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Q3 Shareholder Letter

Dear Cyberlux Community,

The Cyberlux team has been on a tremendous revenue and net income trajectory over the last eighteen months, literally up and to the right. We have transformed the Company into a global growth platform with business interests across North America, South America and Europe.  Our UAS, DPS, ITS and ALS Business Units have all contributed significantly to our month-over-month, quarter-over-quarter, and year-over-year growth.

Let’s take a moment to review what has transpired during this time: 

-Since June 2021, our share price has increased 8X, even with the current $0.012 share price, which we believe is very much undervalued given the near-term future.

-We’ve launched four business units focused on the Defense, Software and Infrastructure industries. -We’ve grown Revenue to a cumulative $31M as of 09/30/2022, with the year-to-date September for 2022 as $23.3M versus $367K for 2021. -We’ve transformed our Net Income and Cash Flow, with year-to-date September Net Income growth of $1.9M year-over-year and year-to-date Cash Flow growth of $1.6M year-over-year. -We’ve grown our assets by $12M year-over-year, from $0.9M to $13M. -We’ve raised over $6M dollars with RB Capital partners and our early Operation Alpha investors team who have helped us sustain our growth rate and saw the potential back in June of 2021. The Operation Alpha investors team helped us with the initial thrust during the summer of 2021 which helped us gain the momentum to build a robust foundation for a very strong FY 2022 and breakout 2023.

-By far, Q3 2022 was clearly the Unmanned Aircraft Systems quarter. We can’t say strongly enough how important the last four months have been for the future of Cyberlux Corporation.

-We’ve closed the committed revenue for 2022 and expect to overachieve our Q4 execution, and we expect to update the 2023 outlook soon, once we are cleared to disclose the scope of our Cyberlux Defense business going forward.

-While maintaining the Outstanding Share count in the 5B range over the last year, we’ve built a revenue pipeline of over $150M for 2023, from less than $10M in 2021, which we’ll be disclosing additional details in upcoming Cyberlux Defense communication.

We have also had typical issues associated with rapid growth, including resource scaling, frustrating administration issues, the ongoing discussions we’ve had with OTCM regarding formatting requirements and our disclosure levels. As a company, our genetics guide us to disclose as little as possible, with our Defense Industry posture, the end-users we serve, and the type of rapid growth we’ve experienced.  In the Q3 2022 filing, we have disclosed in greater detail the share table and control people involved rather than the proxy representations as we have provided in the past, including our Operation Alpha investor team who truly fueled our Operation Alpha launch with early investments in Cyberlux in June of 2021. For reference since we have not mentioned this recently, the Cyberlux Operation Alpha plan has three top priorities: (1) drive growth through aggressive business development, acquisitions and joint ventures; (2) address new target markets with Cyberlux products and technology capabilities; and (3) accelerate business growth with new products, new projects and new strategic IP development.

I would also like to also emphasize that the past few quarters have also been physically dangerous for our team while we’ve operated in the blackout environment we now serve. While we typically strive to operate on a low information and classified activity basis, and generally act in stealth mode, during the last eighteen months, we’ve grown the company from literally zero revenues in Q1 2021 to $31M in cumulative revenue through Q3 2022, with only a $6M investment into the company – results I am very proud of.

As you will see in our Q3 results, we directed $3.9M in cash flow into our Research & Development in order to capture the opportunities we identified in our UAS business unit. This R & D investment was critical but also required tactical cash flow re-allocation as a higher priority over Q3 2022 share buybacks. Because of this UAS activity and the commitment across the entire Cyberlux team, we have delivered for our shareholders and have bookings of nearly $150M as a result of our last 6 months of activities. We have achieved all of this while maintaining an Outstanding Share range of 5B shares, while also removing 1.2B shares in potential dilution (700M phantom shares and 420M Management shares), and we fully expect to execute our full buyback plan during 2023.

As you know, we are on a mission to build a global enterprise, now with the broader scope of the Cyberlux Defense opportunities. We are trailblazers with our technology and product innovation, and we are truly harnessing the future!

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