Kustom Entertainment, Inc. - Form 8-K Filing

Kustom Entertainment, Inc. (the "Company" or "Buyer") has entered into a Unit Purchase Agreement to acquire all equity interests of TFL, LLC. The total consideration includes $89.6 million in cash and $22.4 million in restricted common stock, subject to adjustments for TFL's net debt and transaction expenses. The Company will also repay $35.0 million of TFL's outstanding indebtedness. A portion of the purchase price, $11.2 million in restricted common stock, will be held back and issued upon achievement of a specified Target EBITDA for the period through calendar year 2027. Ancillary agreements, including an escrow agreement, registration rights agreement, lock-up agreements, and employment agreements with key TFL executives, will be entered into at closing. Additionally, one individual designated by the Sellers will be appointed to the Company's board of directors. The transaction is subject to customary closing conditions, including third-party consents, stockholder approvals, and sufficient funding for the Company. The agreement includes customary representations, warranties, covenants, and indemnification provisions, with the Sellers agreeing to non-competition and non-solicitation restrictions for five years post-closing. Termination of the agreement is possible by mutual consent or if the transaction is not completed by October 15, 2026, with a possible 15-day extension. The shares of Common Stock issuable are unregistered and will be issued in reliance upon exemptions from registration under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. The Company also issued a press release on September 1, 2026, announcing the signing of the Agreement.