Kustom Entertainment To Sell Its Video Solutions Unit To Cycurion For $1.25M In Cash, A $4.25M Promissory Note, Contingent Cash Earnout Of $

Cycurion, Inc. (NASDAQ: CYCU ) ("Cycurion" or the "Company"), a leading provider of AI-driven cybersecurity, IT security solutions, and managed services, today announced that it has entered into an Asset Purchase Agreement, dated June 24, 2026 (the "Asset Purchase Agreement") with Kustom Entertainment, Inc. (NASDAQ: KUST ) ("Kustom") to acquire substantially all of the assets comprising Kustom’s video-solutions division, including the development, sale, licensing, support and servicing of video hardware, camera products, platforms, software and software solutions (the "Business"), subject to the satisfaction or waiver of closing conditions as set forth in the Asset Purchase Agreement.

Closing is expected in early July 2026.

The Business includes the well-established Digital Ally-branded in-car video systems, body-worn cameras, and digital evidence management solutions used by law enforcement agencies, municipalities, and public safety organizations across the United States.

Kustom currently holds a robust portfolio of approximately 58 patents covering video surveillance, evidence management, and integration technologies, with more patents pending — strengthening its leadership in AI-enhanced rugged video capture, real-time analytics, and secure evidence management.

This transaction represents disciplined execution of Cycurion’s strategy to build a comprehensive public safety technology platform.

By combining Kustom’s proven video and evidence management capabilities with Cycurion’s ARx AI-powered cybersecurity platform and the recently acquired Panoptic threat visibility and MDR solutions, the Company expects to create a differentiated, full-spectrum offering that enhances recurring revenue and supports profitable growth.

The transaction has been structured to minimize immediate dilution to existing stockholders.

Subject to closing, the aggregate purchase consideration is expected to consist of (i) a cash payment of $1.25 million, (ii) a $4.25 million secured promissory note, (iii) contingent cash consideration of up to $1.0 million payable only upon the achievement of specified earnout conditions, and (iv) warrants to purchase up to 2,000,000 shares of Cycurion common stock.

The transaction structure is intended to align a substantial portion of the consideration with future performance while limiting immediate equity dilution to existing stockholders.

Upon closing, Cycurion expects to gain access to approximately 1,000 new customer relationships, including numerous police departments and municipal agencies where the Company already provides cybersecurity and managed services.

These overlapping relationships create immediate opportunities for cross-selling integrated video, evidence management, and AI-driven security solutions.

Based on information from the seller, the Business generated approximately $5.1 million in annual revenue and holds approximately $8.0 million in contracted backlog, primarily from recurring subscriptions and multi-year contracts.

Cycurion believes the acquisition can enhance operating leverage and support margin expansion, although there can be no assurance that these benefits will be realized.