Kustom Entertainment (KUST) inks $5.5M video unit sale with Cycurion plus warrants
Rhea-AI Filing Summary
Kustom Entertainment, Inc. is divesting all assets of its legacy video-solutions division to Cycurion, Inc. under a binding Asset Purchase Agreement. The deal provides total consideration of up to $5.5 million, including $1.25 million in cash, a $4.25 million secured promissory note, and up to $1.0 million in contingent earnout payments, plus warrants for 2,000,000 Cycurion shares at an exercise price of $2.80 per share. The transaction is expected to close in July 2026, subject to extensive closing conditions such as due diligence, audited carve-out financials, board approvals, third‑party consents, and key employee arrangements. Management presents this divestiture, alongside a prior medical billing sale and a Gilley’s Park City live‑music partnership, as a major step in refocusing entirely on live event production and proprietary ticketing, highlighted by its Country Stampede festival platform.
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Insights
Kustom is exiting video solutions via a structured sale to fund a live‑events pivot.
Kustom Entertainment signed a binding Asset Purchase Agreement to sell its video‑solutions division to Cycurion. Consideration totals up to $5.5 million, combining $1.25 million cash, a $4.25 million secured note at 7%, and up to $1.0 million in earnout payments, plus 2,000,000 Cycurion warrants at $2.80.
The structure blends immediate liquidity with deferred and equity‑linked value, aligning outcomes with the division’s performance inside Cycurion. Extensive closing conditions—due diligence, audited carve‑out statements, board approvals, and key‑employee arrangements—introduce execution uncertainty explicitly flagged by the companies.
Management frames this divestiture, together with a prior medical billing sale and the Gilley’s Park City partnership, as central to a shift toward live festivals and ticketing. Subsequent company filings may show how proceeds, note payments, and warrant value affect leverage, cash flow, and the scale of future live‑event investments.
8-K Event Classification
Key Figures
Key Terms
Asset Purchase Agreement financial
Secured Promissory Note financial
earnout financial
registration rights agreement financial
warrants financial
forward-looking statements regulatory
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement.
On June 24, 2026, Kustom Entertainment, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Acquisition Agreement”) with Cycurion, Inc., a Delaware corporation (“Buyer”). Pursuant to the Acquisition Agreement, the Company will sell to Buyer all assets of the Company relating to the video-solutions division, including the development, sale, licensing, support and servicing of video hardware, camera products, platforms, software and software solutions (the “Business”). The Company shall sell, transfer, convey, assign and deliver to Buyer all of the Company’s right, title and interest in all assets, claims, rights and interests used primarily in or held for the use of the Business (the “Acquired Assets”). The transaction is anticipated to close on July 15, 2026.
In consideration for the sale, assignment and delivery of the Acquired Assets and in consideration of the other agreements contained in Acquisition Agreement, Buyer will pay to the Company an aggregate consideration consisting of: (i) a cash payment of One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00), (ii) a Secured Promissory Note in the original principal amount of Four Million Two Hundred Fifty Thousand Dollars ($4,250,000), (iii) contingent cash consideration of up to One Million Dollars ($1,000,000) payable solely upon satisfaction of the applicable earnout conditions set forth herein and in the Earnout Agreement (as defined in the Acquisition Agreement), and (iv) warrants to purchase up to 2,000,000 shares of Buyer’s common stock at an exercise price of $2.80 per share.
Pursuant to the Acquisition Agreement, the parties will enter into a registration rights agreement, pursuant to which, Buyer would be required to file a shelf registration statement covering the resale of the shares of Buyer’s common stock issuable upon exercise of the warrants described above (up to 2,000,000 shares), subject to the terms and conditions of such registration rights agreement.
The consummation of the transactions contemplated by the Acquisition Agreement is subject to the satisfaction or waiver of various closing conditions set forth in the Acquisition Agreement and a related conditions precedent agreement entered into by the parties. Such conditions include, among other, satisfactory completion of financial, accounting, operational and business due diligence; reconciliation and validation of financial information and projections; delivery of carve-out financial statements and supporting documentation sufficient to satisfy audit and U.S. Securities and Exchange Commission (the “SEC”) reporting requirements; approval by the boards of directors of both companies; execution and delivery of ancillary transaction documents; obtaining any required third-party consents; entering arrangements with key employees and contractors identified by Buyer; and, the absence of a material adverse effect on the Business. There can be no assurance that the conditions precedent will be satisfied or waived or that the transaction will close on the anticipated timeframe or at all.
The foregoing summary provides only a brief description of the Acquisition Agreement. The summary does not purport to be complete and is qualified in its entirety by the full text of such document, a copy of which is attached as Exhibit 10.1 and incorporated herein by reference.
Item 8.01 Other Information.
On June 25, 2026, the Company issued a press release announcing the execution of the Acquisition Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
See the Exhibit Index below, which is incorporated by reference herein.
| Exhibit No. | Description | |
| 10.1#* | Asset Purchase Agreement dated June 24, 2026 | |
| 99.1 | Press Release dated June 25, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
# Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K as the Company has determined they (1) are not material and (2) are the type that the Company treats as private or confidential. The Company hereby agrees to furnish a copy of any omitted portion to the SEC upon request.
* Schedules or exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: June 25, 2026 | ||
| Kustom Entertainment, Inc. | ||
| By: | /s/ Stanton E. Ross | |
| Name: | Stanton E. Ross | |
| Title: | Chairman, President and Chief Executive Officer | |
Exhibit 99.1
FOR IMMEDIATE RELEASE
KUSTOM ENTERTAINMENT, INC. ANNOUNCES BINDING AGREEMENT FOR THE DIVESTITURE OF ITS VIDEO SOLUTIONS SEGMENT TO FULLY COMPLETE LIVE ENTERTAINMENT PIVOT
Transaction Structured to Provide Up to $5.5 Million plus 2,000,000 Warrants to acquire shares of common stock of Cycurion, Inc.; Follows Previously Announced Major Live Music Expansion Partnership with Gilley’s Park City
OVERLAND
PARK, KS – June
This strategic divestiture accelerates Kustom’s complete focus on its rapidly growing live event production portfolio and proprietary online ticketing operations, fully aligning corporate resources with its recent rebranding and Nasdaq ticker symbol “KUST.”
The transaction represents a key operational milestone in Kustom’s planned corporate overhaul, following the divestiture of its medical billing business earlier this year and the Company’s recently announced multi-year partnership between its wholly owned subsidiary, Kustom 440, Inc., and Ruffin Properties, LLC, owner of Gilley’s Park City (“Gilley’s”). Together, these divestitures and the Gilley’s partnership position Kustom to expand its live music footprint ahead of the upcoming festival season while continuing to strengthen and grow its online ticketing business, which complements its live event operations.
Transaction Overview
The Cycurion transaction is designed to enhance Kustom’s near-term financial flexibility while preserving meaningful long-term equity upside. The consideration includes:
| ● | Cash and secured debt consideration: $5.5 million in total consideration, including $1.25 million in upfront cash and a $4.25 million secured promissory note payable over 36 months at 7% interest. | |
| ● | Warrant upside: Kustom will receive 2,000,000 warrants to purchase Cycurion common stock, giving the Company potential upside from Cycurion’s future market performance as the legacy video solutions division is integrated into Cycurion’s security business. | |
| ● | Timing: The divestiture is expected to close in July 2026, subject to the satisfaction of customary closing conditions. | |
| ● | Value to Shareholders: Based on total consideration of $5.5 million, the transaction equates to approximately $5.33 per estimated current outstanding common share. |
The sale of the legacy video segment gives Kustom a leaner operating structure and sharper focus on the full fan experience—from ticket purchase through the final encore—as it pursues an estimated $100 billion global addressable market.
Management Comment
“This divestiture sharpens our focus and allows us to direct resources toward the significant opportunity we see in the entertainment sector,” said Stanton E. Ross, CEO of Kustom Entertainment. “We are quickly moving from a strong regional presence to a national live event and ticketing platform. This transaction gives us the capital and operational clarity needed to accelerate the expansion plans we launched last month.”
Reflecting on the combined impact of the past month’s milestones, Ross added: “As we noted in our Gilley’s announcement, expanding our festival footprint into the Wichita region enables us to significantly enhance the fan experience with camping, premium amenities, and world-class live music. Completing this divestiture ensures we have the dedicated capital and team focus to execute that plan effectively.”
The “Country Stampede” Evolution & Gilley’s Expansion Status
Kustom’s flagship event, the Country Stampede Music Festival, celebrates its milestone 30th Anniversary this week (June 25–27, 2026) at the Azura Amphitheater in Bonner Springs, Kansas, featuring headliners Rascal Flatts, Zach Top, and Treaty Oak Revival.
As detailed in the Company’s announcement this past month, the 2027 edition of Country Stampede Kansas will officially move to Gilley’s Park City from June 25–27, 2027.
The transition to Gilley’s—located in Park City, KS, a suburb of Wichita—is the cornerstone of Kustom’s live entertainment pipeline:
| ● | Doubled Capacity: The venue move allows Kustom to nearly double its current capacity, hosting up to 35,000 people per show. |
| ● | Expanded Footprint: The added acreage gives Kustom the ability to expand and customize the destination experience with larger crowds, extensive camping, diverse food and beverage options, and premium fan amenities. |
| ● | Increased Utilization: The agreement establishes Gilley’s as a seasonal destination, including more than 20 show days in 2027 across multiple events spanning the spring, summer, and fall, alongside select events planned for fall 2026. |
Patrons attending this week’s 2026 festival in Bonner Springs will receive the previously promised “first look” at early details of the future Park City festival concept. When tickets go on sale for the 2027 event at Gilley’s, current 2026 ticket holders will receive early access before the general public. Tickets to the 2026 festival can be purchased at www.countrystampede.com.
Additional details regarding fall 2026 event dates, 2027 festival schedules, artist lineups, and ticketing packages continue to be finalized and will be announced at a later date.
About Kustom Entertainment, Inc.
Kustom Entertainment, Inc. (Nasdaq: KUST) is an emerging leader in live event production and entertainment ticketing technology, specializing in large-scale music festivals and end-to-end event management solutions. By leveraging proprietary ticketing platforms and premier venue partnerships, Kustom is dedicated to monetization across the entire live event lifecycle. For additional information, please visit www.kustom440.com.
Forward-Looking Statements
Statements made in this press release that are not descriptions of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on management’s current expectations and assumptions and are subject to risks and uncertainties with the proposed divestiture. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “may,” “potential,” “should,” “will,” “would” or the negative or plural of these words or similar expressions or variations. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition, and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of today’s date. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made, and the Company assumes no duty to update forward-looking statements, except as required by law. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, some of which are beyond the control of the Company, including, but not limited to, the risks described from time to time in the Company’s periodic filings with the U.S. Securities and Exchange Commission, (i) the ability of the parties to complete the proposed transaction on the anticipated terms and timing, or at all; (ii) the risk that the Company’s stock price may fluctuate during the pendency of the proposed transaction and may decline if the proposed transaction is not completed; (iii) the risk that disruptions from the proposed transaction will harm the Company’s business, including current plans and operations, including during the pendency of the proposed transaction; (iv) the diversion of management’s time and attention from ordinary course business operations to completion of the proposed transaction; (v) potential adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the proposed transaction; (vi) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (vii) unexpected costs, liabilities or delays associated with the transaction; (viii) the satisfaction or waiver of other conditions to the completion of the proposed transaction; and the risks described in the Company’s 2025 Annual Report on Form 10-K under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (as applicable). These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and the Company undertakes no duty to update this information.
For Additional Information, Please Contact:
Stanton E. Ross, CEO
Phone: (913) 456-KUST (5878)
info@kustoment.com
www.kustoment.com
www.kustom440.com
www.countrystampede.com