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Cyberlux Corporation Responds to Inaccurate Seattle Times Article
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Offline - 10/14/2008

"...the Seattle Times has published an article that wrongly identified (Cyberlux) the Company as receiving 'earmark' funds in the 2008 Department of Defense (DOD) budget and insinuated that the Company illegally raised funds for Senator Dole and Representative Price."

Despite reforms, Congress hides $3.5B in defense earmarks

Big bucks for little-known product

"One case in which Congress clearly broke its disclosure rule involves an $8 million earmark to buy a "portable illumination system." It turned out to be for Cyberlux, a tiny lighting company in Durham, N.C., that is struggling to survive.

"Cyberlux competes against corporate giants such as General Electric but advertises that its lights save energy and cost less than common household bulbs. Despite its efforts, the company barely sells any products to consumers.

"Cyberlux lost $9 million on sales of only $332,000 for the first six months of this year. Since its founding in 2000, Cyberlux has lost more than $50 million and the company has sunk deeply in the red. Its stock sells publicly for about a penny. Earlier this year, its independent auditor said in the company's financial statement that Cyberlux was in danger of failing.

"To stave off failure, Cyberlux has turned its attention to the military and to earmarks.

"In a December letter to shareholders, Cyberlux said: "After product demonstrations to aides in the Capitol building, they enthusiastically recommended budgetary provisions for the BrightEye to their respective Representatives and Senators who responded with a line item inclusion of $8 million."

"Thanks to the undisclosed earmark, the company announced in February that the Air Force had made a commitment to order $3.3 million of portable lighting products from Cyberlux, including one product on collapsible legs that looked much like its name, "Watchdog."

"Cyberlux's chief executive officer declined requests for an interview. The Times was not able to get confirmation of the order from the Air Force.

"Cyberlux hosted separate fundraisers in the spring for Rep. David Price, D-N.C., and Sen. Elizabeth Dole, R-N.C., and even posted solicitations on its company Web site, asking people to donate $500 to the lawmakers. The events raised $10,600 for the two.

"(Lawyers with expertise in campaign-finance laws say it's illegal for a company to assist in raising campaign donations from the public.)

"Through a spokesman, Dole said that her staff met with the company but that she did not ask for an earmark.

"Price serves on the powerful House Appropriations Committee. His staffers met with Cyberlux and contacted the defense subcommittee "to see if they are favorably inclined to the technology, to putting funding in the bill," said Price's chief of staff, Jean-Louise Beard.

"Even so, she said, they didn't consider those actions an earmark request.

"Cyberlux announced it was seeking $25 million in defense earmarks for 2009 and that it had 'submitted this forecast to its sponsorship in the House of Representatives and Senate.'"

Commenting, Mark D. Schmidt, Cyberlux president and chief executive officer, said:

"For me, the Seattle Times article was difficult to read because it paints a picture of Cyberlux Corporation that isn't consistent with reality. We are a small lighting technology business and we have developed fantastic products that are being used for the betterment of our country's active military and National Guard men and women. This article was surprising to say the least, and the points regarding the Company receiving DOD budget 'earmarks' and illegally raising funds for local congressional candidates were simply false. In particular, I'd like to make the following points:

1) Cyberlux is a small lighting technology business that has designed and commercially developed patented or patent pending lighting systems that are, we believe, the most advanced portable LED lighting systems available to the U.S. military.

2) In 2005, Cyberlux was selected over 25 other companies in a competitive selection held by the United States Air Force (USAF) Air Mobility Command's Battlelab. The USAF Battlelab was seeking a lighting system capable of providing perimeter security for its Raven Security Forces that had provided both bright white light and night-vision capabilities, and our WatchDog System met all project specifications and was recommended by the USAF. In 2006, Cyberlux was again selected by the USAF Battlelab to adopt its commercial technology to broad-based white light and night-vision compatible portable lighting systems. In September 2007, our BrightEye System met all project specifications and was recommended by the USAF.

3) Since 2005, Cyberlux has worked closely with various USAF commands, National Guard commands and other DOD units to identify requirements and pursue product deployment opportunities. We have invested time, money and effort in meeting the USAF needs for advanced portable lighting capability and have developed routes to market that will allow our products to reach U.S. military customers throughout the DOD.

4) Cyberlux Corporation received no earmarks. While Cyberlux is a leader in delivering USAF recommended lighting and actively assisted in identifying the broad existing need for advanced portable lighting technology to the House Appropriations Committee, the 2008 DOD budget funds were competitive funds, not Cyberlux funds, and it remained the responsibility of Cyberlux, and any other competitor, to sell our products to the USAF as part of the competitive bid process.

5) The Company performed multiple demonstrations and worked with various USAF commands over the past year to ensure our products met their specific needs. Despite our diligent work with the various USAF commands over multiple years, despite our products meeting unique, patented or patent-pending specifications and despite the fact that various USAF commands have identified specific requirements for our specific products, to date no new USAF contracts having been issued to Cyberlux Corporation and the competitive bid process has yet to conclude.

6) Regarding the congressional budget funding process, the House Appropriations Committee was transparent (see pages 114-116 of the House Report 110-434). The House Appropriations Committee inserted the 'portable illumination systems' funds into USAF Account # 012C as a 'national program' to compel and accelerate the necessary lighting technology transition across the DOD, beginning with the USAF program.

7) Regarding the spurious allegations concerning campaign fundraising, in consultation with the campaign staffs of both Senator Dole and Representative Price, the former Cyberlux CEO, other individuals and I contacted numerous North Carolinians about the opportunity to meet our local senator and congressman. It was an honor for everyone in attendance to meet both Senator Dole and Representative Price. The events were very much like a church potluck supper, despite the implication of the Seattle Times article.

8) Cyberlux did not solicit funds as a corporate entity. While the Dole and Price events were held at the Cyberlux headquarters, both were held after business hours. Given that Cyberlux is a public company, the Company determined that it should fully disclose this event to all shareholders. The Company never engaged in any fundraising.

Lastly, over the next several months I will comment further on our business direction for what we believe will be an exciting 2009. Of course, the Company will continue to provide shareholders with any relevant information as it becomes germane, but the Company believes these false allegations by the Seattle Times should not be ignored," concluded Schmidt.

Posted on: Oct. 15, 2008 6:52pm,UTC
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Cyberlux Partners with Sacred Power Corporation to Deliver Solar Powered Lighting to DOD
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Companies Awarded Portable Solar Power Lighting Contract for Department of Defense Initiative

Last update: 9:23 a.m. EDT Oct. 31, 2008
Cyberlux Corporation
10:22am 10/31/2008

CYBL, a leading provider of LED lighting solutions, announced today that the company has entered into a product development, business development and product sales relationship with Sacred Power Corporation, a leading provider of renewable energy solutions. Sacred Power Corporation specializes in solar power solutions and provides innovative renewable energy technologies to the Department of Defense (DOD) and Federal government marketplace. Sacred Power, a Native American owned and operated 8(a) certified company, has significant government and military experience in the design and delivery of telecommunication, power generation and electrification projects. - more
Posted on: Oct. 31, 2008 2:43pm,UTC
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