EXCLUSIVE: Cycurion Seeks To Acquire Kustom Video Unit In $6-$8.4 Million Deal

Cycurion, Inc. (NASDAQ:CYCU) on Thursday announced that it has entered into a Memorandum of Understanding (MOU) to acquire the video-solutions division of Kustom Entertainment, Inc. (NASDAQ:KUST), a mobile video surveillance technologies provider.

The contemplated transaction valued between $6.0-8.4 million is based on the pro forma financial information, with $1-$1.4 million payable in cash and the remainder in Cycurion preferred stock.

The conversion price for Cycurion's preferred stock shall be equal to 20% above the 30-day VWAP of Cycurion's common stock before the closing and subject to adjustment to reflect stock splits, stock dividends, recapitalizations, and other similar events, and down round protection as outlined in a definitive agreement.

Kustom shall have the right, but not the obligation, to convert the preferred stock into shares of Cycurion common stock at any time after the registration of the shares underlying the preferred stock.

"By combining Kustom's proven video and evidence management expertise with our AI-powered cybersecurity platforms, we expect to create a comprehensive, secure ecosystem for public safety agencies and enterprises. The deal is expected to deliver immediate top- and bottom-line growth, strengthen recurring revenue, and unlock significant cross-selling potential all at what we believe is an attractive valuation," Cycurion CEO Kevin Kelly said.

Backlog and Customer Reach Strengthen Growth Outlook

Cycurion said that the addition of Kustom's video-solutions division could increase its revenues by approximately $5.1 million, or 35% in 2026 compared to 2025, and approximately $8.0 million in backlog from Kustom's established contracts and recurring subscription models.

This may build on Cycurion's strong momentum and forecasted run-rate growth. The company said that the transaction could provide Cycurion with immediate access to Kustom's extensive client footprint.

This includes agencies from all 50 U.S. states and more than 30 countries. Kustom has built a broad network serving thousands of end-users through its deployments, including over 300 subscription contracts for its video solutions as of 2025.

The transaction would be subject to customary closing conditions, including regulatory approvals and applicable shareholder approval.

Price Action: Cycurion shares were up 3.89% at $2.60, and Kustom Entertainment shares were down 3.26% at $2.08 during premarket trading on Thursday, according to Benzinga Pro data.

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