secwatch.observer — SEC 8-K summary
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Issuer:     KUSTOM ENTERTAINMENT, INC. (KUST)
CIK:        0001342958
Form:       8-K
Filed at:   2026-08-04T13:35:39+00:00
Accession:  0001493152-26-035942
Event type: m_and_a
Sentiment:  positive
Materiality: 0.80
Item codes: 1.01, 2.01, 9.01, 8.01
LLM model:  deepseek-v4-flash:cloud@v2

Kustom Entertainment closes $6.1M divestiture of video solutions business to Cycurion
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- Closed sale of video solutions assets to Cycurion (CYCU) for $1.25M cash, $4.25M secured note (7% interest, 3-year term), and $600K Series H Preferred (12% cumulative dividend).
- Earnout potential up to $1M based on 2026/2027 revenue targets ($5.5M/$5.8M); symmetrical clawback if revenue falls >20% below target.
- Company pivots to pure-play live entertainment and ticketing; plans to expand Country Stampede festival to 35,000 capacity in 2027.
- Pro forma balance sheet shows $2.47M cash, $4.63M notes receivable, and $305K investment in Cycurion preferred stock post-divestiture.
- Amended ELOC purchase agreement with investor to adjust maximum share purchases based on beneficial ownership limitation.

Source:
  EDGAR index:    https://www.sec.gov/Archives/edgar/data/1342958/000149315226035942/0001493152-26-035942-index.htm
  Primary doc:    https://www.sec.gov/Archives/edgar/data/1342958/000149315226035942/form8-k.htm
  HTML page:      https://secwatch.observer/filing/0001493152-26-035942

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