Kustom Entertainment, Inc.

What they do

The company operates two reportable segments: Video Solutions and Entertainment. The Video Solutions segment sells in-car and body-worn cameras, cloud-based evidence management, and disinfectant products for law enforcement and commercial fleets. The Entertainment segment, through TicketSmarter, provides primary and secondary ticketing, event promotion, and live event production across more than 125,000 events nationwide, including the Country Stampede Music Festival.

Revenue drivers

• Entertainment/TicketSmarter — Generates revenue through ticketing service charges (percentage of face value) and ticket resale inventory sales, recognized when tickets are sold; includes event production fees.
• Video Solutions — Sells digital video recording products (EVO-HD, DVM-800, FirstVu lines) and related subscriptions for cloud storage and extended warranties, recognized over contract terms of 3-5 years.
• Shield disinfectant products — Sales of disinfectant and personal protective equipment, noted as a declining revenue line within the Video Solutions segment.

Recent performance

Fiscal year 2025 revenue from continuing operations was approximately $13.8 million, up $0.2 million year-over-year. Net loss from continuing operations improved by about $11.9 million to $5.9 million in 2025, driven by a $4.6 million improvement in warrant derivative fair value and a $2.7 million reduction in interest expense. SG&A expenses fell by $2.3 million to $12.2 million, including a $2.5 million non-cash impairment charge. Quarterly revenue declined sequentially from $5.6 million (June 2025) to $4.5 million (Sept 2025), then to $0.5 million (Dec 2025) before recovering to $4.3 million in March 2026. As of March 31, 2026, total assets were $19.1 million, liabilities $14.8 million, and cash $1.2 million.

Strategy

Management has shifted the primary business to live entertainment and proprietary ticketing, renaming the company to Kustom Entertainment in January 2026. It sold its RCM medical billing business effective January 1, 2026, and has a non-binding MOU to sell the legacy video solutions division to Cycurion, Inc. for $6.0-$8.5 million. The focus is on growing TicketSmarter's marketplace, enhancing recurring revenue through cloud-based services, and promoting the 2026 Country Stampede Music Festival. Additional priorities include improving operating efficiency and strengthening the balance sheet.

Risks

• Dependence on TicketSmarter — The company's strategic pivot concentrates revenue in a competitive online ticketing market with significant larger rivals.
• Legacy asset sale uncertainty — The planned sale of the video solutions division to Cycurion is only a non-binding MOU; if not finalized, the company retains a struggling segment.
• Thin cash position — Cash and equivalents were only $1.2 million as of March 31, 2026, with negative operating cash flow in recent years requiring external capital.
• Reverse stock split risk — The company effected 1-for-3 and 1-for-5 reverse stock splits to maintain Nasdaq listing, and retains risk of delisting if bid price falls again.

Outlook

Management expects continuing improvement from the divestiture of non-core assets, with the RCM sale removing $1.4 million in 2025 losses. The 2026 Country Stampede Music Festival, celebrating its 30th anniversary, is scheduled for June 25-27, 2026, with headliners Rascal Flatts and Zach Top. The company aims to complete the video solutions sale to streamline operations and focus exclusively on entertainment and ticketing.