KUST News & Events

Cycurion (CYCU) provided an update on the revised non-binding Memorandum of Understanding, MOU, with Kustom Entertainment (KUST) for the acquisition of Kustom's legacy video solutions segment. The transaction is expected to contribute approximately $5.1M in annual revenue and an estimated $8M backlog comprised of established contracts and recurring subscription revenue. These figures are based on the pro forma financials jointly prepared by both parties and are consistent with the segment's historical performance. Both parties plan to work diligently to close the transaction as quickly as possible, targeting completion by the beginning of June 2026, subject to final due diligence, execution of a definitive agreement, and satisfaction of customary closing conditions.

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."

Kustom Entertainment announced that its video solutions business, operating under the Digital Ally brand, has secured a notable three-year subscription order from a leading health system in the Kansas City metropolitan area. The system is a member of one of the largest non-profit integrated health systems serving the United States. The order consists of a hardware component including 68 FirstVu Pro body-worn cameras and 9 docking systems coupled with a cloud-based service component with an initial three-year subscription contract. This deployment is part of a strategic initiative by the health system to enhance the security, safety, and protection of its patients, employees, and guests by documenting interactions between security personnel and the public, as well as providing objective records of unusual events within the clinical environment.