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Executive Summary

Cycurion, Inc. (CYCUW) entered into a definitive merger agreement to acquire Secuvant, LLC for $2,875,000 total consideration ($875,000 cash + 888,888 shares of Series I Convertible Preferred Stock valued at $2,000,000), plus earn-out payments based on Secuvant's post-closing performance. The filing also includes a Certificate of Designation for the new preferred stock, registration rights for the seller equityholders, and escrow arrangements. CFO departure occurred 12 days prior to this agreement, consistent with a management transition tied to the reverse merger. No financial results or guidance were provided.

Key Financial Metrics

Key Facts

• Cycurion acquires Secuvant LLC via reverse merger for $2,875,000 base consideration ($875k cash + $2,000,000 in Series I Convertible Preferred Stock)
• 888,888 shares of preferred stock issued as equity consideration, convertible at $2.25/share into common stock
• Cash consideration paid in three installments: $350k at close, $300k at day 60, $225k at day 120
• Earn-out structure: $100k guaranteed per year (2026-2028) plus performance earn-out based on Panoptic licensing revenue gross profit
• Preferred stock subject to lock-up: $1.5M face value locked for 6 months, $500k face value locked for 90 days
• Registration rights agreement filed with SEC within 30 days post-close, target effectiveness within 90 days
• 10% of base consideration ($287,500) placed in escrow for 6-month indemnification
• CFO departure (5/31/26) occurred 12 days before this merger agreement was signed, consistent with management change
• No revenue, earnings, guidance, or financial results reported in this filing

Financial Impact

$2,875,000 total base consideration ($875k cash + $2,000,000 equity) plus contingent earn-out payments of minimum $100k/year for 3 years ($300k guaranteed) plus performance earn-out up to 70-87% of gross profit from new Panoptic licensing revenue above escalating baselines ($200k/$1M/$2M).

Risk Factors

• Dilution risk from 888,888 preferred shares convertible to common at $2.25/share
• Lock-up expirations create predictable selling pressure at 90 days and 6 months post-close
• No financial statements or operational history of target provided in filing
• Nasdaq listing approval required for closing - no guarantee of approval
• CFO departure may signal internal instability during integration

Market Snapshot

Investment Themes

Documents Analyzed

This report is based on 4 SEC documents filed with EDGAR.

US Market Status