Volcon Faces Delisting Risk, Amends Bylaws on Jan 30

TL;DR

**Volcon is in hot water with its listing and just changed its rules, watch out for delisting.**

AI Summary

Volcon, Inc. filed an 8-K on February 5, 2024, reporting several significant events that occurred on January 30, 2024. These include a notice of delisting or failure to satisfy continued listing rules, material modifications to security holders' rights, and amendments to the company's articles of incorporation or bylaws. This matters to investors because it signals potential instability and a risk of the stock being delisted, which could severely impact its liquidity and value.

Why It Matters

This filing indicates Volcon, Inc. is facing serious issues with its stock exchange listing and has made fundamental changes to its corporate governance, which could negatively impact shareholder value and trading access.

Risk Assessment

Risk Level: high — The notice of delisting or failure to satisfy listing rules presents a significant risk to the stock's liquidity and investor confidence.

Analyst Insight

A smart investor would carefully evaluate the implications of a potential delisting and the impact of corporate governance changes on their investment, potentially considering reducing exposure until more clarity emerges on Volcon's listing status and strategic direction.

Key Players & Entities

• Volcon, Inc. (company) — the registrant filing the 8-K
• January 30, 2024 (date) — date of earliest event reported
• February 5, 2024 (date) — date the 8-K was filed
• Delaware (company) — state of incorporation for Volcon, Inc.

Forward-Looking Statements

• Volcon, Inc. stock will experience increased volatility due to delisting concerns. (Volcon, Inc.) — high confidence, target: Q1 2024
• The company may announce further actions to address its listing status. (Volcon, Inc.) — medium confidence, target: Q2 2024

FAQ

Key Financial Figures

• $0.00001 — h registered Common Stock , par value $0.00001 per share VLCN NASDAQ Indicate by
• $800,000 — es for an initial annual base salary of $800,000, an annual bonus of $250,000, and an an
• $250,000 — salary of $800,000, an annual bonus of $250,000, and an annual option grant. For 2024,
• $300,000 — es for an initial annual base salary of $300,000, provided that Mr. Endo agreed to volun
• $238,500 — o voluntarily reduce his base salary to $238,500 until December 31, 2024. Mr. Endo's agr
• $12,500 — ecutive officer transition for a fee of $12,500. The foregoing descriptions of the emp

Filing Documents

• volcon_8k.htm (8-K) — 137KB
• volcon_ex0301.htm (EX-3.1) — 6KB
• volcon_ex1001.htm (EX-10.1) — 67KB
• volcon_ex1002.htm (EX-10.2) — 71KB
• volcon_ex1003.htm (EX-10.3) — 59KB
• volcon_ex9901.htm (EX-99.1) — 9KB
• 0001683168-24-000670.txt ( ) — 580KB
• vlcn-20240130.xsd (EX-101.SCH) — 3KB
• vlcn-20240130_lab.xml (EX-101.LAB) — 33KB
• vlcn-20240130_pre.xml (EX-101.PRE) — 22KB
• volcon_8k_htm.xml (XML) — 4KB

01 Notice of Delisting or Failure to Satisfy a Continued

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. On January 30, 2024, Volcon, Inc. (the "Company") entered into an employment agreement with John Kim pursuant to which Mr. Kim agreed to serve as the Company's chief executive officer and president, effective February 3, 2024. Effective upon Mr. Kim's appointment as our chief executive officer and president, Mr. Kim no longer qualified as an independent board member, and is no longer eligible to serves as a member of the Company's audit committee, compensation committee or nominating and governance committee. As such, the Company's current board of directors does not have a majority of independent board members as required by Nasdaq Listing Rule 5605(b), and the Company's audit committee no longer has three board members as required by Nasdaq Listing Rule 5605(c)(2). Pursuant to Nasdaq listing rules, the Company will have until the earlier of its next annual shareholders meeting or one year from the occurrence of the event that caused the failure to comply with the foregoing requirements; provided, however, that if the annual shareholders meeting occurs no later than 180 days following the event that caused the vacancy, the Company shall instead have 180 days from such event to regain compliance. On February 1, 2024, the Company notified the Nasdaq Stock Market of such non-compliance.

03. Material Modifications of Rights of Security Holders

Item 3.03. Material Modifications of Rights of Security Holders. To the extent required by Item 3.03 of Form 8-K, the information contained in Item 5.03 herein is incorporated by reference into this Item 3.03.

02. Departure of Directors

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. John Kim Employment Agreement On January 30, 2024, the Company entered into an employment agreement with John Kim pursuant to which Mr. Kim agreed to serve as the Company's chief executive officer and president, effective February 3, 2024. Mr. Kim's agreement provides for an initial annual base salary of $800,000, an annual bonus of $250,000, and an annual option grant. For 2024, the annual option grant shall (i) be issued after the date of the Company's 2024 annual meeting and on or prior to the date the Company issues equity compensation to any other executive officers or members of the Board; (ii) be for a number of shares equal to 10% of the fully diluted number of shares of Company common stock outstanding on the date of grant and shall vest on the earlier of one year after issuance or on the date when at least 90% of the Company's convertible promissory notes outstanding on the date hereof are no longer outstanding; (iii) have an exercise price equal to the closing price of the Common Stock on the date of issuance; and (iv) shall be subject to the approval by the Company's shareholders to increase the number of shares of common stock available for issuance under the Company stock plan. Mr. Kim's agreement provides for an initial term of one year, which is automatically renewed for additional one-year terms unless either party chooses not to renew the agreement. If Mr. Kim's employment is terminated at the Company's election without "cause" (as defined in the agreement), which requires 90 days advance notice, or by Mr. Kim for "good reason" (as defined in the agreement), Mr. Kim shall be entitled to receive severance payments equal to six months of Mr. Kim's base salary and 100% of the target annual bonus for the year in which such termination occurs. In addition, if Mr. Kim's employment is terminate

03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. At the Company's special meeting of stockholders held on January 12, 2024, the stockholders of the Company approved, among other items, an amendment to the Company's amended and restated certificate of incorporation (the "Amendment") to effect the reverse stock split at a ratio in the range of 1-for-2 to 1-for-45, with such ratio to be determined in the discretion of the Company's board of directors and with such reverse stock split to be effected at such time and date, if at all, as determined by the Company's board of directors in its sole discretion prior to the one-year anniversary of the special meeting. Pursuant to such authority granted by the Company's stockholders, the Company's board of directors approved a one-for-forty-five (1:45) reverse stock split (the "Reverse Stock Split") of the Company's common stock and the filing of the Amendment to effectuate the Reverse Stock Split. The Amendment was filed with the Secretary of State of the State of Delaware and the Reverse Stock Split became effective in accordance with the terms of the Amendment at 11:59 p.m. Eastern Time on February 2, 2024 (the "Effective Time"). The Amendment provides that, at the Effective Time, every forty-five shares of the Company's issued and outstanding common stock will automatically be combined into one issued and outstanding share of common stock, without any change in par value per share, which will remain $0.00001. 3 As a result of the Reverse Stock Split, the number of shares of common stock outstanding will be reduced from approximately 52.5 million shares to approximately 1.2 million shares, and the number of authorized shares of common stock will remain at 250 million shares. As a result of the Reverse Stock Split, except with respect to our Series A warrants and Series B warrants, which will adjust as described in the Company's Form 8-K filed November 20, 2023, which description is i

01. Other Events

Item 8.01. Other Events. On January 31, 2024, the Company issued a press release to announce that it is filing a certificate of amendment to its articles of incorporation with the Secretary of State of the State of Delaware to effect a 1-for-45 reverse stock split of its common stock. A copy of the press release is attached to this report as Exhibit 99.1 and is incorporated by reference herein. The table below sets forth the impact of the Reverse Stock Split on the Company's net loss per common share – basic and diluted; weighted average common shares outstanding – basic and diluted; and shares issued and outstanding, for the years ended December 31, 2022 and 2021; the three months ended March 31, 2023 and 2022; three months ended June 30, 2023 and 2022; six months ended June 30, 2023 and 2022; three months ended September 30, 2023 and 2022; and the nine months ended September 30, 2023 and 2022. 4 PRE SPLIT (1) POST SPLIT YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 2022 2021 2022 2021 Net loss $ (34,235,405 ) $ (40,125,109 ) $ (34,235,405 ) $ (40,125,109 ) Net loss per common share - basic $ (7.23 ) $ (43.93 ) $ (325.20 ) $ (1,976.70 ) Net loss per common share - diluted $ (7.23 ) $ (43.93 ) $ (325.20 ) $ (1,976.70 ) Weighted average common shares outstanding - basic 4,737,351 913,415 105,275 20,299 Weighted average common shares outstanding - diluted 4,737,351 913,415 105,275 20,299 PRE SPLIT (1) POST SPLIT 3 MONTHS ENDED MARCH 31, 3 MONTHS ENDED MARCH 31, 2023 2022 2023 2022 Net loss $ (7,299,469 ) $ (8,612,345 ) $ (7,299,469 ) $ (8,612,345 ) Net loss per common share - basic $ (1.49 ) $ (1.98 ) $ (66.94 ) $ (89.11 ) Net loss per common share - diluted $ (1.49 ) $ (1.98 ) $ (66.94 ) $ (89.11 ) Weighted average common shares outstanding - basic 4,907,027 4,349,018 109,046 96,645 Weighted average common shares outstanding - diluted 4,907,027 4,349,018 109,046 96,645 PRE SPLIT

01. Exhibits

Item 9.01. Exhibits. (d) Exhibits Exhibit No. Description 3.1 Amendment to Amended and Restated Certificate of Incorporation of Volcon, Inc. 10.1 Employment Agreement dated January 30, 2024 between Volcon, Inc. and John Kim 10.2 Employment Agreement dated January 30, 2024 between Volcon, Inc. and Greg Endo 10 .3 Consulting Agreement dated February 1, 2024 between Volcon, Inc. and Jordan Davis 99.1 Press release dated January 31, 2024 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document 7

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Volcon, Inc. (Registrant) Date: February 5, 2024 /s/ Greg Endo Greg Endo Chief Financial Officer 8

View Full Filing

View this 8-K filing on SEC EDGAR