Cyberlux Corp (CYBL)

[VERAX]

One question has been answered. No restriction on selling.

RISKS RELATING TO OUR CURRENT FINANCING ARRANGEMENT:

THERE ARE A LARGE NUMBER OF SHARES UNDERLYING OUR SECURED CONVERTIBLE NOTES AND
WARRANTS THAT MAY BE AVAILABLE FOR FUTURE SALE AND THE SALE OF THESE SHARES MAY
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.

As of September 13, 2006, we had 97,529,157 shares of common stock
issued and outstanding, secured convertible notes outstanding pursuant to our
securities purchase agreements dated September 23, 2004, April 22, 2005, October
24, 2005, December 28, 2005, March 23, 2006 and July 24, 2006 that may be
converted into an estimated 45,394,058, 75,000,000, 40,000,000, 38,888,889,
27,777,778 and 25,000,000 shares of common stock at current market prices,
respectively, and outstanding warrants pursuant to our securities purchase
agreements dated September 23, 2004, April 22, 2005, October 24, 2005, December
28, 2005, March 23, 2006 and July 24, 2006, to purchase 2,250,000, 25,000,000,
800,000, 700,000, 19,000,000 and 15,000,000 shares of common stock,
respectively. In addition, the number of shares of common stock issuable upon
conversion of the outstanding secured convertible notes issued pursuant to the
securities purchase agreements dated September 23, 2004, April 22, 2005, October
24, 2005, December 28, 2005, March 23, 2006 and July 24, 2006 may increase if
the market price of our stock declines. All of the shares, including all of the
shares issuable upon conversion of the secured convertible notes and upon
exercise of our warrants, may be sold without restriction when registered. The
sale of these shares may adversely affect the market price of our common stock.