Business Context and Reporting Period
This Form 8-K Current Report is filed by Volcon, Inc. (not Empery Digital Inc.) on February 27, 2025, covering events occurring on February 21 and February 25, 2025. The registrant is an emerging growth company incorporated in Delaware with its principal executive offices in Round Rock, Texas. The filing primarily details a new material definitive agreement and board committee appointments.
Key Financial Metrics and Agreements
The filing does not contain standard financial statements (revenue, profit, cash flow, or margins) for a reporting period. However, it discloses specific financial terms related to a new Supplier Agreement:
- Agreement Counterparty: Venom-EV ("Venom").
- Purchase Limit: Up to $3.0 million in product purchases.
- Initial Order: Venom placed an order for 500 vehicles on February 25, 2025, with an aggregate purchase price of $2.36 million.
- Payment Terms: Net 90 days from delivery; Venom pays a 3% fee on the order price to Volcon upon repayment.
- Equity Consideration: Volcon will issue shares of common stock to Venom quarterly based on units purchased (1% of outstanding shares for every 1,000 units), capped at 5,000 units or June 30, 2026.
Material Changes
The primary material change is the entry into the Supplier Agreement with Venom-EV, designating Volcon as the supply representative for Venom's "gold carts." Additionally, the Board of Directors approved new appointments to the Audit, Compensation, and Nominating and Governance committees on February 21, 2025. No prior comparable period financial data is provided in this filing to assess changes in revenue or profitability.
Guidance, Risks, and Contingencies
Equity Issuance Risks: The issuance of shares to Venom is subject to Nasdaq shareholder approval rules. If approval is required, Volcon must seek it within three months. Failure to issue shares (excluding shareholder approval delays) entitles Venom to compensatory damages equal to the share value and the right to terminate the agreement immediately.
Liability and Costs: Venom is responsible for all shipping, tariffs, duties, product liability claims, documentation, and warranties. Volcon's liability is limited to the supply arrangement.
Termination: The agreement may be terminated immediately by either party for breach, insolvency, bankruptcy, or liquidation events.
Unregistered Securities: The shares issuable under the agreement are offered in a private placement under Section 4(a)(2) of the Securities Act and have not been registered.
Investor Verification Checklist
- Verify the exact number of Volcon common shares outstanding as of the last day of each quarter to calculate the equity issuance obligation to Venom.
- Confirm whether the proposed share issuances will trigger a requirement for shareholder approval under Nasdaq listing rules.
- Review the full text of the Supplier Agreement (Exhibit 10.1) for detailed definitions of "Products" and specific performance metrics.
- Monitor the execution of the initial $2.36 million purchase order and the subsequent cash flow impact given the 90-day payment terms.
- Assess the financial stability of Venom-EV, as Volcon's revenue from this deal is contingent on Venom's ability to sell the products and repay Volcon.