Cycurion has entered into an Asset Purchase Agreement to acquire Kustom Entertainment’s video solutions division for a total consideration of $6.5 million to expand its public safety technology portfolio. The transaction, structured to minimize immediate dilution, includes $1.25 million in cash, a $4.25 million secured promissory note, and a contingent cash earnout of up to $1.0 million. The acquisition is expected to close in early July 2026, subject to standard closing conditions and regulatory approvals.

The acquired business encompasses the development, sale, and support of video hardware, camera products, and software solutions. This includes the well-established Digital Ally-branded in-car video systems, body-worn cameras, and digital evidence management solutions utilized by law enforcement and public safety organizations across the United States. Kustom holds approximately 58 patents related to video surveillance and evidence management, with additional patents pending.

This acquisition aligns with Cycurion’s strategy to build a comprehensive public safety platform by integrating Kustom’s video capabilities with its ARx AI-powered cybersecurity and Panoptic threat visibility solutions. The company anticipates creating a differentiated offering that enhances recurring revenue and supports profitable growth. The transaction structure is designed to align a significant portion of the purchase consideration with future performance.

Upon closing, Cycurion expects to immediately access approximately 1,000 new customer relationships, including police departments and municipal agencies. These overlapping client bases provide opportunities for cross-selling integrated video, evidence management, and AI-driven security solutions. The company believes the acquisition can enhance operating leverage and support margin expansion.

Financial metrics for the acquired business indicate approximately $5.1 million in annual revenue and a contracted backlog of about $8.0 million. The backlog is primarily derived from recurring subscriptions and multi-year contracts. Additionally, the deal includes warrants to purchase up to 2,000,000 shares of Cycurion common stock at an exercise price of $2.80 per share.

Transaction Breakdown

Acquired Business Metrics

Cycurion, Inc. has responded to a coordinated adversarial campaign targeting its stock price, citing evidence of spoofing and unauthorized press releases. The company believes damages from this campaign could exceed $30 million and is actively pursuing litigation to recover losses. Despite these external challenges, Cycurion continues to strengthen its core business by reducing net debt and integrating recent acquisitions.

Evidence of Market Manipulation

On March 16, 2026, an unauthorized press release was distributed through ACCESS Newswire, falsely announcing a fictitious acquisition by Cycurion. This triggered a coordinated manipulation of the company's stock price. Subpoenaed trading records from multiple registered market makers revealed several irregularities:

The company states that the spoofing pattern constitutes unlawful activity under the Dodd-Frank Act and FINRA Rule 5210.

Legal Action and Industry Context

Cycurion has filed a lawsuit naming ACCESS Newswire as a defendant and plans to include market manipulators. The company highlights similar cases involving other public companies, such as Genius Group and Datavault AI, which have filed federal lawsuits alleging spoofing and market manipulation. The SEC's Fiscal Year 2025 enforcement report also identified spoofing as a priority, reinforcing the severity of the issue.

Operational Strengthening

While addressing the stock manipulation, Cycurion has focused on improving its operational fundamentals:

• Reduced net debt by over 70% while maintaining solid cash reserves.
• Implemented disciplined cost controls focused on profitable revenue.
• Integrated acquisitions of Secuvant and Digital Ally's Video Solutions segment to expand its AI-powered ARx platform.
• Positioned to more than double run-rate revenue through significant contract wins and improved margins.

The company emphasizes that its share price decline reflects the coordinated external attack rather than its operational performance. Cycurion remains committed to fighting back legally while continuing to grow its cybersecurity and public safety business.