Management Change/Compensation (Form 8-K)

Effective January 22, 2026, the Compensation Committee (the "Committee") of the Board of Directors (the "Board of Directors") of Kustom Entertainment, Inc. (the "Company") approved certain compensatory arrangements for the Company's executive officers and members of the Board of Directors.

The Committee set the annual base salaries of Stanton E. Ross, President and Chief Executive Officer of the Company, Peng Han, Chief Operating Officer and Thomas J. Heckman, Chief Financial Officer, Treasurer, and Secretary at $200,000 for Mr. Ross and Mr. Han and $90,000 for Mr. Heckman for the 2026 fiscal year.

The Committee determined that Mr. Ross, Mr. Han and Mr. Heckman will each be eligible for bonuses of up to a total of $250,000 for 2026 based on individual performance during the year. The Committee will review each executive officer's performance on a periodic basis during 2026 and determine what if any portion of such bonus has been earned and will be paid as of such time.

The Committee also approved the issuance of options to acquire shares of the Company's common stock, par value $0.001 (the "Common Stock"), under the Company's 2022 Stock Option and Restricted Stock Plan, as amended (the "Plan"). Mr. Ross was granted options to acquire 58,333 shares of Common Stock and Mr. Han and Mr. Heckman were each granted options to acquire 22,500 shares of Common Stock subject to the effectiveness of a Form S-8 Registration Statement registering awards under the Plan. The exercise price for such options is $2.04 per share which was the closing price of the Common Stock on the Nasdaq Capital Market on January 22, 2026. One hundred percent of the options awarded to these executive officers will vest on January 22, 2027, provided each individual remains an officer of the Company on such date.

The Committee also approved the issuance of options to members of the Board of Directors under the Plan. Leroy C Richie was granted options to acquire 5,000 shares of Common Stock, and Duke Daughtery and Charles Anderson were each granted options to acquire 3,333 shares of Common Stock subject to the effectiveness of a Form S-8 Registration Statement. The exercise price for all such options is $2.04 per share which was the closing price of the Common Stock on January 22, 2026. One hundred percent of each director's option award will vest on January 22, 2027, provided the individual remains a director on such dates.