{"url_path":"/sec/kust/8-k/2026-06-25/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry into a Material Definitive Agreement.**","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-06-25","source_url":"https://www.sec.gov/Archives/edgar/data/1342958/0001493152-26-030046-index.html","accession_number":"0001493152-26-030046","cik":"0001342958","ticker":"KUST","issuer_name":"DIGITAL ALLY, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1342958/0001493152-26-030046-index.html","primary_entity_key":"0001342958","primary_entity_name":"KUSTOM ENTERTAINMENT, INC."},"word_count":504,"has_tables":true,"body_markdown":"**Item\n1.01 Entry into a Material Definitive Agreement.**\n\n \n\nOn\nJune 24, 2026, Kustom Entertainment, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Acquisition\nAgreement”) with Cycurion, Inc., a Delaware corporation (“Buyer”). Pursuant to the Acquisition Agreement, the Company\nwill sell to Buyer all assets of the Company relating to the video-solutions division, including the development, sale, licensing, support\nand servicing of video hardware, camera products, platforms, software and software solutions (the “Business”). The Company\nshall sell, transfer, convey, assign and deliver to Buyer all of the Company’s right, title and interest in all assets, claims,\nrights and interests used primarily in or held for the use of the Business (the “Acquired Assets”). The transaction\nis anticipated to close on July 15, 2026.\n\n \n\nIn\nconsideration for the sale, assignment and delivery of the Acquired Assets and in consideration of the other agreements contained in\nAcquisition Agreement, Buyer will pay to the Company an aggregate consideration consisting of: (i) a cash payment of One Million Two\nHundred Fifty Thousand Dollars ($1,250,000.00), (ii) a Secured Promissory Note in the original principal amount of Four Million Two Hundred\nFifty Thousand Dollars ($4,250,000), (iii) contingent cash consideration of up to One Million Dollars ($1,000,000) payable solely upon\nsatisfaction of the applicable earnout conditions set forth herein and in the Earnout Agreement (as defined in the Acquisition Agreement),\nand (iv) warrants to purchase up to 2,000,000 shares of Buyer’s common stock at an exercise\nprice of $2.80 per share.\n\n \n\nPursuant\nto the Acquisition Agreement, the parties will enter into a registration rights agreement, pursuant to which, Buyer would be required\nto file a shelf registration statement covering the resale of the shares of Buyer’s common stock issuable upon exercise of the\nwarrants described above (up to 2,000,000 shares), subject to the terms and conditions of such registration rights agreement.\n\n \n\nThe\nconsummation of the transactions contemplated by the Acquisition Agreement is subject to the satisfaction or waiver of various closing\nconditions set forth in the Acquisition Agreement and a related conditions precedent agreement entered into by the parties. Such conditions\ninclude, among other, satisfactory completion of financial, accounting, operational and business due diligence; reconciliation and validation\nof financial information and projections; delivery of carve-out financial statements and supporting documentation sufficient to satisfy\naudit and U.S. Securities and Exchange Commission (the “SEC”) reporting requirements; approval by the boards of directors\nof both companies; execution and delivery of ancillary transaction documents; obtaining any required third-party consents; entering arrangements\nwith key employees and contractors identified by Buyer; and, the absence of a material adverse effect on the Business. There can be no\nassurance that the conditions precedent will be satisfied or waived or that the transaction will close on the anticipated timeframe or\nat all.\n\n \n\nThe\nforegoing summary provides only a brief description of the Acquisition Agreement. The summary does not purport to be complete and is\nqualified in its entirety by the full text of such document, a copy of which is attached as Exhibit 10.1 and incorporated herein by reference."}