How a Penny-Stock Company Sold the Pentagon on Small Drones for Ukraine
Cyberlux Corp., a penny-stock company traded on the over-the-counter market, recently made a foray into drone production and had pitched the Pentagon for Ukraine business without luck.
So executives with the North Carolina lighting company decided to cut through the U.S. military’s red tape and take its product directly to the Ukrainians.
In July, Cyberlux Chief Executive Mark Schmidt raced to Kyiv under military escort with a modified movie-production drone he hoped could help Ukraine’s military repel the Russian invasion.
Now, eight months later, the Pentagon appears set to buy the Cyberlux K8 and deliver the machinery to Ukraine.
“We’re a virus that’s inside the body of DOD,” said Mr. Schmidt of the company’s path to the Pentagon, referring to the Department of Defense. “We’re either going to influence the way they do things in the future, or be ejected from the body.”
Cyberlux showed how its K8 drone operated during its CEO’s trip to Ukraine last year.
“It’s very hard for our bureaucratic system to look past what it knows best, which are programs of record,” said Jon Gruen, Fortem’s CEO, referring to the Pentagon’s method of buying technology as part of a long-term budgeting cycle.
Cyberlux took a different angle, via a U.S. drone expert. The expert connected Cyberlux with senior officials in Kyiv, according to Mr. Schmidt, and in July, he traveled to Poland and crossed the border into Ukraine.
At a testing ground outside the capital, Cyberlux demonstrated its drone to Ukrainian officials, including Gen. Valeriy Zaluzhny, the commander in chief of the country’s armed forces.
The Cyberlux K8 zipped across a field toward a static armored personnel carrier, trailed by another drone fitted with a video camera that captured the explosion as the drone made contact with the vehicle and relayed the footage to a screen visible to the soldiers and officials present.
Gen. Valeriy Zaluzhny, the commander in chief of the Ukrainian armed forces, here at a February event in Kyiv, Ukraine, attended Cyberlux’s drone presentation last summer.
Following the demonstrations, Ukrainian Deputy Defense Minister Denys Sharapov, in a letter reviewed by The Wall Street Journal, requested 1,000 K8 drones from the U.S. European Command.
The Pentagon assigned Ukraine’s Cyberlux request to the Naval Air Systems Command, which works with airborne-weapons systems, including drones, according to a Defense Department spokesman.
In November, the naval command paired Cyberlux [color=red][/color]with Huntington Ingalls Industries Inc., a Virginia shipbuilder that already has extensive contracts with the Pentagon, Mr. Schmidt said. Working with an established company allowed Cyberlux to bypass the months or years it might take for a small firm to break through military-procurement bureaucracy, which requires many layers of approvals and voluminous documentation.
