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
| Component |
Amount |
| Cash Payment |
$1.25 million |
| Secured Promissory Note |
$4.25 million |
| Contingent Cash Earnout |
Up to $1.0 million |
| Warrants |
Up to 2,000,000 shares |
Acquired Business Metrics
| Metric |
Value |
| Annual Revenue |
~$5.1 million |
| Contracted Backlog |
~$8.0 million |
| Patents Held |
~58 |
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