Cyberlux Corporation Q&A #5 – 01/09/2022

We look forward to answering any and all questions our shareholders may have.

You can send in future questions via email to: ir_cybl@cyberlux.com

1. Is the strategic IP still being disclosed at year-end?

We achieved our 2021 Strategic IP objectives through our internal development work, our Partners and through our acquisitions, across all four business units, most notably within our UAS unit. With significant discussions between Management and Partners, we concluded that certain details may be disclosed once our collective Strategic IP is fully protected. Our work to harness and monetize these developments into shareholder value is fully underway, and further details can be expected as our new offerings are introduced.

We have some specific targets for each Quarter as part of our 2022 Roadmap, and we expect to achieve these and disclose the developments in line with our Partners and our need to protect long-term shareholder value.

2. In the Q & A you mentioned that the dilution we’ve seen recently has been for acquisitions that are further in the pipeline. What is the timeline for the closing & announcements of those acquisitions? Will there be transparency in showing the details of the previous acquisitions in Q4 filings? (Price paid, # of shares, etc?)

We are aggressively working on our acquisition pipeline as detailed in the 2022 Roadmap, and we are currently pursuing acquisitions over the full year horizon. As our Roadmap shows, we have important milestones over the next four quarters, and we will continue to disclose the result with as much transparency as we can provide without impacting our business confidentiality and our competitive advantages.

As you have seen from our previous disclosures, our acquisition deal structure typically includes a cash earnout, a stock component and incentive shares with a share price objective that we set with our new management partners. We disclose deal terms where it won’t disrupt our ability to conduct business or make future negotiations unnecessarily complex.

We had fantastic execution of our Operation Alpha plan by any measure during 2021 and we are off to a fast start in 2022 as well. We have rapidly transformed the company into an Advanced Technology Platform company, with four operational business units – FlightEye Unmanned Aircraft Systems Solutions, Advanced Lighting Solutions, Infrastructure Technology Solutions and Infrastructure Software Solutions – now addressing global markets of over $400 billion in annual opportunity.

3. The last update to the Share Structure on OTCMarkets.com was on 12/9/21. In it, there were 5,699,417,345 shares outstanding. Once the Phantom shares are removed, we will be at 5B O/S, not including shares that have been added since 12/9. Do you plan on holding the O/S to 5.5B and under? And have there been additional shares entered since 12/9? Are we still looking at potential dilution of nearly 1B shares?

As we said in the October Shareholder Letter, we plan to hold the Outstanding Shares to 6B with what we see in the acquisition and growth pipeline. This would only change if we can accelerate growth in some non-linear fashion that would also deliver non-linear shareholder value.

As we said in the brief Q&A video released on 01/06/2022, for every 100 million shares issued to accelerate our business growth, we have added $10 million – $20 million to the Company’s expected revenue growth, once fully realized over the next 24 months. As you’ve seen, we have initially increased our 2022 guidance to $44.8 million in revenue. Since Operation Alpha launched, we have issued 618 million shares, a small 7% of the Authorized Shares, which will grow to $120+ million in annual revenue.

With the pipeline in front of us, we expect to drive our revenue to over $220 million as we’ve forecasted within the next 36 months. We expect to generate at least $100 million in earnings with at least a 20 multiple (a blended industry multiple driven by UAS and SaaS). This is how you build a $2 billion dollar valuation company.

4. Have the NYC follow-up meetings with the Investment bank taken place? Is the aggressive strategy still on pace to be implemented and disclosed for shareholders in early January ’22? Any progress on Institutional outreach?

We have been working diligently with three investment banking partners and have been supporting the institutional outreach since our last meetings in NYC in December. This business matter is one we can’t disclose much more on during the process. We are headed back to NYC for meetings in two weeks.

5. As we’ve seen, with the larger share structure, CYBL has been prone to heavy shorting due to the number of available shares. What will be the strategy to help circumvent this type of activity if any?

Overall, the best action we as the CYBL company can take is to continue to execute our plans and achieve the results as we communicate to the market. Like all our longer-term shareholders, we take the shorting activity very seriously, but we are limited in the ways we can address shorting directly. We have addressed this in several prior Q&A videos and offered some individual actions that can be taken. We do believe our plans and our demonstrated track record of execution will ultimately win, with significant growth in shareholder value.

6. Are the DoD Contracts that were going to be publicly disclosable still on pace for happening?

Yes, we anticipate a busy Q1 and we are continuing with the contracting process as required. We will update when appropriate.

7. The overall trade volume of Cyberlux daily has been relatively low over the past few months. Do you foresee some PR’s forthcoming that will bring additional investors into the mix?

As you see in our 2022 Roadmap, we have an aggressive plan and we expect to have ongoing news in 2022 to fuel market growth. Based on our 2021 performance and our fast start to 2022, we expect 2022 to be a great year. We also anticipate new institutional support as the year continues as well.

8. Have you had discussions with the investment banks recommended auditors for the OTCQb uplisting or do you see Cyberlux going in a different direction in order to obtain NASDAQ/NYSE uplisting? (I know there were 3-4 paths mentioned in the Q & A)

At this point, we can say that we have at least 3 paths that we are considering, where the ultimate decision will be based on what is best for our shareholders and the growth of Cyberlux. We’ll have more information to share when appropriate, but certainly in the course of Q1 activity.

9. On the IR Deck, there are mentions of Wolfspeed Strategic IP as well as L3 Harris Strategic IP in Q3 & Q4 of 2021. Will there be any additional details released on those ventures? Is there a possibility of a joint PR from those companies with Cyberlux confirming the relationship?

We did achieve our Strategic IP objectives for 2021 and we have significant, on-going discussions between Management and Partners on what to implement and when, what to disclose and when. We are very focused on monetizing these developments so that the full value of our IP translates into strategic shareholder value as well. For now, Management and Partners have concluded that certain details may be disclosed once our collective Strategic IP is completely protected. You can expect further details as our new offerings are disclosed, including Partner announcements when appropriate.

10. On Dec 2, CyberluxC tweeted “New Strategic IP Disclosure”. Is that an additional Strategic IP partner, on top of the two aforementioned? Or a confirmation from one/both?

We were referencing our 2021 Strategic IP objectives being achieved through our internal development work with Partners as disclosed. As noted, Management and Partners have concluded that certain details may be disclosed once our collective Strategic IP is fully protected. You can expect further disclosures of Partners and details as our new offerings when announced as appropriate.

11. Can you confirm that Cyberlux does currently have ongoing contracts/PO’s with the Department of Defense, National Guard, Marine Corps, etc?

As we have disclosed previously, public contracts we will disclose and anticipate doing so throughout 2022. Contracts we can’t disclose, we don’t disclose, but you will see the results in our financials.

12. How is the aggressive strategy with the “Major” NYC Investment bank coming along? Are we still on pace for an early January implementation? Have there been additional Institutional Investors that have been in discussion?

We have been working diligently with three investment banking partners and we can say there are least three paths, ranging from conservative to aggressive, that we are considering. We have certain catalysts we expect to confirm the best path for our shareholders and our shareholder value creation, as well as what is best for the growth of Cyberlux. We are headed back to NYC for meetings in two weeks. We’ll have more information to share as soon as it is appropriate.

13. Has Mr. Goodman been able to consult on the aggressive strategy with the Investment bank? Does he, based on his prior experience, believe in Cyberlux’s ability to uplist to the NASDAQ or NYSE? What, if any, changes does he see necessary in order to meet that objective (share structure, sales/revenue, partnerships, etc)?

As you saw during our Management Interlock 10 days ago, Mr. Goodman is very involved and has been a fantastic addition to the Board as well as a member of our extended Management team. We will keep our shareholders up to date as appropriate without compromising our plans. While the details of our plans are confidential, shareholders can be assured Mr. Goodman is assisting Cyberlux as we achieve breakthrough velocity in 2022.

14. Is this true? Both of your spokespeople from the Q&A are saying that you plan to sell Bitcoin to the grid? Is this accurate? If not, I feel you are misleading shareholders by not correcting both of your spokespersons…

First, our Company spokespeople are from our IR team (The CYBL Team) and please feel free to reach out to us at ir_cybl@cyberlux.com as needed. Second, the Twitter comments you are referring to were certainly in the spirit of what we are planning, and we appreciate the recognition of the shareholder value we expect to deliver with this initiative. What Mr. Zuluaga stated is we plan to have partnerships to both sell energy to the Colombian grid, which is in certification now, and sell energy to a partner who is already engaged in Bitcoin mining. We’ll share more on this as appropriate.

15. Has RB Capital purchased or been issued or plan to be issued any shares in Q4 2021 and at what conversion price per share? Will the 12/31/2021 report show any share issuances to RB Capital or RB Capital be included in any of the issuances in this section of the annual report?

Along with the announcement of RB Capital’s debt financing, RB Capital published the key terms of the funding relationship which showed the debt agreement and the conversion share price of $0.25. This is the long-term relationship we have with RB Capital, and we look forward to their support going forward. Of course, we want to drive our business forward to a $0.25 share price as rapidly as possible so the debt can convert to equity, so our objectives are aligned. We will be including the $4.5 million in convertible debt with the $0.25 per share conversion price as we publish our next financial reports.

As stated previously, the small level of share expansion we’ve had, 7% of our Authorized Shares, are all related to the acquisitions we have made or have in the pipeline, including management incentives. We have an exciting plan for 2022 and look forward to sharing more information when appropriate.

16. Hi there, been an investor for quite some time now, and looking forward to your upcoming Q&A! It may be too late to add a question, or perhaps it’s already being addressed, but can you update us on your plans to uplist/acquire institutional investors?

Since our last meetings in December in NYC, we have been working on institutional outreach and developing plans with three investment banking partners. While we are very transparent, this is a business matter where we can’t disclose much more during the process. We are scheduled to be back in NYC for meetings in two weeks.

17. I can see the company growing fast, any chance to having NASDAQ talk by end of the Year or 2023? Keep up the great work, 100+ million revenue surprise in 2022?

There is a very good chance! We can say that we have at least 3 paths that we are considering, where ultimately the decision will be based on what is best for our shareholders and the growth of Cyberlux. We’ll have more information to share when appropriate during Q1. And we are working non-stop to accelerate the business revenue as rapidly as possible!

18. What reassurances can you provide to shareholders who continually see your stock prices continue to fall, even after good PR & news?

Like most of our shareholders, we are very aware and frustrated by the price action we’ve seen in the last 6 to 8 weeks. We know the shareholder value we are generating will ultimately be represented in our share price, so we remain solely focused on driving the business forward as fast as possible. We have an aggressive 2022 Roadmap and we expect to fuel market growth in 2022 with ongoing news as we achieve new milestones.

19. Do you plan on diluting for all of these upcoming acquisitions, and if so, how much?

20. HI; As an average shareholder I am concerned to see the share price dropping amidst a constant barrage of good news. Are these frequent acquisitions having a negative impact on shareholder value due to newly issued shares?

Like most of our shareholders, we monitor price action each day and we have been very frustrated by what we’ve seen in the last 6 to 8 weeks. We are focused 24/7 on driving the business forward as fast as possible, with our aggressive 2022 Roadmap and ongoing milestones. In our October Shareholder Letter, we stated that we expect the Outstanding Shares to range to 6B with what we see in the acquisition and growth pipeline. This would only change if we can accelerate growth in some non-linear fashion that would also deliver non-linear shareholder value. We have already transformed the company into an Advanced Technology Platform company, with four operational business units – FlightEye Unmanned Aircraft Systems Solutions, Advanced Lighting Solutions, Infrastructure Technology Solutions and Infrastructure Software Solutions – now addressing global markets of over $400 billion in annual opportunity. Ultimately, we know the shareholder value we are creating will be represented in our share price.

21. What’s the plan to address the outstanding shares? Will CYBL be buying back shares?

We continue to evaluate share buyback plans, but this has not been the best use of capital in the last 6 months. We continue to have our finance team monitor our internal metrics for when this would be a meaningful action. We will keep our shareholders informed if and when our metrics support a buyback plan.

22. Would you be looking to include Iotex blockchain in your equipment to utilize the security of blockchain? They have already made real world applicable/ blockchain utilizing hardware and I think it would be great for any equipment that you’d want to secure ie. Military equipment.

We can’t disclose much yet regarding this area and other IoT blockchain implementations. We can say this is an area we have fundamental technical expertise in dating back to the origins of IoT.

23. Will you be looking into partnering with ALGORAND blockchain? They also have a drone racing team.

So far, we are only considering Bitcoin mining partners, but we are also evaluating other blockchain ecosystems and mining economics. We have asked the team to add ALGORAND to the evaluation list. We’ll share more if appropriate.

24. To Cyberlux team. Congratulations on your achievements to date. I know that you stated that dividends are in the plans for some time in the future, but can you provide more information on your plans?

We truly value our long-term shareholders and we continue to evaluate all practical plans to increase shareholder value. We will have more to say about our plans over the next few months.

25. Hello CYBL team, I am invested pretty heavily in this stock and have some questions for you… I would like to know when any of the big names you are working with together on strategic IP will acknowledge your working relationship. I am not asking because this may result in a bump in your stock price temporarily as Mark has stated during a Q and A video. I am asking this because as a company trading on the OTC you have to go above and beyond to prove that what you as a company claim can be verified by the partners being mentioned. Not only will this shake any potential doubts of people who are unwillingly to invest due to speculation but this will open the eyes of countless more investors that may have yet to hear about your company and what you do. People may be wondering if you truly are the real deal.

As reported, we achieved our 2021 Strategic IP objectives through our internal development work, our Partners and through our acquisitions, across all four business units, most notably within our UAS unit. After significant on-going discussions between Management and Partners, we decided that certain Strategic IP details may be disclosed once our collective strategic developments are fully protected. Our work to harness and monetize these developments into shareholder value is fully underway, and further details can be expected as our new offerings are introduced. We have specific targets for the 2022 Roadmap, and we expect to achieve these and disclose the Strategic IP developments in line with our Partners and our need to protect long-term shareholder value. Ultimately, we know the value of our Strategic IP will be represented in the shareholder value and share price of CYBL.

26. Good afternoon. I have a few questions below:
Will there be a shareholders meeting and board of directors meeting Q1 of 2022?
Will the audit of your financials be completed before the end of Q1 2022?
When can we expect to hear a few words from your new hires i.e Cheri Nolan?

We have ongoing Board of Directors meetings, and those will occur as our business requires.

We are currently considering the logistics and timing for a shareholder meeting. More as we have information.

We expect to have auditors in place for the Q2 reporting, which will provide enough time to cost-effectively move forward. We’ll share more as possible.

As you saw with the recent Management Interlock, we are very engaged as a management team. We intend to have a series of YouTube videos introducing the extended team – we just ran out of time during the December meeting. We’ll have more information on this as we get schedules set during Q1!

27. Good afternoon. Stellar job on the updated revenue guidance for 2022. Will this help you in leveraging talks with investment banks in NY?
Also do you have any updates on your search for ibanks you’re willing to share via Twitter before the holidays?

As we’ve noted, we have been working diligently with three investment banking partners and supporting the much-needed institutional outreach since our last meetings in NYC in December. As you would expect, the growth we have experienced, including our new revenue guidance for 2022, is very exciting to all our partners involved. With this i-banking business matter, we can’t disclose much during the process, but we are headed back to NYC for meetings in two weeks.

28. Thank you for all your hard work and dedication to the company! I am excited to see what CYBL has in store for the future. Here are my main questions.

How does CYBL plan to uplist without conducting a RS? It seems like the market cap is already pretty high compared with the revenue. Are more share buy backs an option in the near future? How will you get more institutional investors? Thank you!

Since the November NYC trip, we have honed down our investment banking partner list to three groups. We also have the foundation of an uplisting strategy with at least three pathways that will maximize shareholder value. We will have more to share as appropriate. From a core business standpoint, there are a number of initiatives in the greater NYC area but we can’t disclose anything more at this time.

29. Can you provide insight on the benefits gained from the recent Infrastructure Bill?

To date, we are pursuing $47m in rural broadband infrastructure initiatives across six states and 10 municipal opportunities, including street lighting infrastructure, state and local law enforcement emergency lighting, and SWAT team tactical support including lighting and UAS requirements.

30. You mentioned giving back to military veterans. Can you share some details on your plans? Is there anything we (shareholders) can do to assist?

We are working with the Special Operations Warrior Foundation to donate the proceeds of our gear sales to the Foundation. As we’ve noted before, we are not a merchandising company but having company/brand awareness is important. We expect to have co-branded gear soon and introduce the relationship as soon as possible.

31. Are there plans to reduce the outstanding shares this month? What would prevent you from initiating another share reduction?

We continue to evaluate the best use of capital for outstanding share reduction actions, such as a share buyback plan. We also have our team evaluating reducing the AS further from 8.75B to something lower, based on business opportunities and our longer-term business strategy.

32. Does Cyberlux have plans to merge with another company? If so, can you provide some details?

We have a very exciting plan for 2022 as seen in our Roadmap, but merging with another company is not currently part of the plan. If we have any changes of this nature to our plan, we will evaluate and disclose any information when appropriate. There is nothing to disclose at this time.

33. What is Cyberlux doing to increase its brand awareness?

Most of our efforts are through various social media channels and we started an initiative for new institutional investor outreach in November and December. We are having a very good response despite the short-selling pressure we’ve had recently, and we should see further support in Q1.

34. Would you consider hiring shareholders?

Of course. We want the best candidate for the job and we are growing rapidly. Please send your resume to: jobs@cyberlux.com.

35. What details can you provide on the infrastructure opportunity and how soon before you believe you would find out if you win the contract? What is Rural Broadband and why do you believe Cyberlux has the competitive advantage over competition?

Our FBD team has decades of experience in the implementation of telecom infrastructure and we a have a competitive cost advantage, and we believe a market access advantage in certain states and circumstances. We are pursuing the opportunities as we’ve described, as both as a prime contractor and a subcontractor depending on the opportunity. In particular, the Rural Broadband opportunity is part of the infrastructure bill to bring high-speed internet access to rural communities across the United States. This is a very large opportunity, with over $1B in targeted funding.

36. I was wondering if there will be further dilution this year to pay for future acquisitions you guys are eyeing? Looking forward to hearing from you and wish you all the best with everything the company is working on.

As we said in the shareholder letter dated 10/22, we believe the limit will hold at 6B to accomplish what we have in the pipeline. Nothing has changed and we expect organic growth to be the driving factor for our growth in 2022.

37. Can you please address dilution and outstanding shares, as well as the plan to get to nasdaq with so many shares. I am fine with dilution for acquisitions but can you please let us know the plan on that regard with respect to total number of shares.

38. Will the 45 million dollars be shown on Q4 2021 or Q1 2021 financial filings?

We expect the six states $47M opportunity to fund during 2022 and will be recognized in the appropriate quarter. We will evaluate the best use of these profits and invest accordingly, which could include further investment in our Company’s growth as well funding a share buyback plan.

39. Will the YouTube be used for business updates more often now?

Yes, we plan on publishing a calendar for shareholder communication including YouTube broadcasts. We will have more on this soon.

40. Are there any ongoing concerns?

We have the typical business ongoing concerns: Economic concerns, Policy concerns, Regulatory concerns. Nothing out of the normal concerns.

41. Regarding the new convertible debt acquired, before October 2023, the company expects the share to hit 25 cents, I assume that it will hit that price earlier leaving room for just-in-case scenarios. Is there estimate of stock price growth?

We believe this was an important source of financing for the Company and we expect to see growth in share price as we see strong growth in revenue and earnings. We don’t predict share price given all the market factors we have no control over. All we can do is drive the Company fundamentals up as fast and optimally as possible.

42. If the company reaches management estimates, will dividends become a part of the equity structure?

We would like to see some sort of dividend for our long-term shareholders in the future. We believe this is a part of growing the Company over the long-term.

43. Are you planning any share buybacks?

We continue to evaluate the best use of capital for outstanding share reduction actions, such as a share buyback plan.

44. If you had a crystal ball, where do you see the company in 7 years…

We see Cyberlux Corporation as a leading advanced technology platform company leading digital transformation across the industries we serve, growing market share in our chosen markets, and creating the best possible value for our shareholders. We see Cyberlux emerging as a ‘hardware/software Palantir-like’ company, serving a $700B global market.

45. Are you interested in funding at this time?

We are focused on execution of our plans and 2022 Roadmap. We continuously evaluate business opportunities, which led us to RB Capital and their financing support. Right now, we are executing the 2022 business plan and focused on selecting the best investment banking partners for the future.

46. Are there plans to do a reverse split to increase the share price to uplist to the NASDAQ?

No, we have the foundation of an uplisting strategy with at least three pathways that will maximize shareholder value during the uplisting. We will have more to share as appropriate.

47. There are rumors on Twitter that Cyberlux is running rampant with toxic debt, and that you are not being truthful regarding the retired shares. Can you address this once and for all please?

We have no toxic debt now, despite what some anonymous short selling social media accounts are saying. In fact, one of the catalysts for our share price growth has been the removal of the toxic debt. Unfortunately, we’ve also had over 50% of our trading volume be from short sellers over the last 8 weeks as we’ve discussed in prior videos.

48. Can you guys do a independent audit of the company?

We will be audited in 2022, most likely by the Q2 timeframe.

49. For the solar generation project in Colombia, do you already have a buyer for whatever energy you produce, and will it be tied into the grid, or go to a private company? Will this solar be backed by battery storage as well?

We are focused with this first 30-hectare project on power generation and the energy delivery to the grid and to a selected Bitcoin mining solution provider, each with shared revenue streams. The exact partners are still under negotiation, but this will be a public / private project as we go forward in either case. We will have battery backup, similar to what we do today, scaled to meet the needs of this facility. We offer a solar power generation solution and a battery storage solution to DoD customers. We will use that technology to scale to the 20MW facility.