Volcon implements comprehensive program to improve profitability and cash flow

AUSTIN, TX, August 25, 2022 (GLOBE NEWSWIRE) — Volcon Inc. (NASDAQ: VLCN) (“Volcon” or the “Company”), the first all-electric off-road powersports company, today announced a comprehensive program and manufacturing transition aimed at improving profitability and Treasury.

Improve cash flow and profitability in the immediate and short term, volcon will close its manufacturing operations in Round Rock, Texas, merging its logistics and storage operations into one location, reducing storage and fulfillment costs. In order to improve product margins, the Company entered into a manufacturing contract with GLV Ventures (GLV), a well-established automotive supplier and manufacturer. GLV Ventures and its partner companies have been providing strong automotive solutions, superior product development and advanced manufacturing quickly and cost effectively for over 25 years. GLV will produce the Volcon Grunt in current and future models, as well as the Volcon Stag, the class-leading all-electric UTV launched by volcon in July 2022.

The Company expects these actions to improve the overall gross margin at the product-by-product level by reducing material, labor and overhead costs, reducing operating expenses due to the lower headcount and facility costs, all of which should improve cash retention. The Company is also seeking to reduce its reliance on parts and components sourced from Chinaand will seek to consolidate its supply chain in countries friendly to U.S. manufacturers, particularly those located in North America.

“The manufacturing, supply chain and logistics environment in which emerging small businesses are rapidly evolving. The socio-economic and geopolitical landscapes are very different today than they were two or three years ago,” said Jordan Davisgeneral manager of volcon. “Over the past few quarters, our leadership team has been re-evaluating our costs across the organization to ensure we are properly structured to achieve profitability to set us up for long-term success. Although we have successfully managed supply chain and logistical issues to date, we believe the best course of action for our profitability and cash retention is to leverage the scale of third-party manufacturers. that eliminating our reliance on Chinese components where possible will improve our payment terms and cash outlays for parts and components that can be purchased closer to home.While we understand that this transition will take time to execute and some products will require supply from southeast Asia in the immediate future, we believe that this cost reduction plan is the best way to achieve profitability for our company and our shareholders as quickly as possible. As part of this program, we made the difficult decision to reduce the size of the volcon crew. It was a very difficult decision because we recognize that we are losing quality teammates. We thank them for their dedication to building a great product because we couldn’t have brought the Grunt to market without them.

To improve competitiveness and profitability in the immediate and short term, volcon plans to look at other opportunities to use third-party manufacturers that have robust infrastructure, established supply bases that allow for lower cost structure, high overhead utilization, and greater buying power . The Company believes that these types of relationships will allow it to launch products at an accelerated pace which the Company believes will improve near-term profitability.

About Volcon Inc.
Volcon Inc. is the first all-electric powersports company to produce high-quality off-road vehicles. Situated at Round Rock, Texas, volcon joins many major electric vehicle companies located nearby Austin, TXa region on the way to becoming the world capital of electric vehicles.

volcon was founded with a mission to enhance the outdoor experience while reducing the industry’s environmental footprint so that adventurers and workers can enjoy the outdoors and preserve it for generations to come. volcon produces all-electric all-terrain vehicles designed to elevate the adventure experience and help people get things done at work and at home.

Volcon’s first product, the innovative Grunt, combines a large physical tire with high-torque electric power and a near-silent drivetrain that began shipping in September 2021. Future two-wheeled models may include the Runt, which is a version for young people from the revolutionary Grunt, and an eBike, the Brat. Deer and Project X should be Volcon’s venture into the expanding world of UTVs and are expected in the years to come as the company continues to grow.

Volcon Contacts
For media: [email protected]
For dealers: [email protected]
For investors: [email protected]
For marketing: [email protected]

For more information on volcon or to learn more about its full line of motorcycles and side-by-sides, visit: www.volcon.com

Forward-looking statements

Some of the statements in this release are forward-looking statements, which involve risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date they are made, the expectations may turn out to be materially different from the results expressed or implied by these forward-looking statements. The Company has attempted to identify forward-looking statements by terminology including “believes”, “estimates”, “anticipates”, “”intends” ”potential” ”may” ”could” ”could” ”will” ”should” ”approximately” or other words that convey uncertainty of future events or results to identify these forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors. All forward-looking statements contained in this press release speak only as of its date. The Company undertakes no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after the date thereof or to reflect the occurrence of unforeseen events. More detailed information about the risks and uncertainties affecting the Company is contained under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with from SECONDwhich are available on the SEC’s website, www.sec.gov.

Source: Volcon, Inc.

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