Kustom to acquire TFL for $89.6M cash plus stock
Kustom Entertainment, Inc. (KUST) signed a Unit Purchase Agreement to acquire 100% of the equity interests of TFL, LLC, a wholesale ticketing distribution and live event technology platform.
Rhea-AI Filing Summary
Kustom Entertainment, Inc. (KUST) signed a Unit Purchase Agreement to acquire 100% of the equity interests of TFL, LLC, a wholesale ticketing distribution and live event technology platform. The consideration at closing will include $89.6 million in cash (subject to adjustments) and $22.4 million in restricted common stock, plus repayment of $35.0 million of TFL’s indebtedness that does not adjust the purchase price.
The stock portion will be based on the 10-day volume-weighted average price before closing and includes $11.2 million of restricted shares held back and issuable only if a specified Target EBITDA is achieved through year-end 2027. Additional purchase price adjustment and indemnification escrows of $0.5 million and $1.0 million, respectively, will be funded. Closing is subject to customary conditions, required consents, stockholder approvals, financing, and related corporate actions, with an outside date of October 15, 2026, extendable 15 days if Kustom files a Form S-1 by that date.
Kustom states that TFL generated $238 million of revenue in 2025 and that the acquisition is expected to be immediately accretive to consolidated revenue, earnings, and adjusted EBITDA. TFL’s leadership will enter long-term employment agreements, one seller designee will join Kustom’s board at closing, and the sellers have agreed to five-year non-compete and non-solicitation covenants.
Positive
- Transformational acquisition with scale: Kustom is acquiring 100% of TFL, LLC, a premier ticketing distribution and technology platform that generated $238 million in revenue in 2025, which Kustom states is expected to be immediately accretive to consolidated revenue, earnings and adjusted EBITDA.
- Structured consideration with performance alignment: The deal uses a mix of $89.6 million cash, $22.4 million in restricted stock, and an $11.2 million stock holdback tied to achieving Target EBITDA through 2027, aligning a portion of seller value with post-closing performance.
- Debt cleanup and strong partner incentives: Kustom will repay $35.0 million of TFL’s debt at closing, while TFL’s executives enter long-term employment agreements and sellers accept five-year non-compete and non-solicitation commitments, supporting integration and continuity.
Negative
- Significant cash and financing requirement: The transaction requires $89.6 million in cash consideration plus repayment of $35.0 million of TFL debt at closing, and completion is conditioned on Kustom obtaining sufficient funds, creating execution and financing risk.
- Closing and timing risk: The acquisition is subject to numerous conditions, including third-party consents, stockholder approvals, financing, and corporate actions, with an outside date of October 15, 2026 (extendable by 15 days), introducing the risk that the deal may be delayed or may not close.
Filing Explained
The stock consideration is unregistered and contingent on closing; if issued, it would reduce existing holders’ percentage ownership, while financing remains a closing condition.
The stock consideration is described as issuable at closing and remains unregistered; if issued, it would reduce existing holders’ percentage ownership absent offsetting changes.
The agreement lists
Sources and calculations
- August 31, 2026 Form 8-K and September 1, 2026 press-release exhibit (2026-08-31)
- Kustom Entertainment second-quarter 2026 fundamentals (2026-06-30)
- Dilution definition (2026-07-17)
- Available liquidity against the last reported quarterly operating outflow, in days at that rate $830,193 / ($2,661,864 / 91) = 28.4 days
8-K Event Classification
Key Figures
Key Terms
Unit Purchase Agreement regulatory
Target EBITDA financial
registration rights agreement regulatory
indemnification escrow financial
non-competition and non-solicitation regulatory
Regulation D regulatory
FAQ
What acquisition did KUST announce in this 8-K?
What is the purchase price structure for KUST’s TFL acquisition?
How is the KUST stock consideration and holdback structured?
What financial performance did TFL contribute before the KUST deal?
What are the main conditions and timing for closing KUST’s TFL acquisition?
What governance and non-compete arrangements are included in KUST’s TFL acquisition?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Charter)
| (State or other Jurisdiction | (Commission | (IRS Employer | ||
| of Incorporation) | File Number) | Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
Item 1.01 Entry into a Material Definitive Agreement.
On August 31, 2026, Kustom Entertainment, Inc. (the “Company” or the “Buyer”) entered into a Unit Purchase Agreement with (i) TFL, LLC, a Kansas limited liability company (“TFL”), (ii) The Rouen Trust Dated October 5, 2010, Daniel P. Rouen Irrevocable Trust dated December 16, 2024, The Shefali S. Rouen Irrevocable trust dated November 17, 2023, Jeffrey Fromm Irrevocable Trust Dated December 26, 2012, William M. Fromm (collectively, the “Sellers”), and (iii) Daniel P. Rouen (the “Sellers’ Representative”), (the “Agreement”). Pursuant to the Agreement, on the closing date (the “Closing”) the Company will acquire all of the equity interests of TFL for aggregate consideration consisting of (i) $89.6 million in cash, subject to certain adjustments, and (ii) $22.4 million in shares of the Company’s restricted common stock (the “Common Stock”), minus the Holdback Shares as described below, with the number of shares determined based on the volume weighted average trading price of the Company’s Common Stock over the ten consecutive trading days ending immediately prior to the Closing (the “Stock Consideration”).
The Agreement provides for a purchase price adjustment based primarily on TFL’s closing net debt and transaction expenses. The Company has also agreed to repay, at Closing, $35.0 million of TFL’s outstanding indebtedness, which repayment will not result in any adjustment to the purchase price. In connection therewith, $500,000 of the purchase price will be deposited into a purchase price adjustment escrow and $1.0 million will be deposited into an indemnification escrow to secure certain obligations of the Sellers.
In addition, the Company will hold back a portion of the purchase price, which holdback amount shall consist of shares of restricted common stock having an aggregate value of $11.2 million (the “Holdback Shares”). The Holdback Shares will be issued upon achievement of a specified Target EBITDA (as defined in the Agreement) for the period beginning on the closing date and through calendar year 2027.
Pursuant to the Agreement, at Closing the parties will enter into ancillary agreements, including an escrow agreement, a registration rights agreement pursuant to which the Company will grant registration rights with respect to the Stock Consideration, lock-up agreements, and employment agreements with certain key TFL executives. The Agreement further provides that, effective as of the Closing, one individual designated by the Sellers will be appointed to the Company’s board of directors, subject to applicable legal and regulatory requirements.
The Closing of the transaction is subject to customary closing conditions, including, among other things, required third-party consents, stockholder approvals, the Company obtaining sufficient funds, corporate actions necessary to authorize the issuance of the stock consideration, and the satisfaction of other customary closing conditions.
The Agreement contains customary representations, warranties, covenants and indemnification provisions for a transaction of this nature. The Sellers agreed to certain non-competition and non-solicitation restrictions for a period of five years following the Closing.
The Agreement may be terminated at any time by the mutual written consent of the parties. In addition, either party may terminate the Agreement if the transactions contemplated thereby have not been consummated by October 15, 2026 (the “Outside Date”); provided that the Outside Date will automatically be extended once for a period of 15 days if the Company files a registration statement on Form S-1 prior to October 15, 2026. A party may not exercise this termination right if its material breach of the Agreement was the principal cause of, or primarily resulted in, the failure to consummate the transactions by the Outside Date (as extended, if applicable). The Agreement also contains customary termination rights, including termination by a party in the event of certain material breaches of the Agreement by the other party, subject to applicable notice and cure provisions.
The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of which is filed as Exhibit 1.1 hereto and is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure required by this Item and included in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. The shares of Common Stock issuable pursuant to the Agreement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.
The securities will be issued in reliance upon exemptions from registration under Section 4(a)(2) of the Securities Act, and Rule 506 promulgated under Regulation D of the Securities Act.
Item 8.01 Other Events.
On September 1, 2026, the Company issued a press release (the “Press Release”) announcing the signing of the Agreement. A copy of the Press Release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 1.1* | Unit Purchase Agreement, dated as of August 31, 2026. | |
| 99.1 | Press Release dated September 1, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon its 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: September 1, 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. Enters Into an Agreement to Acquire TFL, LLC (dba Tickets For Less)
Transformational Acquisition is Expected to Combine Kustom’s Music Festival Platform with Ticketing & Distribution Engine; Expected to be Immediately Accretive to Revenue, Earnings and Adjusted EBITDA
OLATHE, KS — September 1, 2026 — Kustom Entertainment, Inc. (Nasdaq: KUST) (“Kustom” or the “Company”), an emerging leader in live music festival production and proprietary ticketing technology, today announced that it has entered into a definitive Unit Purchase Agreement to acquire 100% of the equity interests of TFL, LLC (“TFL”), a premier wholesale ticketing distribution and live event technology platform.
The transaction will unite Kustom’s festival production footprint with TFL’s high-margin inventory distribution network, proprietary eCommerce and TFLConnect technology platforms, and long-standing commercial relationships across professional sports teams, collegiate athletics, and venues.
Executive Commentary
“The acquisition of TFL will be a transformational milestone for Kustom Entertainment as we build a fully integrated, end-to-end live entertainment ecosystem,” said Stanton E. Ross, Chief Executive Officer of Kustom Entertainment, Inc. “TFL is expected to bring an exceptional track record of profitable growth, robust cash flows, and market-leading technology that aggregates billions in live event inventory. Dan Rouen and his team have established a dominant position in live event ticketing, and integrating their technology with our festival platform will drive significant long-term shareholder value.”
“Over the past two decades, TFL has built a reputation on fee-transparent pricing, technology innovation, and deep partnerships across professional and collegiate sports,” said Dan Rouen, Founder and CEO of TFL, LLC. “Joining forces with Kustom will provide us with the capital, public market platform, and strategic alignment to accelerate our expansion. We look forward to deploying our distribution infrastructure across Kustom’s growing footprint to deliver unmatched value to venues, teams, and fans.”
Strategic & Financial Highlights
| ● | Immediate Financial Accretion: The transaction is expected to be immediately accretive to Kustom’s consolidated revenue, earnings and adjusted EBITDA. TFL brings a proven history of strong cash flow generation and high-margin profitability having generated over $238 million in revenue for full-year 2025. | |
| ● | Expanded Footprint & Partnerships: TFL will expand Kustom’s reach into major collegiate and professional sports ecosystems, leveraging partnerships with iconic brands across The National Football League, Major League Baseball, NCAA and more. | |
| ● | Proprietary Technology Integration: TFL’s eCommerce platform which currently powers TicketSmarter.com, a Kustom company, will integrate across Kustom’s festival assets, unlocking broader distribution, dynamic pricing synergies, and direct cross selling opportunities | |
| ● | Leadership Continuity: TFL’s executive leadership team will enter into long-term employment agreements with Kustom upon closing. |
Transaction Overview
Under the terms of the Unit Purchase Agreement, Kustom will acquire 100% of TFL’s issued and outstanding equity units from its selling members for consideration consisting of cash, shares of Kustom common stock, and some of the share consideration will be held back and released upon completion of future EBITDA performance milestones.
The transaction is subject to customary closing conditions, including working capital adjustments, escrow provisions, regulatory consent, and specified financing conditions.
Roth Capital Partners, LLC is acting as exclusive financial advisor to Kustom in connection with the transaction and rendered a fairness opinion to Kustom’s Board of Directors.
About TFL, LLC
Founded in 2004 as Tickets For Less, TFL, LLC is a premier live event ticketing technology and inventory distribution platform headquartered in Overland Park, KS. TFL manages millions in live event ticket inventory on behalf of their team and venue partners using its proprietary distribution engine, and aggregates billions in inventory with its proprietary multi-feed. TFL is widely recognized for its transparent pricing model, strong asset base, and sustained operational profitability across regional and national markets. For more information, visit www.ticketsforless.com.
About Kustom Entertainment, Inc.
Kustom Entertainment, Inc. (Nasdaq: KUST) specializes in large-scale live music festival production, event management, and ticketing technology solutions designed to maximize high-margin monetization across the entire live event lifecycle. For more information, visit http://www.kustoment.com/
Cautionary Statement Regarding 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 including the ability of the parties to finalize definitive documentation and the satisfaction of closing conditions by the anticipated closing date. Such statements include, but are not limited to, statements regarding the anticipated closing of the transaction contemplated by the Unit Purchase Agreement; the Company’s growth strategy; the integration of the acquired business; 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 are intended to identify such forward-looking statements. 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. Examples of such risks and uncertainties include, but are not limited to, risks related to the closing conditions and obtaining required consents; the success of integrating the business; any potential legal proceedings; or, the future performance of the Company’s common stock. 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, including, without limitation, 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.
Media & Investor Contact:
Stanton E. Ross, CEO
Kustom Entertainment, Inc.
Phone: (913) 456-KUST (5878)
Email: info@kustoment.com
Websites: www.kustoment.com