Cycurion Issues Letter to Shareholders; Management Declines Reverse Stock Split and Intensifies Actions Against Suspected Market Abuse

Rhea-AI Summary

Cycurion (NASDAQ:CYCU) issued a shareholder letter explaining its decision not to proceed with a planned 7-for-1 reverse stock split, prioritizing fundamentals-driven listing compliance over short-term price changes.

According to Cycurion, recent actions include acquiring Digital Ally (about $5.1M revenue) and Secuvant (about $2.5M), growing organic revenue to roughly $15.5M, lifting annual revenue run rate to about $28M, securing a 10-year, $58M contract, and building about $8M in contracted backlog.

The company outlines a forensic review of CYCU trading, describes patterns it views as inconsistent with fair and orderly markets, and states it is working with NASDAQ and considering further actions while continuing to focus on business growth.

AI-generated analysis. How Rhea-AI works. Not financial advice.

Positive

• Two acquisitions added about $7.6M in annual revenue contribution
• Organic revenue grew to approximately $15.5M
• Annual revenue run rate increased to about $28M
• New ten-year contract valued at approximately $58M
• Contracted backlog of about $8M provides multi-year visibility

Negative

• CYCU share price volatility and listing compliance risk highlighted
• Management cites trading patterns it views as inconsistent with fair markets
• Potential costs and uncertainty from ongoing forensic, legal, and regulatory efforts

What This Means

The stock is down -8.5% following this news. If shares moved sharply lower, the decline would exceed...

Analysis

The stock is down -8.5% following this news. If shares moved sharply lower, the decline would exceed the typical -4.21% reaction seen around past reverse split news, despite management rejecting a 7-for-1 split and citing a $58 million contract and $8 million backlog, leaving trading integrity a focal risk.

Key Figures

Proposed reverse split ratio: 7-for-1 Digital Ally revenue: $5.1 million Secuvant revenue: $2.5 million +5 more

8 metrics

Proposed reverse split ratio 7-for-1 Reverse stock split alternative rejected by Board and management

Digital Ally revenue $5.1 million Revenue contribution from Digital Ally acquisition over past year

Secuvant revenue $2.5 million Revenue contribution from Secuvant acquisition over past year

Organic revenue $15.5 million Organic revenue grown by Cycurion over the past year

Annual revenue run rate $28 million Company annual revenue run rate reached

Ten-year contract value $58 million Value of new ten-year contract secured

Contracted backlog $8 million Contracted backlog providing multi-year revenue visibility

Single-day volume spike 89.9 million shares CYCU shares traded in one October 2025 session vs. 86.5M float

Previous Stock split Reports

2 past events · Latest: Oct 27 (Negative)

Same Type Pattern 2 events

Date	Event	Sentiment	24h Move	Catalyst
Oct 27	reverse split completion	Negative	-2.8%	Completion of 1-for-30 reverse stock split and start of split-adjusted trading.
Oct 23	reverse split announcement	Negative	-5.6%	Announcement of 1-for-30 reverse stock split to maintain Nasdaq compliance.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Past reverse split announcements for Cycurion were followed by modest share-price declines.

Historical Comparison

-4.2% avg move · In the last two stock-split-related announcements, CYCU moved about -4.21% on average, with both pri...

stock split

-4.2%

Average Historical Move stock split

In the last two stock-split-related announcements, CYCU moved about -4.21% on average, with both prior reverse split actions coinciding with modest declines. This letter shifts focus away from executing another split toward business growth and trading scrutiny.

Regulatory & Risk Context

Short Interest: 3.09%

Short Interest

3.09% of float

0% 15% 30%+

low as of 2026-06-15 Days to cover: 1

Reported short interest appears relatively low, indicating limited short-squeeze potential and suggesting that sharp moves would more likely reflect news flow or liquidity rather than forced short covering.

Key Terms

reverse stock split, regulation sho rule 201, short exempt, spoofing

4 terms

reverse stock split financial

"A reverse stock split does not create value."

A reverse stock split reduces a company's number of outstanding shares while raising the price per share proportionally, so the total value of each investor's holding is unchanged; a 1-for-10 split turns 100 shares worth $1 each into 10 shares worth $10 each. Companies often do this to regain compliance with an exchange's minimum price rule or to attract investors who avoid very low-priced stocks.

regulation sho rule 201 regulatory

"triggering the Regulation SHO Rule 201 short-sale circuit breaker at 9:30:01 a.m."

A SEC short-sale rule that automatically restricts short selling in a single stock when its price falls 10% or more from the previous trading day's close. Once triggered, short sales can only be executed at a price above the national best bid for the rest of that day and the following day, similar to a temporary traffic rule that slows only one type of trading to prevent further rapid declines. It matters to investors because it can reduce downward selling pressure and change trading liquidity and execution prices during volatile declines.

short exempt regulatory

"most marked “short exempt” — a designation that, if misused, permits short selling"

Short exempt is an order label on exchanges that indicates a seller is placing a short sale that is allowed to bypass certain short-sale price tests or trading restrictions under market rules. The flag is used when a trade meets a regulatory exception—commonly for market-making, specific settlement or risk-management activities—so the order can execute even when normal short-sale limits would apply. For investors, the designation explains why a broker-dealer executed a short sale that might otherwise have been restricted.

spoofing technical

"consistent with additional acts of manipulation, including 'spoofing' — including an unusually high number of orders"

Placing fake buy or sell orders with the intent to trick other market participants and then canceling them before execution; the goal is to create a false impression of demand or supply and move a security’s price. Think of it like pretending to bid at a yard sale to make an item seem more desirable, then backing out — it can mislead investors, distort prices and trading volume, and lead to regulatory enforcement and financial losses.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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MCLEAN, Va., July 08, 2026 (GLOBE NEWSWIRE) -- Cycurion, Inc. (NASDAQ: CYCU) (“Cycurion” or the “Company”), a leading AI-driven, tech-enabled cybersecurity solutions provider, today releases the following Letter to Shareholders from Kevin Kelly, Chairman and Chief Executive Officer.

Dear Valued Shareholders,

Cycurion's first obligation is to protect and build shareholder value, and to maintain our listing through sustainable, fundamentals-driven performance rather than short-term price optics. After careful deliberation, the Board of Directors and Management have determined that a 7-for-1 reverse stock split is not in the best interest of shareholders at this time. Our focus is on growing the business, and management expects that continued growth will, over time, be reflected in the price of the stock. Management further believes that pursuing a reverse split now would not protect shareholders and would divert the Company from the work that creates value. Based on the Company’s prior experience, the trading record we have analyzed, and the evidence we have collected and continue to collect, management concluded that another reverse split carried a substantial risk of harming shareholders while failing to resolve the underlying issues.

Steps We Have Taken to Build the Business

Our decision begins with a simple premise: the most reliable way to protect and grow shareholder value is to build a stronger, more profitable company — and that is where management is concentrating its efforts. Over the past year we completed two strategic acquisitions: Digital Ally, which contributed approximately $5.1 million in revenue, and Secuvant, which contributed approximately $2.5 million — each expanding our cybersecurity platform, deepening customer relationships, and adding recurring, high-value services we can cross-sell across the base. We grew organic revenue to approximately $15.5 million and lifted the Company’s annual revenue run rate to approximately $28 million. We secured a new ten-year contract valued at $58 million and built approximately $8 million of contracted backlog, giving the Company multi-year revenue visibility. The organization is focused on integrating those acquisitions, tightening operating discipline, and prioritizing the recurring, higher-margin work that we believe drives durable profitability.

In other words, the business continues to expand while management works to strengthen the Company’s position. Continued growth — not financial engineering — ultimately builds shareholder value. The Company’s operating progress will be reflected in the share price over time.

Revenue Composition & Annual Run Rate

Contracted & Committed Forward Value

Why a Reverse Split Was Not the Answer for Cycurion

A reverse stock split does not create value. It reduces the number of shares outstanding and raises the nominal price, but it does not change the underlying worth of the business.

At best, a reverse split offers mechanical, short-term compliance with minimum price rules; it does not create the stable, fundamentals-based valuation that long-term compliance requires. Our own history makes the point. A previous reverse split historically did not deliver durable price support for Cycurion stock.

The Company has evidence from our experience in 2025 of what can happen when a reverse split is announced into this kind of environment. According to our historical records, if a 7-for-1 reverse split had been announced while CYCU was trading around $0.60, the implied post-split price would have been approximately $4.20. Based on the October 2025 pattern, Management believes the stock could have been driven down sharply before and after the split, potentially leaving it in an effective range of approximately $1.20 to $1.50, and vulnerable to being pushed below $1.00 again. That outcome would have reduced shareholder ownership and still left the Company exposed to the same listing risk. Management concluded that, while announcing another split into this environment might create a brief optical improvement, it would be followed by renewed pressure capable of pushing the stock back down. We are not willing to ask shareholders to bear that risk.

What Our Forensic Review of Trading Has Found

The Company's conclusion that its stock has been the target of trading activity inconsistent with fair and orderly markets is not speculation. In October 2025, approximately 89.9 million shares of CYCU changed hands in a single session against a float of roughly 86.5 million shares. More than 100% of the float turned over in a single day — an event that, in Management’s view, is not consistent with legitimate market activity.

The pattern was repeated this spring. On March 16, 2026, CYCU fell approximately 45% intraday — from a prior close near $1.75 to a low of $0.96 — triggering the Regulation SHO Rule 201 short-sale circuit breaker at 9:30:01 a.m. That safeguard is meant to restrain short selling once a stock has dropped 10% or more. Yet on precisely the two days the restriction was in force (March 16 and 17), the records reflect a pronounced surge in short sales, most marked “short exempt” — a designation that, if misused, permits short selling to continue at or below the prevailing bid during the window when it is supposed to be curtailed. The chart below shows both the price collapse and the concentration of short-exempt selling on those two restricted days.

CYCU price collapse and restricted-day short selling (Feb–Mar 2026)

The order records suggest trading behavior consistent with additional acts of manipulation, including 'spoofing' — including an unusually high number of orders placed and executed, followed by rapid sequencing of cancellations, creating a false impression of supply and demand.

The Company intends to follow the evidence and, if appropriate, pursue those parties responsible for improper trading and market manipulation identified in our review. In connection with these efforts, the Company is in contact with NASDAQ regarding this trading activity and the actions Cycurion is taking, and we will continue to work with the exchange as our investigation proceeds, recognizing that the timing and outcome of any regulatory or enforcement actions remain inherently uncertain.

Again, deciding not to engage in a reverse stock split was a shareholder-protection decision: it preserved shareholder positions and gave the Company the ability to continue pursuing the remedies it believes best protect investors, including holding accountable those responsible for what the Company views as improper trading and market manipulation in its stock.

Management recognizes that the last several quarters have not been a smooth road for investors. The volatility in CYCU’s share price, particularly when it has not reflected the progress and growth of the business, has been frustrating and, for many long-term shareholders, painful. 

Cycurion will continue standing up for its shareholders. The Company will continue building its business, continue pursuing the evidence, and continue using every appropriate legal, regulatory, and forensic avenue available to address any misconduct that our investigation substantiates. Deciding not to pursue a reverse split at this time was the right decision, the protective decision, and the decision most consistent with our duty to defend our shareholders and their long-term interests.

Sincerely,

Kevin Kelly, Chairman and Chief Executive Officer

About Cycurion, Inc.

Based in McLean, Virginia, Cycurion (NASDAQ: CYCU) is a forward-thinking provider of IT cybersecurity solutions and AI, committed to delivering secure, reliable, and innovative services to clients worldwide. Specializing in cybersecurity, program management, and business continuity, Cycurion harnesses its AI-enhanced ARx platform and expert team to empower clients and safeguard their operations. Along with its subsidiaries, Axxum Technologies LLC, Cloudburst Security LLC, and Cycurion Innovation, Inc., Cycurion serves government, healthcare, and corporate clients committed to securing the digital future. More info: www.cycurion.com.

Forward-Looking Statements
This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the operations and prospective growth of Cycurion’s business.

Certain statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Such statements include, but are not limited to, statements regarding the acceleration of the Company’s inorganic growth strategy through potential acquisitions and strategic transactions; the continued execution of the Company’s contracted backlog; the timing, amount and likelihood of realizing revenues associated with our contracted backlog; and other statements that are not historical facts, including statements which may be accompanied by words such as “continue,” “will,” “may,” “could,” “should,” “expect,” “expected,” “plans,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and similar expressions intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Cycurion and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to, risks related to customer performance and satisfaction, contract modifications, delays or terminations, and the Company’s ability to fulfill contractual obligations, the outcomes of the Company’s investigations, any potential legal proceedings, or the future performance of the Company’s stock. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed by Cycurion with the U.S. Securities and Exchange Commission. Cycurion anticipates that subsequent events and developments may cause its plans, intentions, and expectations to change. Cycurion assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Cycurion’s plans and expectations as of any subsequent date.

Cycurion Investor Relations:
(888) 341-6680
investors@cycurion.com

Cycurion Media Relations:
(888) 341-6680
media@cycurion.com

Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/5b24c81c-e9b4-410f-850e-19af7c646cba
https://www.globenewswire.com/NewsRoom/AttachmentNg/c5ab9851-4ffe-4444-b5d5-c3b6e14dd855
https://www.globenewswire.com/NewsRoom/AttachmentNg/49724926-f2da-4262-ab26-1b54d3c61fd5

FAQ

Why did Cycurion (NASDAQ:CYCU) decide against a 7-for-1 reverse stock split in July 2026?

Cycurion declined the 7-for-1 reverse stock split, citing shareholder protection and long-term value focus. According to Cycurion, past experience suggested a reverse split could reduce shareholder ownership, fail to provide durable price support, and still leave the company exposed to listing risk.

What recent revenue and contract milestones did Cycurion (CYCU) report in its July 8, 2026 shareholder letter?

Cycurion reported an annual revenue run rate of about $28 million and a new ten-year contract worth $58 million. According to Cycurion, Digital Ally added about $5.1 million revenue, Secuvant about $2.5 million, organic revenue reached roughly $15.5 million, and backlog is about $8 million.

How do Cycurion’s acquisitions of Digital Ally and Secuvant impact CYCU shareholders?

The Digital Ally and Secuvant acquisitions add roughly $7.6 million of revenue and expand Cycurion’s cybersecurity platform. According to Cycurion, these deals deepen customer relationships, add recurring high-value services, and create cross-selling opportunities that management believes support stronger, more durable profitability for CYCU shareholders.

What trading concerns did Cycurion (CYCU) raise about its stock in 2025–2026?

Cycurion described trading it views as inconsistent with fair and orderly markets, including large one-day volume and short-exempt activity. According to Cycurion, its forensic review suggests possible manipulative behaviors, and the company is pursuing evidence while coordinating with NASDAQ on the matter.

How is Cycurion addressing suspected improper trading in CYCU shares?

Cycurion is conducting a forensic review and considering actions against parties it believes engaged in improper trading. According to Cycurion, it is in contact with NASDAQ and plans to use legal, regulatory, and forensic avenues, while acknowledging the timing and outcome of any enforcement efforts are uncertain.

What does Cycurion’s focus on business growth mean for long-term CYCU investors?

Cycurion emphasizes building a stronger, more profitable business as the path to long-term shareholder value. According to Cycurion, growing recurring, higher-margin cybersecurity services, integrating acquisitions, and leveraging its $58 million contract and $8 million backlog are expected to support fundamentals-driven share price over time.

How does Cycurion’s decision on the reverse split affect CYCU listing compliance?

Cycurion chose not to use a reverse split for mechanical price compliance, favoring fundamentals-driven stability instead. According to Cycurion, another split could have briefly lifted the price but still left CYCU vulnerable to renewed pressure and potential minimum-price listing risk.