Kustom Entertainment sweetens video unit sale to $6.1M with $250K upfront cash and preferred stock

summarizeSummary

Kustom Entertainment amended its asset sale to Cycurion, raising the deal value to $6.1 million, adding a $250,000 immediate cash payment, and swapping warrants for high-yield preferred stock. The transaction is on track to close by September 15, 2026.

check_boxKey Events · M&A and Partnerships · KUST

• Deal Value Upgraded to $6.1M

  The amendment boosts total consideration to $6.1 million, up from the original $5.5 million base plus earnouts, with $1.25 million in upfront cash and a $4.25 million secured note.

• Immediate $250K Non-Refundable Cash

  Upon signing the amendment, Cycurion paid $250,000—providing immediate liquidity to Kustom—which credits against the purchase price at closing.

• Warrants Replaced with Preferred Stock

  The 2,000,000 warrants (strike $2.80) were canceled and replaced with $600,000 in Series H Preferred Stock, carrying a 12% annual dividend paid in common stock and convertible at $1.45 per share.

• Closing Extended to September 15, 2026

  The outside closing date moved from July 15 to September 15, 2026; all conditions precedent have been satisfied or waived, and both parties are aligned to close.

auto_awesomeAnalysis · KUST · Manufacturing

An amendment to the divestiture of its video solutions segment lifts the total deal value to $6.1 million and delivers an immediate $250,000 non-refundable cash injection. The buyer, Cycurion, canceled 2 million warrants and replaced them with $600,000 in Series H Preferred Stock, which yields 12% annually and converts at $1.45 per share. All closing conditions have been met, and the transaction is now expected to close by September 15, 2026. For a company with a market cap under $1 million and a recent $5.88 million quarterly loss, the upfront cash and improved terms provide critical near-term liquidity and reduce dilution risk from warrant overhang.