The World's Only
Flashlight Industry News Site

Magnalight Claims Over $15,000 in
NSF Checks from Cyberlux

"Potential Cyberlux vendors and customers should be aware of how these folks operate,"

Larson Electronics Magnalight Press Release - 6/8/2009

Click photo to enlarge

Larson Magnalight IR LED Lighting

Larson Magnalight IR LED Lighting

DALLAS, Tx. - Larson Electronics Magnalight announced that Cyberlux Corporation, (OTC Bulletin Board: CYBL), a customer that produces LED lighting products based on dated technology is more than 180 days past due on $15,465.52 for components that they purchased from Larson Electronics' and resold to US National Guard. The most recent checks passed recently included check 4865 ($1000), 4866 ($1000) and check 1465 ($1465.52).

"When they were 60 days past due they issued a stack of post dated checks, to be cashed at weekly intervals," stated Rob Bresnahan, President of Larson Electronics. Then they would send emails each week asking us not to cash the checks. Now when checks dated for February, March and April are deposited they come back NSF. Jeanette Lord at Cyberlux repeatedly indicated that replacements will be sent out, but we haven't seen them in over a month now. Mark Schmidt, CEO at Cyberlux, stated on 1/19/09.

"We do expect our cash flow to restart this week which will allow us to retire the oldest 11/19 invoice this week and the 12/01 invoice next week. The balance should be cleaned up by the first week in February, if not sooner." Richard Brown, who is responsible for finance and investor relations, called the following day to say the CEO's offer wouldn't be possible and offered to pay us off in a schedule that stretched out for a year. "I indicated that we were not a financing operation. Eventually, he put together a schedule that ended in May. Ultimately, he shipped us $16,000 of post dated NSF checks."

The Seattle Times reported that Cyberlux has the resources to chase earmarks and host fundraising dinners for Senator Elizabeth Dole and Representative David Price, but our recent attempts to get paid resulted in a Cyberlux response of, 'Please do not deposit any checks as they will be returned for insufficient funds.' The link below, however, shows the contribution commitment from Cyberlux management and board members exceeding $10,000. An October 2008 issue of the Seattle Times reported, "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.)"

Rob continued, "Apparently, in lieu of marketing or repeat customers, they have choosen to chase earmarks. They could have used that to pay off most of their debt to us."

Rob explained, "Sources associated with facilitating the sales of their LED light products to the military indicated that they had to come out of pocket to provide replacements to those military customers, given that the customers were underwhelmed by the product's performance for the price tag. In order to preserve their reputation with the military customers, they had to provide alternatives for free that were more in line with the customer's expectations. LED technology has come a long way in the last few years, both in price and performance. They are selling a 20 watt LED light on a tripod for more than $10,000 each. We sell a 24 watt model with a heavy duty tripod for about $500. We have models with 180 watts of LEDs on a collapsible, extendable tripod with wheels for under $3000. And were not the only ones. LED technology is changing monthly."

"Potential Cyberlux vendors and customers should be aware of how these folks operate," Rob concluded. "They did a few credit purchases with us to win confidence and then put in their purchase orders. We let our gaurd down, because we had their card on file. Once we realized there was a problem, we discovered that card was cancelled. We have since overhauled our credit policies. I am curious to see if Cyberlux's SEC filings actually show this debt on their balance sheet."

Search for other press releases from Magnalight

Current FlashlightNews Headlines