Kustom Entertainment and Cycurion Reach $5.5 Million Transaction Agreement

Kustom Entertainment (KUST) and Cycurion (CYCU) announced they have entered into a revised, non-binding Memorandum of Understanding that establishes revised terms for the sale of Kustom's legacy video solutions segment to Cycurion from the previously announced MOU on January 22, 2026. The parties have moved into the final stage of the transaction, focusing on the completion of definitive documentation. Based on the progress made to date, the parties currently anticipate the transaction will close on or prior to June 30, 2026. Under the terms of the agreement, the aggregate purchase price is $5,500,000, structured to provide Kustom with immediate liquidity, long-term yield, and equity upside. The consideration consists of: Cash Payment: A $1,250,000 cash down payment payable at closing. Secured Promissory Note: A $4,250,000 secured promissory note bearing 7% interest, payable in 36 monthly installments. Equity Upside: The issuance to Kustom of 2,000,000 common stock purchase warrants with a two-year term and an exercise price of $2.80 per share. Performance Adjustments: An earn-out and clawback mechanism, capped at $1,000,000, based on the Business achieving specific net income milestones, as defined in the definitive agreement, milestones over a one-year period for the clawback and a three-year period for the earn-out. "We are pleased to have reached an agreement on the revised economic terms of this divestiture," said Stanton Ross, CEO of Kustom. "This moves us into the final stretch of a transition that allows Kustom Entertainment to focus on its core growth initiatives while ensuring our legacy video customers continue to receive high-level service under Cycurion's stewardship."