KUST · Kustom Entertainment, Inc.

Substantial doubt about the company's ability to continue as a going concern.

“These conditions raise substantial doubt about the Company's ability to continue as a going concern within one year from the date of issuance of these condensed consolidated financial statements. In response, management has implemented and continues to implement plans intended to mitigate these conditions, including (i) continued access to the Company's committed equity financing facility (the "ELOC") providing up to $25,000,000 over a 36-month term, (ii) the January 8, 2026 divestiture of Nobility Healthcare, which eliminated the operating losses and working capital requirements of the Revenue Cycle Management segment, (iii) ongoing cost-reduction initiatives, including headcount reductions and facility consolidations in the Video Solutions segment, and (iv) continued evaluation of additional debt and equity financing alternatives. There can be no assurance that the Company will be successful in restoring positive cash flows and profitability, or that it will be able to raise additional financing on terms acceptable to the Company.Notwithstanding these measures, substantial doubt about the Company's ability to continue as a going concern has not been alleviated as of the date of issuance of these condensed consolidated financial statements.”