Kustom Entertainment Completes Sale of Video-Solutions Business

What Happened Kustom Entertainment, Inc. (KUST) announced it closed the sale of its video-solutions division to Cycurion, Inc. on August 3, 2026. The parties originally signed an Asset Purchase Agreement on June 24, 2026 (amended July 23, 2026), and the transaction transferred all assets used in the video hardware, camera products, platforms and software business to Cycurion. The consideration includes cash, a secured promissory note, contingent earnouts and preferred stock.

Key Details

• Buyer: Cycurion, Inc.; closing date: August 3, 2026 (Agreement dated June 24, 2026; amended July 23, 2026).
• Consideration: $1,250,000 cash + $4,250,000 secured promissory note + up to $1,000,000 contingent earnout + Series H Convertible Preferred Stock with $600,000 stated value.
• Security & protections: the $4.25M note is secured by the sold assets; parties also executed a Registration Rights Agreement, Earnout & Clawback Agreement, and a Leak-Out Agreement limiting resale of shares.
• Other: Kustom amended a Common Stock Purchase Agreement (Second Amendment) on August 3, 2026 affecting an investor’s ELOC purchase limits; the company issued a press release announcing the transaction.

Why It Matters This 8-K reports a material disposition: Kustom has sold substantially all assets of its video-solutions business, which will remove that line from the company’s future operations and financials. Shareholders should note the mix of cash, secured debt, contingent payments and convertible preferred stock received—each has different liquidity, credit and dilution implications. The secured note and registration rights affect when and how the convertible preferred shares (and underlying common stock) can be sold; the earnout means up to $1M additional cash could be paid later if performance targets are met. Watch future filings for how the company records the sale proceeds, any gain or loss, and the ongoing impact on revenue and operations.