EX-99.1 2 exhibit991q12026earningsre.htm EX-99.1 Document


 
Exhibit 99.1
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Cycurion Reports First Quarter 2026 Results
Delivers 900 Basis Point Gross Margin Expansion, Net Loss Cut 51% and $21 to $22 Million Annual Revenue Visibility Turnaround Momentum
McLean, Virginia., May 14, 2026. (GLOBE NEWSWIRE) -- Cycurion, Inc. (NASDAQ: CYCU) ("Cycurion" or the "Company"), a leader in AI-driven cybersecurity and national security solutions with trusted relationships across the U.S. Government, numerous leading corporations, and high-profile individuals across all industries, announced today results for the first quarter ended March 31, 2026.
"The first quarter of 2026 marks a clear inflection point in our transformation," said Kevin Kelly, Chairman and Chief Executive Officer of Cycurion. "We nearly doubled gross margins, significantly reduced operating expenses and executed binding agreements to acquire Halo Privacy and HavenX, which adds approximately $7 million in annualized contracted revenues at approximately 55% gross margin once the deal closes. Combined with our existing contracted backlog, which we expect to deliver approximately $15 million to $17 million in annual revenue, the addition of Halo Privacy and HavenX will increase our contracted backlog we estimate to convert to revenue in a one year period to approximately $21 million to $22 million. We are executing with discipline - exiting lower margin legacy work, reducing costs and reinvesting in our AI-driven platforms. I am confident in our path to profitability and long-term shareholder value."
Highlights of First Quarter 2026 as Compared to Fourth Quarter 2025
•Revenue of $3.3 million, which reflects the planned wind-down of certain legacy contracts ahead of the ramp of higher-margin replacement work.
•Gross margin expanded 900 basis points to 21.1% from 12.1%, nearly doubling as a result of a deliberate shift to higher-margin contracts and disciplined cost management.
•Selling, general and administrative expenses decreased $1.3 million, or 31.6%, to $2.7 million.
•Net loss improved 51.5% to $2.6 million from $5.3 million.
•EBITDA loss improved 60.2% to $1.9 million from $4.9 million.
Strategic and Operational Momentum
•Halo Privacy and HavenX Acquisition (Binding Agreement May 2026): Adds approximately $7 million in estimated annualized contracted revenue with a gross margin of approximately 55%. Brings industry-leading secure communications technology (including the Halo Link app) and elite digital investigations/attribution capabilities (HavenX), expanding Cycurion's presence in high-growth markets.
•Robust Contract Backlog: Consistent with prior disclosures, the Company's $112 million contracted backlog is expected to realize approximately $15 million – $17 million over the next twelve months, which the addition of Halo Privacy and HavenX upon closing, this expectation increases to approximately $21 million – $22 million over a one yer period.
•Cost Reduction Initiatives: Organizational realignment on track to generate over $2.2 million in annualized savings, with meaningful benefits already reflected in first quarter of 2026 selling, general and administrative expenses.
•Acquisition Pipeline: Continued advancement of the revised Memorandum of Understanding to acquire Kustom Entertainment's Legacy Video Solutions segment (expected to add approximately $5.1 million in annual revenue and approximately $8 million in contracted backlog).


About Cycurion
Based in McLean, Virginia, Cycurion (NASDAQ: CYCU) is a forward-thinking provider of IT cybersecurity solutions and AI, committed to delivering secure, reliable, and innovative services to clients worldwide. Specializing in cybersecurity, program management, and business continuity, Cycurion harnesses its AI-enhanced ARx platform and expert team to empower clients and safeguard their operations. Along with its subsidiaries, Axxum Technologies LLC, Cloudburst Security LLC, and Cycurion Innovation, Inc., Cycurion serves government, healthcare, and corporate clients committed to securing the digital future. For more information, visit www.cycurion.com.
About Halo Privacy
Halo Privacy, with more than 10 years of expertise, develops cutting-edge, privacy-first secure communication tools engineered for the highest security standards, including the revolutionary Halo Link app.
About HavenX
HavenX is a leading digital investigations and attribution firm focused on cyber-harassment, defamation tracking, OSINT, IP geolocation, breach intelligence, and high-confidence threat actor identification.
Forward-Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the operations and prospective growth of Cycurion's business.
Certain statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Such statements include, but are not limited to, statements regarding the proposed transaction contemplated by the binding agreement, including the likelihood, timing, structure or consummation of the transaction; the anticipated benefits of the transaction; the acceleration of the Company's inorganic growth strategy; the continued execution on the Company's backlog; and other statements that are not historical facts, including statements which may be accompanied by words such as "continue," "will," "may," "could," "should," "expect," "expected," "plans," "intend," "anticipate," "believe," "estimate," "predict," "potential," and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Cycurion and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to, risks related to customer performance and satisfaction, contract modifications, delays or terminations, and the Company’s ability to fulfill contractual obligations, the outcomes of the Company"s investigations, any potential legal proceedings, or the future performance of the Company's stock. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed by Cycurion with the U.S. Securities and Exchange Commission. Cycurion anticipates that subsequent events and developments may cause its plans, intentions, and expectations to change. Cycurion assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Cycurion's plans and expectations as of any subsequent date.
Cycurion Investor Relations:
(888) 341-6680
investors@cycurion.com
Cycurion Media Relations:
(888) 341-6680
media@cycurion.com
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Quarterly Results of Operations and Non-GAAP Financial Measures
(Unaudited)

Quarterly Consolidated Results of Operations
For the Three Months Ended
March 31, 2026December 31, 2025March 31, 2025
Revenue$3,268,620 $3,542,644 $3,870,050 
Cost of revenue2,580,262 3,114,505 3,192,287 
Gross profit688,358 428,139 677,763 
Gross margin21.1 %12.1 %17.5 %
Operating expenses:
Selling, general and administrative expenses2,743,695 4,013,876 337,374 
Stock compensation expenses315,833 804,424 — 
Business combination expenses— 630,000 10,437,894 
Total operating expenses3,059,528 5,448,300 10,775,268 
Operating loss(2,371,170)(5,020,161)(10,097,505)
Interest income14,236 25,768 — 
Interest expense(204,852)(257,174)(178,890)
Gain on debt settlement, net— (28,504)141,653 
Other expense— — (113,744)
Other expense, net(190,616)(259,910)(150,981)
Loss before income taxes(2,561,786)(5,280,071)(10,248,486)
Provision for income tax— — — 
Net loss(2,561,786)(5,280,071)(10,248,486)
Less: Net loss attributable to non-controlling interest433,324 175,017 — 
Net loss attributable to Cycurion$(2,128,462)$(5,105,054)$(10,248,486)

Reconciliation of Net Loss to EBITDA (Non-GAAP) and Adjusted EBITDA (Non-GAAP)
For the Three Months Ended
March 31, 2026December 31, 2025March 31, 2025
Net loss attributable to Cycurion$(2,128,462)$(5,105,054)$(10,248,486)
Interest income(14,236)(25,768)— 
Interest expense204,852 257,174 178,890 
Other expense— — 113,744 
Depreciation and amortization1,187 7,665 74,892 
EBITDA (Non-GAAP)(1,936,659)(4,865,983)(9,880,960)
Loss on debt settlement, net— 28,504 (141,653)
Transaction related expenses— 630,000 10,437,894 
Finance expense— — 100,000 
Stock-based compensation315,833 904,424 — 
Adjusted EBITDA (Non-GAAP)$(1,620,826)$(3,303,055)$515,281 
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CYCURION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, 2026December 31, 2025
Assets:
Cash and cash equivalents$2,028,718 $5,255,235 
Accounts receivable, net3,336,047 2,687,479 
Prepaid expenses and other current assets106,934 60,133 
Total current assets5,471,699 8,002,847 
Software development costs, net4,735,981 4,606,981 
Goodwill21,238,450 20,842,508 
Total non-current assets25,974,431 25,449,489 
Total assets$31,446,130 $33,452,336 
Liabilities and Stockholders' Equity:
Liabilities:
Bank loan-revolving credit line$2,725,546 $2,933,396 
Loans payable - current portion669,693 669,693 
Factoring liability1,566,887 1,511,678 
Convertible notes192,897 192,897 
Promissory notes2,500,849 2,499,662 
Loans payable - related parties123,650 123,650 
Accounts payable1,441,596 1,314,772 
Accrued liabilities4,283,045 4,228,337 
Accrued compensation and benefits1,306,906 919,825 
Accrued interest payable1,486,041 1,347,787 
Excise tax payable1,167,173 1,167,173 
Total current liabilities17,464,283 16,908,870 
Loans payable - non-current portion300,000 300,000 
Total non-current liabilities300,000 300,000 
Total liabilities17,764,283 17,208,870 
Stockholders' Equity:
Preferred stock ($0.0001 par value, 20,000,000 shares authorized)
Series A convertible preferred stock ($0.0001 par value, 110,000 shares designated, 0 and 0 issued and outstanding, respectively)
— — 
Series B convertible preferred stock ($0.0001 par value, 3,000 shares designated, 0 and 1 issued and outstanding, respectively)
— — 
Series C convertible preferred stock ($0.0001 par value, 5,000 shares designated, 2,547 and 4,851 issued and outstanding, respectively)
— — 
Series D convertible preferred stock ($0.0001 par value, 6,666,700 shares designated, 150,000 and 150,000 issued and outstanding, respectively)
15 15 
Series E convertible preferred stock ($0.0001 par value, 100 shares designated, 51 and 51 issued and outstanding, respectively)
— — 
Series F convertible preferred stock ($0.0001 par value, 10,000 shares designated, 0 and 0 issued and outstanding, respectively)
— — 
Series G convertible preferred stock ($0.0001 par value, 10,000 shares designated, 143 and 143 issued and outstanding, respectively)
— — 
Common stock ($0.0001 par value, 300,000,000 shares authorized, 5,510,021 and 3,642,501 shares issued and outstanding, respectively)
551 364 
Additional paid in capital46,979,742 46,979,762 
Accumulated deficit(29,007,543)(26,879,081)
Total stockholders' equity attributable to Cycurion17,972,765 20,101,060 
Deficit attributable to noncontrolling interests(4,290,918)(3,857,594)
Total stockholders' equity13,681,847 16,243,466 
Total liabilities and stockholders’ equity$31,446,130 $33,452,336 
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CYCURION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
For the Three Months Ended March 31,
20262025
Revenue$3,268,620 $3,870,050 
Cost of revenue2,580,262 3,192,287 
Gross profit688,358 677,763 
Operating expenses:
Selling, general and administrative expenses2,743,695 337,374 
Stock compensation expenses315,833 — 
Business combination expenses— 10,437,894 
Total operating expenses3,059,528 10,775,268 
Operating loss(2,371,170)(10,097,505)
Other income/(expenses):
Interest income14,236 — 
Interest expense(204,852)(178,890)
Gain on debt settlement, net— 141,653 
Other expense, net— (113,744)
Other expenses, net(190,616)(150,981)
Loss before income taxes(2,561,786)(10,248,486)
Provision for income tax— — 
Net loss(2,561,786)(10,248,486)
Less: Net loss attributable to non-controlling interest433,324 — 
Net loss attributable to Cycurion$(2,128,462)$(10,248,486)
Comprehensive loss$(2,128,462)$(10,248,486)
Loss per share:
Basic$(0.47)$(15.57)
Diluted$(0.47)$(7.40)
Weighted average shares outstanding:
Basic4,561,976658,218
Diluted4,561,9761,383,507
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CYCURION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31,
20262025
Cash flows from operating activities:
Net loss$(2,561,786)$(10,248,486)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation315,833 — 
Stock-based compensation - business combination related— 9,250,000 
Amortization of debt discount1,187 64,850 
Depreciation of property and equipment— 1,709 
Amortization of software development costs— 8,333 
Gain on debt settlement, net— (141,653)
Finance expense— 100,000 
Changes in assets and liabilities:
Accounts receivable, net and other receivables(648,568)(1,300,686)
Prepaid expenses and other current assets(46,801)(11,415)
Accounts payable and accrued liabilities(184,201)(286,114)
Accrued compensation and benefits96,248 37,673 
Accrued interest payable138,254 (219,320)
Net cash used in operating activities(2,889,834)(2,745,109)
Cash flows from investing activities:
Cash acquired on business combination— 34,983 
Capitalized software development costs(129,000)(70,000)
Cash withdrawn from Trust Account in connection with redemption— 1,001,216 
Release of Trust Account to Company's bank account— 833,324 
Net cash (used in)/provided by investing activities(129,000)1,799,523 
Cash flows from financing activities:
Proceeds from exercise of warrants167 3,309,921 
Redemption of common stock subject to redemption— (1,001,216)
Repayments of revolving line of credit(207,850)(9,300)
Repayment of bank borrowings— (5,114)
Proceeds from convertible notes payable— 386,500 
Proceeds from notes payable— 513,200 
Repayments of notes payable— (20,000)
Net cash (used in)/provided by financing activities(207,683)3,173,991 
Net (decrease)/increase in cash and cash equivalents(3,226,517)2,228,405 
Cash and cash equivalents, beginning of period5,255,235 40,790 
Cash and cash equivalents, end of period$2,028,718 $2,269,195 

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