Form 8-K/A

8-K/A — Cycurion, Inc.

Accession: 0001493152-26-049007

Filed: 2026-10-28

Period: 2026-08-03

CIK: 0001868419

SIC: 7371 (SERVICES-COMPUTER PROGRAMMING SERVICES)

Item: Financial Statements and Exhibits

Documents

8-K/A — form8-ka.htm (Primary)

EX-23.1 (ex23-1.htm)

EX-99.1 (ex99-1.htm)

EX-99.2 (ex99-2.htm)

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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

WASHINGTON,

DC 20549

FORM

8-K/A

CURRENT

REPORT

PURSUANT

TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date

of report (Date of earliest event reported): August 3, 2026

Cycurion,

Inc.

(Exact

Name of Registrant as Specified in Its Charter)

Delaware

001-41214

86-3720717

(State

or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS

Employer

Identification No.)

1640

Boro Place, Suite

420C McLean,

Virginia

22102

(Address

of principal executive offices)

(Zip

Code)

Registrant’s

telephone number, including area code: (888) 341-6680

Check

the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under

any of the following provisions:

☐

Written

communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting

material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement

communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement

communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities

registered pursuant to Section 12(b) of the Act:

Title

of each class

Trading

Symbol

Name

of each exchange on which registered

Common

stock, par value $0.0001 per share

CYCU

The

NASDAQ Stock Market LLC

Redeemable

warrants, each exercisable for one share of common stock at an exercise price of $345.00 per share

CYCUW

The

NASDAQ Stock Market

Indicate

by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405

of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging

growth company ☒

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory

Note

This

Current Report on Form 8-K/A (Amendment No. 1) amends the Current Report on Form 8-K filed by Cycurion, Inc. (the “Company”)

with the U.S. Securities and Exchange Commission on August 4, 2026 (the “Original Form 8-K”), which reported the completion

on August 3, 2026 of the Company’s acquisition of substantially all of the assets, and the assumption of certain specified liabilities,

of the video solutions business (the “Video Solutions Business”) of Kustom Entertainment, Inc. (formerly Digital Ally, Inc.)

(“Kustom”), pursuant to the Asset Purchase Agreement, dated June 24, 2026, between the Company and Kustom, as amended on

July 23, 2026.

This

Amendment is being filed to provide the financial statements required by Item 9.01(a) of Form 8-K and the unaudited pro forma financial

information required by Item 9.01(b) of Form 8-K. The unaudited pro forma condensed combined financial information filed as Exhibit 99.2

to this Amendment supersedes the unaudited pro forma financial information furnished as Exhibit 99.2 to the Original Form 8-K.

Except

as expressly provided herein, this Amendment does not modify, amend or supplement any information contained in the Original Form 8-K.

Item

9.01 Financial Statements and Exhibits

(a)

Financial Statements of Businesses Acquired.

The

audited abbreviated financial statements of the Video Solutions Business, consisting of the statements of assets acquired and liabilities

assumed as of December 31, 2025 and 2024 and the related statements of revenues and direct expenses for the years then ended, together

with the related notes and the report of Victor Mokuolu, CPA PLLC, independent auditor, and the unaudited abbreviated financial statements

of the Video Solutions Business, consisting of the statement of assets acquired and liabilities assumed as of June 30, 2026 and the statements

of revenues and direct expenses for the six months ended June 30, 2026 and 2025, together with the related notes, are filed as Exhibit

99.1 to this Current Report on Form 8-K/A and are incorporated herein by reference. The Video Solutions Business was not a separate legal

entity or subsidiary of Kustom, and separate financial statements have not historically been prepared for it; accordingly, the financial

statements are presented in accordance with Rule 3-05(e) of Regulation S-X.

(b)

Pro Forma Financial Information.

The

unaudited pro forma condensed combined financial information of the Company giving effect to the acquisition of the Video Solutions Business,

consisting of the unaudited pro forma condensed combined balance sheet as of June 30, 2026 and the unaudited pro forma condensed combined

statements of operations for the year ended December 31, 2025 and the six months ended June 30, 2026, and the related notes, is filed

as Exhibit 99.2 to this Current Report on Form 8-K/A and is incorporated herein by reference.

The

unaudited pro forma condensed combined financial information has been prepared for informational purposes only in accordance with Article

11 of Regulation S-X and is not necessarily indicative of the financial position or results of operations that would have occurred had

the acquisition been completed on the dates assumed therein, nor is it necessarily indicative of future results.

(d)

Exhibits.

Exhibit

No.

Description

23.1

Consent of Victor Mokuolu, CPA PLLC, independent auditor.

99.1

Abbreviated Financial Statements of the Video Solutions Business of Kustom Entertainment, Inc. (formerly Digital Ally, Inc.).

99.2

Unaudited Pro Forma Condensed Combined Financial Information.

104

Cover

Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant

to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf

by the undersigned hereunto duly authorized.

CYCURION,

INC.

Date:

October

28, 2026

By:

/s/

L. Kevin Kelly

Name:

Kevin Kelly

Title:

Chief

Executive Officer

EX-23.1

Filename: ex23-1.htm · Sequence: 2

Exhibit

23.1

CONSENT

OF INDEPENDENT AUDITOR

consent to the incorporation by reference of our report dated October 8, 2026, relating to the abbreviated financial statements of the

Video Solutions Business of Kustom Entertainment, Inc. (formerly Digital Ally, Inc.), as of and for the years ended December 31, 2025

and December 31, 2024 (which report includes a paragraph regarding the basis of accounting), appearing in this Current Report on Form

8-K/A of Cycurion, Inc. dated October 28, 2026.

/s/ Victor Mokuolu, CPA PLLC

Houston, Texas

October 28, 2026

EX-99.1

Filename: ex99-1.htm · Sequence: 3

Exhibit

99.1

VIDEO

SOLUTIONS BUSINESS OF KUSTOM ENTERTAINMENT, INC.

(formerly

Digital Ally, Inc.)

ABBREVIATED

FINANCIAL STATEMENTS

For

the Years Ended December 31, 2025 and 2024

and

the Six Months Ended June 30, 2026 and 2025 (unaudited)

Index

to Abbreviated Financial Statements

Page

Independent Auditor’s Report

1-2

Abbreviated Financial Statements:

Statements of Assets Acquired and Liabilities Assumed

Statements of Revenues and Direct Expenses

Notes to the Abbreviated Financial Statements

5 - 9

INDEPENDENT

AUDITOR’S REPORT

the Board of Directors of Kustom Entertainment, Inc.

Opinion

have audited the abbreviated financial statements of the Video Solutions Business of Kustom Entertainment, Inc. (formerly Digital Ally,

Inc.) (the “Business”), which comprise the Statements of Assets Acquired and Liabilities Assumed as of December 31, 2025

and 2024, and the related Statements of Revenues and Direct Expenses for the years then ended, and the related notes to the abbreviated

financial statements (collectively referred to as the “financial statements”).

our opinion, the accompanying financial statements present fairly, in all material respects, the assets acquired and liabilities assumed

of the Business as of December 31, 2025 and 2024, and its revenues and direct expenses for the years then ended in accordance with accounting

principles generally accepted in the United States of America.

Basis

for Opinion

conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities

under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section

of our report. We are required to be independent of the Business and to meet our other ethical responsibilities, in accordance with the

relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate

to provide a basis for our audit opinion.

Basis

of Accounting

discussed in Note 1 to the financial statements, the financial statements have been prepared for the purposes of complying with the rules

and regulations of the U.S. Securities and Exchange Commission and are not intended to be a complete presentation of the Business’

financial position or results of operations. Our opinion is not modified with respect to this matter.

Responsibilities

of Management for the Financial Statements

Management

is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally

accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation

and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s

Responsibilities for the Audit of the Financial Statements

Our

objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level

of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with U.S. GAAS will

always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher

than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override

of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate,

they would influence the judgment made by a reasonable user based on the financial statements.

performing an audit in accordance with U.S. GAAS, we:

● Exercise

professional judgment and maintain professional skepticism throughout the audit.

● Identify

and assess the risks of material misstatement of the financial statements, whether due to

fraud or error, and design and perform audit procedures responsive to those risks. Such procedures

include examining, on a test basis, evidence regarding the amounts and disclosures in the

financial statements.

● Obtain

an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the Business’ internal control. Accordingly, no such opinion

is expressed.

● Evaluate

the appropriateness of accounting policies used and the reasonableness of significant accounting

estimates made by management, as well as evaluate the overall presentation of the financial

statements.

are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit,

significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/

Victor Mokuolu, CPA PLLC

Houston, Texas

October 8, 2026

VIDEO

SOLUTIONS BUSINESS OF KUSTOM ENTERTAINMENT, INC.

(formerly

Digital Ally, Inc.)

STATEMENTS

OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

June 30, 2026

December 31, 2025

December 31, 2024

(Unaudited)

Assets acquired

Accounts receivable, net

$ 86,812

$ 382,082

$ 126,474

Subscription receivables, current

2,690,503

3,219,647

3,988,994

Inventories, net

1,498,601

2,129,453

2,212,774

Prepaid expenses

261,995

333,930

318,636

Total current assets acquired

4,537,911

6,065,112

6,646,878

Property, plant and equipment, net

63,834

87,368

176,546

Operating lease right-of-use assets

109,711

147,937

219,966

Intangible assets, net

168,024

182,211

197,800

Subscription receivables, long-term

2,178,923

2,976,758

4,889,289

Other assets

82,216

125,249

205,585

Total non-current assets acquired

2,602,708

3,519,523

5,689,186

Total assets acquired

$ 7,140,619

$ 9,584,635

$ 12,336,064

Liabilities assumed

Accounts payable

$ 193,935

$ 316,089

$ 874,324

Accrued expenses

138,824

113,455

270,780

Customer deposits

61,054

101,387

246,916

Deferred revenue, current

3,009,194

3,239,340

3,210,396

Operating lease liabilities, current

81,180

78,007

72,029

Total current liabilities assumed

3,484,187

3,848,278

4,674,445

Deferred revenue, long-term

3,613,846

4,739,356

6,317,472

Operating lease liabilities, long-term

28,531

69,930

147,937

Total long-term liabilities assumed

3,642,377

4,809,286

6,465,409

Total liabilities assumed

7,126,564

8,657,564

11,139,854

Net assets acquired and liabilities assumed

$ 14,055

$ 927,071

$ 1,196,210

See

accompanying notes to the abbreviated financial statements.

VIDEO

SOLUTIONS BUSINESS OF KUSTOM ENTERTAINMENT, INC.

(formerly

Digital Ally, Inc.)

STATEMENTS

OF REVENUES AND DIRECT EXPENSES

Six Months

Ended

June 30, 2026

Six Months

Ended

June 30, 2025

Year

Ended

December 31, 2025

Year

Ended

December 31, 2024

(Unaudited)

Net revenues

Product

$ 475,517

$ 492,364

$ 1,184,079

$ 1,983,769

Service

1,775,102

1,770,589

3,916,678

3,758,002

Total net revenues

2,250,619

2,262,953

5,100,757

5,741,771

Direct expenses

Cost of revenue, product

1,177,774

649,009

1,523,613

1,780,283

Cost of revenue, service and other

625,542

687,406

1,259,293

1,252,213

Research and development expense

274,838

268,228

551,447

1,339,673

Selling, advertising and promotional expense

238,129

204,211

426,047

1,153,839

General and administrative expense

945,816

1,009,181

1,990,187

2,874,683

Total direct expenses

3,262,099

2,818,035

5,750,587

8,400,691

Revenues less direct expenses

$ (1,011,480 )

$ (555,082 )

$ (649,830 )

$ (2,658,920 )

See

accompanying notes to the abbreviated financial statements.

VIDEO

SOLUTIONS BUSINESS OF KUSTOM ENTERTAINMENT, INC.

(formerly

Digital Ally, Inc.)

NOTES

TO THE ABBREVIATED FINANCIAL STATEMENTS

NOTE

1. DESCRIPTION OF THE TRANSACTION AND BASIS OF PRESENTATION

Description

of the Transaction:

June 24, 2026, Kustom Entertainment, Inc. (“Kustom” or the “Company”) entered into an Asset Purchase Agreement

(the “APA”) with Cycurion, Inc. (“Cycurion”), pursuant to which the Company agreed to sell the assets and transfer

certain specified liabilities of its Video Solutions business (the “Business”). On July 23, 2026, the parties amended the

APA to extend the closing date and to replace the warrants originally contemplated with shares of Cycurion’s Series H Preferred

Stock, and Cycurion paid the Company a non-refundable extension payment of $250,000, which was credited against the cash consideration

at closing. The sale was completed on August 3, 2026. Total consideration consists of $1,250,000 in cash, including the $250,000 extension

payment, a secured promissory note in the principal amount of $4,250,000 bearing interest at 7% per annum over a three-year term, shares

of Cycurion’s Series H Preferred Stock, and a revenue-based earn-out and clawback arrangement based on 2026 and 2027 performance,

each capped at $500,000 per year and $1,000,000 in the aggregate. The purchase price was determined by reference to the financial position

of the Business as of June 30, 2026. There is no material relationship between the Company or its affiliates and Cycurion other than

in connection with the transaction.

Description

of the Business:

The

Business develops, sells, and services video hardware, camera products, software and related solutions for law enforcement, public safety

and commercial customers under the Digital Ally brand, including in-car video systems, body-worn cameras, and cloud-based digital evidence

management and warranty solutions offered through both hardware sales and subscription models.

Basis

of Presentation:

The

accompanying statements of assets acquired and liabilities assumed and statements of revenues and direct expenses (collectively, the

“abbreviated financial statements”) were prepared in accordance with the recognition and measurement principles of accounting

principles generally accepted in the United States of America (“U.S. GAAP”) for the purpose of complying with the rules and

regulations of the U.S. Securities and Exchange Commission (the “SEC”), including Rule 3-05 of Regulation S-X, as amended

by SEC Final Rule Release No. 33-10786, Amendments to Financial Disclosures About Acquired and Disposed Businesses. They are not intended

to be a complete presentation of the financial position, results of operations, or cash flows of the Business.

The

Business historically operated as an integrated part of the Company rather than as a separate legal entity. Separate stand-alone financial

statements have not previously been prepared for the Business, and the Company has not maintained the distinct and separate accounts

necessary to prepare such financial statements. The Business did not maintain separate cash accounts, and its cash activities were commingled

with those of the Company and funded through the Company’s centralized cash management function; no cash or cash equivalents were

conveyed to Cycurion in the transaction. Because the transaction was structured as a purchase of assets and an assumption of specified

liabilities rather than a purchase of equity interests, no legal entity or equity interests were transferred, and the Business did not

maintain separate equity accounts. Accordingly, it is impracticable to prepare complete financial statements of the Business, including

statements of cash flows and statements of equity.

The

abbreviated financial statements were derived from the accounting records of the Company and reflect the historical carrying amounts

of the assets acquired and liabilities assumed as recorded by the Company. They do not reflect any purchase accounting or fair value

adjustments arising from Cycurion’s acquisition of the Business. The statements of assets acquired and liabilities assumed include

only the assets acquired and liabilities assumed pursuant to the APA. Assets and liabilities not acquired or assumed are excluded, including

cash and cash equivalents, corporate facilities and other corporate assets, leases of real property other than 6366 College Boulevard

and equipment leases retained by the Company and the related right-of-use assets and lease liabilities, intercompany balances, income

tax balances, litigation reserves retained by the Company, and corporate-level debt.

Attribution

of Costs and Expenses:

The

statements of revenues and direct expenses include costs and expenses directly attributable to the revenue-producing activities of the

Business, including cost of revenue, research and development, selling, advertising and promotional, and general and administrative expenses.

Direct expenses were identified on the basis of whether the underlying cost obligation transferred with, or terminated upon, the sale

of the Business, rather than on the basis of general ledger departmental coding or time- or usage-based allocation. Accordingly, the

costs of employees, contractors, and contracts that transferred with the Business are included in full by specific identification, including

such costs historically recorded in corporate or shared departmental accounts and the full cost of transferring personnel who historically

supported both the Business and the Company’s other operations. No time- or usage-based allocations were used.

The

statements of revenues and direct expenses exclude the costs of corporate-level functions that remain with the Company following the

sale and that were not directly associated with the revenue-producing activities of the Business, as well as interest expense, other

income (expense), and income taxes. These retained corporate-level functions include executive management, board of directors, corporate

accounting and audit, legal, treasury, insurance administration, and public-company costs. Such retained corporate-level costs were not

historically attributed to the Business in the Company’s accounting records, and any allocation of such costs would be arbitrary

and would not be indicative of the costs the Business will incur as part of Cycurion. The basis of attribution described above is consistent

with the basis on which the Business is presented as discontinued operations in the Company’s consolidated financial statements.

The financial information presented herein is not indicative of the results that would have been achieved had the Business operated as

a separate, stand-alone entity during the periods presented, nor of the results to be expected in future periods.

Unaudited

Interim Information:

The

statement of assets acquired and liabilities assumed as of June 30, 2026, and the statements of revenues and direct expenses for

the six months ended June 30, 2026 and 2025 are unaudited. In the opinion of management, such unaudited interim information reflects

all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation on the basis of presentation described

herein. Results for the interim periods are not necessarily indicative of results for a full year.

NOTE

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use

of Estimates:

The

preparation of the abbreviated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and revenues and direct expenses. Significant estimates include allowances

for doubtful accounts on trade and subscription receivables, the inventory valuation reserve, warranty accruals, useful lives of long-lived

assets, standalone selling prices used in the allocation of revenue, the incremental borrowing rate on leases, and the determination

of costs directly attributable to the Business as described in Note 1. Actual results could differ from those estimates.

Accounts

Receivable and Subscription Receivables:

Trade

accounts receivable are carried at original invoice amount less an allowance for credit losses estimated under the current expected credit

loss (“CECL”) model in ASC 326-20, based on individual customer evaluation, customer financial condition and credit history,

current economic conditions, and reasonable and supportable forecasts. Subscription receivables represent amounts due from customers

under multi-year subscription and lease-style arrangements for hardware and related services and are presented in current and

long-term portions based on contractual collection dates, net of allowances. Trade accounts receivable are presented net of allowances

for doubtful accounts of $90,000, $10,262, and $13,286 on June 30, 2026, December 31, 2025, and December 31, 2024, respectively,

and subscription receivables are presented net of allowances of $165,000, $75,000, and $25,000 at June 30, 2026, December 31, 2025, and

December 31, 2024, respectively.

Inventories:

Inventories

consist of electronic parts, circuitry boards, camera parts and ancillary parts (collectively, “components”), work-in-process,

and finished goods, carried at the lower of cost or net realizable value, with cost determined by standard cost methods, which approximate

the first-in, first-out method. Inventory costs include material, labor, and manufacturing overhead. Manufacturing inventory is reviewed

for obsolescence and excess quantities on a quarterly basis, based on estimated future use of quantities on hand, which is determined

based on past usage, planned changes to products, and known trends in markets and technology. Changes in support plans or technology

could have a significant impact on obsolescence. To support its service operations, the Business maintains service spare parts inventory

consisting of both consumable and repairable spare parts; consumables are charged to cost of revenue when issued during a service call,

and the net carrying value of repairable spare parts is reduced over the related product group’s post-production service life,

which is generally seven to twelve years.

Property,

Plant and Equipment:

Property,

plant and equipment is stated at cost, net of accumulated depreciation. Additions and improvements are capitalized, while ordinary maintenance

and repair expenditures are charged to expense as incurred. Depreciation is recorded using the straight-line method over the estimated

useful lives of the assets, which range from two to seven years; leasehold improvements are depreciated over the shorter of their estimated

useful lives or the remaining lease term. The cost and accumulated depreciation of assets sold or retired are removed from the accounts,

and any resulting gain or loss is recognized in the statements of revenues and direct expenses. Depreciation ceased upon classification

of the Business as held for sale during the three months ended June 30, 2026.

Intangible

Assets:

Intangible

assets consist principally of patents, trademarks and trade names, and license agreements. Legal expenses incurred in preparation of

patent applications are deferred and amortized over the useful lives of granted patents; costs of applications not granted are charged

to expense at that time. The Business has entered into sublicense agreements under which it has been assigned exclusive rights to certain

licensed materials used in its products; upfront payments under such agreements are capitalized and amortized on a straight-line basis

over their estimated useful lives. Long-lived assets, including property, plant and equipment, operating lease right-of-use assets, and

intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be

recoverable. Amortization of intangible assets ceased upon classification of the Business as held for sale during the three months ended

June 30, 2026.

Leases:

The

Business determines whether an arrangement is, or contains, a lease at inception. Operating lease right-of-use assets and operating lease

liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the rate

implicit in the lease is not readily determinable, the Company’s incremental borrowing rate at the commencement date is used to

determine the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term and is included

in general and administrative expense. Leases with an initial term of twelve months or less are not recorded on the statements of assets

acquired and liabilities assumed, and the related lease expense is recognized on a straight-line basis over the lease term. The Business’s

lease relates to office space; the Business has no finance leases.

Revenue

Recognition:

The

Business recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Product revenue is recognized when control

of the product is transferred to the customer, which typically occurs at shipment; customers do not have a right to return products other

than for warranty reasons. Service and other revenue is comprised of revenues from extended warranties, repair services, cloud revenue,

and software revenue; revenue for extended warranty, cloud services, and other software-based products is recognized on a straight-line

basis over the contract or service period, and repair services revenue is recognized upon customer acceptance. In arrangements with multiple

performance obligations, the transaction price is allocated to each performance obligation based on its relative standalone selling price.

Amounts invoiced or received in advance of the satisfaction of performance obligations are recorded as deferred revenue. The Business

reports revenues on a gross basis, net of sales taxes.

Warranty:

Products

of the Business carry explicit product warranties that extend up to two years from the date of shipment. A provision for estimated warranty

costs is recorded based upon historical warranty loss experience and is periodically adjusted to reflect actual experience; accrued warranty

costs are included within accrued expenses. As the Business has continued its transition to subscription-based arrangements in which

devices are provided as part of the service arrangement, the volume of products subject to assurance-type warranties has declined and

anticipated assurance-type warranty costs are not significant. Accrued warranty costs included within accrued expenses were $0, $0, and

$11,615 at June 30, 2026, December 31, 2025, and December 31, 2024, respectively. When a customer purchases an extended warranty, the

associated proceeds are treated as deferred revenue and recognized over the term of the extended warranty.

Customer

Deposits:

Customer

deposits consist of amounts received from customers in advance of shipment of products, together with customer overpayments and other

unapplied customer credits. Advance payments are recognized as revenue when the related performance obligations are satisfied; overpayments

and unapplied credits are applied against amounts due from customers or refunded.

NOTE

3. INVENTORIES

Inventories

consisted of the following:

June 30, 2026

December 31, 2025

December 31, 2024

(Unaudited)

Raw material and component parts

$ 2,633,275

$ 2,829,039

$ 2,589,804

Work-in-process

43,581

4,906

Finished goods

994,320

1,149,538

1,655,316

Reserve for excess and obsolete inventory

(2,172,575 )

(1,849,124 )

(2,037,252 )

Total inventories, net

$ 1,498,601

$ 2,129,453

$ 2,212,774

During

the year ended December 31, 2025, the Business changed the method used to estimate the reserve for excess and obsolete inventory from

specific identification of slow-moving product lines and items to a method that also applies reserve percentages by product line based

on the number of years in which the items have had no sales or usage activity. The change has been accounted for prospectively as a change

in accounting estimate, and the reserve as of December 31, 2025, was determined under the current method. The reserve as of December

31, 2024, was determined under the previous method; had the current method been applied as of December 31, 2024, the reserve for

excess and obsolete inventory would have been $2,097,795, and cost of revenue, product for the year ended December 31, 2024 would have

been $60,543 higher.

NOTE

4. SUBSCRIPTION RECEIVABLES

The

Business offers subscription and lease-style purchasing programs under which customers, principally law enforcement agencies, acquire

hardware and related cloud, warranty, and service offerings for a periodic fee over a multi-year term. Amounts contractually due from

customers under these arrangements are recorded as subscription receivables, with $2,690,503, $3,219,647, and $3,988,994 classified as

current and $2,178,923, $2,976,758, and $4,889,289 classified as long-term as of June 30, 2026, December 31, 2025, and December 31, 2024,

respectively, net of allowances described in Note 2. These arrangements are accounted for as revenue contracts with customers under ASC

606, with unbilled contractual amounts recorded as subscription receivables and amounts billed in advance recorded as deferred revenue.

NOTE

5. DEFERRED REVENUE

Deferred

revenue consists of amounts invoiced or received in advance of the satisfaction of performance obligations, principally under multi-year

extended warranty, cloud subscription and evidence management, and prepaid installation arrangements. Deferred revenue expected to be

recognized within one year is classified as current. Deferred revenue totaled $6,623,040, $7,978,696, and $9,527,868 as of June 30, 2026,

December 31, 2025, and December 31, 2024, respectively, of which $3,009,194, $3,239,340, and $3,210,396 was classified as current. As

of December 31, 2025, deferred revenue consisted of extended warranty contracts of $2,461,161, cloud subscription and evidence management

services of $5,510,365, and prepaid installation services of $7,170. Deferred revenue is recognized as the related performance obligations

are satisfied, generally on a straight-line basis over contract terms extending up to five years.

Deferred

revenue activity for the year ended December 31, 2024, was as follows:

December 31, 2024

December

31,

2023

Additions/

Reclass

Recognized

Revenue

December

31,

2024

Deferred revenue, current

$ 2,926,468

$ 3,728,331

$ 3,444,403

$ 3,210,396

Deferred revenue, non-current

7,340,459

(1,022,987 )

—

6,317,472

$ 10,266,927

$ 2,705,344

$ 3,444,403

$ 9,527,868

Deferred

revenue activity for the year ended December 31, 2025, was as follows:

December 31, 2025

December 31,

2024

Additions/

Reclass

Recognized

Revenue

December 31,

2025

Deferred revenue, current

$ 3,210,396

$ 3,598,270

$ 3,569,326

$ 3,239,340

Deferred revenue, non-current

6,317,472

(1,578,116 )

—

4,739,356

$ 9,527,868

$ 2,020,154

$ 3,569,326

$ 7,978,696

Deferred

revenue activity for the six months ended June 30, 2026, was as follows:

June 30, 2026

December 31,

2025

Additions/

Reclass

Recognized

Revenue

June 30,

2026

Deferred revenue, current

$ 3,239,340

$ 1,519,111

$ 1,749,257

$ 3,009,194

Deferred revenue, non-current

4,739,356

(1,125,510 )

—

3,613,846

$ 7,978,696

$ 393,601

$ 1,749,257

$ 6,623,040

Additions/Reclass

reflects amounts invoiced during the period, net of cancellations, and the reclassification of deferred revenue from non-current to current

as performance obligations become due within one year.

NOTE

6. REVENUES

The

Business operates as a single product line comprising video hardware and related software and services. Disaggregation of net revenues

between product and service revenue is presented on the face of the statements of revenues and direct expenses. Revenues are derived

solely from customers located in the United States, and all of the Business’s long-lived assets are located within the United States.

Product revenue and repair services revenue are recognized at a point in time. Extended warranty, cloud and other software-based service

revenue is recognized over time.

NOTE

7. LEASES

The

Business leases office space at 6366 College Boulevard, Overland Park, Kansas under an operating lease expiring October 31, 2027, measured

using the Company’s incremental borrowing rate of 8%. Operating lease right-of-use assets and lease liabilities were $109,711,

$147,937, and $219,966 as of June 30, 2026, December 31, 2025, and December 31, 2024, respectively, of which $81,180, $78,007, and $72,029

of the liabilities were current. Operating lease cost, included in general and administrative expense, was $43,512, $43,512, $87,023,

and $14,504 for the six months ending June 30, 2026 and 2025 and the years ended December 31, 2025 and 2024, respectively.

NOTE

8. RELATED PARTY TRANSACTIONS AND CORPORATE SUPPORT SERVICES

The

Business was operated as part of the Company during the periods presented; accordingly, the Company is a related party of the Business.

The Company provided the Business with treasury and cash management, payroll processing, benefits administration, insurance, legal, information

technology, and other corporate support services. As described in Note 1, the costs of corporate functions that remain with the Company

and are not directly associated with the revenue-producing activities of the Business are excluded from the statements of revenues and

direct expenses, while the costs of personnel and obligations that transferred with the Business, including such costs recorded in corporate

or shared departmental accounts, are included. Intercompany balances between the Business and the Company or its other businesses are

excluded from the statements of assets acquired and liabilities assumed. There were no significant sales or purchases between the Business

and the Company’s other businesses during the periods presented.

NOTE

9. COMMITMENTS AND CONTINGENCIES

The

Business is subject to various claims and legal proceedings arising in the ordinary course of business. Litigation reserves and related

obligations of the Company were retained by the Company and are not reflected in the statements of assets acquired and liabilities assumed,

which include only the liabilities specifically assumed by Cycurion pursuant to the APA. Product warranty obligations are described in

Note 2.

NOTE

10. SUBSEQUENT EVENTS

Management

has evaluated subsequent events through October 8, 2026, the date the abbreviated financial statements were available to be issued. On

August 3, 2026, the Company completed the sale of the Business to Cycurion as described in Note 1. No other events were identified requiring

recognition or disclosure in the abbreviated financial statements.

EX-99.2

Filename: ex99-2.htm · Sequence: 4

Exhibit

99.2

CYCURION,

INC.

UNAUDITED

PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

August 3, 2026, Cycurion, Inc. (“Cycurion” or the “Company”) completed its acquisition of substantially all of

the assets, and assumed certain specified liabilities, of the video solutions business (the “Video Solutions Business”) of

Kustom Entertainment, Inc. (formerly Digital Ally, Inc.) (“Kustom”) pursuant to an Asset Purchase Agreement dated June 24,

2026, as amended on July 23, 2026 (the “Video Solutions Acquisition”). Previously, on June 3, 2026, the Company completed

its acquisition of Secuvant, LLC (“Secuvant”) pursuant to an Agreement and Plan of Merger dated May 21, 2026 (the “Secuvant

Acquisition” and, together with the Video Solutions Acquisition, the “Acquisitions”).

The

following unaudited pro forma condensed combined balance sheet as of June 30, 2026, gives effect to the Video Solutions Acquisition

as if it had occurred on June 30, 2026. The Secuvant Acquisition is already reflected in the Company’s historical unaudited condensed

consolidated balance sheet as of June 30, 2026. The following unaudited pro forma condensed combined statements of operations for the

year ended December 31, 2025, and the six months ended June 30, 2026 give effect to both Acquisitions as if they had occurred on

January 1, 2025. The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of

Regulation S-X, as amended by SEC Release No. 33-10786, “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”

The

unaudited pro forma condensed combined financial information is derived from, and should be read together with, the following:

● the

Company’s audited consolidated financial statements for the year ended December 31,

2025, included in its Annual Report on Form 10-K;

● the

Company’s unaudited condensed consolidated financial statements as of and for the six

months ended June 30, 2026, included in its Quarterly Report on Form 10-Q;

● the

audited financial statements of Secuvant for the year ended December 31, 2025, and

the unaudited condensed financial statements of Secuvant for the six months ended June 30,

2026, and the unaudited pro forma condensed combined financial information giving effect

to the Secuvant Acquisition, included in the Company’s Current Report on Form 8-K/A

relating to the Secuvant Acquisition; and

● the

audited abbreviated financial statements of the Video Solutions Business as of and for the

years ended December 31, 2025 and 2024 and the unaudited abbreviated financial statements

as of June 30, 2026, and for the six months ended June 30, 2026 and 2025, included

as Exhibit 99.1 to this Current Report on Form 8-K/A.

The

unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not necessarily indicate

the financial position or results of operations that would have been achieved had the Acquisitions occurred on the dates indicated, or

the future financial position or results of operations of the combined company. The Video Solutions Business was not operated as a separate

entity, and its abbreviated financial statements exclude corporate overhead, interest expense, other income and expense, and income taxes

(Note 2). The purchase price allocation for the Video Solutions Acquisition is preliminary, and the final allocation may differ materially,

including through the recognition of identifiable intangible assets and related amortization.

CYCURION,

INC.

UNAUDITED

PRO FORMA CONDENSED COMBINED BALANCE SHEET

of June 30, 2026

Cycurion, Inc.

(Historical)

Video Solutions

Business (Historical, as

reclassified) (Note 4)

Transaction

Accounting

Adjustments

Note 5

Pro Forma Combined

ASSETS

Current assets:

Cash and cash equivalents

$ 1,873,287

$ —

$ (1,250,000 )

(a)

$ 623,287

Accounts receivable, net

3,721,520

86,812

—

3,808,332

Subscription receivables, current

—

2,690,503

—

2,690,503

Inventories, net

—

1,498,601

—

1,498,601

Prepaid expenses and other current assets

222,886

261,995

—

484,881

Other receivables

133,058

—

133,058

Total current assets

5,950,751

4,537,911

(1,250,000 )

9,238,662

Software development costs, net

4,798,981

—

4,798,981

Goodwill and intangibles

27,617,398

168,024

5,309,136

(b)

33,094,558

Property and equipment, net

—

63,834

—

63,834

Operating lease right-of-use assets

—

109,711

—

109,711

Subscription receivables, non-current

—

2,178,923

—

2,178,923

Other assets

—

82,216

—

82,216

Total non-current assets

32,416,379

2,602,708

5,309,136

40,328,223

Total assets

$ 38,367,130

$ 7,140,619

$ 4,059,136

$ 49,566,885

LIABILITIES

Current liabilities:

Bank loan-revolving credit line

$ 2,421,305

$ —

$ 2,421,305

Loans payable - current portion

269,068

—

269,068

Factoring liability

1,300,470

—

1,300,470

Convertible notes

2,686,748

—

2,686,748

Promissory notes

1,161,960

—

657,850

(c)

1,819,810

Loans payable - related parties

123,650

—

123,650

Accounts payable

1,290,801

193,935

—

1,484,736

Accrued liabilities

7,613,943

199,878

112,816

(d)

7,926,637

Accrued compensation and benefits

1,063,856

—

1,063,856

Accrued interest payable

432,748

—

432,748

Excise tax payable

1,167,173

—

1,167,173

Deferred revenue, current

—

3,009,194

—

3,009,194

Operating lease liabilities, current

—

81,180

—

81,180

Total current liabilities

19,531,722

3,484,187

770,666

23,786,575

Loans payable - non-current portion

627,010

—

627,010

Promissory note - seller, net of current portion

—

2,900,417

(c)

2,900,417

Deferred revenue, non-current

—

3,613,846

—

3,613,846

Operating lease liabilities, non-current

—

28,531

—

28,531

Contingent consideration

—

(e)

—

Total non-current liabilities

627,010

3,642,377

2,900,417

7,169,804

Total liabilities

20,158,732

7,126,564

3,671,083

30,956,379

STOCKHOLDERS’ EQUITY

Preferred stock (Series B, C, D, E, G, H and I)

104

—

104

Common stock

1,189

—

1,189

Additional paid in capital

55,545,133

—

514,924

(f)

56,060,057

Accumulated deficit

(32,763,317 )

—

(112,816 )

(d)

(32,876,133 )

Net assets of Video Solutions Business

—

14,055

(14,055 )

(g)

—

Total stockholders’ equity attributable to Cycurion

22,783,109

14,055

388,053

23,185,217

Deficit attributable to noncontrolling interests

(4,574,711 )

—

(4,574,711 )

Total stockholders’ equity

18,208,398

14,055

388,053

18,610,506

Total liabilities and stockholders’ equity

$ 38,367,130

$ 7,140,619

$ 4,059,136

$ 49,566,885

See

accompanying notes to the unaudited pro forma condensed combined financial information.

CYCURION,

INC.

UNAUDITED

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For

the Year Ended December 31, 2025

Cycurion, Inc.

(Historical)

Secuvant, LLC

(Historical, as

reclassified)

(Note 4)

Secuvant

Transaction

Accounting

Adjustments

Video Solutions

Business

(Historical, as

reclassified)

(Note 4)

Video Solutions

Transaction

Accounting

Adjustments

Note 5

Pro Forma

Combined

Revenue

$ 15,133,647

$ 2,336,556

$ —

$ 5,100,757

$ —

$ 22,570,960

Cost of revenue

13,521,329

736,942

—

2,782,906

—

17,041,177

Gross profit

1,612,318

1,599,614

—

2,317,851

—

5,529,783

Operating expenses:

Selling, general and administrative

9,258,199

919,171

—

2,967,681

—

(i)

13,145,051

Stock compensation

3,898,867

—

3,898,867

Business combination expenses

11,870,114

—

116,531

—

112,816

(k) (j)

12,099,461

Total operating expenses

25,027,180

919,171

116,531

2,967,681

112,816

29,143,379

Operating (loss) income

(23,414,862 )

680,443

(116,531 )

(649,830 )

(112,816 )

(23,613,596 )

Other income (expense):

Interest income

27,538

—

27,538

Interest expense

(1,763,831 )

(14,871 )

—

(629,440 )

(h)

(2,408,142 )

Gain (loss) on debt settlement, net

1,221,635

—

1,221,635

Other (expense) income, net

(129,564 )

121,353

—

(8,211 )

Total other income (expense), net

(644,222 )

106,482

—

(629,440 )

(1,167,180 )

(Loss) income before income taxes

(24,059,084 )

786,925

(116,531 )

(649,830 )

(742,256 )

(24,780,776 )

Provision for income tax

—

Net (loss) income

(24,059,084 )

786,925

(116,531 )

(649,830 )

(742,256 )

(24,780,776 )

Less: net loss attributable to non-controlling interest

393,376

—

393,376

Net (loss) income attributable to Cycurion, Inc.

(23,665,708 )

786,925

(116,531 )

(649,830 )

(742,256 )

(24,387,400 )

Less: Series H preferred stock dividends

—

72,000

(l)

72,000

Net (loss) income attributable to common stockholders

$ (23,665,708 )

$ 786,925

$ (116,531 )

$ (649,830 )

$ (814,256 )

$ (24,459,400 )

Net loss per share:

Basic

$ (107.52 )

$ (111.16 )

Diluted

$ (107.12 )

$ (111.16 )

Weighted average shares outstanding:

Basic

220,039

Diluted

220,455

220,039

See

accompanying notes to the unaudited pro forma condensed combined financial information.

CYCURION,

INC.

UNAUDITED

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For

the Six Months Ended June 30, 2026

Cycurion, Inc.

(Historical)

Secuvant, LLC

(Historical, as

reclassified)

(Note 4)

Secuvant

Transaction

Accounting

Adjustments

Video Solutions

Business

(Historical, as

reclassified)

(Note 4)

Video Solutions

Transaction

Accounting

Adjustments

Note 5

Pro Forma

Combined

Revenue

$ 7,025,696

$ 885,409

$ —

$ 2,250,619

$ —

$ 10,161,724

Cost of revenue

5,244,001

216,594

—

1,803,316

—

7,263,911

Gross profit

1,781,695

668,814

—

447,303

—

2,897,812

Operating expenses:

Selling, general and administrative

5,385,015

470,675

—

1,458,783

—

(i)

7,314,473

Stock compensation

652,555

—

652,555

Business combination expenses

—

116,531

(116,531 )

—

(k)

—

Total operating expenses

6,037,570

587,206

(116,531 )

1,458,783

—

7,967,028

Operating (loss) income

(4,255,875 )

81,608

116,531

(1,011,480 )

—

(5,069,216 )

Other income (expense):

Interest income

17,742

—

17,742

Interest expense

(432,793 )

(5,374 )

—

(250,887 )

(h)

(689,054 )

Gain (loss) on debt settlement, net

(1,930,427 )

—

(1,930,427 )

Other (expense) income, net

—

67,804

—

67,804

Total other income (expense), net

(2,345,478 )

62,430

—

(250,887 )

(2,533,935 )

(Loss) income before income taxes

(6,601,353 )

144,038

116,531

(1,011,480 )

(250,887 )

(7,603,151 )

Provision for income tax

—

Net (loss) income

(6,601,353 )

144,038

116,531

(1,011,480 )

(250,887 )

(7,603,151 )

Less: net loss attributable to non-controlling interest

717,117

—

717,117

Net (loss) income attributable to Cycurion, Inc.

(5,884,236 )

144,038

116,531

(1,011,480 )

(250,887 )

(6,886,034 )

Less: Series H preferred stock dividends

—

36,000

(l)

36,000

Net (loss) income attributable to common stockholders

$ (5,884,236 )

$ 144,038

$ 116,531

$ (1,011,480 )

$ (286,887 )

$ (6,922,034 )

Net loss per share:

Basic

$ (6.88 )

$ (8.11 )

Diluted

$ (6.88 )

$ (8.11 )

Weighted average shares outstanding:

Basic

853,283

Diluted

853,283

See

accompanying notes to the unaudited pro forma condensed combined financial information.

CYCURION,

INC.

NOTES

TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note

1. Description of the Acquisitions

Video

Solutions Acquisition. On August 3, 2026, the Company acquired substantially all of the assets, and assumed certain specified liabilities,

of the Video Solutions Business, which develops, sells and services in-car video systems, body-worn cameras and cloud-based digital evidence

management and related solutions for law enforcement, public safety and commercial customers under the Digital Ally brand. The consideration

consisted of $1,250,000 in cash (including a $250,000 non-refundable extension payment made on July 23, 2026 and credited against the

cash consideration at closing); a secured promissory note in the principal amount of $4,250,000 bearing interest at 7% per annum, payable

interest-only for six months and thereafter in 30 monthly installments of $154,836, secured by the acquired assets; shares of the Company’s

Series H Preferred Stock with an aggregate stated value of $600,000, which accrue dividends at 12% per annum and are convertible into

common stock at $11.60 per share (as adjusted for the 1-for-8 reverse stock split of the Company’s common stock effective August

28, 2026); and a revenue-based earnout and clawback arrangement based on the Video Solutions Business’s revenue for 2026 and 2027,

under which the Company may pay, or the seller may refund, up to $500,000 per year and $1,000,000 in the aggregate.

Secuvant

Acquisition. On June 3, 2026, the Company acquired 100% of the membership interests of Secuvant, a provider of managed cybersecurity

services. The Secuvant Acquisition, its consideration and the related pro forma adjustments are described in the unaudited pro forma

condensed combined financial information included in the Company’s Current Report on Form 8-K/A relating to the Secuvant Acquisition.

Because Secuvant is included in the Company’s historical balance sheet as of June 30, 2026, and in its historical results

of operations from June 3, 2026, Secuvant’s historical results for the year ended December 31, 2025 and for the period from January

1 through June 2, 2026, and the related adjustments, are included in the pro forma condensed combined statements of operations.

Note

2. Basis of Presentation

The

unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and presents

transaction accounting adjustments only; no autonomous entity adjustments or management’s adjustments are presented. The Acquisitions

are accounted for as business combinations under ASC Topic 805, Business Combinations, with the Company as the accounting acquirer. Under

the acquisition method, the assets acquired and liabilities assumed are recognized at their acquisition-date fair values, and contract

liabilities are measured in accordance with ASC Topic 606 under ASU 2021-08.

The

historical financial information of the Video Solutions Business is derived from its abbreviated financial statements, which present

only the assets acquired and liabilities assumed and the revenues and direct expenses of the Video Solutions Business. The statements

of revenues and direct expenses exclude the costs of corporate functions retained by Kustom, interest expense, other income and expense,

and income taxes, and include depreciation and amortization only through the date the Video Solutions Business was classified as held

for sale during the three months ended June 30, 2026. Accordingly, the pro forma statements of operations may not reflect all of the

costs the Video Solutions Business will incur as part of the Company.

The

historical results of the Video Solutions Business for the six months ended June 30, 2026, include a charge of $567,357 to write

down inventories and a provision for credit losses of $169,738, which management does not expect to recur. No pro forma adjustment has

been made for these items.

The

Company records no provision for income taxes because it maintains a full valuation allowance against its net deferred tax assets; accordingly,

no income tax effect has been recognized for the pro forma adjustments. Secuvant was a pass-through entity for income tax purposes during

the periods presented.

Note

3. Preliminary Purchase Consideration and Allocation – Video Solutions Business

Purchase consideration

Amount

Cash

$ 1,250,000

Secured promissory note

3,558,267

Series H Preferred Stock

514,924

Earnout and clawback, net (contingent consideration)

—

Total preliminary purchase consideration

$ 5,323,191

Preliminary allocation

Amount

Net assets acquired at historical carrying amounts, June 30, 2026

$ 14,055

Identifiable intangible assets

—

Goodwill

5,309,136

Total

$ 5,323,191

The

purchase price allocation is preliminary and is based on the historical carrying amounts of the assets acquired and liabilities assumed

as of June 30, 2026, which management believes approximate their fair values pending completion of a valuation. The secured promissory

note is reflected at its preliminary estimated fair value of $3,558,267, determined by discounting its contractual payments at an estimated

market interest rate of 18% for a comparable secured obligation of the Company. The Series H Preferred Stock is reflected at its preliminary

estimated fair value of $514,924, determined as the value of the common stock into which it is convertible plus the present value of

the dividends expected to be paid in common stock over an estimated three-year term, based on the closing price of the Company’s

common stock on August 3, 2026 of $7.32 per share, as adjusted for the reverse stock split. The earnout and clawback arrangement is reflected

at an estimated fair value of zero. Based on revenue from the Video Solutions Business to date, no earnout payment or clawback is

expected for 2026. Management expects 2027 revenue of approximately $5,600,000, slightly below the 2027 target of $5,800,000 and within

the range in which neither an earnout payment, which requires revenue more than 20% above the target, nor a clawback, which applies if

revenue is 30% or more below the target and begins at $100,000 and increases in $100,000 steps to a maximum of $500,000, would arise.

Considering the range of possible 2027 outcomes, management estimated the net fair value of the arrangement at less than $100,000 and,

considering its immateriality, has not recognized it. Deferred revenue of the Video Solutions Business of $6,623,040 is reflected at

its historical carrying amount, consistent with the measurement of contract liabilities acquired in a business combination under ASC

805-20-30-28. These estimates are Level 3 fair value measurements and will be updated upon completion of the valuation. A one-percentage-point

increase or decrease in the market interest rate would decrease or increase the fair value of the note by approximately $56,000, and

each $1.00 change in the price of the common stock would change the fair value of the Series H Preferred Stock by approximately $70,000,

with a corresponding change in goodwill. Identifiable intangible assets, including customer relationships, developed technology, patents

and trade names, have not yet been valued, and the excess of the consideration over the net assets acquired has been assigned to goodwill.

The final allocation may differ materially, including through the recognition of identifiable intangible assets and related amortization

expense.

Note

4. Reclassifications

Certain

historical amounts of the Video Solutions Business have been reclassified to conform to the Company’s presentation: cost of revenue

for products and for services and other are combined in cost of revenue; research and development, selling, advertising and promotional,

and general and administrative expenses are combined in selling, general and administrative expenses; customer deposits are included

in accrued liabilities; and intangible assets are included in goodwill and intangibles. Subscription receivables, inventories, property

and equipment, operating lease right-of-use assets and liabilities, other assets and deferred revenue are presented as separate line

items. Secuvant’s historical amounts are presented as reclassified in the Company’s Current Report on Form 8-K/A relating

to the Secuvant Acquisition. The Company may identify further differences in accounting policies or classification upon completion of

its integration.

Note

5. Transaction Accounting Adjustments

(a)

Reflects the cash consideration of $1,250,000 for the Video Solutions Acquisition, including the $250,000 extension payment made on July

23, 2026.

(b)

Reflects preliminary goodwill of $5,309,136 (Note 3). No identifiable intangible assets have yet been recognized pending completion of

the valuation; the historical intangible assets of the Video Solutions Business of $168,024 are included at their carrying amount.

(c)

Reflects the secured promissory note issued to Kustom, with a principal amount of $4,250,000, at its preliminary estimated fair value

of $3,558,267 (Note 3). The principal portion of the installments due from February through June 2027, $657,850, is classified as current,

and the remainder, net of the unamortized discount of $691,733, as non-current.

(d)

Reflects estimated transaction costs of the Video Solutions Acquisition of $112,816, consisting of legal, accounting and other professional

fees incurred after June 30, 2026, which are accrued in the pro forma balance sheet and charged to accumulated deficit. The amount is

based on management’s estimate, and actual costs may differ.

(e)

Reflects the earnout and clawback arrangement at its preliminary estimated fair value of zero (Note 3).

(f)

Reflects the issuance of Series H Preferred Stock with an aggregate stated value of $600,000 as consideration, at its preliminary estimated

fair value of $514,924 (Note 3). The amount is reflected in additional paid-in capital because the par value of the shares issued is

nominal.

(g)

Eliminates the historical net assets of the Video Solutions Business.

(h)

Reflects interest expense on the secured promissory note under the effective interest method at an effective rate of approximately 17.7%

per annum, as if the note had been issued on January 1, 2025, comprising contractual interest at 7% per annum (six months of interest-only

payments followed by monthly installments) and accretion of the discount recognized in the purchase price allocation: $629,440 for the

year ended December 31, 2025, including accretion of $343,407, and $250,887 for the six months ended June 30, 2026, including accretion

of $141,722.

(i)

Reflects amortization of identifiable intangible assets of the Video Solutions Business, which is nil pending completion of the valuation.

Each $1,000,000 of identifiable intangible assets with an estimated useful life of five years would increase annual amortization expense

by $200,000.

(j)

Reflects the estimated transaction costs of the Video Solutions Acquisition of $112,816 (see (d)) in the year ended December 31, 2025,

as if the acquisition had occurred on January 1, 2025. These costs are nonrecurring and are not expected to affect the combined company’s

results beyond twelve months after the acquisition.

(k)

Reflects the transaction accounting adjustments for the Secuvant Acquisition, as presented in the Company’s Current Report on Form

8-K/A relating to that acquisition: Secuvant’s acquisition costs of $116,531 recognized in the period from January 1 through June

2, 2026, are removed from the six months ended June 30, 2026 and reflected in the year ended December 31, 2025. These costs are

nonrecurring.

(l)

Reflects dividends on the Series H Preferred Stock issued as consideration at 12% per annum on the $600,000 stated value: $72,000 for

the year ended December 31, 2025, and $36,000 for the six months ended June 30, 2026.

Note

6. Net Loss per Share

Pro

forma basic and diluted net loss per share are calculated by dividing pro forma net loss attributable to common stockholders by the Company’s

historical weighted average shares outstanding, because no shares of common stock were issued as consideration in the Acquisitions. Historical

and pro forma share and per share amounts have been retroactively adjusted to reflect the 1-for-8 reverse stock split of the Company’s

common stock effective August 28, 2026. The Series H Preferred Stock issued in the Video Solutions Acquisition, which is convertible

into approximately 51,724 shares of common stock at $11.60 per share, the Series I Preferred Stock issued in the Secuvant Acquisition,

and other potentially dilutive securities are excluded from diluted net loss per share because their effect would be anti-dilutive. Accordingly,

pro forma diluted weighted average shares outstanding equal pro forma basic weighted average shares outstanding, and pro forma diluted

net loss per share equals pro forma basic net loss per share. The Company’s historical basic and diluted amounts are presented

as reported in its Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as adjusted for the reverse stock split.

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Cover

Aug. 03, 2026

Document Type

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Amendment Description

This

Current Report on Form 8-K/A (Amendment No. 1) amends the Current Report on Form 8-K filed by Cycurion, Inc. (the “Company”)

with the U.S. Securities and Exchange Commission on August 4, 2026 (the “Original Form 8-K”), which reported the completion

on August 3, 2026 of the Company’s acquisition of substantially all of the assets, and the assumption of certain specified liabilities,

of the video solutions business (the “Video Solutions Business”) of Kustom Entertainment, Inc. (formerly Digital Ally, Inc.)

(“Kustom”), pursuant to the Asset Purchase Agreement, dated June 24, 2026, between the Company and Kustom, as amended on

July 23, 2026.

Document Period End Date

Aug. 03, 2026

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Redeemable

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