NOTE 15 - SUBSEQUENT EVENT

Exclusive Distribution Agreement

On January 31, 2025, the Company entered into a Distribution Agreement (the “Distribution Agreement”) with Super Sonic Company Limited (“Manufacturer”). The Manufacturer appointed the Company to act as Manufacturer’s exclusive distributor of certain of the Manufacturer’s golf cart products (the “Products”), in the United States. The Manufacturer agreed to recommend to all customers the sole use of the Company for all Products. The Manufacturer has the right to sell non-Volcon branded products to other customers, provided that Manufacturer shall pay 5% of the order price to the Company. Before the end of June 2025, the Manufacturer and the Company will agree to a procurement plan, and if the Company fails to meet the minimum purchase requirement described in the procurement plan for two consecutive months, the Manufacturer shall have the right to immediately terminate the Distribution Agreement. During the term of the Distribution Agreement, to the extent the Company sells any Volcon-branded products (the “Volcon Products”) that are similar to the Products, the Company agrees to provide the Manufacturer with a right of first refusal to manufacture Volcon Products.

At the end of each calendar quarter, the Company agreed to issue the Manufacturer shares of Company common stock based on the number of Product units (the “Units”) ordered by the Company during the quarter as follows: for each 1,000 Units ordered in 2025 by the Company and produced by the Manufacturer (including any products referred to the Company by the Manufacturer), the Company shall issue the Manufacturer a number of common shares equal to 1% of the Company’s outstanding shares of common stock (the “Consideration Shares”) as of the last day of such quarter that the 1,000 Units were ordered for no additional consideration, in addition to making full payment for all Units ordered. The requirement to issue the Consideration Shares shall cease on the anniversary of the parties’ confirmation of the procurement plan or upon the sale of 7,000 Units, whichever comes first. Notwithstanding the foregoing, to the extent the issuance of the Consideration Shares shall require shareholder approval pursuant to the rules of the Nasdaq Stock Market, such issuances shall be subject to the receipt of such shareholder approval and the Company agrees to seek such approval within three months of the determination that the approval is required. If, for any reason, the Company fails to issue such shares to the Manufacturer, the Manufacturer is entitled to compensatory damages in the amount equal to the value of the Consideration Shares that should have been issued to the Manufacturer in that quarter (determined by the closing stock price on the last day of that quarter), and to immediately terminate the Distribution Agreement.

On or before February 1, 2026, the Manufacturer will also be provided two-year warrants (the “Consideration Warrants”) to purchase up to 10% of the Company’s outstanding shares of common stock exercisable if, as of February 1, 2026, 10,000 Units are ordered (the “Order Date”). The exercise price of the warrants will be equal to 90% of the Company’s closing stock price on such date. Notwithstanding the foregoing, to the extent the issuance of the Consideration Warrants shall require shareholder approval pursuant to the rules of the Nasdaq Stock Market, such issuance shall be subject to the receipt of such shareholder approval and the Company agrees to seek such approval within three months of the determination that the approval is required. If, for any reason, the Company fails to issue the Consideration Warrants or fails to fulfill the Manufacturer’s request to exercise the Consideration Warrants, the Manufacture is entitled to compensatory damages in the amount equal to 10% of the value of the shares that would have been purchased by Manufacturer under the Consideration Warrants, and to immediately terminate the Distribution Agreement.

If the Company orders over 10,000 Units in 2025 (including any products referred to the Company by the Manufacturer), on or before February 1, 2026, the Company will provide the Manufacturer with the right to appoint a director to our board, subject to board and shareholder approvals of the director.

The term of the Distribution Agreement is for one year, which can be extended for additional one-year periods by the parties. The Agreement may be terminated immediately by either party in the event of a breach of the Distribution Agreement by the other party, or by either party if the other party: (i) becomes insolvent or bankrupt, becomes unable to pay its debts as they fall due, or files a petition for voluntary or involuntary bankruptcy or under any other insolvency law; (ii) makes or seeks to make a general assignment for the benefit of its creditors, seeks reorganization, winding-up, liquidation, dissolution, or other similar relief with respect to it or its debts; or (iii) applies for, or consents to, the appointment of a trustee, receiver, or custodian for a substantial part of its property.

Supply Agreement

On February 24, 2025, the Company entered into a Supply Agreement (the “Supply Agreement”) with Venom-EV LLC (“Venom”) to supply Venom with certain golf carts. The Supply Agreement allows Venom to purchase up to $3 million of golf carts with payment terms of 90 days from the date the golf carts are delivered to Venom’s facility. These golf carts will be purchased through a manufacturer specified in the Supply Agreement and the Company will receive consideration of the cost of the golf carts plus a three percent margin. At the end of each calendar quarter, the Company agreed to issue Venom shares of Company common stock based on the number of golf carts purchased by Venom during the quarter as follows: for each 1,000 Units sold in 2025 to Venom by the Company, the Company shall issue Venom a number of shares equal to 1% of the Company’s outstanding shares of common stock (the “Venom Shares”) as of the last day of such quarter that the 1,000 Units were sold for no additional consideration. The requirement to issue the Venom Shares shall cease upon the sale of 5,000 Units or June 30, 2026, whichever comes first. Notwithstanding the foregoing, to the extent the issuance of the Venom Shares shall require shareholder approval pursuant to the rules of the Nasdaq Stock Market, such issuances shall be subject to the receipt of such shareholder approval. If for any reason the Company fails to issue such shares to Venom, Venom is entitled to compensatory damages in the amount equal to the value of the Venom Shares that should have been issued to Venom in that quarter (determined by the closing stock price on the last day of that quarter), and to immediately terminate the Supply Agreement.

Share Repurchase Program

On March 7, 2025 the board of directors authorized a share repurchase program whereby the Company can repurchase up to $2 million of it’s common stock at the Company’s discretion. The share repurchase program expires on March 7, 2026. Through March 28, 2025, 383,081 shares have been repurchased at an average purchase price of $1.02.