# KUSTOM ENTERTAINMENT, INC. (KUST) — divestiture/joint_venture [completed]
Source: SEC API (secapi.ai) · situation sit_0ff3e99212f8776c0196 · retrieved 2026-08-11T16:12:01.236Z

## Overview
Kustom Entertainment, Inc. (formerly Digital Ally, Inc.) develops and sells video recording and surveillance solutions, including video hardware, camera products, platforms, and software for law enforcement and fleet management applications.

Kustom Entertainment, Inc. completed the sale of its video-solutions division to Cycurion, Inc. on August 3, 2026, pursuant to an Asset Purchase Agreement dated June 24, 2026 and amended on July 23, 2026. The transaction consideration totaled $7.1 million in aggregate value, consisting of: (i) $1,250,000 in cash; (ii) a $4,250,000 secured promissory note at 7% interest, payable in 30 monthly installments of $154,835.60 beginning February 15, 2027, with interest-only payments for the first six months; (iii) contingent earnout consideration of up to $1,000,000 based on future performance of the business; and (iv) Series H Convertible Preferred Stock with an aggregate stated value of $600,000. The acquired assets include all video hardware, camera products, platforms, software, and related intellectual property (48 utility patents, 4 design patents, and multiple trademarks). Kustom retained a security interest in the acquired assets as collateral for the promissory note.

## Terms
- Counterparty: Cycurion, Inc. · Deal value: $6.1M · Consideration: mixed · Price/share: $1.45

## Key dates
- Announced 2026-07-27 · Expected close 2026-09-15 · Completed 2026-08-03

## Timeline
- 2026-07-27 · 8-K (0001493152-26-034719): 8-K - KUSTOM ENTERTAINMENT, INC. — *Kustom Entertainment, Inc. is an emerging leader in live event production and entertainment ticketing technology, specializing in large-scale music festivals and end-to-end event management solutions.* Kustom Entertainment, Inc. amended its asset purchase agreement with Cycurion, Inc. on July 23, 2026, extending the closing date to September 15, 2026. As consideration for the extension, Cycurion paid Kustom $250,000 in immediate, non-refundable cash and replaced 2,000,000 warrants with Series H Preferred Stock having an aggregate stated value of $600,000. The Series H Preferred Stock accrues cumulative dividends at 12.0% per annum, paid quarterly in shares of Cycurion common stock, and is convertible into Cycurion common stock at $1.45 per share. All conditions precedent to closing have been satisfied or waived.
  https://www.sec.gov/Archives/edgar/data/1342958/0001493152-26-034719.txt
- 2026-08-04 · 8-K (0001493152-26-035942): 8-K - KUSTOM ENTERTAINMENT, INC. — *Kustom Entertainment, Inc. (formerly Digital Ally, Inc.) develops and sells video recording and surveillance solutions, including video hardware, camera products, platforms, and software for law enforcement and fleet management applications.* Kustom Entertainment, Inc. completed the sale of its video-solutions division to Cycurion, Inc. on August 3, 2026, pursuant to an Asset Purchase Agreement dated June 24, 2026 and amended on July 23, 2026. The transaction consideration totaled $7.1 million in aggregate value, consisting of: (i) $1,250,000 in cash; (ii) a $4,250,000 secured promissory note at 7% interest, payable in 30 monthly installments of $154,835.60 beginning February 15, 2027, with interest-only payments for the first six months; (iii) contingent earnout consideration of up to $1,000,000 based on future performance of the business; and (iv) Series H Convertible Preferred Stock with an aggregate stated value of $600,000. The acquired assets include all video hardware, camera products, platforms, software, and related intellectual property (48 utility patents, 4 design patents, and multiple trademarks). Kustom retained a security interest in the acquired assets as collateral for the promissory note.
  https://www.sec.gov/Archives/edgar/data/1342958/0001493152-26-035942.txt

## Citations
- 0001493152-26-034719 — https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&type=&dateb=&owner=include&count=40&search_text=000149315226034719
- 0001493152-26-035942 — https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&type=&dateb=&owner=include&count=40&search_text=000149315226035942