Kustom Entertainment (Nasdaq: KUST) lifts Cycurion asset sale to $6.1M package
Rhea-AI Filing Summary
Kustom Entertainment, Inc. amended its asset purchase agreement with Cycurion, Inc. for the sale of its legacy video-solutions business, extending the anticipated closing to on or about September 15, 2026. All conditions precedent under the original agreement have been satisfied or waived.
As consideration for the extension, Cycurion delivered an immediate, non-refundable $250,000 cash payment to Kustom and replaced 2,000,000 previously contemplated warrants with Series H preferred stock having an aggregate stated value of $600,000. The Series H Preferred carries a 12.0% annual dividend, paid quarterly, and is convertible into Cycurion common stock at a price of $1.45 per share based on stated value plus accrued dividends.
The press release states that total base consideration for the divestiture increases to $6.1 million, consisting of $1.25 million total upfront cash (including the $250,000 extension payment) and a $4.25 million secured promissory note with a 36‑month term at 7% annual interest. Kustom describes the divestiture as completing its shift toward a focused live entertainment and proprietary ticketing business.
Positive
- None.
Negative
- None.
Filing Explained
The divestiture remains pending despite completion language; potential CYCU conversion and dividend shares now receive registration-rights coverage.
The press release describes the amendment as completing Kustom’s transformation, but the filing states the divestiture is only anticipated to close on or about
The amendment applies registration rights to all CYCU common shares issuable upon conversion of the Series H Preferred or payment of its dividends, extending contractual coverage to those potential shares. That clause concerns future shares that may be issued through those mechanisms; it does not itself report that they have been issued or sold.
8-K Event Classification
Key Figures
Key Terms
Forbearance / Extension Agreement regulatory
secured promissory note financial
cumulative dividend financial
liquidation preferences financial
registration rights regulatory
anti-dilution protections financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What did Kustom Entertainment (KUST) change in its asset sale to Cycurion?
How much total consideration will Kustom Entertainment (KUST) receive under the upgraded deal?
What immediate cash does Kustom Entertainment (KUST) receive from the amendment?
How were the original Cycurion warrants changed in the KUST transaction?
What are the key terms of Cycurion’s Series H Preferred Stock issued to Kustom (KUST)?
How does the divestiture support Kustom Entertainment’s (KUST) live events strategy?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
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Item 1.01 Entry into a Material Definitive Agreement.
As previously reported, 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” or “CYCU”). 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.
On July 23, 2026, the Company entered into an Amendment No. 1 and Forbearance / Extension Agreement to Asset Purchase Agreement (the “Amendment Agreement”) with the Buyer. The transaction is anticipated to close on or about September 15, 2026, pursuant to a temporary forbearance and extension of the closing date, subject to the terms and conditions set forth in the Amendment Agreement. As consideration for such extension, the Buyer has agreed to (i) make an immediate, non-refundable cash payment to the Company of $250,000 and (ii) replace the 2,000,000 warrants contemplated by the Acquisition Agreement with Series H CYCU preferred stock (the “Series H Preferred Stock”) having an aggregate stated value of $600,000.
The Series H Preferred Stock will accrue dividends at a rate of 12.0% per year on the stated value, paid quarterly. Each share of Series H Preferred Stock is convertible into shares of CYCU common stock at a conversion rate equal to the stated value plus accrued dividends divided by $1.45 per share.
The Registration Rights Agreement entered into in connection with the Acquisition Agreement is amended by the Amendment Agreement, pursuant to which the registration rights will apply to all shares of CYCU common stock issuable upon conversion of or payment of dividends on the Series H Preferred Stock.
All conditions precedent under the Acquisition Agreement have been fully satisfied or waived, with both parties fully aligned to complete the transaction on or before the extended date.
Except as expressly modified by the Amendment Agreement, all provisions of the Acquisition Agreement remain unchanged and in full force and effect. In the event of any inconsistency between the Amendment Agreement and the Acquisition Agreement, the Amendment Agreement will control.
The foregoing summary provides only a brief description of the Amendment 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 July 27, 2026, the Company issued a press release announcing the execution of the Amendment 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 | Amendment No. 1 and Forbearance / Extension Agreement to Asset Purchase Agreement, dated July 23, 2026. | |
| 99.1 | Press Release dated July 27, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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: July 27, 2026 | ||
| Kustom Entertainment, Inc. | ||
| By: | /s/ Stanton E. Ross | |
| Name: | Stanton E. Ross | |
| Title: | Chairman, President and Chief Executive Officer | |
Exhibit 99.1
Kustom Entertainment Amends Divestiture Terms with Cycurion into Upgraded $6.1M Deal Featuring Immediate Cash Injection and 12% Yielding Preferred Equity
Captures $250,000 in immediate non-refundable capital, eliminates warrants in favor of preferred equity, and sharpens execution on its $100B live entertainment and ticketing expansion.
OVERLAND PARK, KS – July 27, 2026 – Kustom Entertainment, Inc. (Nasdaq: KUST) (“Kustom” or the “Company”), an emerging force in live music festival production and proprietary ticketing operations, today announced a major upgrade to its divestiture strategy. On July 23, 2026, the Company executed the Amendment No. 1 and Forbearance / Extension Agreement to its Asset Purchase Agreement with Cycurion, Inc. (Nasdaq: CYCU) for the sale of Kustom’s legacy video solutions business assets.
The upgraded agreement increases the total valuation to $6.1 million, injects immediate non-refundable capital directly into Kustom, and swaps out warrants for high-yield Series H Preferred Stock—all while extending the targeted closing window to September 15, 2026. All conditions precedent under the original agreement have been fully satisfied or waived, with both companies fully aligned to complete the transaction on or before the extended date.
This strategic move completes Kustom’s transformation into a pure-play live entertainment powerhouse, fully dedicating corporate energy and resources toward its rapidly expanding festival footprint, proprietary ticketing technology, and dynamic growth strategy under the ticker “KUST.”
Key Transaction Upgrades & Financial Terms:
| ● | Immediate $250,000 Non-Refundable Cash Injection: Cycurion has delivered an immediate $250,000 non-refundable cash payment to Kustom. This upfront liquidity is earned immediately by Kustom and will only credit toward the final purchase price upon closing. | |
| ● | Boosted Valuation to $6.1 Million: Base deal consideration rises to $6.1 million, featuring $1.25 million in total upfront cash (inclusive of the $250k extension payment) and a $4.25 million secured promissory note (36-month term at 7% annual interest). |
| ● | High-Yield $600,000 Series H Preferred Stock (Replacing Warrants): Kustom has canceled the previously planned 2,000,000 warrants ($2.80 strike price), replacing them with newly created, value-accretive Series H Preferred Stock issued by Cycurion featuring: |
| ○ | 12.0% Annual Cumulative Dividend: Paid quarterly in shares of Cycurion common stock. | |
| ○ | $1.45 Conversion Price: Convertible into common stock with customary anti-dilution protections. | |
| ○ | Institutional-Grade Protections: Includes senior liquidation preferences, class voting protections, and registration rights. |
| ● | Optimized Transition Timeline: The Outside Closing Date is extended to September 15, 2026, ensuring an orderly transition for legacy customers while allowing Kustom to capitalize fully on its peak summer/fall event calendar. |
Executive Leadership Perspective
“This upgraded agreement is a win-win: it underscores Cycurion’s resolute commitment to acquiring our legacy assets while immediately fortifying Kustom’s balance sheet with non-refundable capital and high-yield preferred equity,” said Stanton E. Ross, CEO of Kustom Entertainment.
“Swapping volatile warrants for 12% dividend-bearing stock creates strong downside protection and direct income yield for our shareholders. Best of all, it allows our team to be 100% focused on scaling our live entertainment engine, expanding our proprietary ticketing platforms, and executing our ambitious festival pipeline.”
Accelerating Momentum in a $100 Billion Market
Divesting the legacy video segment establishes a leaner, agile operating structure designed to capture market share across the global $100 billion addressable live event industry.
Kustom’s strategic pivot builds directly on the milestone success of its flagship event—the Country Stampede Music Festival, which celebrated its 30th Anniversary in June 2026. Looking ahead to 2027, the festival is officially expanding to Gilley’s Park City in Park City, KS (Wichita metro area). The move doubles capacity to 35,000 fans per show and serves as the anchor for more than 20 planned live event days across 2026 and 2027.
About Kustom Entertainment, Inc.
Kustom Entertainment, Inc. (Nasdaq: KUST) is an emerging leader in live event production and entertainment ticketing technology. The Company specializes 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 driving high-margin monetization across the entire live event lifecycle—from the initial ticket sale to the final encore. For more information, 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,” “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 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, including: (i) the ability of the parties to complete the proposed transaction on the extended 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; (iv) the diversion of management’s time and attention from ordinary course business operations; (v) potential adverse reactions or changes to business relationships resulting from the announcement or pendency of the amendment to the agreement; (vi) the satisfaction of ongoing operational covenants through the extended closing date; and the risks described in the Company’s annual and quarterly filings with the U.S. Securities and Exchange Commission. The Company undertakes no duty to update forward-looking statements except as required by law.
Media & Investor Contacts
Stanton E. Ross, CEO
Kustom Entertainment, Inc.
Phone: (913) 456-KUST (5878)
Email: info@kustoment.com
Websites: www.kustoment.com | www.kustom440.com | www.countrystampede.com