KUST · Kustom Entertainment, Inc.

Kustom Entertainment, Inc. has entered into a revised non-binding Memorandum of Understanding (MOU) with Cycurion, Inc. to divest its legacy Video Solutions Segment. This agreement supersedes the previous non-binding MOU announced on January 22, 2026. The transaction is strategically significant as it allows Kustom to divest a non-core asset and focus on its core growth initiatives in live event production and ticketing technology, while ensuring continued service for legacy video customers under Cycurion. The total consideration of $5.5 million is structured to provide immediate liquidity and potential equity upside. It includes a $1.25 million cash down payment and a $4.25 million secured promissory note bearing 7% interest, payable over 36 months. Additionally, Kustom will receive 2 million warrants to purchase Cycurion common stock at $2.80 per share. The deal also features a performance adjustment mechanism with an earn-out and clawback capped at $1 million based on net income milestones. The parties have agreed to a 30-day exclusivity period to finalize the Asset Purchase Agreement, with a target closing date on or before June 30, 2026. However, the transaction remains subject to the completion of definitive documentation and customary closing conditions.