Kustom Entertainment Plans to Divest Video Solutions Division for $6M to $8.5M
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
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Should l Buy KUST?
Kustom Entertainment (KUST) entered into a non-binding Memorandum of Understanding with Cycurion (CYCU) to divest its video solutions division. The divestiture of the Company's video solutions business supports the Company's strategic focus on its rapidly growing live event production and proprietary online ticketing operations, aligning with its broader rebranding initiative and new Nasdaq ticker symbol "KUST". Pursuant to the MOU, the transaction is expected to be valued between $6M and $8.5M based on the parties' pro forma financial information. The transaction is subject to customary closing conditions and subject to final negotiation between the parties. The purchase price is structured to provide the Company with immediate liquidity and long-term equity upside: Cash Consideration: $1M - $1.4M. Equity Consideration: Remainder to be paid in Cycurion preferred stock. The divestiture represents a significant step in Kustom's strategic shift to streamline its operations and focus exclusively on live entertainment and online ticketing markets business segment, which allows the Company to control the entire fan experience-from the moment a ticket is purchased to the final encore of a live performance. By offloading its video solutions division, Kustom intends to aggressively expand its footprint in the live event management and online ticketing platform business.
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Analyst Views on KUST
About KUST
Kustom Entertainment, Inc. is focused on live event production and ticketing technology. The Company specializes in large-scale music festivals, including the country stampede, and provides end-to-end event management and proprietary ticketing solutions for venues across the United States. The country stampede festival is the Company’s flagship event, celebrating music while fostering community and providing a platform for emerging talent.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Growth: The quarterly revenue reached $822.47 million, surpassing the Street estimate of $758.08 million, demonstrating enhanced competitiveness in the market that may attract more investor interest.
- Optimistic Outlook: The company provided second-quarter sales guidance above estimates and raised its FY26 guidance, reflecting management's confidence in future growth, which could further drive stock price increases.
- Positive Stock Reaction: F5 shares jumped 10.9% to $299.99 in pre-market trading, indicating strong market response to its earnings report, which may draw in more investors and bolster market confidence.
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- Video Division Sale Agreement: The company entered a non-binding Memorandum of Understanding with Virginia-based Cycurion Inc. for a transaction valued between $6 million and $8.5 million, with $1 million to $1.4 million in cash and the remainder in Cycurion preferred stock.
- Strategic Shift to Live Events: This divestiture allows Kustom to sharpen its focus on live event production and proprietary online ticketing, aligning with its Nasdaq rebranding strategy, as CEO Stanton E. Ross emphasized the significant opportunities in the entertainment sector.
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See More
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- Stock Price Surge: Baker Hughes shares rose 3.7% to $55.81 in pre-market trading, indicating a positive market reaction to its financial performance, which may attract more investor interest.
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- Customer Base Expansion: This acquisition will provide Cycurion access to Kustom's extensive client footprint across all 50 U.S. states and over 30 countries, significantly enhancing its competitiveness in the public safety and enterprise markets and unlocking substantial cross-selling potential.
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- Liquidity Assurance: The transaction includes $100,000 in cash, $209,501 in debt and working capital credits, and a long-term promissory note of $1,140,499, ensuring liquidity during the transition phase.
- Event Expansion: Kustom plans to leverage the successful model of the Country Stampede Music Festival to scale its live event and ticketing services nationwide, aiming to attract more top-tier talent and audiences, thereby enhancing brand influence.
- Market Outlook: The company will focus on the $100 billion live event market, with the CEO stating intentions to pursue a dominant market share through the Kustom Entertainment and TicketSmarter platforms, ensuring effective resource allocation for long-term growth.
See More
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- Funding Structure: The transaction includes $100,000 in cash, $209,501 in debt and working capital credits, and a long-term promissory note of $1,140,499 at 6% interest, demonstrating a balance between liquidity and long-term value.
- Market Potential: By divesting healthcare assets, Kustom Entertainment aims to expand its footprint in the $100 billion global live event market, focusing on enhancing its ticketing platform's integration capabilities to improve customer experience.
- Event Expansion: The company plans to leverage the success of the Country Stampede Music Festival to promote its event production and ticketing services nationwide, attracting more top-tier artists and audiences to further solidify its market position.
See More
