Cycurion Acquires Kustom Entertainment Video Solutions Assets

Cycurion (CYCU) announced that it has entered into an asset purchase agreement with Kustom Entertainment (KUST) to acquire substantially all of the assets comprising Kustom's video-solutions division, including the development, sale, licensing, support and servicing of video hardware, camera products, platforms, software and software solutions, subject to the satisfaction or waiver of closing conditions as set forth in the asset purchase agreement. Closing is expected in early July. Subject to closing, the aggregate purchase consideration is expected to consist of a cash payment of $1.25M, a $4.25M secured promissory note, contingent cash consideration of up to $1M payable only upon the achievement of specified earnout conditions, and warrants to purchase up to 2,000,000 shares of Cycurion common stock. The transaction structure is intended to align a substantial portion of the consideration with future performance while limiting immediate equity dilution to existing stockholders. Upon closing, Cycurion expects to gain access to approximately 1,000 new customer relationships, including numerous police departments and municipal agencies where the company already provides cybersecurity and managed services. These overlapping relationships create immediate opportunities for cross-selling integrated video, evidence management, and AI-driven security solutions. Based on information from the seller, the business generated approximately $5.1M in annual revenue and holds approximately $8M in contracted backlog, primarily from recurring subscriptions and multi-year contracts. Cycurion believes the acquisition can enhance operating leverage and support margin expansion, although there can be no assurance that these benefits will be realized.