Kustom Entertainment, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue from continuing operations increased 57% year-over-year to $2.7 million, compared to $1.7 million in Q3 2025.
• Service revenue grew 65% to $2.1 million, driven by transaction volume on the TicketSmarter marketplace.
• Product revenue increased 32% to $575,067, attributed to higher ticket inventory sales.
• Gross profit rose 10% to $208,949, compared to $189,673 in the prior-year period.
• Net income attributable to common stockholders reached $2,346,315 ($4.51 per basic and diluted share), reversing a net loss of $1,021,867 ($(88.73) per share) in Q3 2025.
• Loss from continuing operations was $2,670,888 ($(5.13) per share), compared to a loss of $994,761 ($(86.38) per share) in Q3 2025.
• Income from discontinued operations was $5,017,203, reflecting the net gain on the divestiture of the legacy video solutions business.
• Approximately $625,000 of the increase in continuing operations loss was non-cash expense for common stock issued for consulting, acquisition-related costs, and collaborative arrangements.
• Total stockholders' equity more than tripled to $7,852,961 as of September 30, 2026, compared to $2,369,956 as of December 31, 2025.
• Total liabilities declined by $9.3 million to $7.7 million, down from $17.0 million at year-end 2025.
• Cash and cash equivalents increased to $1,715,820 as of September 30, 2026, compared to $757,369 as of December 31, 2025.
• Working capital (excluding current assets and liabilities of discontinued operations) improved by $3.2 million.
• The company holds a $4.25 million, 7% secured promissory note and $600,000 in 12% Cumulative Series H preferred stock of Cycurion received from the video solutions sale.

Guidance and Future Outlook:

• Management expects deliberate investments in customer acquisition and marketing to translate into expanding margins as the TicketSmarter platform scales.
• The 2027 Country Stampede Music Festival will move to Gilley's Park City near Wichita, Kansas, featuring nearly double the venue capacity.
• The company is building its schedule of live event days for 2027.

Business Segments and Product Lines:

• The company is now a pure-play live entertainment and ticketing enterprise following the sale of its legacy video solutions business to Cycurion, Inc. on August 3, 2026.
• The legacy video solutions business divestiture eliminated overhead and working capital demands associated with legacy operations.
• The company is proceeding with the proposed acquisition of TFL, LLC, a ticketing technology and inventory distribution business, subject to financing completion.

Market and Competitive Landscape:

• Revenue growth was driven by surging transaction volume on the TicketSmarter marketplace.
• The 30th anniversary Country Stampede festival contributed to revenue growth.

Risks and Challenges:

• Forward-looking statements are subject to risks including the ability to finalize closing requirements and satisfy all conditions to closing by the extended outside date of December 18, 2026.
• Risks include the success of integrating new business, changes in consumer demand for live entertainment, and the ability to host live events.
• Future performance of the common stock is identified as a potential risk factor.

Management Commentary and Tone:

• CEO Stanton E. Ross described the quarter as the first full quarter operating exclusively as a live entertainment and ticketing company, citing strong business strength.
• Management highlighted the elimination of legacy overhead and the emergence of a "far stronger and cleaner balance sheet."
• Ross expressed excitement about the opportunity in front of the company, noting the acquisition of TFL will bring substantial scale.
• The CEO thanked employees, partners, directors, and stockholders for support through the transformation.

Other Key Points:

• Stockholders approved the proposed acquisition of TFL, LLC on October 5, 2026.
• The purchase agreement for the TFL acquisition was amended on November 6, 2026, to extend the outside date to December 18, 2026.
• The company previously sold its Nobility Healthcare business at the start of 2026.
• The company filed its Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2026, with the SEC.