Kustom Entertainment, Inc. (Nasdaq: KUST) completed the sale of its legacy video solutions business to Cycurion, Inc. (Nasdaq: CYCU) for $6.1 million, according to a press release. The transaction closed on August 3, 2026.

The deal includes $1.25 million in upfront cash, a $4.25 million secured promissory note bearing 7% annual interest over 36 months, and $600,000 in Cycurion Series H Preferred Stock carrying a 12% annual cumulative dividend payable quarterly in Cycurion common shares. The preferred stock carries a $1.45 conversion price into common stock and includes liquidation preferences, class voting rights, and registration rights.

The transaction was completed under an amended asset purchase agreement, including Amendment No. 1 and a Forbearance/Extension Agreement.

"Closing this divestiture marks a historic milestone for Kustom Entertainment," said CEO Stanton E. Ross. "By finalizing this upgraded $6.1 million agreement with Cycurion, we have strengthened our balance sheet, eliminated legacy operational overhead, and secured non-dilutive, yield-bearing capital for our shareholders."

Following the divestiture, Kustom said it will concentrate on live music festival production and proprietary ticketing technology. The company plans to expand its Country Stampede Music Festival to Gilley's Park City in Park City, Kansas for 2027, with a stated capacity of 35,000 fans per show. Kustom also cited a pipeline of more than 20 planned live event days across 2026 and 2027.