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Volcon Inc. (NASDAQ:VLCN), an emerging leader in the electric vehicle industry with a market capitalization of $1.87 million and impressive year-over-year revenue growth of 41%, has inked a pivotal distribution agreement with Super Sonic Company Limited, according to a recent SEC filing.
The deal, dated January 31, 2025, grants Volcon exclusive rights to distribute Super Sonic’s golf cart products in the United States. InvestingPro analysis suggests the stock is currently undervalued, trading near its 52-week low of $3.18.
Under the terms of the agreement, Super Sonic will recommend Volcon as the sole distributor for its products, although Super Sonic retains the right to sell non-Volcon branded products to other customers. In such cases, Super Sonic is obliged to pay Volcon 5% of the order price.
The partnership includes a provision for Volcon to issue shares of common stock to Super Sonic based on the number of product units ordered each quarter. For every 1,000 units ordered in 2025 and produced by Super Sonic, Volcon will issue shares equivalent to 1% of its outstanding common stock at the end of the respective quarter. This share issuance is capped at the confirmation of a procurement plan’s anniversary or upon the sale of 7,000 units, whichever occurs first.
Additionally, Super Sonic will receive a two-year warrant to purchase up to 10% of Volcon’s outstanding common stock if 10,000 units are ordered by February 1, 2026. The exercise price for the warrant will be set at 90% of Volcon’s closing stock price on the order date.
The agreement also stipulates that if Volcon orders exceed 10,000 units in 2025, Super Sonic will be offered a board seat, subject to board and shareholder approvals.
Set for an initial one-year term with potential annual extensions, the agreement can be terminated immediately by either party in case of a breach, insolvency, or bankruptcy-related events.
This strategic move is expected to fortify Volcon’s market position in the electric vehicle sector and expand its product offerings. While InvestingPro data shows the company’s overall financial health score is currently weak at 1.27, this partnership could provide needed momentum.
However, the issuance of shares and warrants is subject to shareholder approval as per Nasdaq’s rules, and Volcon has committed to seeking such approval within three months if necessary. For deeper insights into Volcon’s financial metrics and 18 additional ProTips, consider exploring InvestingPro’s comprehensive analysis tools.
The information in this article is based on a press release statement and provides an objective summary of the key aspects of the distribution agreement between Volcon Inc. and Super Sonic Company Limited.
In other recent news, Volcon Inc., the all-electric powersports company, has been making significant strides. The company announced the arrival of its latest model, the Volcon HF1, at Lithium Powersports in Jacksonville, Florida, expanding its lineup of electric motorcycles and utility terrain vehicles (UTVs). In addition, Volcon has settled an agreement with GLV Ventures, ending their existing supplier agreements and appointing Orn Olason as an independent member of its Board of Directors.
In terms of marketing efforts, Volcon has released a promotional video for the VLCN HF1, providing potential customers and investors a closer look at the vehicle’s features and design. The company is also investigating a discrepancy regarding the issuance of additional shares following a recent one-for-eight reverse stock split.
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