KUSTOM ENTERTAINMENT, INC. ANNOUNCES A NON-BINDING MEMORANDUM OF UNDERSTANDING FOR THE CONTEMPLATED DIVESTITURE OF ITS VIDEO SOLUTIONS SEGMENT

Core Viewpoint - Kustom Entertainment, Inc. has entered into a non-binding Memorandum of Understanding with Cycurion, Inc. to divest its video solutions division, allowing the company to focus on its growing live event production and online ticketing operations, aligning with its rebranding initiative and new Nasdaq ticker symbol "KUST" [1][2]. Transaction Overview - The divestiture is expected to be valued between $6.0 million and $8.5 million based on pro forma financial information, providing immediate liquidity and long-term equity upside for the company [2]. - The divestiture is part of Kustom's strategic shift to streamline operations and focus exclusively on the live entertainment and online ticketing markets, which have a global addressable market estimated at $100 billion [2]. Management Comment - The CEO of Kustom stated that the divestiture allows the company to sharpen its focus and allocate resources to the significant opportunities in the entertainment sector, evolving from a regional footprint to a national live event and ticketing platform [3]. The "Country Stampede" Blueprint - Kustom's flagship event, the Country Stampede Music Festival, is celebrating its 30th year in 2026, featuring a mix of legacy and rising acts, and the company plans to use this festival's success as a model for expanding its nationwide event production and integrated ticketing services [4]. About Kustom Entertainment, Inc. - Kustom Entertainment, Inc. specializes in live event production and ticketing technology, focusing on large-scale music festivals and end-to-end event management, with its flagship event held annually at the Azura Amphitheater in Bonner Springs, Kansas [5]. Cash and Equity Consideration - The cash consideration for the transaction is expected to be between $1.0 million and $1.4 million, with the remainder to be paid in Cycurion preferred stock [8].