Cyberlux Corporation (OTC: CYBL) closed out March in a big way. And investors responded by sending $CYBL shares more than 22% higher at press time. Still, while that move is impressive, the value of its two late-March deals is likely worth multiples of that gain. Moreover, they indicate that not only is CYBL on track to meet a 2022 revenue target of $44 million but is also keeping the CEO’s goal of reaching $100 million in revenues by the end of 2023 in the crosshairs.
It’s not surprising that under-the-radar Cyberlux is not surging more. They are an emerging company with a relatively small but growing retail following. Of course, trading at less than $0.02 per share keeps it out of the hands of institutional investors as well. But that doesn’t mean CYBL isn’t doing the right things in the right markets at the right time. They absolutely are. And using any valuation model, its stock is well below bargain basement prices; hence, backing up the truck on this one could be a wise and timely consideration. Investors won’t, after all, find many stocks at this level achieving the milestones reached by Cyberlux. In fact, two deals announced in the final six days of March are likely to become near-term catalysts.
Those, of course, are value drivers. So, what happened to inspire the CYBL bulls? A Lot.
Late-March Deals Put CYBL Into Rally Mode
On March 25th, Cyberlux announced that the Kreatx Group of its Digital Platform Solutions (DPS) business unit won a competitive tender to provide the Judicial Court System of Albania with new digital capabilities to modernize its public records and case management systems. It’s the first of more expected deals as the Judicial System works to modernize its digital processes, and the initial agreement brings $625,000 into the Kreatx books. It’s no small job, either. The Kreatx system is expected to be fully implemented across all 38 District Courts by the end of 2022.
Better still, this first contract in Europe could be the bridge needed to lead to more high-ticket deals, with Kreatx able to prove the value of its systems by providing real-time electronic access to case information and associated documents. It will also give the courts cumulative details on case processing and statistical data for internal and public reporting on the nature and volume of the court’s work. Many people may expect courts and governments worldwide to already be a part of the digital age. However, that’s not the case. Not even close.
Many, perhaps even a majority, of governments, municipalities, courts, and the private sector companies that serve them are well behind the pace of digital transformation. It results from technology moving faster than the public sector can handle, which has left them short on utilizing modern technology to make internal processes easier to manage. But needed upgrades for them expose more opportunity for CYBL’s assets, Kreatx included.
In fact, Kreatx is already working closely with local and federal government institutions to support their vision of modernizing existing systems to enhance government transparency and increase financial performance. And that focus presents a lucrative proposition, with Kreatx targeting an estimated $17 billion legal technology market alone. And the best news is that these entities, public and private, need what Kreatx is selling.
For many, its services platform is the ideal conduit to provide governments and their citizens a better end-user experience. Moreover, providing that service isn’t a luxury; it’s a necessity. Thus, this deal is more than a near-term revenue driver; it’s a proving ground that could lead to Kreatx implementing systems in Europe and the United States. Indeed, those multi-billion dollar market opportunities, with just 1% success, would bode well for CYBL’s bottom line.
And grabbing a $170 million slice (1%) of a total market is a reasonable expectation. After all, CYBL’s Digital Platform Solutions (DPS) business unit delivers disruptive technology to both government and commercial customers, helping these customers make data-driven decisions, support integration capabilities, automate business workflow, and provide business intelligence analytics. Keep in mind its DPS business unit already has world-class Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) offerings, innovative software development competencies, and product delivery capabilities to drive growth through digital transformation opportunities across global markets.
So, its announced European contract, and its potential for add-on business, are worth far more than a 16% spike in share price. And considering that the deal is likely the first of many, it can become a milestone reached that keeps on giving. Put simply, appreciate the foot into the European door
There was more excellent news in March.
Major Acquisition Puts $36 Billion UAS Market In-Play
A massive deal that deserves far more attention than it’s getting is CYBL’s acquisition of Catalyst Machineworks, LLC. This deal alone dwarfs the current CYBL market cap, enabling Cyberlux to immediately target revenue-generating opportunities in an existing $36 billion UAS market. But, with a 56% CAGR, a more than $85 billion opportunity is expected by 2025. It’s another example of CYBL doing the right things at the right time.
What does the deal bring to CYBL? Foremost, Catalysts’ leadership position in the highly technical cinematography drone market where already established product lines target the high-end military-grade, the specialized drone racing, and the high-volume consumer markets. Further, CYBL benefits from Catalyst Machineworks’ position as a leading United States-based drone hardware manufacturer with the intellectual property, technology know-how, and production capabilities to deliver true military-grade and law enforcement drone solutions as 100% Made-In-America. The completed transaction gives CYBL 100% ownership of the company.
The deal is also accretive to CYBL’s Unmanned Aircraft Solutions (UAS), with the transaction delivering a robust hardware technology platform, existing customers, and incremental revenue. The revenues are significant, and as a result of the transaction, CYBL’s UAS business unit is expected to generate income of $22 million this year, extending toward a goal of scoring over $67 million in revenue by 2024.
Furthermore, the acquisition accelerates CYBL’s UAS strategy with an immediate focus on the additional UAS hardware and software offerings with immediate demand and market scale. Cyberlux noted that the company is now better positioned than ever to build the future of UAS technology and create enormous growth in revenue and profit over the coming years. How? By providing solutions that meet the significant demand for U.S.-manufactured, high-capability drones across U.S. government agencies, law enforcement, and significant commercial markets, including Cinematography, Oil and Gas, Construction, and Real Estate.
Better still, Cyberlux isn’t losing ambitions. On the contrary, they clarified that ongoing strategic investments in UAS hardware and software development under the FlightEyeGDN platform are a significant part of its 2022 business plans. Thus, while this deal is significant, expect more.
The value this deal brings to CYBL can’t be overstated. From the start, the acquisition of Catalyst Machineworks provides Cyberlux the full capability to fulfill its UAS mission and create a long-term competitive advantage in the UAS market. Noted earlier, it’s a market estimated to extend an $85 billion revenue-generating opportunity by 2025. Keep in mind, too, the deal comes with managerial and industry expertise, with Catalyst executive joining CYBL to accelerate growth objectives at full speed and push its Operation Alpha plans further and faster. And if you think the entire team isn’t bullish, think again. CYBL fully expects to accomplish new, significant growth milestones and have its UAS business unit propel Cyberlux to over $100 million in revenue in a vast and rapidly growing market.
Getting there may be easier than many expect. The Cyberlux UAS business unit’s added strength allows them to immediately leverage core technology capability and provide next-generation performance, industry-focused capability, and consumer-focused UAS products. Driving near-term revenues, the UAS business unit is focused on several existing commercial markets and significant Department of Defense (DoD) requirements.
Included is a research and development focus on geofencing capabilities, “observe and monitor” alert systems, collision avoidance capabilities, beyond-line-of-sight operations, urban area operations, operating system support for multiple drone operations, traffic management, and other critical priorities such as weight optimization and energy efficiency. They could be effectively competing with Boeing ($BA) and Nvidea ($NVDA) before the years through. The key word being “effectively.” Yes, it’s a mouthful of technical description. But, investors need to see and know how many markets are in play. Knowing the particulars makes it easier to understand why the CYBL investment proposition is too big to ignore.
And that’s considering its assets today. The following week, month, or quarter could make the CYBL asset portfolio appreciably stronger, noting CYBL is actively pursuing partnerships with UAS technology companies and drone service providers. Factoring in organic growth and harnessing the power of its two most recent deals, CYBL is indeed better positioned than ever to create enormous shareholder value.
Milestones Into Catalysts
That’s happening now. And despite the share price consolidating, the clues to how CYBL will become a potentially massive company are front and center. Just a quick totaling of CYBL’s sum of its parts shows they have the revenue-generating firepower already in place to squeeze its stock price appreciably higher. Add in the two recent deals, a strong cash position, raising revenue guidance by 44%, and a slew of accretive 2021 milestones that can turn into catalysts; it’s a sum total showing CYBL to be in the best operating position in its history.
Most importantly, clients and industries need what CYBL is selling due to technology outpacing large companies and government offices’ ability to keep pace with implementing supporting change. In other words, thousands of commercial clients and probably hundreds of global governments are way behind the curve when it comes to having integrated necessary technology upgrades to their communications infrastructure. Bad for them, but good for CYBL since those same clients needing what CYBL offers today will also need them in the future. Thus, CYBL won’t ever be a one-and-done services provider. Instead, initial contracts will likely lead to CYBL establishing a client base that lasts decades.
And there is plenty of current jobs and future opportunities in the pipeline for CYBL to extend its reach to provide efficient digital functionality. Its Marketplace solution is an excellent example of how that works by enabling clients to leverage customized services allowing them to catalog and manage third-party suppliers. CYBL targets an $813 billion global market in that business segment alone. And knowing that CYBL’s Digital Platform Solutions capabilities provide comprehensive and much-needed technological solutions to government and industry, capturing a significant part of that almost trillion-dollar market potential is undoubtedly within near-term reach. Its deal announced Thursday could be the spark to ignite that fuse.
Diverse And Potentially Lucrative Markets In The Crosshairs
Still, it’s the totality of CYBL that should be attracting investor interest. And short-term gains should pale to what’s in store for long-term investors. That’s an expected result from CYBL’s combined revenue-generating power, harnessing strength from separate business units that have billion-dollar shots on goals across a broad range of industries.
Today’s value drivers are capitalizing on its interest from a stake in advanced unmanned aircraft systems (UAS), LED lighting solutions, renewable energy and infrastructure technology, and Software-as-a-Service (SaaS) solutions. In addition, as an active Department of Defense (DoD) contractor, CYBL is already providing leading-edge, battle-tested lighting solutions to the U.S. Air Force, National Guard, Special Operations Command (SOCOM), and the U.S. Army. Client interest in CYBL technology at that level is more than product validation; it shows how good CYBL’s technology is.
CYBL’s interest in maximizing its opportunities is warranted. Its FlightEye UAS solutions and its Infrastructure Technology solutions focus combine to allow CYBL to target a more than $171 billion global revenue-generating opportunity. Another $3.7 billion is in play from its Advanced Lighting Solutions business market opportunities. And those dollar market estimates are for 2022. Each is expected to increase by low to mid-double-digit percentages, which, when compounded, can double the market opportunity by 2025.
Therefore, considering its March deals, investors relying only on CYBL’s $44 million 2022 guidance may be short-changing the future. Still, at about $0.018 a share, a $44 million run rate should have CYBL valued exponentially higher. If investors are in a wait-and-see mode, the better opportunity may be to wait from the inside. Current prices expose a valuation gap that can close in minutes if the right investment group takes an interest. And by all accounts, they should.
A Surge In 2022 Likely
Investors likely won’t find another company like CYBL, which is expected to post $44 million in revenues this year and trade at less than two cents. Similar opportunities rarely, if ever, come into real-time consideration. Sure, there are companies with promise, but few can show an asset portfolio and revenue-generating arsenal already producing. Cyberlux does, and things are only getting better.
So, while procrastination is an option, it’s not recommended. CYBL has too many drivers in motion for its name to remain under the radar for much longer. Indeed, 2021 was a setup year, and 2022 can be transformational. Fundamentals, contracts, acquisitions, soaring revenues, and fiscal discipline support that thesis. The better news is that each is aligned to generate results that beat even the highest ends of the expectation table. Therefore, trading ahead of updates is a timely and warranted consideration. It could be a profitable one as well.
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