Cycurion's Kustom Deal: 1,000 Police Clients, $5.1M Revenue

Cycurion (CYCU) is buying Kustom Entertainment's video-solutions division in a deal that adds roughly 1,000 law enforcement clients and $5.1 million in annual revenue. The acquisition closes in early July.

The purchase price is a blend of cash, debt, and warrants. Cycurion hands over $1.25 million upfront and issues a $4.25 million secured promissory note. Another $1 million in earnout payments depends on hitting performance targets. Kustom's shareholders also get warrants to buy 2 million Cycurion shares. Most of the consideration is tied to future results, not paid today.

The acquired business includes Digital Ally-branded in-car video systems, body-worn cameras, and digital evidence management software. Kustom holds 58 patents covering video surveillance and evidence integration, with more pending. Cycurion plans to pair those products with its ARx AI cybersecurity platform and the Panoptic threat-detection tools it bought earlier.

The cross-sell opportunity is the real angle. Many of the 1,000 new clients are police departments where Cycurion already provides cybersecurity and managed services. Those overlapping relationships let the company pitch integrated video, evidence management, and AI security in a single conversation. The seller's data shows $8 million in contracted backlog, mostly recurring subscriptions and multi-year contracts. Revenue from the division was $5.1 million.