KUST 8-K
Kustom Entertainment, Inc. (KUST)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
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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 10.1
AMENDMENT NO. 1 AND FORBEARANCE / EXTENSION AGREEMENT TO ASSET PURCHASE AGREEMENT
This Amendment No. 1 and Forbearance / Extension Agreement to Asset Purchase Agreement (this “Amendment”) is entered into and effective as of July 23, 2026 (the “Amendment Effective Date”), by and between Kustom Entertainment, Inc., a Nevada corporation (“Kustom”), and Cycurion, Inc., a Delaware corporation (“CYCU”). Kustom and CYCU are referred to collectively as the “Parties” and individually as a “Party.”
RECITALS
WHEREAS, the Parties entered into that certain Asset Purchase Agreement dated June 23, 2026 (the “Original APA”), pursuant to which Kustom agreed to sell, and CYCU agreed to acquire the Video Solutions Business assets of Kustom on the terms and conditions set forth therein;
WHEREAS, the transaction contemplated by the Original APA was required to close on or before the closing date specified in the Original APA of July 15, 2026;
WHEREAS, CYCU has requested, and Kustom has agreed to grant, a temporary forbearance and extension of the Closing Date through September 15, 2026, subject to the terms and consideration set forth in this Amendment;
WHEREAS, as consideration for such extension, CYCU has agreed to (i) make an immediate, non-refundable cash payment to Kustom and (ii) replace the 2,000,000 warrants contemplated by the Original APA with a series of CYCU preferred stock having an aggregate stated value of $600,000, upon the terms described herein; and
WHEREAS, the Parties wish to confirm that, as of the Amendment Effective Date, all conditions precedent to closing under the Original APA have either been satisfied or waived, and that both Parties remain ready, willing, and able to complete the transaction on or before the extended Closing Date.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. EXTENSION OF CLOSING DATE AND IMMEDIATE CONSIDERATION
1.1 Extension of Closing Date
The Parties hereby amend the Original APA of July 15, 2026 to extend the Outside Closing Date to September 15, 2026 (the “Extended Expiration Date”).
1.2 Extension Payment
Upon execution of this Amendment, CYCU shall immediately pay Kustom $250,000 in cash by wire transfer of immediately available funds (the “Extension Payment”).
1.3 Application of Extension Payment
The Extension Payment shall be fully earned and non-refundable under all circumstances. However, if the transaction closes on or before the Extended Expiration Date, the full amount of the Extension Payment shall be credited against the aggregate purchase price payable by CYCU at Closing under the Original APA.
2. REPLACEMENT OF WARRANTS WITH SERIES H PREFERRED STOCK
The Parties agree that the 2,000,000 warrants provided for under the Original APA are hereby cancelled and terminated in their entirety and shall be replaced by a designated series of CYCU preferred stock known as Series H Preferred Stock (the “Series H Preferred Stock”), having an aggregate stated value of $600,000 (the “Stated Value”), to be issued pursuant to a Certificate of Designation containing substantially the following terms:
(a) Dividends
The Series H Preferred Stock shall accrue cumulative dividends at a rate of 12.0% per annum on the Stated Value, payable quarterly in arrears on the last day of each calendar quarter. Dividends will be paid in shares of CYCU common stock, calculated on an as-converted basis using the then-effective Conversion Price.
(b) Conversion Price
Each share of Series H Preferred Stock shall be convertible, at the holder’s option, into shares of CYCU common stock at a conversion rate equal to the Face Amount (Stated Value plus accrued dividends) ÷ $1.45 per share, as adjusted pursuant to the anti-dilution provisions set forth herein.
(c) Beneficial Ownership Limitation
CYCU shall not effect any conversion, and no holder shall have the right to convert any portion of the Series H Preferred Stock, if such conversion would cause the holder and its affiliates to beneficially own more than 9.99% of the outstanding CYCU common stock immediately following such conversion.
A holder may increase or decrease this limitation, up to the 9.99% maximum, upon providing CYCU with sixty-one (61) days’ prior written notice.
(d) Voting Rights and Class Protections
Holders of Series H Preferred Stock shall vote together with holders of common stock on an as-converted basis with respect to all matters submitted to stockholders.
In addition, for so long as any shares of Series H Preferred Stock remain outstanding, approval of a majority of the outstanding Series H Preferred Stock, voting as a separate class, shall be required to:
| 1. | Amend, alter, or repeal any provision of CYCU’s Certificate of Incorporation or Bylaws in a manner that adversely affects the rights, preferences, or powers of the Series H Preferred Stock; | |
| 2. | Authorize, create, or issue any class or series of senior preferred stock; or | |
| 3. | Increase or decrease the authorized number of shares of Series H Preferred Stock. |
(e) Liquidation Preference
Upon any liquidation, dissolution, or winding up of CYCU, holders of Series H Preferred Stock shall be entitled to receive, prior to any distribution to holders of common stock, an amount equal to the Stated Value plus all accrued and unpaid dividends.
The Series H Preferred Stock shall rank pari passu with any existing or future parity preferred stock of CYCU.
(f) Failure-to-Deliver Penalties and Buy-In Rights
If CYCU fails to deliver conversion shares within five (5) trading days after receipt of a valid conversion notice, CYCU shall pay liquidated damages to the holder in an amount equal to:
| ● | $50 per trading day for each $5,000 of Stated Value being converted; and | |
| ● | $200 per trading day after the fifth trading day of continued non-delivery. |
In addition, if a holder is required to purchase shares in the open market to satisfy a sale transaction resulting from such failure to deliver (a “Buy-In”), CYCU shall pay such holder in cash the excess, if any, of (i) the holder’s total purchase price for such shares (including brokerage commissions), over (ii) the number of shares the holder was entitled to receive multiplied by the actual sale price at which the underlying sale was executed.
(g) Fundamental Transaction Protections
In connection with any merger, consolidation, sale of substantially all assets, change of control, or other fundamental transaction, holders of Series H Preferred Stock shall be entitled to receive equivalent consideration in the successor entity.
Any successor entity shall expressly assume all obligations of CYCU under the applicable Certificate of Designation.
(h) Anti-Dilution Adjustments
The Conversion Price and any applicable Floor Price shall be subject to customary proportional adjustments for stock splits, stock dividends, stock combinations, recapitalizations, reclassifications, and pro rata distributions or rights offerings made available to all holders of common stock.
3.
REGISTRATION RIGHTS AND LEAK-OUT AGREEMENT
3.1 Amendment to Registration Rights Agreement
The Registration Rights Agreement entered into in connection with the Original APA is hereby amended so that the registration rights previously applicable to the warrant shares shall instead apply to all shares of CYCU common stock issuable upon conversion of, or payment of dividends on, the Series H Preferred Stock (the “Conversion Shares”).
CYCU shall include such Conversion Shares in any registration statement filed under the Securities Act of 1933, as amended, subject to customary underwriter and cutback provisions.
3.2 Leak-Out Restrictions
All restrictions and limitations contained in the Leak-Out Agreement executed in connection with the Original APA shall apply in full to all Conversion Shares issued or issuable upon conversion of, or as dividends on, the Series H Preferred Stock.
4. SATISFACTION OF CLOSING CONDITIONS AND READINESS TO CLOSE The Parties acknowledge, represent, and agree that, as of the Amendment Effective Date:
(a) all conditions precedent and conditions to Closing under the Original APA have been fully satisfied, performed, or irrevocably waived; and
(b) both Parties are ready, willing, and able to execute all remaining Closing deliverables and consummate the transaction on or before the Extended Expiration Date.
5. GOVERNING LAW, DISPUTE RESOLUTION, AND GENERAL PROVISIONS
5.1 Governing Law
This Amendment and all disputes arising out of or relating to this Amendment shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict-of-law principles.
5.2 Exclusive Jurisdiction
Each Party irrevocably submits to the exclusive jurisdiction of the state and federal courts located in New York, New York for the resolution of any dispute arising out of or relating to this Amendment.
5.3 Waiver of Jury Trial
EACH PARTY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
5.4 Attorneys’ Fees
In any action or proceeding brought to enforce or interpret this Amendment, the prevailing party shall be entitled to recover its reasonable attorneys’ fees, court costs, and related expenses from the non-prevailing party.
5.5 Continued Effect of Original APA
Except as expressly modified by this Amendment, all provisions of the Original APA shall remain unchanged and in full force and effect. In the event of any inconsistency between this Amendment and the Original APA, this Amendment shall control.
5.6 Counterparts and Electronic Signatures
This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument.
Electronic signatures and signatures transmitted by PDF or similar electronic means shall be deemed valid and enforceable for all purposes.
IN WITNESS WHEREOF
The Parties have executed this Amendment No. 1 and Forbearance / Extension Agreement to Asset Purchase Agreement as of the Amendment Effective Date.
| KUSTOM ENTERTAINMENT, INC. | ||
| By: | /s/ Stanton E Ross | |
| Name: | Stanton E Ross | |
| Title: | CEO | |
| Date: | July 23, 2026 | |
| CYCURION, INC. | ||
| By: | /s/ Kevin Kelly | |
| Name: | Kevin Kelly | |
| Title: | chairman and ceo | |
| Date: | July 23, 2026 | |
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: [email protected]
Websites: www.kustoment.com | www.kustom440.com | www.countrystampede.com