Volcon inks supply agreement with Venom-EV, shares to be issued

Volcon , Inc. (NASDAQ:VLCN), a player in the motor vehicles market with revenue growth of 41.15% in the last twelve months, has entered into a significant Supplier Agreement with Venom-EV, as per a recent 8-K filing with the SEC. According to InvestingPro data, the company maintains a healthy balance sheet with more cash than debt and a current ratio of 2.07, indicating strong short-term liquidity. The agreement, which was finalized on February 25, 2025, establishes Volcon as Venom’s supplier for golf carts.

Under the terms, Volcon will procure up to $3 million worth of products from the manufacturer on Venom’s behalf, with a net 90-day payment term from delivery. Venom will handle shipping costs, import fees, and product liability claims. Additionally, they will manage sales documentation and warranties for the products. This agreement comes at a crucial time for Volcon, as InvestingPro analysis shows the company reported an EBITDA of -$31.45M in the last twelve months, highlighting the importance of strategic partnerships for growth.

A unique aspect of the agreement is the equity component: Volcon agreed to issue shares of its common stock to Venom based on the number of units purchased. For every 1,000 units, Venom will receive shares equivalent to 1% of Volcon’s outstanding common stock as of the quarter’s end, with no further consideration. This arrangement is set to expire on June 30, 2026, or upon the sale of 5,000 units, whichever occurs first. However, if shareholder approval is required for the share issuance, the company will seek it within three months of recognizing the need.

If Volcon fails to issue the shares (excluding reasons related to shareholder approval), Venom is entitled to compensatory damages equivalent to the value of the unissued shares and may terminate the agreement.

The agreement, which initially spans one year with potential annual extensions, can be terminated immediately by either party under certain conditions, such as insolvency or breach of terms.

On the same day the agreement was signed, Venom placed an order for 500 vehicles, totaling $2.36 million. This move signals the start of what could be a robust partnership between the two companies.

Volcon’s board also announced new appointments to its committees on February 21, 2025, including Karin-Joyce Tjon as the Chair of the Audit Committee and Jonathan Foster as the Chair of the Compensation Committee.

Investors should note that the shares issued under this agreement will be part of a private placement and not registered under the Securities Act, relying on exemptions provided by Section 4(a)(2) of the Act and/or Regulation D. The stock currently trades at a Price/Book ratio of 0.1, with a significant decline of 99.87% over the past year. For deeper insights into Volcon’s valuation and 18 additional key investment tips, consider subscribing to InvestingPro.

This news is based on a press release statement.

In other recent news, Volcon ePowersports has reported raising approximately $9.47 million through the sale of 1,831,558 shares as part of an At-The-Market offering agreement with Aegis Capital Corp. This financial move is part of Volcon’s strategy to strengthen its financial position and support its growth initiatives. Additionally, Volcon has entered into a supply agreement with Venom-EV to provide 500 electric golf carts, marking its expansion into the golf cart market. The company has also secured an exclusive distribution agreement with Super Sonic Company Limited to distribute Super Sonic’s golf carts in the United States. This agreement leverages Super Sonic’s Vietnamese manufacturing advantages, offering Volcon a competitive edge due to lower import tariffs compared to Chinese imports. Furthermore, Volcon has launched its latest model, the Volcon HF1, now available at Lithium Powersports in Jacksonville, Florida. These developments reflect Volcon’s ongoing efforts to expand its product offerings and strengthen its market presence.

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