Cycurion, Inc. Acquires Kustom Entertainment's Video Solutions Business

What Happened
Cycurion, Inc. announced it closed the acquisition of substantially all assets of Kustom Entertainment, Inc.’s video‑solutions division on August 3, 2026, under an Asset Purchase Agreement dated June 24, 2026 (amended July 23, 2026). The deal transfers the business that develops, sells, licenses and supports video hardware, cameras, platforms and related software to Cycurion, with the company assuming certain specified liabilities.

Key Details

• Purchase price and consideration: $1,250,000 cash; a secured promissory note with original principal $4,250,000; up to $1,000,000 in contingent earnout payments; and Series H Preferred Stock with stated value $600,000.
• Series H terms: 12.0% annual dividend (accruing, payable quarterly); convertible into common stock at an effective conversion price of $1.45/share (subject to Certificate of Designation adjustments). Series H replaced 2,000,000 warrants previously contemplated.
• Closing mechanics and protections: Cycurion executed ancillary agreements including assignment and IP transfers, bill of sale, non‑compete/non‑solicit, secured promissory note and security agreement (granting seller a security interest), registration rights, earnout & clawback, leak‑out limits on resale, and a side letter for deferred employee and contractor agreements.
• Regulatory/filing items: Series H issued in a private placement exempt from registration (Section 4(a)(2) and/or Rule 506 Reg D). Cycurion furnished a press release on Aug 4, 2026 and filed unaudited pro forma financial information reflecting the acquisition (Exhibit 99.2).

Why It Matters
The acquisition expands Cycurion’s product portfolio into video hardware and software solutions, which could add revenue and technology capabilities tied to the acquired business. Investors should note the mix of cash, sizable seller‑financing (secured $4.25M note), contingent earnouts, and convertible preferred stock: these create future cash‑flow obligations, potential dilution if Series H converts, and resale limits (leak‑out). The company also granted the seller security and registration rights, and provided unaudited pro forma financials to show the combined results for informational purposes.