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AW Harris Awh 2024 48085 Doc. 121037472

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DISTILLATES

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quotationattribution

Cyberlux does not dispute the $21,677.50 Bell Nunnally SDTX fee award.

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2 error, Berleth continues to intentionally use the total overstated amount in the Turnover Order to try and recover a windfall.2 Cyberlux has made hundreds of thousands of payments on the judgment. Indeed, Judgment Creditors acknowledged this in Mr. Walton’s letter dated May 15, 2025 letter correspondence to the Court, in which he stated: “The outstanding balance due and owed under the Amended Final Order and Judgment is, at minimum, $912,000, after accounting for any prior payments, credits, or offsets.”3 Mr. Walton is wrong. Cyberlux’s payments under the judgment to date have reduced the total payoff to $747,027.73.4 Judgment Creditors bear the burden to prove this is the incorrect amount due, and they have provided no such documentation to refute that amount. See Cadle Co. v. Int'l Bank of Commerce, No. 04-06-00456-CV, 2007 WL 752260, at *2 (Tex. App.—San Antonio Mar. 14, 2007, pet. denied). Credits and offsets must be applied to determine the amount of the sister-state judgment that is actually due and owing and before Berleth’s fee is determined. Any amounts received by Berleth in excess of the actual amount due and owing must be returned to Legalist, who advanced the now-acknowledged payment to Berleth. 2 Berleth’s position is that the Turnover Order permits him to recover a 33% fee if he recovers the total judgment. Berleth cannot collect the total judgment because of the significant payments Cyberlux made on the judgment before Berleth’s appointment. 3 Exhibit B. 4 Declaration of Schmidt with Payoff Ledger, attached as Exhibit C and C-1. UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

Cyberlux and Mark D. Schmidt object to the receiver’s report and proposed distribution in AWH cause2024-48085. The file is stamped12June2025

Cyberlux and Mark D. Schmidt object to the receiver’s report and proposed distribution in AWH cause2024-48085. The file is stamped12June2025 8:41AM, envelope101925092; counsel Alexander J. Pennetti signs for Thompson Coburn. The pleading asks for relief and is not the court’s disposition.

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1 CAUSE NO. 2024-48085 ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT OF § and SECURE COMMUNITY, LLC, § § Plaintiff/Judgment-Creditor § § v. § HARRIS COUNTY, TEXAS § CYBERLUX CORPORATION and § MARK D. SCHMIDT, Individually, § § Defendant/Judgment Debtors. § 129TH JUDICIAL DISTRICT CYBERLUX CORPORATION AND MARK D. SCHMIDT’S OBJECTIONS TO RECEIVER’S REPORT AND ORDER TO DISTRIBUTE FUNDS COME NOW, Cyberlux Corporation and Mark D. Schmidt (“Cyberlux”), and file their Objections Berleth’s Report and Order to Distribute Funds. In support thereof, Cyberlux respectfully shows: 1. Berleth Confirmed Receipt of the Wire Payment. On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.1 2. Berleth Now Holds Funds in Excess of the Judgment Balance. The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties’ underlying settlement agreement. Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied. Despite being informed about his 1 Exhibit A. 6/12/2025 8:41 AM Marilyn Burgess - District Clerk Harris County Envelope No. 101925092 By: Shanelle Taylor Filed: 6/12/2025 8:41 AM UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

Citing historical Preferred Ready Mix litigation and other grounds, Cyberlux asks to dissolve the receivership, recognise satisfaction, addr

Citing historical Preferred Ready Mix litigation and other grounds, Cyberlux asks to dissolve the receivership, recognise satisfaction, address fee objections and direct notice. The cited separate case does not itself establish misconduct in this matter, and the requested dissolution is not evidence dissolution occurred.

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9 Berleth will seek more excessive fees). Again, as this Court already held, Berleth’s limited role was to seek to satisfy an already-existing sister-state judgment. The sister-state judgment has been satisfied, so Berleth’s role must be terminated. 7. Berleth’s Current Conduct and Past Sanctions Illustrate that the Court Should Direct Berleth to Pay Funds to the Court’s Registry for the Protection of the Parties and Counsel Involved. Berleth’s actions from the date of his appointment to present raise grave concerns about his integrity and ability to act as a court-appointed neutral. While this matter was pending, the Fifth Circuit held that Berleth had exceeded his authority as Court-appointed receiver. Matter of Preferred Ready-Mix, L.L.C., No. 24-20158, 2024 WL 5252498, at *1 (5th Cir. Dec. 31, 2024). Berleth lost that appeal, which arose after the Southern District of Texas concluded that he had “effectively held the major assets of the debtor hostage.” If Berleth is willing to withhold tools and dump trucks (which he apparently did in Preferred Ready-Mix), there should be grave concerns that he will withhold the cash paid to his trust account. The Court should direct Berleth to deposit the entire wire payment to the Court’s registry for the benefit and protection of all interested. CONCLUSION Judgment Debtors have satisfied the entire judgment due to the overpayment made to Berleth. Berleth’s Report is deficient and cannot form the basis of an award of the fees sought by Berleth. The judgment amount is incorrect and must be corrected. The Court should dissolve the Receivership and mark the judgment satisfied. Then, the Court should set forth deadlines by which the documentation must be provided, allowing Cyberlux time to review and object to the documentation. Any order of the Court should require Berleth UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The signature certificate states service on11June; automated records show SENT12June at8:41:44AM with status asof9:04AM. Both date roles are

The signature certificate states service on11June; automated records show SENT12June at8:41:44AM with status asof9:04AM. Both date roles are preserved, and repeated contacts are not independent receipts or proof of reading. The twelve-page physical file does not contain all the referenced ExhibitsA–D.

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10 to notify all parties that the Receivership is dissolved. Cyberlux prays for all further relief to which it is entitled. Respectfully submitted, /s/ Alexander J. Pennetti Douglas S. Lang State Bar No. 11895500 Alexander J. Pennetti State Bar No. 24110208 THOMPSON COBURN LLP 2100 Ross Avenue, Suite 3200 Dallas, Texas 75201 Tel Phone: (972) 629-7100 Fax: (972) 629-7171 dlang@thompsoncoburn.com apennetti@thompsoncoburn.com Attorneys for Defendants Cyberlux Corporation and Mark D. Schmidt CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing instrument was served on all counsel pursuant to the Texas Rules of Civil Procedure on June 11, 2025. /s/ Alexander J. Pennetti UnofficialCopyOfficeofMarilynBurgessDistrictClerk Alexander J. Pennetti
claimallegation

Counsel states Berleth confirmed receipt of $3,083,639.75 on June11 and argues this exceeds proper satisfaction after offsets. He compares W

Counsel states Berleth confirmed receipt of $3,083,639.75 on June11 and argues this exceeds proper satisfaction after offsets. He compares Walton’s May15 minimum $912,000 with Cyberlux’s June11 asserted $747,027.73 payoff. Actual credit allocation and a common as-of ledger are not reproduced in the pleading.

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1 CAUSE NO. 2024-48085 ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT OF § and SECURE COMMUNITY, LLC, § § Plaintiff/Judgment-Creditor § § v. § HARRIS COUNTY, TEXAS § CYBERLUX CORPORATION and § MARK D. SCHMIDT, Individually, § § Defendant/Judgment Debtors. § 129TH JUDICIAL DISTRICT CYBERLUX CORPORATION AND MARK D. SCHMIDT’S OBJECTIONS TO RECEIVER’S REPORT AND ORDER TO DISTRIBUTE FUNDS COME NOW, Cyberlux Corporation and Mark D. Schmidt (“Cyberlux”), and file their Objections Berleth’s Report and Order to Distribute Funds. In support thereof, Cyberlux respectfully shows: 1. Berleth Confirmed Receipt of the Wire Payment. On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.1 2. Berleth Now Holds Funds in Excess of the Judgment Balance. The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties’ underlying settlement agreement. Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied. Despite being informed about his 1 Exhibit A. 6/12/2025 8:41 AM Marilyn Burgess - District Clerk Harris County Envelope No. 101925092 By: Shanelle Taylor Filed: 6/12/2025 8:41 AM UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

Cyberlux attributes the wire advance to Legalist and requests return of excess to Legalist. This is a party position about funding and resti

Cyberlux attributes the wire advance to Legalist and requests return of excess to Legalist. This is a party position about funding and restitution; the pleading alone is not the originating-account or underlying client-funding record.

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2 error, Berleth continues to intentionally use the total overstated amount in the Turnover Order to try and recover a windfall.2 Cyberlux has made hundreds of thousands of payments on the judgment. Indeed, Judgment Creditors acknowledged this in Mr. Walton’s letter dated May 15, 2025 letter correspondence to the Court, in which he stated: “The outstanding balance due and owed under the Amended Final Order and Judgment is, at minimum, $912,000, after accounting for any prior payments, credits, or offsets.”3 Mr. Walton is wrong. Cyberlux’s payments under the judgment to date have reduced the total payoff to $747,027.73.4 Judgment Creditors bear the burden to prove this is the incorrect amount due, and they have provided no such documentation to refute that amount. See Cadle Co. v. Int'l Bank of Commerce, No. 04-06-00456-CV, 2007 WL 752260, at *2 (Tex. App.—San Antonio Mar. 14, 2007, pet. denied). Credits and offsets must be applied to determine the amount of the sister-state judgment that is actually due and owing and before Berleth’s fee is determined. Any amounts received by Berleth in excess of the actual amount due and owing must be returned to Legalist, who advanced the now-acknowledged payment to Berleth. 2 Berleth’s position is that the Turnover Order permits him to recover a 33% fee if he recovers the total judgment. Berleth cannot collect the total judgment because of the significant payments Cyberlux made on the judgment before Berleth’s appointment. 3 Exhibit B. 4 Declaration of Schmidt with Payoff Ledger, attached as Exhibit C and C-1. UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The objection challenges lack of fee/time/expense proof, reasonableness and the proposed approximately $83,000 expenses, citing authorities

The objection challenges lack of fee/time/expense proof, reasonableness and the proposed approximately $83,000 expenses, citing authorities on fee review. It disputes Bell Nunnally and Vargo amounts in scope but expressly does not dispute the $21,677.50 Bell Nunnally fee award from the Southern District of Texas. Distinct fee categories must remain separate.

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2 error, Berleth continues to intentionally use the total overstated amount in the Turnover Order to try and recover a windfall.2 Cyberlux has made hundreds of thousands of payments on the judgment. Indeed, Judgment Creditors acknowledged this in Mr. Walton’s letter dated May 15, 2025 letter correspondence to the Court, in which he stated: “The outstanding balance due and owed under the Amended Final Order and Judgment is, at minimum, $912,000, after accounting for any prior payments, credits, or offsets.”3 Mr. Walton is wrong. Cyberlux’s payments under the judgment to date have reduced the total payoff to $747,027.73.4 Judgment Creditors bear the burden to prove this is the incorrect amount due, and they have provided no such documentation to refute that amount. See Cadle Co. v. Int'l Bank of Commerce, No. 04-06-00456-CV, 2007 WL 752260, at *2 (Tex. App.—San Antonio Mar. 14, 2007, pet. denied). Credits and offsets must be applied to determine the amount of the sister-state judgment that is actually due and owing and before Berleth’s fee is determined. Any amounts received by Berleth in excess of the actual amount due and owing must be returned to Legalist, who advanced the now-acknowledged payment to Berleth. 2 Berleth’s position is that the Turnover Order permits him to recover a 33% fee if he recovers the total judgment. Berleth cannot collect the total judgment because of the significant payments Cyberlux made on the judgment before Berleth’s appointment. 3 Exhibit B. 4 Declaration of Schmidt with Payoff Ledger, attached as Exhibit C and C-1. UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

Counsel contends a Section31.002 turnover receiver is confined to collection for the judgment parties and cannot use this appointment for a

Counsel contends a Section31.002 turnover receiver is confined to collection for the judgment parties and cannot use this appointment for a general third-party creditor roundup under Section64.001. Statements attributed to the June9 hearing support the argument as quoted, not a complete hearing transcript or ruling supplied here.

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4 Here, Berleth submitted nothing more than an amount for his fee and expenses. He provided no documentation to support his work. Without documentation supporting his work, including but not limited to hours spent, a description of the complexity and necessity of the work, Berleth cannot be awarded the fee he demands. The “wish list” of Berleth should be rejected out of hand, and it goes without saying this is also true for the ~$83k in accrued expenses that Berleth claims mounted in less than three weeks. Like with his own fees, Berleth must provide documentation to support the claims for post-judgment attorneys’ fees for the Bell Nunnally firm and the Vargo Law Firm. Berleth has not submitted invoices supporting the reasonableness and necessity of these fees. They cannot be awarded without those firms (or Berleth) providing documentation to support the requests, and, even if the Court were to give Berleth a second chance, Cyberlux must have the opportunity to object.5 In any event, the Court cannot award fees of the Caudle Law Firm, which Berleth states are from CL22-3882-4, without taking into account the necessary credits and offsets described herein. b. Even with Documentation, Berleth Cannot Recover Compensation or Expenses for Work Performed that is Unrelated to Collecting This Judgment. Berleth conceded at the June 9, 2025 hearing that much of his time spent was corralling third parties and creditors that are not parties to this judgment domestication action. As such, all of these acts by Berleth are outside the scope of his appointment under Texas Civil Practice & Remedies Code § 31.002(b)(3).6 Berleth was not appointed under 5 Cyberlux does not dispute that the Bell Nunnally firm is owed $21,677.50, representing an attorneys’ fees award rendered by the Southern District of Texas. 6 Turnover Order, at ¶ 8 (“A Receiver is necessary in this case pursuant to the Texas Turnover Statute . . .). UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The pleading reproduces Welter’s earlier table: $525,296.21 for AWH/Secure Community and $452,586.09 for StrikePoint, with a printed grand t

The pleading reproduces Welter’s earlier table: $525,296.21 for AWH/Secure Community and $452,586.09 for StrikePoint, with a printed grand total $977,882.31. The two subtotals sum to $977,882.30, a one-cent discrepancy. The historic August2024 balance and May/June2025 balances have different dates and cannot be treated as a same-time contradiction without intervening credits and accruals.

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6 Judgment Creditors have made representations to courts across the country about the balance due. As discussed herein, Mr. Walton’s May 15, 2025 letter states that “at minimum, $912,000, after accounting for any prior payments, credits, or offsets.”11 On September 3, 2024, Atlantic Wave’s Managing Director, Will Welter, submitted a declaration to the Southern District of California, that the “Grand Total Owed” by Cyberlux to Judgment Creditors was $977,882.31.12 Indeed, Mr. Welter’s declaration states: Exhibit D. 5. Berleth Previously Agreed to Reduce His Fee. Curiously, Berleth demands over $800k for less than three weeks of being appointed. He has conducted little to no work related to collecting this judgment. Because the time and effort spent on his creditor round-up crusades fall outside the scope of his appointment under section 31.002, he cannot recover those fees. 11 Exhibit B. 12 Declaration of W. Welter, at 6: Atlantic Wave Holdings, LLC and Secure Community, LLC (AWH/SC): - Principal: $430,295.59, Interest Due: $95,000.62, Total Owed: $525,296.21 StrikePoint, LLC: - Principal: $372,669.40, Interest Due: $79,916.69, Total Owed: $452,586.09 Grand Total Owed: $977,882.31. UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

Cyberlux argues Berleth performed little qualifying collection work and quotes January16 testimony about reduction of a receiver fee in anot

Cyberlux argues Berleth performed little qualifying collection work and quotes January16 testimony about reduction of a receiver fee in another case. It challenges the requested percentage, asserting at most25 rather than33 per cent. A prior other-case reduction is not a promise or ruling governing this case; the actual appointment order and qualifying collection facts control the comparison.

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6 Judgment Creditors have made representations to courts across the country about the balance due. As discussed herein, Mr. Walton’s May 15, 2025 letter states that “at minimum, $912,000, after accounting for any prior payments, credits, or offsets.”11 On September 3, 2024, Atlantic Wave’s Managing Director, Will Welter, submitted a declaration to the Southern District of California, that the “Grand Total Owed” by Cyberlux to Judgment Creditors was $977,882.31.12 Indeed, Mr. Welter’s declaration states: Exhibit D. 5. Berleth Previously Agreed to Reduce His Fee. Curiously, Berleth demands over $800k for less than three weeks of being appointed. He has conducted little to no work related to collecting this judgment. Because the time and effort spent on his creditor round-up crusades fall outside the scope of his appointment under section 31.002, he cannot recover those fees. 11 Exhibit B. 12 Declaration of W. Welter, at 6: Atlantic Wave Holdings, LLC and Secure Community, LLC (AWH/SC): - Principal: $430,295.59, Interest Due: $95,000.62, Total Owed: $525,296.21 StrikePoint, LLC: - Principal: $372,669.40, Interest Due: $79,916.69, Total Owed: $452,586.09 Grand Total Owed: $977,882.31. UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

Counsel says Cyberlux staff supervised the inspection/delivery work and that Legalist voluntarily advanced funds rather than a receiver levy

Counsel says Cyberlux staff supervised the inspection/delivery work and that Legalist voluntarily advanced funds rather than a receiver levy producing collection. These are contested effort/causation assertions, not independently established by the objection.

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7 Notably, when vying to get appointed in this matter, Berleth indicated he would reduce his fee if little work was required. He stated, in open Court: My fee is assigned by the Court. If I can solve it very quickly -- I had a case just a few weeks ago where I literally sent two letters; and the fee pro-posed at 25 percent would have been, like, $350,000. And I greatly, greatly reduced that. The court would have reduced it if I hadn't. January 16, 2025 Hearing Transcript, at p. 121. Berleth has made no effort to reduce his fee even though he has not sold a single asset. Instead, he “supervised” (i.e., left a staff member to watch) the U.S. Government, HII, and Cyberlux conduct a final inspection and complete delivery on the Cyberlux subcontract. Since then, Berleth has gone on a crusade to round up third-party creditors while waiting for a cash payment from HII on Cyberlux’s subcontract. Further, the Turnover Order references, at most, 25% of what Berleth obtains, not the 33% he now unilaterally claims. Here, he did little, if anything, to recover on Plaintiffs’ sister-state judgment. In fact, Berleth did not apparently levy upon any assets. Instead, Legalist, under no court levy, advanced funds to overpay the amount listed in the Turnover Order. 6. Berleth is Trying to Use a Newly Filed Lawsuit, Obviously Prompted by Berleth, to Start Over With a New Receivership Not Involving These Plaintiffs’ Claims, Despite that the Court Already Rejected this Attempt. On June 11, 2025 at approximately 8:30 a.m., former Cyberlux employees Neil Whiteley and Phillip Tucker filed suit against Cyberlux. Their Petition, styled as a Petition in Intervention, sought a Temporary Restraining Order. The Petition asserts, among other things, that Whiteley and Tucker should be able to recover their alleged damages from the receivership. At the June 11 hearing, counsel for Whiteley and Tucker suggested that UnofficialCopyOfficeofMarilynBurgessDistrictClerk
claimallegation

The objection describes Tucker/Whiteley’s June11 petition and TRO activity, Berleth’s email understanding of a2pm hearing, and a proposed pa

The objection describes Tucker/Whiteley’s June11 petition and TRO activity, Berleth’s email understanding of a2pm hearing, and a proposed paragraph in cause2025-41073. It alleges inadequate notice and challenges continuation through another proceeding. The quoted proposal is not a signed TRO, and attributed courtroom events require the underlying record.

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7 Notably, when vying to get appointed in this matter, Berleth indicated he would reduce his fee if little work was required. He stated, in open Court: My fee is assigned by the Court. If I can solve it very quickly -- I had a case just a few weeks ago where I literally sent two letters; and the fee pro-posed at 25 percent would have been, like, $350,000. And I greatly, greatly reduced that. The court would have reduced it if I hadn't. January 16, 2025 Hearing Transcript, at p. 121. Berleth has made no effort to reduce his fee even though he has not sold a single asset. Instead, he “supervised” (i.e., left a staff member to watch) the U.S. Government, HII, and Cyberlux conduct a final inspection and complete delivery on the Cyberlux subcontract. Since then, Berleth has gone on a crusade to round up third-party creditors while waiting for a cash payment from HII on Cyberlux’s subcontract. Further, the Turnover Order references, at most, 25% of what Berleth obtains, not the 33% he now unilaterally claims. Here, he did little, if anything, to recover on Plaintiffs’ sister-state judgment. In fact, Berleth did not apparently levy upon any assets. Instead, Legalist, under no court levy, advanced funds to overpay the amount listed in the Turnover Order. 6. Berleth is Trying to Use a Newly Filed Lawsuit, Obviously Prompted by Berleth, to Start Over With a New Receivership Not Involving These Plaintiffs’ Claims, Despite that the Court Already Rejected this Attempt. On June 11, 2025 at approximately 8:30 a.m., former Cyberlux employees Neil Whiteley and Phillip Tucker filed suit against Cyberlux. Their Petition, styled as a Petition in Intervention, sought a Temporary Restraining Order. The Petition asserts, among other things, that Whiteley and Tucker should be able to recover their alleged damages from the receivership. At the June 11 hearing, counsel for Whiteley and Tucker suggested that UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Cyberlux

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1 CAUSE NO. 2024-48085 ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT OF § and SECURE COMMUNITY, LLC, § § Plaintiff/Judgment-Creditor § § v. § HARRIS COUNTY, TEXAS § CYBERLUX CORPORATION and § MARK D. SCHMIDT, Individually, § § Defendant/Judgment Debtors. § 129TH JUDICIAL DISTRICT CYBERLUX CORPORATION AND MARK D. SCHMIDT’S OBJECTIONS TO RECEIVER’S REPORT AND ORDER TO DISTRIBUTE FUNDS COME NOW, Cyberlux Corporation and Mark D. Schmidt (“Cyberlux”), and file their Objections Berleth’s Report and Order to Distribute Funds. In support thereof, Cyberlux respectfully shows: 1. Berleth Confirmed Receipt of the Wire Payment. On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.1 2. Berleth Now Holds Funds in Excess of the Judgment Balance. The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties’ underlying settlement agreement. Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied. Despite being informed about his 1 Exhibit A. 6/12/2025 8:41 AM Marilyn Burgess - District Clerk Harris County Envelope No. 101925092 By: Shanelle Taylor Filed: 6/12/2025 8:41 AM UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Schmidt

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1 CAUSE NO. 2024-48085 ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT OF § and SECURE COMMUNITY, LLC, § § Plaintiff/Judgment-Creditor § § v. § HARRIS COUNTY, TEXAS § CYBERLUX CORPORATION and § MARK D. SCHMIDT, Individually, § § Defendant/Judgment Debtors. § 129TH JUDICIAL DISTRICT CYBERLUX CORPORATION AND MARK D. SCHMIDT’S OBJECTIONS TO RECEIVER’S REPORT AND ORDER TO DISTRIBUTE FUNDS COME NOW, Cyberlux Corporation and Mark D. Schmidt (“Cyberlux”), and file their Objections Berleth’s Report and Order to Distribute Funds. In support thereof, Cyberlux respectfully shows: 1. Berleth Confirmed Receipt of the Wire Payment. On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.1 2. Berleth Now Holds Funds in Excess of the Judgment Balance. The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties’ underlying settlement agreement. Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied. Despite being informed about his 1 Exhibit A. 6/12/2025 8:41 AM Marilyn Burgess - District Clerk Harris County Envelope No. 101925092 By: Shanelle Taylor Filed: 6/12/2025 8:41 AM UnofficialCopyOfficeofMarilynBurgessDistrictClerk
entityobservation

Alexander J. Pennetti

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10 to notify all parties that the Receivership is dissolved. Cyberlux prays for all further relief to which it is entitled. Respectfully submitted, /s/ Alexander J. Pennetti Douglas S. Lang State Bar No. 11895500 Alexander J. Pennetti State Bar No. 24110208 THOMPSON COBURN LLP 2100 Ross Avenue, Suite 3200 Dallas, Texas 75201 Tel Phone: (972) 629-7100 Fax: (972) 629-7171 dlang@thompsoncoburn.com apennetti@thompsoncoburn.com Attorneys for Defendants Cyberlux Corporation and Mark D. Schmidt CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing instrument was served on all counsel pursuant to the Texas Rules of Civil Procedure on June 11, 2025. /s/ Alexander J. Pennetti UnofficialCopyOfficeofMarilynBurgessDistrictClerk Alexander J. Pennetti
entityobservation

Berleth

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1 CAUSE NO. 2024-48085 ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT OF § and SECURE COMMUNITY, LLC, § § Plaintiff/Judgment-Creditor § § v. § HARRIS COUNTY, TEXAS § CYBERLUX CORPORATION and § MARK D. SCHMIDT, Individually, § § Defendant/Judgment Debtors. § 129TH JUDICIAL DISTRICT CYBERLUX CORPORATION AND MARK D. SCHMIDT’S OBJECTIONS TO RECEIVER’S REPORT AND ORDER TO DISTRIBUTE FUNDS COME NOW, Cyberlux Corporation and Mark D. Schmidt (“Cyberlux”), and file their Objections Berleth’s Report and Order to Distribute Funds. In support thereof, Cyberlux respectfully shows: 1. Berleth Confirmed Receipt of the Wire Payment. On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.1 2. Berleth Now Holds Funds in Excess of the Judgment Balance. The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties’ underlying settlement agreement. Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied. Despite being informed about his 1 Exhibit A. 6/12/2025 8:41 AM Marilyn Burgess - District Clerk Harris County Envelope No. 101925092 By: Shanelle Taylor Filed: 6/12/2025 8:41 AM UnofficialCopyOfficeofMarilynBurgessDistrictClerk
eventattribution

The clerk stamp and automated dispatch date are12June, distinct from the certificate’s11June date.

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1 CAUSE NO. 2024-48085 ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT OF § and SECURE COMMUNITY, LLC, § § Plaintiff/Judgment-Creditor § § v. § HARRIS COUNTY, TEXAS § CYBERLUX CORPORATION and § MARK D. SCHMIDT, Individually, § § Defendant/Judgment Debtors. § 129TH JUDICIAL DISTRICT CYBERLUX CORPORATION AND MARK D. SCHMIDT’S OBJECTIONS TO RECEIVER’S REPORT AND ORDER TO DISTRIBUTE FUNDS COME NOW, Cyberlux Corporation and Mark D. Schmidt (“Cyberlux”), and file their Objections Berleth’s Report and Order to Distribute Funds. In support thereof, Cyberlux respectfully shows: 1. Berleth Confirmed Receipt of the Wire Payment. On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.1 2. Berleth Now Holds Funds in Excess of the Judgment Balance. The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties’ underlying settlement agreement. Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied. Despite being informed about his 1 Exhibit A. 6/12/2025 8:41 AM Marilyn Burgess - District Clerk Harris County Envelope No. 101925092 By: Shanelle Taylor Filed: 6/12/2025 8:41 AM UnofficialCopyOfficeofMarilynBurgessDistrictClerk
inferenceinference

Wire acknowledgement can be established while payoff, fees, allocation and dissolution remain contested. Receipt is not interchangeable with

Wire acknowledgement can be established while payoff, fees, allocation and dissolution remain contested. Receipt is not interchangeable with final satisfaction or an entered discharge.

otherattribution

Complete supplied 12-page source reviewed at SHA-256 94e89a94672c922bcd862cbcf26455fa7e61b7f732523fe14794e05e1c045296. Source assertions, or

Complete supplied 12-page source reviewed at SHA-256 94e89a94672c922bcd862cbcf26455fa7e61b7f732523fe14794e05e1c045296. Source assertions, original visual features, filing/communication context and identified missing attachments are retained. No unexamined later court outcome is inferred.

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1 CAUSE NO. 2024-48085 ATLANTIC WAVE HOLDINGS, LLC § IN THE DISTRICT COURT OF § and SECURE COMMUNITY, LLC, § § Plaintiff/Judgment-Creditor § § v. § HARRIS COUNTY, TEXAS § CYBERLUX CORPORATION and § MARK D. SCHMIDT, Individually, § § Defendant/Judgment Debtors. § 129TH JUDICIAL DISTRICT CYBERLUX CORPORATION AND MARK D. SCHMIDT’S OBJECTIONS TO RECEIVER’S REPORT AND ORDER TO DISTRIBUTE FUNDS COME NOW, Cyberlux Corporation and Mark D. Schmidt (“Cyberlux”), and file their Objections Berleth’s Report and Order to Distribute Funds. In support thereof, Cyberlux respectfully shows: 1. Berleth Confirmed Receipt of the Wire Payment. On June 11, 2025, Receiver Robert Berleth confirmed receipt of funds in the amount of $3,083,639.75.1 2. Berleth Now Holds Funds in Excess of the Judgment Balance. The payment of $3,083,639.75 is an overpayment because no credits or offsets have been applied. Cyberlux has made numerous payments on the parties’ underlying settlement agreement. Even Atlantic Wave, in its May 15, 2025 letter correspondence to the Court, acknowledged that credits and offsets should be applied. Despite being informed about his 1 Exhibit A. 6/12/2025 8:41 AM Marilyn Burgess - District Clerk Harris County Envelope No. 101925092 By: Shanelle Taylor Filed: 6/12/2025 8:41 AM UnofficialCopyOfficeofMarilynBurgessDistrictClerk
questionquestion

What receipt and dated ledger reconcile $3,083,639.75 transferred, $747,027.73 asserted payoff, fees, offsets and any returned excess?

questionquestion

What signed appointment/fee orders and time/collection records resolve the25/33per-cent dispute?

questionquestion

What full hearing, notice and signed TRO records resolve the proposed successor receivership and challenged procedure?

questionquestion

What source records establish the ultimate funder and repayment rights beyond the Legalist attribution?

allegation

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 objection describes Tucker/Whiteley’s June11 petition and TRO activity, Berleth’s email understanding of a2pm hearing, and a proposed paragraph in cause2025-41073. It alleges inadequate notice and challenges continuation through another proceeding. The quoted proposal is not a signed TRO, and attributed courtroom events require the underlying record.referencesThe prayer requests intervention, judgment, book access, segregation and a trust over $1,289,765.17 from the pending payment, payment according to applicable priorities, fees and interest. No trust, disbursement or allowed-priority order is entered by this pleading.

Debtor challenges successor proceeding while claimant seeks trust/participation there; neither pleading supplies the entered disposition.

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Confidence 75%Link weight 50%
Cyberlux attributes the wire advance to Legalist and requests return of excess to Legalist. This is a party position about funding and restitution; the pleading alone is not the originating-account or underlying client-funding record.supportsWhat receipt and dated ledger reconcile $3,083,639.75 transferred, $747,027.73 asserted payoff, fees, offsets and any returned excess?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Counsel states Berleth confirmed receipt of $3,083,639.75 on June11 and argues this exceeds proper satisfaction after offsets. He compares Walton’s May15 minimum $912,000 with Cyberlux’s June11 asserted $747,027.73 payoff. Actual credit allocation and a common as-of ledger are not reproduced in the pleading.supportsWire acknowledgement can be established while payoff, fees, allocation and dissolution remain contested. Receipt is not interchangeable with final satisfaction or an entered discharge.

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
The objection describes Tucker/Whiteley’s June11 petition and TRO activity, Berleth’s email understanding of a2pm hearing, and a proposed paragraph in cause2025-41073. It alleges inadequate notice and challenges continuation through another proceeding. The quoted proposal is not a signed TRO, and attributed courtroom events require the underlying record.supportsWhat full hearing, notice and signed TRO records resolve the proposed successor receivership and challenged procedure?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Counsel states Berleth confirmed receipt of $3,083,639.75 on June11 and argues this exceeds proper satisfaction after offsets. He compares Walton’s May15 minimum $912,000 with Cyberlux’s June11 asserted $747,027.73 payoff. Actual credit allocation and a common as-of ledger are not reproduced in the pleading.supportsWhat receipt and dated ledger reconcile $3,083,639.75 transferred, $747,027.73 asserted payoff, fees, offsets and any returned excess?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Cyberlux argues Berleth performed little qualifying collection work and quotes January16 testimony about reduction of a receiver fee in another case. It challenges the requested percentage, asserting at most25 rather than33 per cent. A prior other-case reduction is not a promise or ruling governing this case; the actual appointment order and qualifying collection facts control the comparison.supportsWhat signed appointment/fee orders and time/collection records resolve the25/33per-cent dispute?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
The objection challenges lack of fee/time/expense proof, reasonableness and the proposed approximately $83,000 expenses, citing authorities on fee review. It disputes Bell Nunnally and Vargo amounts in scope but expressly does not dispute the $21,677.50 Bell Nunnally fee award from the Southern District of Texas. Distinct fee categories must remain separate.supportsWhat receipt and dated ledger reconcile $3,083,639.75 transferred, $747,027.73 asserted payoff, fees, offsets and any returned excess?

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
The objection challenges lack of fee/time/expense proof, reasonableness and the proposed approximately $83,000 expenses, citing authorities on fee review. It disputes Bell Nunnally and Vargo amounts in scope but expressly does not dispute the $21,677.50 Bell Nunnally fee award from the Southern District of Texas. Distinct fee categories must remain separate.supportsWire acknowledgement can be established while payoff, fees, allocation and dissolution remain contested. Receipt is not interchangeable with final satisfaction or an entered discharge.

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
The objection challenges lack of fee/time/expense proof, reasonableness and the proposed approximately $83,000 expenses, citing authorities on fee review. It disputes Bell Nunnally and Vargo amounts in scope but expressly does not dispute the $21,677.50 Bell Nunnally fee award from the Southern District of Texas. Distinct fee categories must remain separate.supportsDoes the objection dispute every fee award?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Cyberlux attributes the wire advance to Legalist and requests return of excess to Legalist. This is a party position about funding and restitution; the pleading alone is not the originating-account or underlying client-funding record.supportsWhat source records establish the ultimate funder and repayment rights beyond the Legalist attribution?

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
Citing historical Preferred Ready Mix litigation and other grounds, Cyberlux asks to dissolve the receivership, recognise satisfaction, address fee objections and direct notice. The cited separate case does not itself establish misconduct in this matter, and the requested dissolution is not evidence dissolution occurred.supportsWire acknowledgement can be established while payoff, fees, allocation and dissolution remain contested. Receipt is not interchangeable with final satisfaction or an entered discharge.

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
Cyberlux attributes the wire advance to Legalist and requests return of excess to Legalist. This is a party position about funding and restitution; the pleading alone is not the originating-account or underlying client-funding record.supportsWire acknowledgement can be established while payoff, fees, allocation and dissolution remain contested. Receipt is not interchangeable with final satisfaction or an entered discharge.

Specifically named source propositions support the bounded distinction or question.

50%
Confidence 75%Link weight 50%
Citing historical Preferred Ready Mix litigation and other grounds, Cyberlux asks to dissolve the receivership, recognise satisfaction, address fee objections and direct notice. The cited separate case does not itself establish misconduct in this matter, and the requested dissolution is not evidence dissolution occurred.supportsWhat full hearing, notice and signed TRO records resolve the proposed successor receivership and challenged procedure?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Counsel contends a Section31.002 turnover receiver is confined to collection for the judgment parties and cannot use this appointment for a general third-party creditor roundup under Section64.001. Statements attributed to the June9 hearing support the argument as quoted, not a complete hearing transcript or ruling supplied here.supportsWhat signed appointment/fee orders and time/collection records resolve the25/33per-cent dispute?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%
Counsel says Cyberlux staff supervised the inspection/delivery work and that Legalist voluntarily advanced funds rather than a receiver levy producing collection. These are contested effort/causation assertions, not independently established by the objection.supportsWhat signed appointment/fee orders and time/collection records resolve the25/33per-cent dispute?

Specifically named source propositions support the bounded distinction or question.

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Confidence 75%Link weight 50%

WEIGH

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