introductions to reflect the best opportunities in the market for Cyberlux Products.
E. In order to meet customer service standards, ARG agrees to provide a monthly rolling
forecast of three (3) month’s supply of Product to Cyberlux, by the 1st day of the month,
during the term of this Agreement.
8. CREDIT AND FINANCIAL REQUIREMENTS
A. ARG represents and warrants to Cyberlux that ARG is in good and substantial financial
condition and is able to pay all bills when due. ARG shall, from time to time, furnish any
financial statements or additional information as may be requested by Cyberlux.
B. All sales shall be made in accordance with the terms of the Cyberlux invoices and the
Agreement. Payment for all Products purchased by ARG shall be made by certified or
cashier’s check, unless the Cyberlux invoice provides otherwise, in which event such
terms shall govern. Receipt of any check, draft or other commercial paper shall not
constitute payment until Cyberlux shall have received, in cash, the full amount thereof.
9. EXCLUSION OF DAMAGES
A. Unless otherwise provided by applicable law, Cyberlux’s liability, if any, to ARG for any
allegedly defective Products shall, under any legal or equitable theory, be limited to
repair or replacement of the Products or parts, at Cyberlux’s option, and CYBERLUX
SHALL NOT BE LIABLE TO ARG FOR ANY DAMAGES, WHETHER
INCIDENTAL, CONSEQUENTIAL OR OTHERWISE, BECAUSE OF PRODUCT OR
PART DEFECTS.
B. Cyberlux has product liability insurance with respect to Products. As such, the only
source of recovery for Cyberlux’s product liability shall be said insurance. NO OTHER
WARRANTIES ARE PROVIDED BY CYBERLUX, EXPRESS OR IMPLIED.
C. ARG shall not make any change to Products, or Product containers, packages, cartons or
the like without Cyberlux’s prior written approval, which may be withheld in Cyberlux’s
sole discretion.
10. PATENT AND TRADEMARK RIGHTS
A. ARG agrees that Cyberlux is the sole and exclusive owner of all patent rights on
Products, including any improvements thereon, whether made by Cyberlux or
Distributor, and of all rights in the Trademarks. ARG agrees to disclose to Cyberlux, in
writing, all improvements in Products, and manufacturing know-how relating to
Products, developed or acquired during the term of this Agreement.
B. ARG further agrees that it will not seek or otherwise obtain any patent, trademark, or
service mark rights on the Products or Trademarks, directly in its own name or indirectly
in any other name, without the written permission of Cyberlux.
EXHIBIT "A"
4 of 12
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Christian Lunghi
Read the anchor · page 2
1
Robert Berleth
From: Christian Lunghi <CLunghi@andersonandjones.com>
Sent: Thursday, June 5, 2025 3:38 PM
To: Robert Berleth
Subject: The ARG Group, LLC v Cyberlux Corporation
Attachments: 2025_05_20_Letter_to_Cyberlux_Ex_A_thru_C.pdf
Robert:
I represent The ARG Group, LLC in its action against Cyberlux Corporation. We spoke today on the
phone.
Attached is a copy of the demand letter we sent to Cyberlux on May 20, 2025.
Procedurally, we have filed the complaint, and Cyberlux has filed a motion for an extension of time to
respond. Otherwise, we have heard nothing from Cyberlux. No surprise.
I’m trying to find representation in Texas. Todd mentioned you may have a draft of the document that
needs to be filed in Harris County. If you have that, I would like to take a look at it.
Best,
Christian Lunghi
Attorney and Counsellor at Law
421 N. Blount Street, Raleigh, NC 27601
PHONE: (919) 277-2541; FAX: (919) 277-2544
DIRECT DIAL: (984) 344-9309
CLunghi@andersonandjones.com
(Mr. Lùn-ghee)
CONFIDENTIALITY NOTICE
This e-mail is intended only for the addressee named above. It contains information that may be attorney-client privileged, confidential
or otherwise protected from use and disclosure. If you are not the intended recipient, you are hereby notified that any review,
disclosure, copying, or dissemination of this transmission, or taking of any action in reliance on its contents, or other use is strictly
prohibited. If you have received this transmission in error, please reply to the sender listed above immediately and permanently delete
this message from your inbox. Thank you for your cooperation.
DISCLAIMER OF TAX ADVICE: Any discussion contained in this email cannot be considered to be tax advice. Actual tax advice would
require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have
not made and have not been asked to make that type of analysis in connection with any advice given in this e-mail. As a result, we are
required to advise you that any Federal tax advice rendered in this e-mail is not intended or written to be used and cannot be used for
the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is
necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.
FAIR DEBT COLLECTION PRACTICES ACT DISCLOSURE: This firm routinely represents lenders and other creditors in debt
collection matters. Please be advised that this communication is from a debt collector and is an attempt to collect a debt. Any
information obtained will be used for that purpose.
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Robert Berleth
Read the anchor · page 2
1
Robert Berleth
From: Christian Lunghi <CLunghi@andersonandjones.com>
Sent: Thursday, June 5, 2025 3:38 PM
To: Robert Berleth
Subject: The ARG Group, LLC v Cyberlux Corporation
Attachments: 2025_05_20_Letter_to_Cyberlux_Ex_A_thru_C.pdf
Robert:
I represent The ARG Group, LLC in its action against Cyberlux Corporation. We spoke today on the
phone.
Attached is a copy of the demand letter we sent to Cyberlux on May 20, 2025.
Procedurally, we have filed the complaint, and Cyberlux has filed a motion for an extension of time to
respond. Otherwise, we have heard nothing from Cyberlux. No surprise.
I’m trying to find representation in Texas. Todd mentioned you may have a draft of the document that
needs to be filed in Harris County. If you have that, I would like to take a look at it.
Best,
Christian Lunghi
Attorney and Counsellor at Law
421 N. Blount Street, Raleigh, NC 27601
PHONE: (919) 277-2541; FAX: (919) 277-2544
DIRECT DIAL: (984) 344-9309
CLunghi@andersonandjones.com
(Mr. Lùn-ghee)
CONFIDENTIALITY NOTICE
This e-mail is intended only for the addressee named above. It contains information that may be attorney-client privileged, confidential
or otherwise protected from use and disclosure. If you are not the intended recipient, you are hereby notified that any review,
disclosure, copying, or dissemination of this transmission, or taking of any action in reliance on its contents, or other use is strictly
prohibited. If you have received this transmission in error, please reply to the sender listed above immediately and permanently delete
this message from your inbox. Thank you for your cooperation.
DISCLAIMER OF TAX ADVICE: Any discussion contained in this email cannot be considered to be tax advice. Actual tax advice would
require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have
not made and have not been asked to make that type of analysis in connection with any advice given in this e-mail. As a result, we are
required to advise you that any Federal tax advice rendered in this e-mail is not intended or written to be used and cannot be used for
the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is
necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.
FAIR DEBT COLLECTION PRACTICES ACT DISCLOSURE: This firm routinely represents lenders and other creditors in debt
collection matters. Please be advised that this communication is from a debt collector and is an attempt to collect a debt. Any
information obtained will be used for that purpose.
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Charles Watts
Read the anchor · page 3
ANDERSON JONES, PLLC
421 N. BLOUNT STREET POST OFFICE BOX 20248
Raleigh, NC 27601 Raleigh, NC 27619
TELEPHONE (919) 277-2541 FACSIMILE (919) 277-2544
Construction Contracts Real Estate Collections Litigation Administrative
Employment Law OSHA Defense Business Law Workers Compensation Defense
May 20, 2025 clunghi@andersonandjones.com
*******************CONFIDENTIAL*******************
VIA EMAIL (legal_cybl@cyberlux.com)
Charles Watts
300 W. Washington St.
PO Box 3136
Greensboro, NC 27402-3136
RE: The ARG Group, LLC v. Cyberlux Corporation
Durham County Superior Court File No. 25CV004246-310
RULE 408 COMMUNICATION – NOT TO BE USED IN LITIGATION – FOR
SETTLEMENT PURPOSES ONLY
Dear Chuck:
This firm represents The ARG Group, LLC (“ARG”) in connection with its claims
against Cyberlux Corporation (“Cyberlux”) in the above-referenced matter. We write
regarding Cyberlux’s obligations to ARG under the governing Distributor Partner
Agreement and to demand immediate payment of outstanding sums owed.
On February 28, 2022, ARG and Cyberlux entered into a valid and binding
agreement titled “Cyberlux Corporation and The ARG Group, LLC Distributor
Partner Agreement” (the “Contract”). A true and accurate copy of the Contract is
attached hereto as Exhibit “A.” Under the terms of the Contract, ARG is entitled to
twenty percent (20%) of the proceeds from the sale of drones facilitated through the
relationship, with Cyberlux retaining the remaining eighty percent (80%).
Importantly, the parties’ course of performance and subsequent written
communications demonstrate that the scope of ARG’s entitlement under the
Contract expanded beyond the original distributor framework. On multiple
occasions, Cyberlux CEO Mark Schmidt expressly acknowledged—via Signal
messages and other forms of communication—that ARG was entitled to 20% of
proceeds from drone sales regardless of who the prime was on the contract. In fact,
Mr. Schmidt confirmed in writing that if Cyberlux sold directly without a prime,
ARG and Cyberlux would split the 20%, so ARG would receive 30% of the proceeds.
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
The ARG Group, LLC
Read the anchor · page 3
ANDERSON JONES, PLLC
421 N. BLOUNT STREET POST OFFICE BOX 20248
Raleigh, NC 27601 Raleigh, NC 27619
TELEPHONE (919) 277-2541 FACSIMILE (919) 277-2544
Construction Contracts Real Estate Collections Litigation Administrative
Employment Law OSHA Defense Business Law Workers Compensation Defense
May 20, 2025 clunghi@andersonandjones.com
*******************CONFIDENTIAL*******************
VIA EMAIL (legal_cybl@cyberlux.com)
Charles Watts
300 W. Washington St.
PO Box 3136
Greensboro, NC 27402-3136
RE: The ARG Group, LLC v. Cyberlux Corporation
Durham County Superior Court File No. 25CV004246-310
RULE 408 COMMUNICATION – NOT TO BE USED IN LITIGATION – FOR
SETTLEMENT PURPOSES ONLY
Dear Chuck:
This firm represents The ARG Group, LLC (“ARG”) in connection with its claims
against Cyberlux Corporation (“Cyberlux”) in the above-referenced matter. We write
regarding Cyberlux’s obligations to ARG under the governing Distributor Partner
Agreement and to demand immediate payment of outstanding sums owed.
On February 28, 2022, ARG and Cyberlux entered into a valid and binding
agreement titled “Cyberlux Corporation and The ARG Group, LLC Distributor
Partner Agreement” (the “Contract”). A true and accurate copy of the Contract is
attached hereto as Exhibit “A.” Under the terms of the Contract, ARG is entitled to
twenty percent (20%) of the proceeds from the sale of drones facilitated through the
relationship, with Cyberlux retaining the remaining eighty percent (80%).
Importantly, the parties’ course of performance and subsequent written
communications demonstrate that the scope of ARG’s entitlement under the
Contract expanded beyond the original distributor framework. On multiple
occasions, Cyberlux CEO Mark Schmidt expressly acknowledged—via Signal
messages and other forms of communication—that ARG was entitled to 20% of
proceeds from drone sales regardless of who the prime was on the contract. In fact,
Mr. Schmidt confirmed in writing that if Cyberlux sold directly without a prime,
ARG and Cyberlux would split the 20%, so ARG would receive 30% of the proceeds.
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Cyberlux Corporation
Read the anchor · page 3
ANDERSON JONES, PLLC
421 N. BLOUNT STREET POST OFFICE BOX 20248
Raleigh, NC 27601 Raleigh, NC 27619
TELEPHONE (919) 277-2541 FACSIMILE (919) 277-2544
Construction Contracts Real Estate Collections Litigation Administrative
Employment Law OSHA Defense Business Law Workers Compensation Defense
May 20, 2025 clunghi@andersonandjones.com
*******************CONFIDENTIAL*******************
VIA EMAIL (legal_cybl@cyberlux.com)
Charles Watts
300 W. Washington St.
PO Box 3136
Greensboro, NC 27402-3136
RE: The ARG Group, LLC v. Cyberlux Corporation
Durham County Superior Court File No. 25CV004246-310
RULE 408 COMMUNICATION – NOT TO BE USED IN LITIGATION – FOR
SETTLEMENT PURPOSES ONLY
Dear Chuck:
This firm represents The ARG Group, LLC (“ARG”) in connection with its claims
against Cyberlux Corporation (“Cyberlux”) in the above-referenced matter. We write
regarding Cyberlux’s obligations to ARG under the governing Distributor Partner
Agreement and to demand immediate payment of outstanding sums owed.
On February 28, 2022, ARG and Cyberlux entered into a valid and binding
agreement titled “Cyberlux Corporation and The ARG Group, LLC Distributor
Partner Agreement” (the “Contract”). A true and accurate copy of the Contract is
attached hereto as Exhibit “A.” Under the terms of the Contract, ARG is entitled to
twenty percent (20%) of the proceeds from the sale of drones facilitated through the
relationship, with Cyberlux retaining the remaining eighty percent (80%).
Importantly, the parties’ course of performance and subsequent written
communications demonstrate that the scope of ARG’s entitlement under the
Contract expanded beyond the original distributor framework. On multiple
occasions, Cyberlux CEO Mark Schmidt expressly acknowledged—via Signal
messages and other forms of communication—that ARG was entitled to 20% of
proceeds from drone sales regardless of who the prime was on the contract. In fact,
Mr. Schmidt confirmed in writing that if Cyberlux sold directly without a prime,
ARG and Cyberlux would split the 20%, so ARG would receive 30% of the proceeds.
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Mark D. Schmidt
Read the anchor · page 13
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
7
provided, however, that a Force Majeure Event shall not be recognized under this
Agreement unless (1) the party seeking to assert such an event gives notice of the
existence of such event to the other party, which notice shall explain in reasonable detail
the nature of the Force Majeure Event, the obligations that have been affected by the
Force Majeure Event, and how such Force Majeure Event has impaired the performance
of such obligations (Force Majeure Event Notice), and (2) such Force Majeure Event
actually and materially impairs the due performance of such parties’ obligations. On
receipt of the Force Majeure Event Notice by the other party, the performance required of
the notifying party shall be extended on a day-for-day basis commencing on the date the
Force Majeure Event Notice was given until such Force Majeure Event has terminated.
A “Force Majeure Event” shall be an act of God, riot, war, civil interest, hostile fire,
flood, earthquake, or other cause beyond a party’s reasonable control and anticipation
(including without limitation, any mechanical, electronic, or communications failure, but
excluding failure caused by a party’s financial condition or negligence), or any inability
due to the aforementioned causes to obtain necessary labor, materials or facilities.
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate, each of which
copies shall for all purposes be deemed an original.
CYBERLUX
Cyberlux Corporation, a Nevada
corporation
By:_______________________________
ARG
The ARG Group, LLC, a
Delaware limited liability company
By:___________________________
Mark D. Schmidt Anthony Gonzalez
Its: President Its: Managing Partner
EXHIBIT "A"
7 of 12
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation
Anthony Gonzalez
Read the anchor · page 13
800 Park Offices Drive, Suite 3209
Research Triangle Park, Durham, NC 27709
7
provided, however, that a Force Majeure Event shall not be recognized under this
Agreement unless (1) the party seeking to assert such an event gives notice of the
existence of such event to the other party, which notice shall explain in reasonable detail
the nature of the Force Majeure Event, the obligations that have been affected by the
Force Majeure Event, and how such Force Majeure Event has impaired the performance
of such obligations (Force Majeure Event Notice), and (2) such Force Majeure Event
actually and materially impairs the due performance of such parties’ obligations. On
receipt of the Force Majeure Event Notice by the other party, the performance required of
the notifying party shall be extended on a day-for-day basis commencing on the date the
Force Majeure Event Notice was given until such Force Majeure Event has terminated.
A “Force Majeure Event” shall be an act of God, riot, war, civil interest, hostile fire,
flood, earthquake, or other cause beyond a party’s reasonable control and anticipation
(including without limitation, any mechanical, electronic, or communications failure, but
excluding failure caused by a party’s financial condition or negligence), or any inability
due to the aforementioned causes to obtain necessary labor, materials or facilities.
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate, each of which
copies shall for all purposes be deemed an original.
CYBERLUX
Cyberlux Corporation, a Nevada
corporation
By:_______________________________
ARG
The ARG Group, LLC, a
Delaware limited liability company
By:___________________________
Mark D. Schmidt Anthony Gonzalez
Its: President Its: Managing Partner
EXHIBIT "A"
7 of 12
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
eventattribution
Lunghi demand to Watts.
Read the anchor · page 3
ANDERSON JONES, PLLC
421 N. BLOUNT STREET POST OFFICE BOX 20248
Raleigh, NC 27601 Raleigh, NC 27619
TELEPHONE (919) 277-2541 FACSIMILE (919) 277-2544
Construction Contracts Real Estate Collections Litigation Administrative
Employment Law OSHA Defense Business Law Workers Compensation Defense
May 20, 2025 clunghi@andersonandjones.com
*******************CONFIDENTIAL*******************
VIA EMAIL (legal_cybl@cyberlux.com)
Charles Watts
300 W. Washington St.
PO Box 3136
Greensboro, NC 27402-3136
RE: The ARG Group, LLC v. Cyberlux Corporation
Durham County Superior Court File No. 25CV004246-310
RULE 408 COMMUNICATION – NOT TO BE USED IN LITIGATION – FOR
SETTLEMENT PURPOSES ONLY
Dear Chuck:
This firm represents The ARG Group, LLC (“ARG”) in connection with its claims
against Cyberlux Corporation (“Cyberlux”) in the above-referenced matter. We write
regarding Cyberlux’s obligations to ARG under the governing Distributor Partner
Agreement and to demand immediate payment of outstanding sums owed.
On February 28, 2022, ARG and Cyberlux entered into a valid and binding
agreement titled “Cyberlux Corporation and The ARG Group, LLC Distributor
Partner Agreement” (the “Contract”). A true and accurate copy of the Contract is
attached hereto as Exhibit “A.” Under the terms of the Contract, ARG is entitled to
twenty percent (20%) of the proceeds from the sale of drones facilitated through the
relationship, with Cyberlux retaining the remaining eighty percent (80%).
Importantly, the parties’ course of performance and subsequent written
communications demonstrate that the scope of ARG’s entitlement under the
Contract expanded beyond the original distributor framework. On multiple
occasions, Cyberlux CEO Mark Schmidt expressly acknowledged—via Signal
messages and other forms of communication—that ARG was entitled to 20% of
proceeds from drone sales regardless of who the prime was on the contract. In fact,
Mr. Schmidt confirmed in writing that if Cyberlux sold directly without a prime,
ARG and Cyberlux would split the 20%, so ARG would receive 30% of the proceeds.
UnofficialCopyOfficeofMarilynBurgessDistrictClerk
eventattribution
Demand transmitted to Berleth.
Read the anchor · page 2
1
Robert Berleth
From: Christian Lunghi <CLunghi@andersonandjones.com>
Sent: Thursday, June 5, 2025 3:38 PM
To: Robert Berleth
Subject: The ARG Group, LLC v Cyberlux Corporation
Attachments: 2025_05_20_Letter_to_Cyberlux_Ex_A_thru_C.pdf
Robert:
I represent The ARG Group, LLC in its action against Cyberlux Corporation. We spoke today on the
phone.
Attached is a copy of the demand letter we sent to Cyberlux on May 20, 2025.
Procedurally, we have filed the complaint, and Cyberlux has filed a motion for an extension of time to
respond. Otherwise, we have heard nothing from Cyberlux. No surprise.
I’m trying to find representation in Texas. Todd mentioned you may have a draft of the document that
needs to be filed in Harris County. If you have that, I would like to take a look at it.
Best,
Christian Lunghi
Attorney and Counsellor at Law
421 N. Blount Street, Raleigh, NC 27601
PHONE: (919) 277-2541; FAX: (919) 277-2544
DIRECT DIAL: (984) 344-9309
CLunghi@andersonandjones.com
(Mr. Lùn-ghee)
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UnofficialCopyOfficeofMarilynBurgessDistrictClerk
inferenceinference
The demand’s universal20%HII-proceeds theory is broader than the written20%GSA-discount reseller mechanics. Messages provide compensation/ch
The demand’s universal20%HII-proceeds theory is broader than the written20%GSA-discount reseller mechanics. Messages provide compensation/channel and quota context, but exact opportunity registration, agreed scope and the signed-writing clause still need reconciliation.
inferenceinference
Projected acquisition growth is modelled damages. The appended credit-request screenshot contains no visible approval or acquisition-specifi
Projected acquisition growth is modelled damages. The appended credit-request screenshot contains no visible approval or acquisition-specific valuation and therefore cannot alone establish promised financing,foreseeability,causation or realised loss.
otherattribution
Complete supplied 24-page source reviewed at SHA-256 af8f7637dc3eeae7426c7bb9da565f56ee711e25cb04e945f34ac16757be3c76. Source assertions, or
Complete supplied 24-page source reviewed at SHA-256 af8f7637dc3eeae7426c7bb9da565f56ee711e25cb04e945f34ac16757be3c76. Source assertions, original visual features, filing/communication context and identified missing attachments are retained. Own full24-page native reading; material images13,15–17,19–24 fully examined. Screenshot OCR compared to own images and corrected, especially attribution,dates and full pricing-table rows. No hidden cropped text reconstructed.
Read the anchor · page 1
CAUSE NO. 202448085
ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT
and SECURE COMMUNITY, LLC, §
Plaintiff, Judgment-Creditor, §
§
v. § 129TH JUDICIAL COURT
§
CYBERLUX CORPORATION and §
MARK D. SCHMIDT, individually § IN AND FOR
Defendant, Judgment-Debtor. § HARRIS COUNTY, TEXAS
Exhibit 7- ARG Group, LLC
Cause No. 202448085 styled Atlantic Wave Holdings, LLC et al.
v. Cyberlux Corporation et al, in the 129th District Court in and
For Harris County, Texas UnofficialCopyOfficeofMarilynBurgessDistrictClerk
questionquestion
What full dated message chain, DOR registration, modification evidence and payment records establish ARG’s entitlement and applicable percen
What full dated message chain, DOR registration, modification evidence and payment records establish ARG’s entitlement and applicable percentage on the HII settlement?
questionquestion
What acquisition agreements, finance commitments, valuations and business projections support the claimed15%growth and breach-caused losses?
distillateobservation
CONNECT
Reviewed relationships
The canvas follows the database: source to DISTIL record, DISTIL record to knowledge object, then reviewed relationship. Position alone means nothing.
The May20 letter to Charles Watts concerns Durham25CV004246-310 and is prominently labelled confidential, Rule408 settlement-only. Counsel argues a valid distributor agreement plus course of performance and communications entitle ARG to20% of all HII proceeds, and alleges30% if Cyberlux sells directly without a prime. These are settlement positions; legal effect of the marking and asserted modification are not decided here.supportsWhat full dated message chain, DOR registration, modification evidence and payment records establish ARG’s entitlement and applicable percentage on the HII settlement?
Specifically named source propositions support the bounded distinction or question.
Section4 gives ARG20% discount off GSA pricing, with ARG securing orders and paying Cyberlux80% of GSA invoice pricing; net30 shipment terms and expected2million annual sales follow. Section5 requires dealer-of-record email details tosales@ andMichaelPorter@, prior competing registration exception, and Cyberlux48-hour confirmation. This written reseller mechanism differs from counsel’s asserted universal proceeds share.supportsDo the appended exhibits establish the entire15,277,634.18 demand as owed?
Specifically named source propositions support the bounded distinction or question.
Section4 gives ARG20% discount off GSA pricing, with ARG securing orders and paying Cyberlux80% of GSA invoice pricing; net30 shipment terms and expected2million annual sales follow. Section5 requires dealer-of-record email details tosales@ andMichaelPorter@, prior competing registration exception, and Cyberlux48-hour confirmation. This written reseller mechanism differs from counsel’s asserted universal proceeds share.supportsWhat full dated message chain, DOR registration, modification evidence and payment records establish ARG’s entitlement and applicable percentage on the HII settlement?
Specifically named source propositions support the bounded distinction or question.
Another Mark Schmidt screenshot requests a DDTC code and discusses Fairwinds contact Paul Nurkkala/ Matthew Jones, possible hundreds of drones monthly and avoiding Global channel conflict. It says intent to involve the interlocutor in all Model-Kx sales. Embedded pricing table showsMSRP18,750;Global Ordnance3,750(20%);CYBLprice15,000;Anthony3,750(20%);J&L375(2%);CYBLcost5,500;CYBLmargin5,375(29%). It documents proposed pricing/channel discussion, not a Government award or measured realised margin.supportsDo the appended exhibits establish the entire15,277,634.18 demand as owed?
Specifically named source propositions support the bounded distinction or question.
Demand adds projected two-year15% annual growth losses: QuickSilver Analytics2.5million→3,306,250 loss806,250; Thin Air Gear65% stake675,000→892,687.50 loss217,687.50; Domestic Fabrics and Blankets1million→1,322,500 loss322,500. Claimed consequential total1,346,437.50 produces demand15,277,634.18. Valuations,15%growth,foreseeability and causation are asserted modelling inputs, not proved lost transactions.supportsDo the appended exhibits establish the entire15,277,634.18 demand as owed?
Specifically named source propositions support the bounded distinction or question.
No agency,joint venture or partnership is created; obligations in Cyberlux’s name need consent. Entire-agreement clause requires signed writing for modification/waiver; NC law and Durham forum selected. Force majeure requires detailed notice and actual material impairment, extends performance day-for-day from notice, and excludes financial condition or negligence.supportsThe demand’s universal20%HII-proceeds theory is broader than the written20%GSA-discount reseller mechanics. Messages provide compensation/channel and quota context, but exact opportunity registration, agreed scope and the signed-writing clause still need reconciliation.
Specifically named source propositions support the bounded distinction or question.
ExhibitC shows outgoing October1 and24,2023 messages and November14/16 requests to revisit a letter-of-credit idea, November20 travel/contact request and partly cropped November22 Thanksgiving greeting. No incoming reply, commitment to provide credit, acquisition terms or growth forecast appears. Thus the screenshot supports requests being made, not the entire consequential-damages causal chain.supportsProjected acquisition growth is modelled damages. The appended credit-request screenshot contains no visible approval or acquisition-specific valuation and therefore cannot alone establish promised financing,foreseeability,causation or realised loss.
Specifically named source propositions support the bounded distinction or question.
Another Mark Schmidt screenshot requests a DDTC code and discusses Fairwinds contact Paul Nurkkala/ Matthew Jones, possible hundreds of drones monthly and avoiding Global channel conflict. It says intent to involve the interlocutor in all Model-Kx sales. Embedded pricing table showsMSRP18,750;Global Ordnance3,750(20%);CYBLprice15,000;Anthony3,750(20%);J&L375(2%);CYBLcost5,500;CYBLmargin5,375(29%). It documents proposed pricing/channel discussion, not a Government award or measured realised margin.supportsThe demand’s universal20%HII-proceeds theory is broader than the written20%GSA-discount reseller mechanics. Messages provide compensation/channel and quota context, but exact opportunity registration, agreed scope and the signed-writing clause still need reconciliation.
Specifically named source propositions support the bounded distinction or question.
Signal screenshot labelled Mark Schmidt includes a partly cropped forwarded discussion of US-funded Ukraine purchases, uncertain FMS/DLA/TLS vehicles and anticipated OEM inquiries. Mark states9800starting price,no go-direct bypass, then listscost4700,CYBL2000,ARG20%1340,total8040,splitprofit1760,total9800,resultingCYBL2880/ARG2220. ARG2220 is about22.65%of9800, not a self-evident universal30%ofgross provision.supportsThe demand’s universal20%HII-proceeds theory is broader than the written20%GSA-discount reseller mechanics. Messages provide compensation/channel and quota context, but exact opportunity registration, agreed scope and the signed-writing clause still need reconciliation.
Specifically named source propositions support the bounded distinction or question.
Demand adds projected two-year15% annual growth losses: QuickSilver Analytics2.5million→3,306,250 loss806,250; Thin Air Gear65% stake675,000→892,687.50 loss217,687.50; Domestic Fabrics and Blankets1million→1,322,500 loss322,500. Claimed consequential total1,346,437.50 produces demand15,277,634.18. Valuations,15%growth,foreseeability and causation are asserted modelling inputs, not proved lost transactions.supportsProjected acquisition growth is modelled damages. The appended credit-request screenshot contains no visible approval or acquisition-specific valuation and therefore cannot alone establish promised financing,foreseeability,causation or realised loss.
Specifically named source propositions support the bounded distinction or question.
ExhibitC shows outgoing October1 and24,2023 messages and November14/16 requests to revisit a letter-of-credit idea, November20 travel/contact request and partly cropped November22 Thanksgiving greeting. No incoming reply, commitment to provide credit, acquisition terms or growth forecast appears. Thus the screenshot supports requests being made, not the entire consequential-damages causal chain.supportsWhat acquisition agreements, finance commitments, valuations and business projections support the claimed15%growth and breach-caused losses?
Specifically named source propositions support the bounded distinction or question.
The May20 letter to Charles Watts concerns Durham25CV004246-310 and is prominently labelled confidential, Rule408 settlement-only. Counsel argues a valid distributor agreement plus course of performance and communications entitle ARG to20% of all HII proceeds, and alleges30% if Cyberlux sells directly without a prime. These are settlement positions; legal effect of the marking and asserted modification are not decided here.supportsThe demand’s universal20%HII-proceeds theory is broader than the written20%GSA-discount reseller mechanics. Messages provide compensation/channel and quota context, but exact opportunity registration, agreed scope and the signed-writing clause still need reconciliation.
Specifically named source propositions support the bounded distinction or question.
Counsel says it reviewed the HII settlement under an NDA and reports initial38,700,600 and expected25,795,303.38. It calculates20% initial7,740,120,20months8%interest1,032,016,20%expected5,159,060.68 and subtotal13,931,196.68. The underlying settlement and bank receipts are not appended; expected proceeds are not paid proceeds.supportsDo the appended exhibits establish the entire15,277,634.18 demand as owed?
Specifically named source propositions support the bounded distinction or question.
Counsel says it reviewed the HII settlement under an NDA and reports initial38,700,600 and expected25,795,303.38. It calculates20% initial7,740,120,20months8%interest1,032,016,20%expected5,159,060.68 and subtotal13,931,196.68. The underlying settlement and bank receipts are not appended; expected proceeds are not paid proceeds.supportsWhat full dated message chain, DOR registration, modification evidence and payment records establish ARG’s entitlement and applicable percentage on the HII settlement?
Specifically named source propositions support the bounded distinction or question.
Section4 gives ARG20% discount off GSA pricing, with ARG securing orders and paying Cyberlux80% of GSA invoice pricing; net30 shipment terms and expected2million annual sales follow. Section5 requires dealer-of-record email details tosales@ andMichaelPorter@, prior competing registration exception, and Cyberlux48-hour confirmation. This written reseller mechanism differs from counsel’s asserted universal proceeds share.supportsThe demand’s universal20%HII-proceeds theory is broader than the written20%GSA-discount reseller mechanics. Messages provide compensation/channel and quota context, but exact opportunity registration, agreed scope and the signed-writing clause still need reconciliation.
Specifically named source propositions support the bounded distinction or question.
Another Mark Schmidt screenshot requests a DDTC code and discusses Fairwinds contact Paul Nurkkala/ Matthew Jones, possible hundreds of drones monthly and avoiding Global channel conflict. It says intent to involve the interlocutor in all Model-Kx sales. Embedded pricing table showsMSRP18,750;Global Ordnance3,750(20%);CYBLprice15,000;Anthony3,750(20%);J&L375(2%);CYBLcost5,500;CYBLmargin5,375(29%). It documents proposed pricing/channel discussion, not a Government award or measured realised margin.supportsWhat full dated message chain, DOR registration, modification evidence and payment records establish ARG’s entitlement and applicable percentage on the HII settlement?
Specifically named source propositions support the bounded distinction or question.
The May20 letter to Charles Watts concerns Durham25CV004246-310 and is prominently labelled confidential, Rule408 settlement-only. Counsel argues a valid distributor agreement plus course of performance and communications entitle ARG to20% of all HII proceeds, and alleges30% if Cyberlux sells directly without a prime. These are settlement positions; legal effect of the marking and asserted modification are not decided here.supportsDo the appended exhibits establish the entire15,277,634.18 demand as owed?
Specifically named source propositions support the bounded distinction or question.
No agency,joint venture or partnership is created; obligations in Cyberlux’s name need consent. Entire-agreement clause requires signed writing for modification/waiver; NC law and Durham forum selected. Force majeure requires detailed notice and actual material impairment, extends performance day-for-day from notice, and excludes financial condition or negligence.supportsWhat full dated message chain, DOR registration, modification evidence and payment records establish ARG’s entitlement and applicable percentage on the HII settlement?
Specifically named source propositions support the bounded distinction or question.
Demand adds projected two-year15% annual growth losses: QuickSilver Analytics2.5million→3,306,250 loss806,250; Thin Air Gear65% stake675,000→892,687.50 loss217,687.50; Domestic Fabrics and Blankets1million→1,322,500 loss322,500. Claimed consequential total1,346,437.50 produces demand15,277,634.18. Valuations,15%growth,foreseeability and causation are asserted modelling inputs, not proved lost transactions.supportsWhat acquisition agreements, finance commitments, valuations and business projections support the claimed15%growth and breach-caused losses?
Specifically named source propositions support the bounded distinction or question.
Signal screenshot labelled Mark Schmidt includes a partly cropped forwarded discussion of US-funded Ukraine purchases, uncertain FMS/DLA/TLS vehicles and anticipated OEM inquiries. Mark states9800starting price,no go-direct bypass, then listscost4700,CYBL2000,ARG20%1340,total8040,splitprofit1760,total9800,resultingCYBL2880/ARG2220. ARG2220 is about22.65%of9800, not a self-evident universal30%ofgross provision.supportsDo the appended exhibits establish the entire15,277,634.18 demand as owed?
Specifically named source propositions support the bounded distinction or question.
ExhibitC shows outgoing October1 and24,2023 messages and November14/16 requests to revisit a letter-of-credit idea, November20 travel/contact request and partly cropped November22 Thanksgiving greeting. No incoming reply, commitment to provide credit, acquisition terms or growth forecast appears. Thus the screenshot supports requests being made, not the entire consequential-damages causal chain.supportsDo the appended exhibits establish the entire15,277,634.18 demand as owed?
Specifically named source propositions support the bounded distinction or question.
Signal screenshot labelled Mark Schmidt includes a partly cropped forwarded discussion of US-funded Ukraine purchases, uncertain FMS/DLA/TLS vehicles and anticipated OEM inquiries. Mark states9800starting price,no go-direct bypass, then listscost4700,CYBL2000,ARG20%1340,total8040,splitprofit1760,total9800,resultingCYBL2880/ARG2220. ARG2220 is about22.65%of9800, not a self-evident universal30%ofgross provision.supportsWhat full dated message chain, DOR registration, modification evidence and payment records establish ARG’s entitlement and applicable percentage on the HII settlement?
Specifically named source propositions support the bounded distinction or question.
Undated iMessage screenshots headed Mark show the outgoing participant questioning the45-day forecast in light of6–12-month government sales. Mark calls it like the quota aspirational rather than cut-and-dry, offers adjustment, and both discuss an understanding. Outgoing participant says he will sign and send DOR; Mark says copy Porter. The screenshots do not themselves establish a later registered opportunity or formal modification.supportsThe demand’s universal20%HII-proceeds theory is broader than the written20%GSA-discount reseller mechanics. Messages provide compensation/channel and quota context, but exact opportunity registration, agreed scope and the signed-writing clause still need reconciliation.
Specifically named source propositions support the bounded distinction or question.
WEIGH
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