8-K: Volcon Enters Amended Supplier Agreement with Venom-EV for Gold Cart Supply

Volcon, Inc. has entered into an amended agreement with Venom-EV to act as their supply representative for gold carts, with a purchase limit of $2.0 million.

Summary

• Volcon, Inc. has entered into an Amended and Restated Supplier Agreement with Venom-EV, effective April 24, 2025.
• Under the agreement, Volcon will act as Venom-EV's supply representative for gold carts.
• Volcon will purchase products from the manufacturer, Whanlong, up to a purchase limit of $2.0 million.
• Payment terms are net 100 days from when the products leave the manufacturer's facility or upon the sale of the products.
• Venom-EV will pay Volcon 5% of the order price, payable with the repayment for the products.
• Venom-EV is responsible for shipping costs, tariffs, duties, fees, product liability claims, and documentation for the sale of the products.
• The agreement has a one-year term with potential for additional one-year extensions.
• Either party can terminate the agreement in case of a breach or insolvency of the other party.

Sentiment

Score: 7

Explanation: The agreement is a positive development for Volcon, providing a potential revenue stream and expanding its role in the electric vehicle market. However, there are also risks associated with purchasing products and potential termination of the agreement.

Positives

• Volcon secures a role as a supply representative, potentially generating revenue through a 5% commission on orders.
• The agreement includes a defined purchase limit, providing clarity on the scale of the arrangement.
• Venom-EV assumes responsibility for key costs and liabilities, including shipping, tariffs, product liability, and documentation.

Negatives

• Volcon is responsible for purchasing the products, which could tie up capital.
• The agreement is subject to termination if either party breaches the agreement or becomes insolvent.

Risks

• The agreement could be terminated if either party breaches the terms or faces financial difficulties.
• Volcon's capital could be tied up in purchasing products.
• Venom-EV's ability to fulfill its responsibilities regarding shipping costs, tariffs, and product liability could impact Volcon.

Future Outlook

The agreement can be extended for additional one-year periods, providing potential for continued collaboration between Volcon and Venom-EV.

Industry Context

This agreement reflects a trend of companies outsourcing supply chain functions to streamline operations and focus on core competencies. It also highlights the growing market for electric vehicles, including niche products like gold carts.

Comparison to Industry Standards

• The 5% commission structure is within the typical range for supply representative agreements in the automotive and recreational vehicle industries.
• Net 100-day payment terms are longer than standard payment terms, which are typically net 30 or net 60 days.
• Comparable companies such as Polaris and Textron often have similar supplier agreements to manage their supply chains.

Stakeholder Impact

• Shareholders may view the agreement positively as it represents a potential revenue stream for Volcon.
• Employees may benefit from increased workload and potential for growth within the company.
• Customers of Venom-EV may benefit from a more reliable supply of gold carts.

Key Dates

Keywords

Supplier Agreement, Volcon, Venom-EV, Gold Carts, Supply Representative, Purchase Limit