Kustom Entertainment, Inc. (NASDAQ: KUST) Announces Significant Financial Turnaround, Strategic Refocus, and Forbes Recognition for TicketSmarter

Key Highlights for Investors

• Substantial Bottom-Line Improvement: Kustom Entertainment, Inc. reported a dramatic reduction in net losses for FY2025, with net loss from continuing operations improving by approximately \$11.9 million to \$5.96 million from \$17.9 million in the prior year.
• Revenue Growth Amid Strategic Refocus: Revenues from continuing operations increased to \$13.76 million, up \$235,000 year-over-year, marking the company’s ability to grow its core business even during a transformative year.
• Enhanced Operating Efficiency: Selling, General, and Administrative (SG&A) expenses declined by \$2.28 million to \$12.23 million, despite absorbing a one-off, non-cash impairment charge of \$2.54 million related to goodwill and intangible assets.
• Non-Operating Income Surge: Non-operating income soared by \$11.44 million, primarily driven by a \$4.58 million improvement in the fair value of warrant derivative liabilities and a \$2.72 million reduction in interest expense.
• Balance Sheet Strengthening: Total stockholders’ equity increased by \$11.4 million, and net working capital improved by \$17.9 million year-over-year, boosting financial resilience.

Strategic Transformation and Asset Divestitures

• Corporate Rebranding and Focus: The company rebranded as Kustom Entertainment, Inc., reinforcing its exclusive focus on the live entertainment and ticketing sectors, a global market valued at \$100 billion.
• Exit from Non-Core Operations:
  • The sale of the medical billing Revenue Cycle Management (RCM) business was completed effective January 1, 2026. This segment had generated losses of \$1.41 million in 2025 and \$3.82 million in 2024.
  • Kustom entered a non-binding Memorandum of Understanding (MOU) to divest its legacy video solutions division to Cycurion, Inc. (NASDAQ: CYCU). If finalized, this deal is expected to be valued between \$6.0 million and \$8.5 million, further streamlining Kustom’s balance sheet and sharpening its focus on entertainment and ticketing technology.

TicketSmarter Earns Prestigious Forbes Recognition

• On February 6, 2026, TicketSmarter was named a “Best Resale Site for Tickets” by Forbes Advisor. The review highlighted:
  • Transparent pricing and clear communication of all fees prior to checkout
  • Robust buyer protections, including a 100% Ticket Guarantee
  • Seller-friendly terms, with commissions as low as 10% for returning sellers
  • Extensive distribution, with listings promoted across thousands of partner websites
• This recognition underscores TicketSmarter’s position as a premier platform and validates Kustom’s strategic focus on proprietary ticketing solutions.

Major Event Update: 2026 Country Stampede Music Festival

• 30th Anniversary Festival: The flagship Country Stampede Music Festival is scheduled for June 25–27, 2026 at Azura Amphitheater, Bonner Springs, KS.
• Headlining Acts: Rascal Flatts, Zach Top (2025 CMA New Artist of the Year), and Treaty Oak Revival.
• Main Stage Support: Scotty McCreery, Wyatt Flores, Tracy Lawrence, Diamond Rio, Jerrod Niemann, Lanie Gardner, Presley & Taylor, and The Wilder Blue.
• Expanded Festival Experience: Includes a pre-party in downtown Bonner Springs, late-night after-parties, a “Battle of the Bands” finale (winner: Isaac Cole, opening the main stage), and a Kickoff Party at Hollywood Casino on June 24th.
• Investor Implication: Successful execution and expansion of this marquee event can drive significant brand visibility, ticket sales, and ancillary revenues.

What Shareholders Need to Know

• Financial Turnaround: The dramatic improvement in net loss, operating efficiency, and non-operating income signals a materially improved financial position that could positively affect share value.
• Balance Sheet De-Risking: The sale of loss-making segments and potential divestiture of the video solutions division is expected to generate cash and reduce operational drag, potentially enhancing shareholder value.
• Strategic Focus: The pivot to live entertainment and ticketing, with industry recognition for TicketSmarter, positions Kustom for growth in a high-potential market.
• Potential Price Sensitivity: Finalization of the Cycurion deal, continued recognition for TicketSmarter, and successful festival execution are all catalysts that could move the share price.

About Kustom Entertainment, Inc.

Kustom Entertainment, Inc. is a leader in live event production and ticketing technology, specializing in large-scale music festivals and end-to-end event management. Its flagship event is the Country Stampede Music Festival. The company maintains a legacy segment in video solutions technology for law enforcement and security, currently being enhanced with artificial intelligence.

For more information, visit www.kustoment.com and www.digitalally.com.

Contact:

Stanton E. Ross, CEO
Phone: (913) 456-5878

Disclaimer

This article contains forward-looking statements that reflect current management expectations and assumptions. Actual results may differ due to risks and uncertainties, including but not limited to those detailed in Kustom Entertainment, Inc.’s filings with the U.S. Securities and Exchange Commission. Investors are cautioned not to place undue reliance on forward-looking statements. This article does not constitute financial advice. Please consult the company’s SEC filings and your financial advisor before making investment decisions.

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