Volcon Inc. 10-K

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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 (Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2024

 OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ________ to__________

 Commission file number: 001-40867

 Volcon, Inc.

 (Exact Name of Registrant as Specified in Its Charter)

 Delaware

 84-4882689

 (State or Other Jurisdiction of

 Incorporation or Organization)

 (I.R.S. Employer

 Identification No.)

 3121 Eagles Nest Street, Suite 120, Round Rock, TX

 78665

 (Address of Principal Executive Offices)

 (Zip Code)

 ( 512) 400-4271

 (Registrant's Telephone Number, Including
Area Code)

 Securities registered pursuant to Section 12(b)
of the Act:

 Title of each class

 Trading symbol

 Name of each exchange on which registered

 Common Stock

 VLCN

 The NASDAQ Stock Market LLC

 Securities registered pursuant to Section 12(g)
of the Act: None

 Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

 Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
 No

 Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and
"emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large Accelerated Filer

 Accelerated Filer

 Non-Accelerated Filer

 Smaller Reporting Company

 Emerging Growth Company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

 Indicate by check mark whether the registrant
has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

 Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 As of March 28, 2025, there were 3,850,824
outstanding shares of our common stock. The aggregate market value of shares of common stock held by non-affiliates as of June 30,
2024 was $ 7,030,705 based on the closing sale
price as reported by the NASDAQ Stock Market.

 DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the registrant's proxy statement
related to its 2025 Annual Stockholders' Meeting to be filed subsequently are incorporated by reference into Part II of this Form
10-K. Except as expressly incorporated by reference, the registrant's proxy statement shall not be deemed to be part of this report.

 Page

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibit and Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Index to Exhibits

 Signatures

 i

 Special Note Regarding Forward-Looking
Statements

 This Form 10-K, together with other statements
and information publicly disseminated by our company, contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with
these safe harbor provisions.

 In addition, from time to time, we or our representatives
may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections
about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future
events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; our product
development and production releases; and our business prospects and opportunities. You can identify forward-looking statements by
those that are not historical in nature, particularly those that use terminology such as "may," "should," "expects,"
"anticipates," "contemplates," "estimates," "believes," "plans," "projected,"
"predicts," "potential," or "hopes" or the negative of these or similar terms. In evaluating these
forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability
to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may
cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The
forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur,
and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated
to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking
events discussed in this document and other statements made from time to time by us or our representatives might not occur.

 While we believe we have identified material risks,
these risks and uncertainties are not exhaustive. Other sections of this Form 10-K describe additional factors that could adversely impact
our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties
emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on
our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained
in any forward-looking statements.

 Although we believe the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking
statements after the date of this Form 10-K to conform our prior statements to actual results or revised expectations, and we do not intend
to do so.

 Forward-looking statements include, but are not
limited to, statements about:

 our ability to maintain the listing of our common stock on the Nasdaq Stock Market;

 our ability to generate revenues from sales, generate cash from operations, or obtain additional funding to market our vehicles and develop new products;

 our ability to successfully implement and effectively manage our outsourced manufacturing, design and development model and achieve any anticipated benefits;

 the ability of third party manufacturers to produce our vehicles in accordance with our design and quality specifications, with sufficient scale to satisfy customers and within a reasonable cost;

 anticipated timing for the manufacture, design, production, shipping and launch of our vehicles;

 the inability of our suppliers to deliver the necessary components for our vehicles at prices and volumes acceptable to our third party manufacturers;

 our ability to establish a network of dealers and international distributors to sell and service our vehicles on the timeline we expect;

 whether our vehicles will perform as expected;

 our facing product warranty claims or product recalls;

 our facing adverse determinations in significant product liability claims;

 customer adoption of electric vehicles;

 the development of alternative technology that adversely affects our business;

 increased government regulation of our industry;

 tariffs and currency exchange rates; and

 the conflict with Russia and Ukraine and the potential adverse effect it may have on the availability of materials used in the manufacturing of batteries for our vehicles.

 ii

 ITEM 1. BUSINESS

 Overview

 We are an all-electric, off-road
powersports vehicle company selling Volcon electric two-wheeled E-Bikes and motorcycles, utility terrain vehicles, or UTVs, also known
as side-by-sides, and golf carts, along with a line of upgrades and accessories. In January 2025, we also entered into a distribution
agreement with a golf cart manufacturer, Super Sonic Company Ltd. ("Super Sonic") located in Vietnam, and a subsidiary of
Odes Industry, to supply golf carts to other companies in the United States who sell golf carts.

 Our Industry

 Powersports

 The powersports industry is made up of on-road
and off-road motorcycles, scooters, ATVs (all-terrain vehicles), UTVs, PWC (personal watercraft) and snowmobiles. Until recently, we focused
on off-road motorcycles and UTVs. We are currently evaluating an on-road/off-road (dual sport) motorcycle offering. During 2024 we introduced
two off-road UTVs, the VLCN MN1 Tradesman for light utility use and the VLCN HF1a higher performance UTV.

 Outdoor recreation is a major driver of the American
economy. In 2023, the U.S. Bureau of Economic Analysis, or the BEA, found that outdoor recreation drives $640 billion of the current-dollar
gross domestic product for the U.S, compared to $563 billion in 2022. The BEA noted that motorcycles and ATVs make up $11.7 billion of
the 2023 total.

 According to the PowerSports
Business 2024 Market Data Book:

 In the U.S., UTV sales were just under 569,000 units in 2023, an increase of approximately 3.5% from 2022, according to Power Products Marketing ("PPM").

 New motorcycle sales in 2023, meanwhile, were
 approximately 520,000 units, according to the Motorcycle Industry Council ("MIC"), compared to 733,537 in 2022.
 MIC estimates the total motorcycle population in the U.S. is 11.6 million units with 1.7 million being off-highway units and
 727,000 being dual sport units.

 According to dealership feedback, turnover of new unit inventory in 2023 at dealerships was 2.6 turns (compared to 4.6 turns in 2022) average. Similarly, new unit gross margin percentage at the dealership level was 14.9% on average during 2023 (compared to 17.1% in 2022).

 Accessory sales for UTVs on average range from $635 to $652 worth of accessories at the time of purchase for work or multi purpose UTVs, respectively.

 While inflationary pressures, economic uncertainty
and higher interest rates may have impacted demand, we believe the culture of escape and outdoor activities will continue to drive off-road
powersports recreation. We believe there are very few all-electric off-road powersports companies, and traditional powersports companies
have only recently started making electric products, so significant data on off-road electric vehicles does not exist yet.

 Golf Carts

 The golf cart industry has grown from golf carts used on golf courses to golf carts used for
leisure and transportation in neighborhoods and communities. According to Persistence Market Research, the U.S. market value is over
$800 million and is expected to grow at a volume CAGR 4.3% through 2032. According to the U.S. Census Bureau 234,000 golf carts valued
at $700 million, were imported from China to the U.S. in 2024 up from 114,000 units valued at $450 million in 2023.

 Recently, the American Personal Transportation
Vehicle Manufacturer Coalition filed a petition against certain low-speed personal transportation vehicles imported from China. The petition
asserted that manufacturers who received foreign government subsidies were able to import vehicles from China at a lower cost than manufacturing
in their home countries. This created unfair trade practices. The Department of Commerce reviewed Chinese manufacturers who sold such
vehicles and determined that they were unfairly competing due to such government subsidies. As a result, countervailing duties and antidumping
tariffs were assigned to Chinese manufacturers, which cumulatively range from 149% to 500% (depending on the manufacturer).

 During 2024 we introduced a four seat golf cart,
the VLCN MN1 Adventurer (the "Adventurer"), that has a fold down rear seat to allow for light utility use. The Adventurer
and the Tradesman, discussed above, are manufactured by Super Sonic Company Ltd. ("Super Sonic") in Vietnam, which currently
has a tariff of 2.5%.

 Ebike

 According to Grand View Research,
the electric bicycle market was valued at $1.98 billion in the U.S. for 2022. The market is expected to grow at a volume CAGR 15.6% through
2030. This growth is attributed to a rise not only in recreational use, but also daily commuting due to environmental concerns, consumer
vehicle cost of ownership, and government incentives.

 Our Products

 Two-Wheeled Products

 We began selling the Grunt in September 2021 and
the Grunt EVO replaced the Grunt in September 2023. Due to the manufacturing cost of the Grunt EVO, we terminated the manufacturing contract
for it in December 2024. As of March 2025, we have sold all of the remaining Grunt EVO finished goods.

 Beginning in the second quarter of 2024, we began
evaluating other potential electric motorcycle offerings. We are determining what features and specifications would be included for new
offerings including considering a street legal version that would be dual purpose as an on-road/off-road motorcycle (not highway legal).
We have identified one new model which we are working on developing with a third party manufacturer. We received prototypes in February
2025 and we are testing them to evaluate the feasibility to produce and sell them. Provided testing is successful, we expect to start
selling this product in the third quarter of 2025.

 In the fourth quarter of 2022,
we began selling an E-Bike, the Brat which is manufactured by a third party. The Brat is a class 2 E-Bike and can be used on-road or off-road.

 We will continue to evaluate
other potential two-wheel product offerings throughout 2025.

 Utility Terrain Vehicles (UTVs)

 Beginning in the second quarter of 2024, the Company began discussions with various third party manufacturers of electric UTVs to
identify models that we could purchase. These models would be primarily used for utility purposes, have two or three passenger options,
a dump bed or flatbed for hauling cargo, with speeds up to 30 miles per hour. These models may also include an enclosed cab with optional
air conditioning.

 During 2024, we signed an
agreement with a manufacturer to distribute one of these utility UTV models, the VLCN HF1 in North America for five years, which includes
a royalty agreement with the manufacturer for them to distribute the vehicle outside of North America. Royalties would commence in the
third year of this agreement.

 We also signed another agreement
with Super Sonic to distribute other light UTV models, the VLCN MN1 in the United States. The VLCN MN1 has two models, the MN1 Adventurer,
a golf cart style product, which has four seats with a fold down rear seat to accommodate light cargo and the MN1 Tradesman which has
two seats with a dump bed for utility purposes.

 Distribution and Supplier Agreements

 Exclusive Distribution Agreement

 In January 2025, we signed an exclusive distribution
agreement (the "Distribution Agreement") with the manufacturer of the MN1s to distribute their golf carts in the United States
and its territories. Super Sonic appointed us to act as their exclusive distributor of certain of their golf cart products (the "Products"),
in the U.S. Super Sonic agreed to recommend us as the sole provider for all Products to all their customers in the U.S.. Super Sonic
has the right to sell non-Volcon branded Products to other customers and shall pay 5% of the order price to us. Before the end of June
2025, we agreed to provide a procurement plan, and if we fail to meet the minimum purchase requirement described in the procurement plan
for two consecutive months, Super Sonic shall have the right to immediately terminate the Distribution Agreement. During the term of the
Distribution Agreement, to the extent we sell any Volcon-branded products (the "Volcon Products") that are similar to the
Products, we agreed to provide Super Sonic with a right of first refusal to manufacture the Volcon Products. As more fully discussed in
Note 15 of the accompanying financial statements, we may be required to issue our common stock, warrants to purchase our common stock
and the right to appoint a director to our board of directors if certain golf cart sales volumes are attained.

 Supply Agreement

 On February 24, 2025, we 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 we will receive consideration of the cost of the golf carts plus a three percent margin. We received an initial order from Venom for
$2.4 million of golf carts. At the end of each calendar quarter, we 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 us, we shall issue
Venom a number of shares equal to 1% of our 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, we fail 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.

 Customers

 Dealers

 We sell our products through
powersports dealers, bicycle retailers, and golf cart dealers. As of March 25, 2025, we have 117 active powersports dealers, 13 active
bicycle dealers and 8 golf cart dealers. For dealers who qualify for credit, we offer dealers payment terms of 30 to 90 days to make
larger purchases of our vehicles provided their order is within their established credit limit. For dealers that do not qualify for credit,
they must pay for their order prior to shipment. Powersports dealers can order any of our available products, bicycle retailers can order
the Brat, and golf cart dealers can order either version of the MN1. We have entered into an accounts receivable factoring arrangement
to allow us the ability to generate cash for working capital. We have agreements with third party financing companies to provide financing
to qualified customers of dealers or customers purchasing from our website. There is no recourse to us or the dealer if the customer
defaults on the financing agreement with the third party.

 Consumers

 Consumers can purchase the
Brat from our website and have it delivered to a location of their choosing in the continental U.S. During 2024, we began selling the
Grunt EVO through our website where continental U.S. customers could pay a deposit and complete their purchase at one of our U.S. powersports
dealer locations.

 International
Distributors

 We also sell our two-wheel products internationally through importers. Each importer buys vehicles by the container
and sells vehicles and accessories to local dealers or directly to consumers. Payment for orders is required in advance of shipment,
except in a few limited instances. Local dealers or the importer will provide warranty and repair services for vehicles purchased in
their country. As of March 21, 2025, we have signed agreements with six importers in Latin America, one importer for the Caribbean Region,
collectively referred to herein as the LATAM importers, and one importer each in New Zealand, Australia and Japan to sell our two-wheel
vehicles and accessories in their assigned countries/markets. In 2025, we expect to expand our global sales of our vehicles and accessories
beyond our current distributor base and offer our four-wheel products to these customers.

 Manufacturers

 We outsource the manufacturing of all of our vehicles
and accessories to third party manufacturers and suppliers. The estimated fulfillment of all two-wheeled and UTV orders we have received,
or will receive, assumes that our third party manufacturers can successfully meet our order quantities and deadlines. We have experienced
delays due to our third party manufacturers being unable to timely meet our order deadlines, and there is no assurance that we will not
experience delays in the future until such time as we are able to source products from multiple manufacturers or from larger, more established
manufacturers. If they are unable to satisfy orders on a timely basis, our customers may cancel their orders. Also, due to the limited
number of third party manufacturers who manufacture our products, if any one of them experiences financial hardship and cannot manufacture
our products, our customers may cancel their orders which will harm our sales. All of our products are manufactured internationally.
If there is a change in import laws, including an increase in tariffs, the cost of our products will increase. We could also experience
delays in receiving shipments of our products if there are delays in getting carriers to ship our products or delays at the port of entry.

 Intellectual
Property

 Our success depends, at least
in part, on our ability to protect our core technology and intellectual property. To accomplish this, we currently rely on a combination
of trade secrets, including know-how, employee and third party non-disclosure agreements, and other contractual rights to establish and
protect our proprietary rights in our technology.

 Our industrial designs are
protected by design patents. In addition, we intend to file for additional utility patents. There is no assurance that we will be granted
any such patents. We do not know whether any patent applications will result in the issuance of patents or whether the examination process
will require us to narrow our claims. Even if granted, there can be no assurance that our issued patents or new patent applications will
provide us with protection.

 We
have registrations for the trademarks VOLCON, GRUNT, and GRUNT EVO in the U.S. We have also applied to register additional trademarks
– including VOLCON, VOLCON BRAT, EMPOWERING ADVENTURE, STAG, VOLCON STAG, VLCN, VLCN BRAT, VLCN HF1, VLCN MN1, VLCN FT1, VLCN HT1,
VLCN SK1, and VLCN RV1 - in the U.S., Canada, New Zealand, Australia and certain additional countries in Latin America, and many of these
trademarks are now allowed or registered in these countries. We have resolved some conflicts and potential conflicts that have arisen
with regard to the use and registration of our trademarks through coexistence agreements and the submission of arguments. We have received
notice from an entity in Brazil who has opposed our applications for trademarks including the word VOLCON, but we believe the trademarks
and the goods being sold under them are not similar and there is no potential for confusion.

 In
addition, we have been transitioning from the use of VOLCON to VLCN in certain countries, in some instances to avoid potential conflicts
with marks that are similar to VOLCON. Our efforts to secure trademark registrations for VOLCON and VLCN and other trademarks referenced
above are ongoing and we may encounter resistance from other companies, particularly as we expand into additional territories. If we receive
objections from other entities and are unsuccessful in obtaining agreements or otherwise resolving the matters with these entities, we
will need to consider the use of different trademarks for our Company and our products.

 Competition

 There are dozens of manufacturers
that sell off-road motorcycles, UTVs and E-Bikes in the U.S. and even more globally. The markets for powersport vehicles and E-Bikes are
highly competitive based on a number of factors, including innovation, performance, price, technology, product features, styling, fit
and finish, brand recognition, quality and distribution. We believe our ability to compete successfully in these markets depends on our
ability to capitalize on our competitive strengths and build brand recognition.

 Many companies, which have
greater financial and marketing resources than us, make electric street motorcycles, including Zero Motorcycles. Some companies make
electric UTVs as part of their product line. For example, Polaris has a joint venture with Zero Motorcycles to help them design dedicated
electric UTVs, the first product of which began selling in 2023. Many companies, like Super 73, make and sell E-Bikes and have a stronger
established brand name and product line.

 Government regulations

 We initially focused on the
off-road-only portion of the market for our motorcycle and UTV because it is free of many of the homologation issues and highway certifications
required to produce and sell an on-road vehicle. In some states, off-road vehicles do have legislative restrictions, but they are related
to noise and exhaust emissions, two things our vehicles do not produce. The MN1 product line can be used as an on-road vehicle and is
required to comply with certain federal, state and local regulations. In addition, we are currently in the early stages evaluating an
on-road/off-road motorcycle.

 Federal, state, and local
governments have promulgated and/or are considering promulgating laws and regulations relating to the safety of our products. In the U.S.,
the Consumer Product Safety Commission (CPSC) has federal oversight over product safety issues related to off-road vehicles and E-Bikes.
We believe that our products comply with all applicable CPSC safety standards as well as all other applicable safety standards in the
U.S.

 The assembly, use, storage,
transport and disposal of battery packs is subject to extensive regulation. Complying with these requirements involves substantial costs,
and any failure to do so may result in heavy fines or other restrictions on our operations. Additionally, we may be responsible for the
recycling and proper disposal of expended batteries from our vehicles. We may enter into agreements with third parties to manage such
recycling and disposal; however, we may be found liable for any failures in compliance by these third parties and subject to fines or
remediation liabilities, which costs may be substantial.

 Vehicles sold internationally
are subject to the local laws of each jurisdiction in which we sell our vehicles. Our international distributors are responsible for ensuring
that our vehicles comply with the jurisdiction in which they are importing the vehicle. Costs associated with compliance are the responsibility
of the distributor. These regulations may result in increased costs and expenses, which may materially and adversely affect the distributors
business where it may not be economically feasible to sell our products locally, which in turn will adversely impact our results of operations
or financial condition.

 Human Capital

 Mission

 People are at the core of
our DNA. Our mission is to source industry leading products that connect people to outdoor experiences through the intentional blending
of leading technology and design. Our vision is to amplify the powersports experience for all. Our values are building the future of powersports.

 Employee Engagement

 Our employees and contractors
focus on customer care, developing and sourcing our products, and building our marketing channels. We believe we offer competitive benefits
and programs to develop employees' expertise, performance, and engagement, while implementing corporate policies to provide a safe,
harassment-free work environment. This work environment is guided by principles of fair and equal treatment and prioritizes effective
communication and employee engagement.

 We are committed to building
a strong culture with high levels of employee engagement. We hold ad hoc meetings where management discusses various topics with employees
including operational updates, vehicle development, financing activities, company policies and safety. Management is also committed to
being available to discuss any employee concerns on a one-on-one basis. We believe that our employees are our greatest asset and are striving
to consistently evaluate our progress in developing and maintaining engagement.

 Available Information

 Our website is at www.volcon.com.
We make available, free of charge, on our corporate website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as soon as reasonably practicable after they are electronically filed with the SEC. The SEC
maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically
with the SEC at www.sec.gov. Information contained on our website does not, and shall not be deemed to, constitute part of this Annual
Report on Form 10-K. Our reference to the URL for our website is intended to be an inactive textual reference only.

ITEM 1A RISK FACTORS

 Investing in our common stock involves a high
degree of risk. You should carefully consider each of the following risks, together with all other information set forth in this Annual
Report on Form 10-K, including the financial statements and the related notes, in evaluating an investment in our common stock. If any
of the following risks actually occurs, our business could be harmed. In that case, the trading price of our common stock could decline,
and you may lose all or part of your investment. Additional risks not presently known to us or that we currently deem immaterial may also
impair our business operations.

 Risks Related to the Company's Business, Operations, and Industry

 Our losses from operations could continue to raise substantial
doubt regarding our ability to continue as a going concern. Our ability to continue as a going concern requires that we obtain sufficient
funding to finance our operations.

 To date we have funded operations through equity
and debt offerings. As of December 31, 2024, we have an accumulated deficit of $166.3 million.

 Subsequent to December 31, 2024 through February 5, 2025, the Company received net proceeds of $8.8 million from the sale of 1,764,113
sh ares of its common stock from our At The Market ("ATM") offering. On February 6, 2025, the Company received net
proceeds of $10.7 million from the sale of 430,000 common stock units, which consisted of 430,000 shares of common stock and 430,000
warrants to purchase the Company's common stock at $2.00 per share, and 5,570,000 pre-funded warrant units, which consisted of
5,570,000 pre-funded fully exercisable warrants with an exercise price of $0.00001 and 5,570,000 warrants to purchase the Company's
common stock at $2.00 per share. See Note 10 in the accompanying financial statements for further discussion of this offering.

 Management anticipates that our cash on hand as
of December 31, 2024 plus the cash expected to be generated from operations, and the cash received from the ATM and February 6, 2025 equity
offering will not be sufficient to fund planned operations and maintain required cash balances for the Convertible Notes beyond one year
from the date of the issuance of the financial statements as of and for the year ended December 31, 2024. There can be no assurance that
we will not require additional funding to support our operations. There can be no assurance that such additional funding, if needed, would
be available to the Company on acceptable terms, or at all. These factors raise substantial doubt regarding our ability to continue as
a going concern.

 The material weaknesses in our internal control over financial
reporting identified in our 2020 audit have not been remediated. If we are unable to remediate these material weaknesses or we or our
auditor identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls,
we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business
and stock price.

 The material weaknesses identified by our independent
registered public accounting firm in our internal control over financial reporting in our 2020 audit have not been remediated as of December
31, 2024. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that
there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be
prevented or detected on a timely basis. These material weaknesses are as follows:

 Inadequate segregation of duties within account processes due to limited personnel

 Insufficient formal written policies and procedures for accounting, IT, financial reporting and record keeping

 In addition to hiring more finance and accounting
personnel in 2021 to improve our segregation of duties, through 2024, we have made further progress towards remediating these material
weaknesses. We have hired more experienced accounting and finance personnel. We have prepared some formal written policies and procedures
for accounting, IT, and financial reporting and record keeping. We have also started the process of documenting our internal controls.
However, we have not fully completed documentation or testing of these policies, procedures, and internal controls.

 While we believe these efforts have improved the
internal control over financial reporting during 2024, they did not fully remediate the material weaknesses as we have not fully documented
all of our policies or procedures and we have not performed any testing of our internal controls.

 We cannot assure you that the measures we have
taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to our material weaknesses
in internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. The effectiveness
of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used
in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. If we are
unable to remediate the material weakness, our ability to record, process and report financial information accurately, and to prepare
financial statements within the time periods required of public companies could be adversely affected which, in turn, may adversely affect
our reputation and business and the market price of our common stock. In addition, any such failures could result in litigation or regulatory
actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of our securities and harm to our reputation
and financial condition, or diversion of financial and management resources from the operation of our business.

 Our transition to an outsourced manufacturing, design and development
business model may not be successful, which could harm our ability to deliver products and recognize revenue.

 In March 2022, we signed an agreement with a manufacturer
in China to develop and manufacture the Brat, our first E-Bike. We provided this vendor with our specifications and design drawings,
and they developed prototypes and the manufacturing process to build the Brat at a cost that was acceptable to us. We launched the Brat
in December 2022 and have sold the Brat throughout 2024 and expect to continue to sell the Brat in 2025.

 During 2024, we signed an agreement with a manufacturer
to build the VLCN HF1 UTV and we signed another agreement with a separate manufacturer to build the VLCN MN1 Adventurer and the VLCN MN1
Tradesman vehicles. In addition we signed a distribution agreement with this manufacturer to distribute its golf carts in the U. S. and
its territories.

 As a result of moving to an outsourced design,
development and manufacturing model, we have reduced headcount in all departments to reduce costs. We continue to evaluate further cost
reductions while developing our sales and marketing team to sell and promote our products to customers in the U.S. and to our international
distributors.

 We rely on third party manufacturers, designers and developers,
which subjects us to risk of product delivery delays, reduced control over product costs and quality control.

 Our business success will depend in large part
on our third party manufacturers' ability to economically produce our vehicles at sufficient capacity to meet the demands of our
customers.

 Our reliance on third parties for the manufacture,
design and development of our vehicles exposes us to a number of risks which are outside our control, including:

 delays due to design and development of our products to meet our product specifications;

 delays due to defective parts or components;

 unexpected increases in manufacturing costs;

 interruptions in vehicle deliveries if a third party vendor is unable to complete production or design in a timely manner;

 shipping delays due to availability of ships, trains, trucks or
containers to ship products or delays at ports to ship products to us or to our customers; and

 inability to control the quality of finished products.

 Our reliance on third parties reduces our control
over the manufacturing, design and development processes, including reduced control over timing to release products, quality, product
costs and product supply. We experienced delays in the design and development of previous vehicles we were seeking to develop.

 We can provide no assurance that we will not realize
future delays in production or our costs will stay at levels that allow us to sell our products profitably. Since we do not have multiple
manufacturers or manufacture our products internally, our ability to release products on the timeline we expect will be dependent on our
current outside manufacturers.

 If any of our third party vendors suffer interruptions,
experience delays in shipments or issues concerning product quality, supply chain or disruptions, including by reason of natural disasters,
work stoppages or capacity constraints, our ability to ship products to dealers and our international distributors would be delayed. Additionally,
if any of our third party vendors experience quality control problems in their operations, we could be required to cover the repair or
replacement of any defective products. These delays or product quality issues could have an immediate and material adverse effect on our
ability to fulfill orders and could have a negative impact on our operating results. In addition, such delays or issues with product quality
could harm our reputation and our relationship with our dealers, distributors and customers.

 Our third party manufacturers may be unable to meet our growing
sales and delivery plans, which could harm our business and prospects.

 Our sales growth and delivery plan contemplate
achieving and sustaining increases in vehicle deliveries. Our ability to achieve this plan depends upon several factors, including our
ability to identify third party manufacturers who can meet our forecasted demand while maintaining our desired quality levels and optimize
design and product changes. Although we believe that the third party manufacturers we have contracted with have the ability to meet our
forecasted demand, there is no assurance that they will be successful in these efforts. In addition, as we do not have a long-term history
of sales, our forecasted demand may be materially incorrect, which could cause us to either fail to meet unforeseen demand or incur higher
costs for excess inventory purchased to meet our forecast. If we are unable to realize our sales and delivery plan, our brand, business,
prospects, financial condition, and operating results could be materially damaged.

 We are dependent on our third party manufacturers, who are dependent
on their suppliers, some of which could be single-source suppliers. The inability of these suppliers to deliver necessary components for
our vehicles according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage
these third party manufacturers and their suppliers has in the past and could in the future have a material adverse effect on our financial
condition and operating results.

 Our vehicles contain numerous purchased parts that
our third party manufacturers either (a) source globally from direct suppliers, some of whom could be single-source suppliers, or (b)
manufacture themselves from components or materials. Any significant unanticipated demand would require our third party manufacturers
to procure or manufacture additional components in a short amount of time. While we believe our third party manufacturers would be able
to secure additional or alternate sources of supply for most of our components and raw materials in a relatively short time frame, there
is no assurance that they will be able to do so or develop their own replacements for certain highly customized components of our products.
We have in the past realized production delays due to delays in sourcing certain parts from single-source suppliers. We can provide no
assurance that we will not in the future realize additional such delays.

 If our third party manufacturers encounter unexpected
difficulties with key suppliers, and if they are unable to fill these needs from other suppliers, we could experience production delays
and potential loss of access to important technology and parts for producing, servicing and supporting our vehicles. This limited, and
in many cases single-source, supply chain exposes our third party manufacturers and us to multiple potential sources of delivery failure
or component shortages for the production of our vehicles. The loss of any single or limited source supplier or the disruption in the
supply of components from these suppliers could lead to design changes and delays in product deliveries to our customers, which could
hurt our relationships with our customers and result in negative publicity, damage to our brand and reputation, and a material and adverse
effect on our business, prospects, financial condition and operating results.

 Our third party manufacturers operate outside of the U.S., subjecting
us to risks of international operations.

 Our third party manufacturers operate outside of
the U.S. and as a result we are increasingly exposed to the challenges and risks of doing business outside the U.S., which could reduce
our revenues or profits, increase our costs, result in significant liabilities or sanctions, or otherwise disrupt our business. These
challenges include: (1) compliance with complex and changing laws, regulations and policies of governments that may impact our operations,
such as foreign ownership restrictions, import and export controls, tariffs, and trade restrictions; (2) compliance with U.S. and foreign
laws that affect the activities of companies abroad, such as anti-corruption laws, competition laws, currency regulations, and laws affecting
dealings with certain nations; (3) the difficulties involved in managing an organization doing business in many different countries; (4)
uncertainties as to the enforceability of contract and intellectual property rights under local laws; and (5) rapid changes in government
policy, political or civil unrest, acts of terrorism, or the threat of international boycotts or U.S. anti-boycott legislation.

 Products that we have manufactured for us in China
may also be subject to any uncertainty of trade relations between China and the U. S., which could cause the cost of our products manufactured
there to rise, or result in our inability to continue to use third party manufacturers in China, resulting in a need to find alternative
sources of manufacture, which could result in the delay of manufacture and supply of our products, increase our cost of manufacture, and
cause a delay in our shipments to customers and a delay or cancellation of orders. Our future operating results and financial condition
could be materially affected to the extent any of these actions occur.

 In addition, the prosecution of intellectual property
infringement and trade secret theft outside of the U.S. may be more difficult than in the U.S. Although we take precautions to protect
our intellectual property, using our third party manufacturers in China could subject us to an increased risk that unauthorized parties
will be able to copy or otherwise obtain or use our intellectual property, and we may be unsuccessful in monitoring and enforcing our
intellectual property rights against them, which could harm our business. We may also have limited legal recourse in the event we encounter
patent or trademark infringers, which could adversely affect our business, results of operations, and financial condition. While we take
measures to protect our trade secrets, the use of third party manufacturers may also risk disclosure of our innovative and proprietary
manufacturing methodologies, which could adversely affect our business.

 We are utilizing a small number of vendors to assist us with
the manufacturing, development and design of our vehicles, including the chassis, electrical systems, safety requirements, body components
and accessories, and the inability of these vendors to complete our respective design requirements may delay our ability to release these
vehicles for production, which could have a material adverse effect on our financial condition and operating results.

 We have entered into manufacturing, design and
development agreements with vendors with experience in the manufacturing, design and development of two-wheel and four-wheel off-road
vehicles to assist us with the development of certain aspects of and manufacturing of our vehicles. Although these vendors have successfully
assisted other companies with manufacture, design and development of vehicles, they may not be able to successfully design, develop and
manufacture our vehicles. These vendors may experience delays in fulfilling their obligations under these contracts due to the inability
to source parts from other vendors, lack of employees available to work on our projects due to labor shortages or other competing projects
from other customers. Failure of these vendors to complete the contracted design, development and manufacture projects for our vehicles
will result in delays in obtaining regulatory approvals and delay production and release of the vehicles for sale, which could have a
material adverse effect on our business, reputation, results of operations or financial condition.

 Increases in costs, disruption of supply, or shortage of materials
could harm our business.

 Our third party manufacturers may experience increases
in the cost or a sustained interruption in the supply or shortage of materials. Any such increase, supply interruption or shortage could
materially and negatively impact our business, prospects, financial condition and operating results. The prices for these materials fluctuate,
and their available supply may be unstable, depending on market conditions and global demand for these materials, including as a result
of increased production of electric vehicle (EV) products by our competitors, and could adversely affect our business and operating results.
For instance, we are exposed to multiple risks relating to battery packs.

 These risks include:

 an increase in the cost, or decrease in the available supply, of materials used in the battery packs;

 disruption in the supply of battery packs due to quality issues or recalls by battery cell manufacturers;

 sanctions imposed by the U.S. on countries in which our products
are manufactured or where parts are manufactured for our third party manufacturers; and

 tariffs on the products we source in China.

 Our business is dependent on the continued supply
of battery cells for the battery packs used in our vehicles. Any disruption in the supply of battery cells, including those caused by
the conflict between Russia and the Ukraine and sanctions imposed on Russia noted below, could disrupt production of our vehicles. Substantial
increases in the prices charged to us, such as those charged by battery cell suppliers, would increase our operating costs, and could
reduce our margins if we cannot recoup the increased costs through increased selling prices of our vehicles. Any attempts to increase
prices in response to increased material costs could result in the cancellation of vehicle orders and therefore materially and adversely
affect our brand, image, business, prospects and operating results.

 We have and could continue to experience delays and other complications
in the design, manufacture, launch and production ramp of our vehicles and our future planned vehicles, which could harm our brand, business,
prospects, financial condition and operating results.

 We have encountered unanticipated challenges, such
as supply chain constraints, that led to initial delays in producing our vehicles. We have experienced longer lead times with certain
suppliers to obtain parts, especially those imported where shipping delays from outbound and inbound ports have caused delays or required
us to use air freight and incur higher shipping costs. We have outsourced the manufacturing of all of our vehicles and plan to outsource
all manufacturing of our vehicles for the foreseeable future. We also reduced headcount in all our departments, as we have outsourced
the design and development of our vehicles. Any significant delay or other complications in the production of our vehicles or the development,
manufacture, and production ramp of our future vehicles, including complications associated with our third party manufacturers'
supply chains or obtaining or maintaining regulatory approvals, could materially damage our brand, business, prospects, financial condition
and operating results.

 We are an early-stage company and we have delivered a limited
number of vehicles to customers.

 We have delivered a limited number of vehicles
to customers and we have no meaningful historical financial data upon which we may base our projected revenue and operating expenses.
Our limited operating history makes it difficult for potential investors to evaluate our products or prospective operations and business
prospects. We are subject to all the risks inherent in business development, financing, unexpected expenditures, and complications and
delays that often occur in a new business. Investors should evaluate an investment in us in light of the uncertainties encountered by
developing companies in a competitive environment. There can be no assurance that our efforts will be successful or that we will ultimately
be able to attain profitability.

 The conflict with Russia and the Ukraine could have an impact
on the availability of components used in the manufacturing of lithium ion batteries that we use to power our vehicles.

 The ongoing conflict between Russia and the Ukraine
could impact the availability of nickel, an element used in the production of lithium ion cells used in batteries that power our vehicles.
According to the Wall Street Journal, Russia produces 5%-6% of the world's nickel supply and 17% of the high purity nickel production.
The shortage of these cells could have an impact on our ability to produce vehicles to meet our customers' demands. In addition,
sanctions against Russia could impact the price of elements, including nickel, that are used in the production of batteries which would
result in higher costs to produce our vehicles. These sanctions have also impacted the U.S. and global economy and could result in an
economic recession which could cause a broader disruption to the Company's supply chain and distribution network and customer demand
for our products. These factors would have a negative impact on our results of operations and cash flows.

 We are currently taking orders for the Brat E-Bike, MN1s and
HF1, and if these vehicles fail to perform as expected, our reputation could be harmed and our ability to develop, market and sell our
vehicles could be harmed.

 If our vehicles were to contain defects in design
and manufacture that cause them not to perform as expected or that require repair or take longer than expected to deliver, our ability
to develop, market and sell our vehicles could be harmed. While we intend to perform internal testing on the vehicles, as a start-up company
our frame of reference by which to evaluate detailed long-term quality, reliability, durability and performance characteristics of our
vehicles is based on industry metrics rather than historical data. Although we have procedures to test all of our vehicles for defects,
there can be no assurance that we will be able to detect and fix all defects in our products prior to their sale to consumers. Any product
defects, delays, or other failure of our products to perform as expected could harm our reputation and result in delivery delays, product
recalls, product liability claims, significant warranty and other expenses, and could have a material adverse impact on our business,
financial condition, operating results and prospects.

 We may not succeed in establishing, maintaining and strengthening
our brand, which could materially and adversely affect customer acceptance of our products, which could in turn materially affect our
business, results of operations or financial condition.

 Our business and prospects heavily depend on our
ability to develop, maintain and strengthen the Volcon brand. If we are unable to establish, maintain and strengthen our brand, we may
lose the opportunity to build and maintain a critical mass of customers. Our ability to develop, maintain and strengthen our brand will
depend heavily on the success of our marketing efforts. Failure to develop and maintain a strong brand could materially and adversely
affect customer acceptance of our vehicles, could result in suppliers and other third parties being less likely to invest time and resources
in developing business relationships with us, and could materially adversely affect our business, results of operations or financial condition.

 An adverse determination in any significant product liability
claim against us could materially adversely affect our business, results of operations or financial condition.

 The development, production, marketing, sale and
usage of our vehicles will expose us to significant risks associated with product liability claims. The powersports vehicles industry
in particular is vulnerable to significant product liability claims, and we may face inherent risk of exposure to claims in the event
our vehicles do not perform or are claimed to not have performed as expected. If our products are defective, malfunction or are used incorrectly
by our customers, it may result in bodily injury, property damage or other injury, including death, which could give rise to product liability
claims against us. Any losses that we may suffer from any liability claims and the effect that any product liability litigation may have
upon the brand image, reputation and marketability of our products could have a material adverse impact on our business, results of operations
or financial condition. No assurance can be given that material product liability claims will not be made in the future against us, or
that claims will not arise in the future in excess or outside of our insurance coverage and contractual indemnities with suppliers and
manufacturers. We believe we have adequate product liability insurance; however, as we release new products and expand our sales channels,
we may not be able to obtain adequate product liability insurance or the cost of doing so may be prohibitive. Adverse determinations of
material product liability claims made against us could also harm our reputation and cause us to lose customers and could have a material
adverse effect on our business, results of operations or financial condition.

 In the first quarter of 2024, we entered into a distribution
agreement with Super Sonic and a golf cart supply agreement with Venom company. We may be required to issue shares of our common stock,
a warrant and provide Super Sonic the right to appoint a director to our board of directors if certain order thresholds are met and we
may be required to issue shares of our common stock to Venom if certain sales thresholds are met. We may not realize significant sales
or gross margin from these agreements.

 In January 2025, we signed an exclusive Distribution
Agreement with Super Sonic to act as their exclusive distributor of certain of their Products, in the U. S. Super Sonic agreed to recommend
to all customers the sole use of us for all Products. Super Sonic has the right to sell non-Volcon branded Products to other customers
and shall pay 5% of the order price to us. Before the end of June 2025, we agreed to provide a procurement plan, and if we fail to meet
the minimum purchase requirement described in the procurement plan for two consecutive months, Super Sonic shall have the right to immediately
terminate the Distribution Agreement. During the term of the Distribution Agreement, to the extent we sell any Volcon-branded products
(the "Volcon Products") that are similar to the Products, we agreed to provide Super Sonic with a right of first refusal
to manufacture the Volcon Products. As more fully discussed in Note 15 of the accompanying financial statements, we may be required to
issue our common stock, a warrant to purchase our common stock and the right to appoint a director to our board of directors if certain
golf cart sales volumes are attained.

 On February 24, 2025, we entered
into a Supply Agreement with 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 and to the extent payment
is received, Venom may order additional units up to $3 million. These golf carts will be purchased through a manufacturer specified in
the Supply Agreement and we will receive consideration of the cost of the golf carts plus a three percent margin. We received an initial
order from Venom for $2.4 million of golf carts. At the end of each calendar quarter, we 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 by us to Venom,
we shall issue Venom a number of shares equal to 1% of our 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 purchase 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, we fail 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.

 Although Super Sonic has an
incentive to refer customers to purchase units through us and Venom has incentives to place orders, there are no minimum order quantities
in their agreements therefore we may not realize significant sales from these agreements.

 The markets in which we operate are in their infancy and highly
competitive, and we may not be successful in competing in these industries as the industry further develops. We currently face competition
from new and established competitors and expect to face competition from others in the future, including competition from companies with
new technology.

 The EV market is in its infancy, and we expect
it will become more competitive in the future. There is no assurance that our vehicles will be successful in the respective markets in
which they compete. A significant and growing number of established and new companies have entered or are reported to have plans to enter
the EV market, including the off-road market that we intend to pursue. Most of our current and potential competitors have significantly
greater financial, technical, manufacturing, marketing, sales networks, and other resources than we do and may be able to devote greater
resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. Increased competition
could result in lower vehicle sales, price reductions, revenue shortfalls, loss of customers and loss of market share, which could harm
our business, prospects, financial condition, and operating results.

 We may need to defend ourselves against intellectual property
infringement claims, which may be time-consuming and could cause us to incur substantial costs.

 Others, including our competitors, may hold or
obtain patents, copyrights, trademarks or other proprietary rights that could prevent, limit or interfere with our ability to make, use,
develop, sell or market our products and services, which could make it more difficult for us to operate our business. From time to time,
the holders of such intellectual property rights may assert their rights and may bring suits alleging infringement or misappropriation
of such rights. In addition, if we are determined to have infringed upon a third party's intellectual property rights, we may be
required to cease making, selling or incorporating certain components or intellectual property into the products we offer, to pay substantial
damages and/or license royalties, to redesign our products, and/or to establish and maintain alternative branding for our products.

 We
have registrations for the trademarks VOLCON, GRUNT, and GRUNT EVO in the U.S. We have also applied to register additional trademarks
– including VOLCON, VOLCON BRAT, EMPOWERING ADVENTURE, STAG, VOLCON STAG, VLCN, VLCN BRAT, VLCN HF1, VLCN MN1, VLCN FT1, VLCN HT1,
VLCN SK1, and VLCN RV1 - in the U.S., Canada, New Zealand, Australia and certain additional countries in Latin America, and many of these
trademarks are now allowed or registered in these countries. We have resolved some conflicts and potential conflicts that have arisen
with regard to the use and registration of our trademarks through coexistence agreements and the submission of arguments. We have received
notice from an entity in Brazil who has opposed our applications for trademarks including the word VOLCON, but we believe the trademarks
and the goods being sold under them are not similar and there is no potential for confusion.

 In
addition, we have been transitioning from the use of VOLCON to VLCN in certain countries, in some instances to avoid potential conflicts
with marks that are similar to VOLCON. Our efforts to secure trademark registrations for VOLCON and VLCN and other trademarks referenced
above are ongoing and we may encounter resistance from other companies, particularly as we expand into additional territories. If we receive
objections from other entities and are unsuccessful in obtaining agreements or otherwise resolving the matters with these entities, we
will need to consider the use of different trademarks for our Company and our products.

 In the event that we were required to take one
or more such actions, our business, prospects, operating results and financial condition could be materially adversely affected. In addition,
any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management
attention.

 Increased tariffs or a global trade war could increase our costs
and could further increase the cost of our products, which could adversely impact the competitiveness of our products and our financial
results.

 The Brat, MN1s and HF1 depend on materials from
China, namely batteries, which are among the main components of our vehicles. We cannot predict what actions may be taken with respect
to tariffs or trade relations between the U.S. and China, what products may be subject to such actions, or what actions may be taken by
China in retaliation. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related
to tariffs, trade agreements or related policies have the potential to adversely impact our supply chain and access to equipment, our
costs and our product margins. Any such cost increases or decreases in availability could slow our growth and cause our financial results
and operational metrics to suffer.

 We primarily sell our vehicles and accessories through a network
of third parties, and there is no assurance that we will be able to successfully build out this network.

 As of March 25, 2025, we have 117 active powersports
dealers, 8 golf cart dealers and 13 bicycle dealers to sell our vehicles and accessories. We have hired a new sales team in 2024 to continue
to expand this network of dealers.

 For the Grunt EVO, MN1s and HF1s, we are required
to comply with manufacture/dealer laws in states which have dealer regulations in which we sell our vehicles through dealers. Dealer laws
vary by state and although our dealer agreements are intended to comply with these laws, we may be required to amend our agreements if
these laws are changed or are challenged by dealers or other OEMs. Our dealer and distribution agreements are generally short-term in
nature and the dealer, distributor or we may cancel these agreements under certain circumstances and we may not be able to retain or expand
the scope of our dealer and/or distribution network in the future.

 We have entered into an accounts receivable factoring
arrangement to allow the Company the ability to generate cash for working capital. We will incur financing costs under this arrangement.
On a longer term basis we intend to obtain a "flooring" financing arrangement to allow financing sources for our dealers to
purchase vehicle inventory. We may incur costs to incentivize dealers to buy our vehicles including free dealer financing for certain
periods or based on purchase volumes, interest rate buydowns on the dealers' customer financing to incentivize their customers'
purchase of our vehicles. Because we are a young company with limited sales history and recurring losses, we may not be able to obtain
these inventory financing sources which may result in dealers not wanting to sell our vehicles.

 In the U.S., we began to sell the Brat on our website
in 2023, in addition to our dealer network and bicycle dealers. Customers can request that these vehicles be delivered to a local Volcon
dealer or directly to a location they can designate within the continental U.S. We do not intend to compete with our dealers who sell
these products and we provide price protection to them in the event we are selling these products below the retail price they are selling
them for in order for them to maintain their margin.

 We also sell our two-wheeled vehicles and accessories
internationally through international distributors. As of March 25, 2025, we have signed distribution agreements with six distributors
in Latin America, and individual distributor agreements with distributors in New Zealand, the Caribbean region, Australia and Japan. We
are relying on these distributors to market, promote, sell and service our vehicles and sell accessories in their designated countries/territories.
We plan to expand this distributor network to other countries as well as sell our four-wheel products to these distributors assuming that
our products can meet the regulatory requirements of these countries.

 We believe our success will be highly dependent
on our ability to build out this network in the major markets in which we intend to compete for customers, and to maintain this network
in the future. Our business model is dependent not only on our ability to create the foregoing network, but also on the commitment and
motivation of these third parties to promote our brand and products.

 Orders for vehicles are cancellable and there can be no assurance
that all orders will result in revenue being recognized.

 Orders from U.S. dealers who are eligible for credit
do not require an upfront payment and are cancellable prior to shipment with no penalty. Most importers must pay for orders in advance
of shipment but can cancel an order prior to shipment and receive a refund without penalty.

 The estimated fulfillment of all orders we have
received assumes our third party manufacturers can successfully increase their production capacity in the future, of which there is no
assurance. If we are unable to satisfy pending orders on a timely basis, customers may cancel their orders.

 In some cases, there will be significant time between
a customer ordering a vehicle and the eventual delivery of the vehicle, which creates a heightened risk that a customer that ordered a
vehicle may change his or her mind and not ultimately take delivery of the vehicle, and accessories, if purchased, in their order. Any
cancellations could harm our financial condition, business, prospects and operating results.

 We may be unable to improve our existing products and develop
and market new products that respond to customer needs and preferences and achieve market acceptance.

 We may not be able to compete as effectively with
our competitors, and ultimately satisfy the needs and preferences of our customers, unless we can successfully enhance current products,
develop new innovative products, maintain or lower product costs and distinguish our products from our competitors' products through
innovation and design. Product development requires significant financial, technological, and other resources. There can be no assurance
that we will be able to incur a level of investment in research and development that will be sufficient to successfully make us competitive
in product innovation and design. In addition, even if we are able to successfully enhance existing products and develop new products,
there is no guarantee that the markets for our existing products and new products will progress as anticipated. If any of the markets
in which our existing products compete do not develop as expected, our business, results of operations or financial condition could be
materially adversely affected.

 We have limited experience servicing our vehicles, we intend
to primarily utilize third parties to service our vehicles, and if we are unable to address the service requirements of our customers,
our business could be materially and adversely affected.

 We have limited experience servicing or repairing
our vehicles and we are developing our service manuals and service procedures to repair our vehicles. We are in the process of developing
a network of service providers who will also be our dealers as many states require that only dealers can provide warranty service on vehicles.
For our international distributors, they will be service providers or will identify third parties who will be service providers to service
our vehicles.

 Servicing electric vehicles is different from servicing
vehicles with internal combustion engines and requires specialized skills, including high voltage training and servicing techniques. If
we are unable to successfully address the service requirements of our customers, our business and prospects will be materially and adversely
affected. If we are unable to successfully address the servicing requirements of our customers or establish a market perception that we
maintain high-quality support, our reputation could be harmed, we may be subject to claims from our customers, and our business, results
of operations or financial condition may be materially and adversely affected.

 Significant product repair and/or replacement due to product
warranty claims or product recalls could have a material adverse impact on our business, results of operations or financial condition.

 We provide a one-year warranty against defects
for the Grunt EVO and Brat and a two-year warranty on the battery. We provide warranties on the HF1 and MN1 products which have varying
warranty terms depending on the part, but are generally from 6 months up to 2 years. The manufacturers of the HF1 and MN1 products provide
the warranty and we are reimbursed for warranty claims provided we obtain approval of the claim from the manufacturer.

 Our warranty will generally require us to repair
or replace defective products during such warranty periods at no cost to the consumer. Some of the parts are warrantied by the part manufacturer
where others are not. We record provisions based on an estimate of product warranty claims, but there is the possibility that actual claims
may exceed these provisions and therefore negatively impact our results of operations of financial condition.

 In addition, we may in the future be required to
make product recalls or could be held liable in the event that some of our products do not meet safety standards or statutory requirements
on product safety, even if the defects related to any such recall or liability are not covered by our limited warranty. The repair and
replacement costs that we could incur in connection with a recall could have a material adverse effect on our business, results of operations
or financial condition. Product recalls could also harm our reputation and cause us to lose customers, particularly if recalls cause consumers
to question the safety or reliability of our products, which could have a material adverse effect on our business, results of operations
or financial condition.

 Our success is dependent upon the success of the off-road vehicle
industry and upon consumers' willingness to adopt electric vehicles.

 Our success is dependent upon the success of the
off-road vehicle industry as a whole, and in particular upon consumers' willingness to adopt electric vehicles as an alternative
to combustion vehicles. If the market for electric off-road vehicles does not develop at the rate or in the manner or to the extent that
we expect, our business, results of operations or financial condition may be adversely materially affected. The market for electric vehicles
is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving
government regulation and industry standard, frequent new vehicle announcements and changing consumer demands and behaviors. Factors that
may influence the adoption of electric vehicles include:

 perceptions about electric vehicle quality, safety, design, performance and costs;

 the limited range over which electric vehicles may be driven on a single battery charge, and the decline of an electric vehicle's range resulting from deterioration over time in the battery's ability to hold a charge;

 the ability to easily charge electric vehicles;

 volatility in the cost of oil and gasoline, and improvements in the fuel economy of combustion engines; and

 the environmental consciousness of off-road vehicles customers.

 The influence of any of the factors described above
may cause our customers not to purchase our vehicles and may otherwise materially adversely affect our business, results of operations
or financial condition.

 Higher inflation and interest rates, volatile financial markets,
unemployment and consumer confidence may cause consumers to defer or not purchase our products.

 Globally inflation and interest rates rose in 2023
and remained at such levels in 2024 and could rise or remain at current levels in the future. Our vehicles represent a discretionary purchase.
Many consumers finance the purchase of an off-road vehicle and higher interest rates will result in higher monthly payments which some
consumers may not qualify for or consumers may elect to defer their purchase until interest rates decline.

 In addition, global financial markets overall have
seen significant volatility since 2023 and could continue to experience volatility in the future and could decline. A number of large
companies have announced layoffs. Public companies in the EV sector have seen significant declines and volatility. Consumer confidence
in the U.S. has declined.

 The influence of any of the factors described above
may cause our customers not to purchase our vehicles and may otherwise materially adversely affect our business, results of operations
or financial condition.

 We currently operate in an area of the vehicle sector that is
not heavily regulated, and future changes in government oversight may subject us to increased regulations, which may increase our expenses.

 The off-road vehicle market is not heavily regulated,
as compared to on-road vehicles, and, as such, we are not currently subject to significant government regulations. We expect to develop
and sell on-road (not on highway) and off-road electric motorcycles in 2025. There are significant regulations that must be met for operating
a motorcycle on-road. There is no guarantee that we will be able to meet these regulations. In addition, the MN1 is designed to be operated
on-road (not on highway).

 There are state and local regulations governing
the operation of vehicles like the MN1 that vary from state to state and municipality to municipality. As an example, certain states only
allow a top speed of 15 miles per hour whereas Texas allows a top speed of 25 miles per hour. There are also regulations where these types
of vehicles may only be allowed to be operated on a road with a speed limit of 35 miles per hour or less.

 As this market develops and grows, it may come
under increased regulatory scrutiny, which may result in increased regulations. This increase in regulations may result in increased
costs and expenses, which may materially and adversely affect our business, results of operations or financial condition.

 We could be negatively impacted by cybersecurity attacks and
are subject to evolving privacy laws in the U.S. and other jurisdictions that could adversely impact our business and require that we
incur substantial costs.

 We use a variety of information technology systems
in the ordinary course of business, which are potentially vulnerable to unauthorized access, computer viruses, ransomware software viruses
and other similar types of malicious activities and cyber-attacks, including cyber-attacks to our information technology infrastructure
and attempts by others to gain access to our proprietary or sensitive information, and ranging from individual attempts to advanced persistent
threats. Additionally, our vendors and potentially our customers, such as federal, state and local governments, require us to maintain
and protect our information technology infrastructure to specified standards in order to protect not only our sensitive information, but
also their sensitive information. Further, ransomware attacks are becoming increasingly prevalent and severe. To alleviate the financial,
operational, and reputational impact of a ransomware attack, it may be preferable to make extortion payments, but we may be unwilling
or unable to do so, including, for example, if applicable laws or regulations prohibit such payments. The procedures and controls we use
to monitor these threats and mitigate our exposure may not be sufficient to prevent cybersecurity incidents. The results of these incidents
could include misstated financial data, theft of trade secrets or other intellectual property, liability for disclosure of confidential
customer, supplier or employee information, increased costs arising from the implementation of additional security protective measures,
litigation and reputational damage, which could materially adversely affect our financial condition, business or results of operations.
Any remedial costs or other liabilities related to cybersecurity incidents may not be fully insured or indemnified by other means. Moreover,
we or our third party vendors or business partners may be more vulnerable to such attacks in remote work environments, which increased
in response to the COVID-19 pandemic. Additionally, security breaches could result in a violation of applicable U.S. and international
privacy and other laws and subject us to governmental investigations and proceedings, which could result in our exposure to material civil
or criminal liability.

 Risks Related to our Common Stock

 Your ownership may be diluted if additional capital stock is
issued to raise capital, to finance our operations, to complete acquisitions or in connection with strategic transactions.

 If we need to raise additional funds to finance
our operations, to complete acquisitions or to develop strategic relationships by issuing equity or convertible debt securities, which
would reduce the percentage ownership of our existing stockholders. Our board of directors has the authority, without action or vote of
the stockholders, to issue all or any part of our authorized but unissued shares of common or preferred stock. Our certificate of incorporation
authorizes us to issue up to 250,000,000 shares of common stock and 5,000,000 shares of preferred stock. Future issuances of common or
preferred stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings per share. In addition,
any newly issued preferred stock could have rights, preferences and privileges senior to those of the common stock. Those rights, preferences
and privileges could include, among other things, the establishment of dividends that must be paid prior to declaring or paying dividends
or other distributions to holders of our common stock or providing for preferential liquidation rights. These rights, preferences and
privileges could negatively affect the rights of holders of our common stock, and the right to convert such preferred stock into shares
of our common stock at a rate or price that would have a dilutive effect on the outstanding shares of our common stock.

 If our stock price fluctuates, you could lose a significant part
of your investment.

 Our share price has historically been highly volatile
and closed at $0.9601 on March 28, 2025. The m arket price of our common stock is subject to wide
fluctuations in response to, among other things, the risk factors described in this filing and other factors beyond our control,
such as fluctuations in the valuation of companies perceived by investors to be comparable to us. Furthermore, the stock markets have
experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and
industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest rate changes or international
currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies that have experienced volatility
in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation
in the future. Securities litigation against us could result in substantial costs and divert our management's attention from other
business concerns, which could seriously harm our business.

 We are party to certain agreements with a founder of the Company
and certain executive officers that may create a conflict of interest for our board of directors in evaluating a potential change of control
transaction.

 We had previously entered into a consulting agreement
with Highbridge Consultants, LLC ("Highbridge"), an entity controlled by Mr. Adrian James, a founder of our Company. Pursuant
to the consulting agreements, upon the occurrence of a Fundamental Transaction (as contemplated by such agreement), which generally includes
a business combination, merger, or sale of all or substantially all of our assets (or similar events), for an aggregate gross sales price
of $100.0 million or more, Highbridge will receive a cash payment equal to 1% of such gross sales price. This payment upon the consummation
of a Fundamental Transaction may make our company less attractive to a potential acquirer or may reduce the valuation we receive in connection
with a Fundamental Transaction.

 Furthermore, if our market capitalization exceeds
$300.0 million for a period of 21 consecutive trading days, Highbridge will receive an additional cash payment equal to $15.0 million;
provided that we will have the right, in our sole discretion, to make the foregoing $15.0 million payment by the issuance of shares of
our common stock. If we elect to make any payments to the entity in the form of stock, it would reduce the ownership percentage of our
other stockholders.

 In January 2024, the Company entered into an employment
agreement with John Kim, a member of the board of directors of the Company, to become the Company's CEO and President. Also in January
2024, the Company entered into an employment agreement with Greg Endo, the Company's CFO and Executive Vice President. As part of
the employment agreements with Mr. Kim and Mr. Endo, they are each entitled to a payment of 5% of the gross proceeds from any merger,
sale or change of control transaction (as determined by the board of directors) entered into by the Company for a period of up to 6 months
after termination of employment; provided that they are not terminated for cause (as defined in the employment agreement).

 These change of control payments may create a conflict
of interest for these directors and officers in evaluating any future change of control transactions.

 We do not intend to pay dividends in the
foreseeable future.

 We have never declared or paid any cash dividends
on our capital stock. We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of future dividends,
if any, will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital
requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors the board deems relevant.

 If securities or industry analysts do not publish research or
reports about us, or if they adversely change their recommendations regarding our common stock, then our stock price and trading volume
could decline.

 The trading market for our common stock is influenced
by the research and reports that industry or securities analysts publish about us, our industry and our market. If no analyst elects
to cover us and publish research or reports about us, the market for our common stock could be severely limited and our stock price could
be adversely affected. As a small-cap company, we are more likely than our larger competitors to lack coverage from securities analysts.
In addition, even if we receive analyst coverage, if one or more analysts ceases coverage of us or fails to regularly publish reports
on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If
one or more analysts who elect to cover us issue negative reports or adversely change their recommendations regarding our common stock,
our stock price could decline.

 We are currently not in compliance with
the continued listing requirements of the Nasdaq Capital Market, we have in the past failed to maintain compliance with all applicable
continued listing requirements of the Nasdaq Capital Market, and if we fail to maintain compliance with all applicable continued listing
requirements of the Nasdaq Capital Market in the future, we will not be afforded traditional cure periods under Nasdaq rules and our common
stock will be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock.

 On December 19, 2023, we were
notified by the Listing Qualifications Department (the "Staff") of the Nasdaq Stock Market ("Nasdaq") that we
were not in compliance with Nasdaq's Listing Rule 5550(a)(2), as the minimum bid price of our common stock had been below $1.00
per share for 30 consecutive business days. On January 4, 2024, the Staff notified us that the market value of our listed securities had
been below the minimum $35,000,000 required for continued listing as set forth in Nasdaq's Listing Rule 5550(b)(2) for the previous
180 calendar days and served as an additional basis for delisting.

 We submitted a hearing request
to Nasdaq's Hearings Department, which stayed the suspension of our common stock. The hearing was held on March 26, 2024. On April
2, 2024, we received notification from the Nasdaq Hearings Panel ("Panel") that it had granted an extension until June 24,
2024, to demonstrate compliance with Listing Rules 5550(a)(2) and 5550(b)(1) (which requires at least $2.5 million in shareholders'
equity), subject to certain conditions.

 On July 17, 2024, we received
a letter from the Nasdaq Office of General Counsel confirming the decision of the Panel that we had demonstrated compliance with the requirements
for continued listing on The Nasdaq Capital Market, but that we will be subject to a Discretionary Panel Monitor for a period of one year.

 Our common stock has traded
below $1.00 since February 20, 2025. If our common stock continues to trade below $1.00 for 30 consecutive days, we will be out of compliance
with Nasdaq's Listing Rule 5550(a)(2). In the event that we have another deficiency or deficiencies, we will immediately go back
into Nasdaq's hearings process. In the event that the Nasdaq Hearings Department does not grant us an extension to demonstrate compliance
our common stock would be delisted from Nasdaq and trading of our common stock could be conducted only in the over-the-counter market
or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such an event,
it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be
a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further.
Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

 In an effort to regain compliance with Nasdaq listing rules,
we completed reverse stock splits during 2024. We cannot predict whether we will need to complete an additional reverse stock split and
the effect that such reverse stock split will have on the market price for shares of our common stock.

 As noted in the risk factor above, in an effort
to regain compliance with the Nasdaq bid price rule we completed reverse stock splits in February 2024, June 2024 and November 2024.
 The Company's stock pric e as of March 28, 2025 was $0.9601 and we
may need to complete another reverse stock split in order to regain compliance with the Nasdaq bid price rule.

 We cannot predict the effect that the reverse stock
split will have on the market price for shares of our common stock, and the history of previous reverse stock splits has not resulted
in our share price remaining above $1.00. Some investors may have a negative view of a reverse stock split. Even if the reverse stock
split has a positive effect on the market price for shares of our common stock, performance of our business and financial results, general
economic conditions and the market perception of our business, and other adverse factors which may not be in our control could lead to
a decrease in the price of our common stock following the reverse stock split.

 Furthermore, even if the reverse stock split does
result in an increased market price per share of our common stock, the market price per share following the reverse stock split may not
increase in proportion to the reduction of the number of shares of our common stock outstanding before the implementation of the reverse
stock split. Accordingly, even with an increased market price per share, the total market capitalization of shares of our common stock
after a reverse stock split could be lower than the total market capitalization before the reverse stock split. Also, even if there is
an initial increase in the market price per share of our common stock after a reverse stock split, the market price may not remain at
that level.

 If the market price of shares of our common stock
declines following the reverse stock split, the percentage decline as an absolute number and as a percentage of our overall market capitalization
may be greater than would occur in the absence of the reverse stock split due to decreased liquidity in the market for our common stock.
Accordingly, the total market capitalization of our common stock following the reverse stock split could be lower than the total market
capitalization before the reverse stock split.

 As an "emerging growth company" under the Jumpstart
Our Business Startups Act, or JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.

 As an "emerging growth company" under
the JOBS Act, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. We are an emerging growth company
until the earliest of:

 the last day of the fiscal year during which we have total annual gross revenues of $1.235 billion or more;

 the last day of the fiscal year following the fifth anniversary of our initial public offering;

 the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or

 the date on which we are deemed a "large accelerated issuer" as defined under the federal securities laws.

 For so long as we remain an emerging growth company,
we will not be required to:

 have an auditor report on our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

 comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis);

 submit certain executive compensation matters to stockholders advisory votes pursuant to the "say on frequency" and "say on pay" provisions (requiring a non-binding stockholder vote to approve compensation of certain executive officers) and the "say on golden parachute" provisions (requiring a non-binding stockholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; and

 include detailed compensation discussion and analysis in our filings under the Securities Exchange Act of 1934, as amended, and instead may provide a reduced level of disclosure concerning executive compensation.

 Additionally, for so long as we remain an emerging
growth company, we:

 may present only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD and

 are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

 We intend to take advantage of all of these reduced
reporting requirements and exemptions, other than the longer phase-in periods for the adoption of new or revised financial accounting
standards under §107 of the JOBS Act.

 Certain of these reduced reporting requirements
and exemptions were already available to us due to the fact that we also qualify as a "smaller reporting company" under SEC
rules. For instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management's
assessment of internal control over financial reporting; are not required to provide a compensation discussion and analysis; are not required
to provide a pay-for-performance graph or CEO pay ratio disclosure; and may present only two years of audited financial statements and
related MD&A disclosure.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 Risk Management and Strategy

 We have established policies
and procedures for assessing, identifying, and managing material risk from cybersecurity threats. We monitor cybersecurity threats, including
any potential unauthorized occurrence on or conducted through our information systems that we use through third party providers that may
result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.

 We conducted a NIST risk assessment
and performed as needed updates to our risks to identify cybersecurity threats, as well as assessments in the event of a material change
in our business practices that may affect information systems that are vulnerable to such cybersecurity threats. We engage a managed service
provider ("MSP") and other third parties in connection with our cybersecurity and information technology risk assessment processes
and our MSP also assists us with managing and monitoring our network and local computer systems. These service providers assist us in
designing and implementing our cybersecurity policies and procedures, as well as monitoring and testing our safeguards. Personnel at all
levels and departments are made aware of our cybersecurity policies through communications.

 As of December 31, 2024, and
through the date of the filing of this report, we are not aware of any cybersecurity incidents that have materially affected or are reasonably
likely to materially affect us, including our business strategy, results of operations or financial condition. For additional information
regarding risks from cybersecurity threats, please refer to Item 1A, "Risk Factors," in this Annual report on Form 10-K.

 Governance

 One of the key responsibilities
of our board of directors is informed oversight of our risk management process, including risks from cybersecurity threats. Our board
of directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day
management of the material risks we face.

 Our Executive Vice-President
and Chief Financial Officer ("CFO") is primarily responsible for assessing and managing our material risks from cybersecurity
threats. In this regard, our CFO has assistance from service providers, other consultants and third parties. Our CFO has served as
an executive officer for three years and prior to this was an audit and advisory partner at a public accounting firm overseeing financial
statement audits of public and private companies. Audit procedures performed for his clients included evaluating internal controls and
risk assessment evaluations over information technology and cybersecurity policies.

 Our CFO oversees our cybersecurity
policies and procedures, including those described in "Risk Management and Strategy" above. Under such policies and procedures,
 our CFO is responsible for reporting to our board of directors regarding any cybersecurity incident including the results of cybersecurity
risk assessments.

 ITEM 2. PROPERTIES

 Our corporate headquarters is located in Round
Rock, Texas, where we currently lease approximately 23,300 square feet of space across three facilities.

 We believe that our existing space is adequate
for our current operations. We believe that suitable replacement and additional space, if necessary, will be available in the future on
commercially reasonable terms.

 ITEM 3. LEGAL PROCEEDINGS

 From time to time in the ordinary course of our
business, we may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation are inherently
unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant
amounts of management time and result in diversion of significant resources. We are not able to estimate an aggregate amount or range
of reasonably possible losses for those legal matters for which losses are not probable and estimable. We have insurance policies covering
potential losses where such coverage is cost effective.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 Market Information

 Our common stock is listed on the NASDAQ Stock
Market LLC under the symbol "VLCN".

 Holders

 As of March 28, 2025, we had 1,148 stockholders
of record and 3,850,824 outstanding shares.

 Dividends

 We have never declared or paid any cash dividends
on our capital stock. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements
and general financial condition. We currently intend to retain earnings, if any, to finance the growth and development of our business.
We do not expect to pay any cash dividends on our common stock in the foreseeable future. Payment of future dividends, if any, will be
at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions
contained in any financing instruments, provisions of applicable law and other factors the board deems relevant.

 Issuer Purchases of Equity Securities

 None.

 Recent Sales of Unregistered
Securities

 All information related
to equity securities sold by us during the period covered by this report that were not registered under the Securities Act have been included
in our Form 10-Q filings or in a Form 8-K filing. We did not issue any equity securities during the fourth quarter of 2024 that were not
registered under the Securities Act.

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

 You should read the following discussion and
analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing
elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations
that involve risks and uncertainties. Actual results and the timing of events could differ materially from those discussed in our forward-looking
statements as a result of many factors, including those set forth under "Risk Factors" and elsewhere in this Annual Report
on Form 10-K.

 Overview

 We are an all-electric, off-road powersports vehicle
company selling and developing Volcon electric two-wheeled E-Bikes and motorcycles, four-wheeled utility terrain vehicles, or UTVs, also
known as side-by-sides, and golf carts, along with a line of upgrades and accessories. In January 2025, we also entered into a distribution
agreement with a golf cart manufacturer, Super Sonic Company Ltd. ("Super Sonic") located in Vietnam, and a subsidiary of
Odes Industry, to supply golf carts to other companies in the U. S. who sell golf carts.

 Distribution and Supplier Agreements

 Exclusive Distribution Agreement

 In January 2025, we signed an
exclusive Distribution Agreement with Super Sonic to act as their exclusive distributor of certain of their golf cart products (the "Products"),
in the U. S.. Super Sonic agreed to recommend to all customers the sole use of us for all Products. Super Sonic has the right to sell
non-Volcon branded Products to other customers and shall pay 5% of the order price to us. Before the end of June 2025, we agreed to provide
a procurement plan, and if we fail to meet the minimum purchase requirement described in the procurement plan for two consecutive months,
Super Sonic shall have the right to immediately terminate the Distribution Agreement. During the term of the Distribution Agreement, to
the extent we sell any Volcon-branded products (the "Volcon Products") that are similar to the Products, we agreed to provide
Super Sonic with a right of first refusal to manufacture the Volcon Products. As more fully discussed in Note 15 of the accompanying financial
statements, we may be required to issue our common stock, warrants to purchase our common stock and the right to appoint a director to
our board of directors if certain golf cart sales volumes are attained.

 Supply
Agreement

 On February 24, 2025, we entered
into a 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 we will receive consideration of the cost
of the golf carts plus a three percent margin. We received an initial order from Venom for $2.4 million of golf carts. At the end of each
calendar quarter, we 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 us, we shall issue Venom a number of shares equal to 1% of our outstanding
shares of common stock as of the last day of such quarter that the 1,000 Units were sold for no additional consideration.

 Results of Operations

 The following
financial information is for the years ended December 31, 2024 and 2023.

 2024

 2023

 Revenue

 $
 4,037,191

 $
 3,260,988

 Cost of goods sold

 18,168,288

 11,391,040

 Gross margin

 (14,131,097
)

 (8,130,052
)

 Operating expenses:

 Sales and marketing

 2,548,953

 7,405,705

 Product development

 2,668,330

 7,868,985

 General and administrative

 7,665,647

 6,388,007

 Total operating expenses

 12,882,930

 21,662,697

 Loss from operations

 (27,014,027
)

 (29,792,749
)

 Interest and other expense

 (18,496,282
)

 (15,278,462
)

 $
 (45,510,309
)

 $
 (45,071,211
)

 Due to recurring losses, there is no provision for income taxes for
any period presented.

 Revenue

 Revenue
for the year ended December 31, 2024, was $4,037,191 which represents sales of Brats of $1,561,555, Grunt EVOs of $1,280,739, Stags of
$371,552, Volcon Youth of $286,680 (which we stopped selling as of June 30, 2024), MN1s of $31,225, HF1s of $22,500 and accessories and
parts of $264,338. Revenue also increased due to the reversal of unclaimed dealer rebates and price adjustment credits in the amount of
$350,093 offset by discounts due to various promotions in the amount of $125,859.

 Revenue for the year ended December 31, 2023, was
$3,260,988 which represents sales of Brats of $2,341,097, Grunt EVO motorcycles of $465,438, Grunt motorcycles of $129,117, Volcon Youth
and Torrot motorcycles of $498,160 and accessories and parts of $261,663 offset by $436,333 for rebates and dealer discounts.

 Cost of goods sold

 Cost
of goods sold for the year ended December 31, 2024 were $18,168,288 including payroll costs of $274,801 for employees performing product
fulfillment, logistics management, and service and warranty, partially offset by a stock-based compensation benefit of ($11,827) for the
reversal of previously recognized stock-based compensation on stock options that did not vest due to employee terminations. Product costs
for Brats and Grunt EVOs sold during the period were $1,523,053 and $1,427,562, (before the finished goods inventory write down discussed
below), respectively. Volcon Youth product costs were $186,813 before the additional expense of $81,911 for the write down of all Volcon
Youth inventory as the Company could no longer sell Volcon Youth motorcycles or parts after June 30, 2024. MN1 and HF1 product costs were
$34,491 and $125,550 respectively.

 Stag
product costs were $950,424, which includes an expense of $112,168 for the loss the Company realized due to agreeing to provide additional
units to a customer at a sales price less than the manufactured cost of the units. As noted above, the Company also wrote off all Stag
parts inventory and prepaid inventory deposits resulting in an expense of $8,712,644. The Company also recognized an expense of $976,420
for a settlement agreement with a vendor who supplies certain suspension components for the Stag, an expense of $2,526,410 for a settlement
agreement with the manufacturer of the Stag and $35,000 for a settlement to a vendor of Grunt parts. These expenses were offset by a credit
of $700,000 for an amendment to the original settlement agreement with Torrot whereby the Company agreed to settle the future payment
obligation by making a one-time lump sum payment and returning all unsold units and parts to Torrot. The Company also wrote down the Grunt
EVO finished goods inventory by $674,379 due to the Company lowering the sales price to dealers and distributors.

 The Company
recorded a loss on disposal of assets of $817,736 primarily tooling related to Stag, Grunt EVO and Runt. The Company also recorded $175,000
as an offset to expenses for the partial recovery of a previously written off prepaid inventory deposit. Facilities costs for the
year ended December 31, 2024 were $408,217 for our warehouse facility and third party warehousing costs.

 Cost of goods sold for the year ended December
31, 2023 were $11,391,040, including payroll costs of $1,200,098 and stock-based compensation of $211,981 for employees performing warehouse
and logistics management and quality control testing. Product costs for Brats, Grunt EVOs, and Volcon Youth motorcycles sold during the
period were $1,674,987, $711,807 and $3,236,773, respectively. We recorded a write down of $2,674,352 for Volcon Youth motorcycles to
reduce their costs to the expected net realizable value. We also recorded an expense of $2,070,000 for the termination of the Torrot agreement.
We recorded an expense of $450,282 related to fees paid to cancel purchase orders to reduce raw material quantities. The Company also
recorded an expense of $1,401,490 to write off inventory contributed to our third party manufacturer of the Grunt EVO in return for a
credit that would be provided for each unit purchased up to 900 units.

 Facilities costs for the year ended December 31,
2023 were $509,360 for our warehouse facility and third party warehousing costs. Accrued warranty
costs were $205,069 offset by a reversal of the accrued warranty liability in the amount o f $472,978 for th e
Grunt where the one year warranty for defects had expired and claims were not as high as estimated.

 In 2025 we expect revenue
and cost of goods sold to increase due to the expected increase in sales of the Brat, MN1 and HF1 products. Additional
cost savings may be realized if the third party manufacturer for these vehicles can source or manufacture parts at a lower cost.

 Sales and marketing

 Sales and marketing expenses relate to costs to
increase exposure and awareness for our products and developing our network of U.S. dealers and international distributors.

 Sales
and marketing expenses were $2,548,953 for the year ended December 31, 2024 and were primarily related to expenses associated with promoting
our products and brand of $788,443, employee payroll costs of $845,675, stock-based compensation of $37,062 for share-based awards granted
to employees and consultants, and travel costs of $99,218 primarily related to costs incurred for travel to build our dealer and distributor
network and to attend events to promote our products. Facilities costs were $117,359. Professional fees were $253,872, mainly related
to legal fees of $19,506 related to entering into international distribution agreements and sales consultants in the amount of $189,673.
Depreciation expense, primarily for demo vehicles, was $157,950.

 Sales and marketing expenses were $7,405,705 for
the year ended December 31, 2023 and were primarily related to expenses associated with promoting our products and brand of $2,889,421,
employee payroll costs of $2,789,652, stock-based compensation of $693,559 for share-based awards granted to employees and consultants,
and travel costs of $294,323 primarily related to costs incurred for travel to build our dealer and distributor network and to attend
events to promote our products. Facilities costs were $168,000. Bad debt expense was $105,687 and professional fees in the amount of $201,125,
mainly related to legal fees in the amount of $74,090 related to entering into international distribution agreements and sales consultant
fees in the amount of $73,132.

 We
expect sales expenses to increase as we begin expanding our international distributors and selling commissions to increase sales of Brats,
MN1s and HF1s. We expect marketing expenses to increase to promote the MN1 and HF1 products and to launch the two-wheel motorcycle that
will replace the Grunt EVO.

 Product Development Expense

 Product development expenses relate to development
of our products and process to manufacture these products.

 Product
development expenses were $2,668,330 for year ended December 31, 2024 and were primarily related to expenses associated with employee
payroll costs of $1,515,900, stock-based compensation of $126,337 for share-based awards granted to employees, facilities costs of $242,677,
prototype costs of $252,147 and software fees related to product development in the amount of $77,837, travel expenses of $163,669 and
depreciation expense of $100,782.

 Product development expenses were $7,868,985 for
the year ended December 31, 2023 and were primarily related to expenses associated with employee payroll costs of $1,772,836, stock-based
compensation of $837,271 for share-based awards granted to employees and consultants, professional fees of $298,713 for consultants assisting
with product design and programming, prototype vehicles and parts costs of $3,662,908, testing costs of $240,472 to complete testing of
vehicles including any required regulatory tests, $198,224 for supplies and software and facilities costs of $192,998.

 We expect 2025 product development costs related
to employee costs to remain consistent with the year ended December 31, 2024 and we expect an increase in prototype expenses as we develop
the dual sport motorcycle.

 General and Administrative Expense

 General and administrative expenses relate to costs
for our finance, accounting and administrative functions to support the operations, development, marketing and sales of our products.

 For
the year ended December 31, 2024, general and administrative expenses were $7,665,647 and were primarily related to expenses associated
with employee payroll costs of $2,120,064, stock-based compensation of $159,388 for share-based awards granted to employees, professional
fees of $1,130,595 (including legal fees of $574,952, tax and accounting fees of $82,116 and audit fees of $242,200), software costs of
$549,238, insurance costs of $2,494,892, travel expenses of $161,078, facilities expense of $177,435, annual and special shareholder meeting
costs of $201,268, board compensation expense of $125,000 and other public company expense costs of $327,774.

 For the year ended December 31, 2023, general and
administrative expenses were $6,388,007 and were primarily related to expenses associated with employee payroll costs of $1,613,575, stock-based
compensation of $885,113 for share-based awards granted to employees, professional fees of $1,024,774 (including legal fees of $522,334,
tax and audit fees of $326,702 and recruiting fees of $50,297), software costs were $444,318, insurance costs of $1,465,092, facilities
costs of $249,074, which includes $85,756 of lease termination costs, annual and special stockholder meeting costs of $227,439 and board
compensation expense of $117,000.

 We expect general and administrative
expenses to remain consistent over the next several quarters. Costs such as product liability insurance may increase due to the introduction
of new products and increased sales.

 Interest and Other Expenses, net

 Interest
and other income/expenses for the year ended December 31, 2024 was $18,496,282. Non-cash interest expense of $314,838 was recognized for
the amortization of debt issuance costs and accretion of principal on the May 2023 Notes through the date these notes were exchanged for
Preferred Stock in March 2024. We recorded a loss on the conversion of some of these notes of $333,544 and a loss from the exchange of
these notes for Preferred Stock of $1,314,065. We recognized a loss of $1,470,554 when we repaid the outstanding principal of the May
2024 Notes with the proceeds received from our July 2024 equity offering. Non-cash interest expense of $238,965 was recognized for the
amortization of debt issuance costs and accretion of principal on the May 2024 Notes until they were repaid. We recorded a loss on the
change in the estimated fair value of the Series A and Series B Warrant liabilities of $14,933,739 which was partially offset by a gain
of $165,355 from the exercise of some of the Series B Warrants.

 Interest and other income/expenses for the year
ended December 31, 2023 was $15,278,462. A loss on extinguishment of the Convertible Notes of $22,296,988 was recognized in the year ended
December 31, 2023 (see Note 6 to the consolidated financial statements). Non-cash interest expense of $4,969,590 was recognized for the
amortization of debt issuance costs and accretion of principal on the Convertible Notes issued in August 2022 prior to extinguishment
of the Convertible Notes and for the May 2023 Notes. A gain on the change in the valuation of derivative financial liabilities and warrant
liabilities of $13,473,218 was recognized in the year ended December 31, 2023 (see Note 7 to the consolidated financial statements). Offering
costs related to the November 2023 public offering for the amount allocated to the issuance of Series A and Series B Warrants in the amount
of $1,444,547.

 Non-cash interest expense
will no longer be recognized on the May 2023 Notes in the future due to the exchange of the May 2023 Notes for Series A Convertible Preferred
Stock. Non-cash interest expense will no longer be recognized on the May 2024 Senior Notes after repayment of these notes in July 2024
with the proceeds from the sale of common stock.

 Net Loss

 Net loss for the year ende d
December 31, 2024 was $45,510,309, com pared to $45,071,211 for the year ended December 31, 2023.

 Liquidity and Capital Resources

 On
December 31, 2024, we had cash and restricted cash of $2.3 million, including $0.1 million of restricted cash, and we had a working capital
of $0.4 million. Since inception we have funded our operations from proceeds from debt and equity sales.

 Cash used in operating activities

 Net cash used in operating
activities was $16.0 million for year ended December 31, 2024 and includes all of our operating costs except depreciation and amortization
of $0.4 million, write down of Stag, Grunt EVO and Volcon Youth inventory and inventory deposits of $ 9.3
m illion, non-cash interest expense for the amortization of debt issuance costs and accretion of principal on the May 2023 Notes
and May 2024 Notes of $0.6 million, loss on change in derivative financial liabilities of $14.8 million, losses on conversion and extinguishment
of Convertible Notes of $ 1.6 million, $1.5 million loss on repayment of the May 2024 Notes,
$0.8 million from the loss on disposal of fixed assets, and stock based compensation of $0.3 million. Cash used in operating activities
includes a decrease in accounts receivable of $0.1 million due to collections, a decrease of $ 0.8
 million in prepaid inventory deposits due to inventory being received, a decrease of $ 0.9
 million in inventory, a decrease of $0.9 million in prepaid assets primarily due to lower insurance costs, a decrease of $0.5 million
in accounts payable, and an increase of $1.6 million in accrued liabilities primarily due to the vendor settlements noted above and $0.4
million used to pay our lease liabilities. As of December 31, 2024, we have a decrease of
$0.2 million in customer deposits, primarily due to orders being fulfilled for two of our Latin American distributors for shipments of
Brats and Grunt EVOs paid for previously.

 Net cash used in operating
activities was $29.6 million for the year ended December 31, 2023 and includes all of our operating costs except stock-based compensation
of $2.6 million, write-down of inventory of $4.3 million, depreciation and amortization of $0.2 million, non-cash interest expense for
the amortization of debt issuance costs and accretion of principal on Convertible Notes and May 2023 Notes of $5.0 million, gain on change
in derivative financial liabilities of $13.5 million, loss on extinguishment of Convertible Notes of $22.3 million, bad debt expense of
$0.1 million. Cash used in operating activities includes a decrease in accounts receivable of $0.6 million due to collections, increases
in inventory of $7.6 million due to the purchase of Brats, Volcon Youth motorcycles and purchases of inventory for the Stag after considering
the write down of Grunt and Volcon Youth motorcycle inventory, a decrease of $0.2 million in accounts payable, and an increase of $1.1
million in accrued liabilities due primarily to the accrual recorded for the settlement to Torrot. As of December 31, 2023, we have an
increase of $0.4 million in customer deposits, primarily for orders to be fulfilled from two of our Latin American distributors for shipments
of Brats and Grunt EVOs.

 Cash used in investing activities

 Net
cash used in investing activities was $0.2 million for the year ended December 31, 2024, primarily consisting of $0.3 million of purchases
of equipment and tooling offset by $0.1 million received from an insurance settlement for a vehicle that was totaled in the period.

 Net cash used in investing
activities was $0.9 million for the year ended December 31, 2023, consisting of $0.9 million of purchases of equipment and tooling offset
by proceeds of $0.1 million received for the sale of two vehicles.

 Cash provided by financing activities

 Cash
provided by financing activities for the year ended December 31, 2024, was $10.4 million and was primarily related to the net proceeds
from the issuance of common stock and pre funded warrants in July 2024 for net proceeds of $10.8 million and net proceeds from the issuance
May 2024 Senior Notes and May 2024 Note Warrants of $2.3 million offset by the repayment of the May 2024 Senior Notes of $2.9 million.
We also received net proceeds of $0.2 million for the issuance of common stock from our At The Market equity offering ("ATM")
established in October 2024 and proceeds of $0.1 million for the exercise of Series B warrants.

 Cash provided by financing
activities for the year ended December 31, 2023, was $27.1 million and was related primarily to proceeds from the public offerings of
42 shares of our common stock for net proceeds of $4.6 million, issuance of convertible notes in a private offering with a principal
amount of $4.9 million and net proceeds of $3.9 million, and proceeds from the public offering of 93 common stock units and 1,099 pre-funded
warrants units for net proceeds of $16.2 million. We also received proceeds of $1.0 million from the exercise of 11 warrants and reduction
of the exercise price for 12 warrants.

 Our continuation as a going
concern is dependent upon our ability to attain profitable operations and if necessary, obtain continued financial support from the issuance
of debt or equity. As of December 31, 2024, we had incurred an accumulated deficit of $166.3 million
since inception. Subsequent to December 31, 2024, the Company received additional net proceeds from the issuance of common stock from
our ATM of $8.8 million. In addition, on February 6, 2025, the Company received net proceeds of $10.7 million from the issuance of common
stock units or pre-funded warrant units as more fully discussed in Note 10 to the accompanying financial statements.

 Management anticipates that our cash on hand as
of December 31, 2024 plus the cash raised from the ATM subsequent to December 31, 2024, net proceeds from the February 6, 2025 equity
offering discussed above, and cash expected to be generated from operations will not be sufficient to fund planned operations beyond one
year from the date of the issuance of the financial statements as of and for the year ended December 31, 2024. We do not have commitments
for any such financing, and there can be no assurance that such additional funding would be available to the Company on acceptable terms,
or at all. If we are unable to raise additional financing, we will be required to modify or curtail our operations. These factors raise
substantial doubt regarding our ability to continue as a going concern.

 As of December 31, 2024, we had shareholders'
equity of $40,761. As described above, subsequent to December 31, 2024, we received additional net proceeds from the issuance of common
stock from our ATM of $8.8 million, and we received net proceeds of $10.7 million from the issuance of common stock units or pre-funded
warrant units. As of the date of this report, we estimate we have shareholders' equity of over $17.0 million.

 JOBS Act Accounting Election

 The recently enacted JOBS Act provides that an
"emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an "emerging growth company"
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably
elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards
on the relevant dates on which adoption of such standards is required for other public companies.

 We have implemented all new
accounting pronouncements that are in effect and may impact our financial statements and we do not believe that there are any other new
accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

 Critical Accounting Policies

 None

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 We are a smaller reporting company as defined by
Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 Report of MaloneBailey, LLP, Houston, TX (PCAOB ID 206)

 Financial Statements

 Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023

 Consolidated Statements of Operations for the years ended December 31, 2024 and 2023

 Consolidated Statements of Stockholders Equity (Deficit) for the years ended December 31, 2024 and 2023

 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023

 Notes to the Financial Statements

 REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

 To the Shareholders and Board of Directors of

 Volcon, Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated
balance sheets of Volcon, Inc. and its subsidiary (collectively, the "Company") as of December 31, 2024 and 2023, and the
related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the
related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of their operations
and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 Going Concern Matter

 The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has
suffered recurring losses from operations and has a net working capital deficiency that raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provides a reasonable basis for our opinion.

 /s/ MaloneBailey, LLP

 www.malonebailey.com

 We have served as the Company's auditor since 2021.

 Houston, Texas

 March 31, 2025

 VOLCON,
INC.

 CONSOLIDATED
BALANCE SHEETS

 AS OF DECEMBER 31, 2024 AND 2023

 2024

 2023

 ASSETS

 Current assets:

 Cash

 $
 2,193,573

 $
 7,983,346

 Restricted cash

 105,000

 210,000

 Accounts receivable, net of allowance for doubtful accounts of $ 99,233 and $ 70,359 at December 31, 2024 and December 31, 2023, respectively

 88,247

 203,303

 Inventory

 1,455,477

 8,973,134

 Inventory deposits

 191,156

 258,316

 Prepaid expenses and other current assets

 1,032,699

 1,904,197

 Total current assets

 5,066,152

 19,532,296

 Long-term assets:

 Property and equipment, net

 206,138

 1,258,607

 Intangible asset, net

 15,698

 –

 Other long-term assets

 199,281

 199,281

 Right-of-use assets - operating leases

 739,234

 1,136,213

 Total assets

 $
 6,226,503

 $
 22,126,397

 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 Current liabilities:

 Accounts payable

 $
 385,326

 $
 831,184

 Accrued liabilities

 1,379,191

 3,128,906

 Vendor settlements - short-term

 2,092,975

 –

 Current portion of notes payable

 7,181

 15,278

 Convertible notes, net of discount and issuance costs

 –

 30,149,579

 Warrant liabilities

 111,658

 5,971,067

 Right-of-use operating lease liabilities - short-term

 443,950

 399,611

 Customer deposits

 216,522

 417,485

 Total current liabilities

 4,636,803

 40,913,110

 Notes payable, net of current portion

 28,533

 69,138

 Vendor settlements - long-term

 1,189,184

 –

 Right-of-use operating lease liabilities - long-term

 331,222

 775,170

 Total liabilities

 6,185,742

 41,757,418

 COMMITMENTS AND CONTINGENCIES

 –

 Stockholders' equity (deficit):

 Preferred stock: $ 0.00001 par value, 5,000,000 shares authorized, 25,000 shares designated, no shares issued and outstanding as of December 31, 2024 and December 31, 2023

 –

 –

 Common stock: $ 0.00001 par value, 250,000,000 shares authorized, 630,865 shares issued and outstanding as of December 31,2024 and 1,291 shares issued and outstanding as of December 31, 2023

 –

 Additional paid-in capital

 166,357,201

 101,175,117

 Accumulated deficit

 ( 166,316,447
)

 ( 120,806,138
)

 Total stockholders' equity (deficit)

 40,761

 ( 19,631,021
)

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 $
 6,226,503

 $
 22,126,397

 CONSOLIDATED STATEMENTS OF OPERATIONS

 FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 2024

 2023

 Revenue:

 $
 4,037,191

 $
 3,260,988

 Cost of goods sold

 18,168,288

 11,391,040

 Gross margin

 ( 14,131,097
)

 ( 8,130,052
)

 Operating expenses:

 Sales and marketing

 2,548,953

 7,405,705

 Product development

 2,668,330

 7,868,985

 General and administrative expenses

 7,665,647

 6,388,007

 Total operating expenses

 12,882,930

 21,662,697

 Loss from operations

 ( 27,014,027
)

 ( 29,792,749
)

 Other income (expense)

 33,981

 ( 40,555
)

 Interest expense

 ( 643,716
)

 ( 4,969,590
)

 Loss from extinguishment of debt

 ( 1,647,608
)

 ( 22,296,988
)

 Issuance costs

 –

 ( 1,444,547
)

 Loss on repayment of debt

 ( 1,470,554
)

 –

 Gain (Loss) on derivative liabilities and warrant liabilities

 ( 14,768,385
)

 13,473,218

 Total other expense

 ( 18,496,282
)

 ( 15,278,462
)

 Loss before provision for income taxes

)

)

 Provision for income taxes

 –

 –

 $
)

 $
)

 Net loss per common share – basic

 $
 ( 146.90
)

 $
 ( 187,796.71
)

 Net loss per common share – diluted

 $
 ( 146.90
)

 $
 ( 187,796.71
)

 Weighted average common shares outstanding – basic

 309,798

 Weighted average common shares outstanding – diluted

 309,798

 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIT)

 FOR THE YEAR ENDED DECEMBER 31, 2024

 Series A Convertible
 Preferred Stock

 Common stock

 Number of Shares

 Amount

 Number of Shares

 Amount

 Additional paid -in capital

 Accumulated deficit

 Total

 Balance at January 1, 2024

 –

 $
 –

 1,291

 $
 –

 $
 101,175,117

 $
 ( 120,806,138
)

 $
 ( 19,631,021
)

 Issuance of common stock for exercise of pre-funded warrants

 –

 –

 226,343

 ( 2
)

 –

 –

 Issuance of common stock for exercise of Series A warrants

 –

 –

 17,325

 –

 17,352,653

 –

 17,352,653

 Proceeds received for exercise of buydown warrants

 –

 –

 –

 3,500

 –

 3,500

 Common stock issued for conversion of convertible notes

 –

 –

 4,971

 –

 7,395,907

 –

 7,395,907

 Conversion of Convertible Notes for Preferred Stock

 24,698

 –

 –

 –

 24,716,118

 –

 24,716,118

 Conversion of Preferred Stock for common stock

 ( 24,698
)

 –

 279,043

 ( 3
)

 –

 –

 Issuance of common stock for exercise of Series B Warrants

 –

 –

 14,701

 –

 ( 1
)

 –

 ( 1
)

 Reclassification of warrant liability to equity

 –

 –

 –

 –

 3,405,662

 –

 3,405,662

 Proceeds received for issuance of warrants with May 2024 Notes, net of issuance costs of $ 111,194

 –

 –

 –

 –

 1,023,200

 –

 1,023,200

 Issuance of common stock and pre-funded warrants, net of issuance costs of $ 1,210,753

 –

 –

 102,605

 10,789,260

 –

 10,789,261

 Stock-based compensation

 –

 –

 –

 –

 310,961

 –

 310,961

 Exchange of Common Stock for Prefunded Warrants

 ( 96,821
)

 –

 –

 –

 –

 Proceeds from sale of common stock from ATM, net if issuance costs of $ 112,814

 68,921

 184,829

 184,830

 Common stock issued for reverse stock split due to rounding

 –

 –

 12,476

 –

 –

 –

 –

 –

 –

 –

 –

 –

)

)

 Balance at December 31, 2024

 –

 $
 –

 630,865

 $

 $
 166,357,201

 $
 ( 166,316,447
)

 $
 40,761

 The accompanying notes are an integral
part of these consolidated financial statements.

 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIT)

 FOR THE YEAR ENDED DECEMBER 31, 2023

 Common stock

 Additional

 Number of

 paid-in

 Accumulated

 Shares

 Amount

 capital

 Deficit

 Total

 Balance at January 1, 2023

 $
 –

 $
 76,369,940

 $
 ( 75,734,927
)

 $
 635,013

 Issuance of common stock in public offerings, net of issuance costs of $ 629,900

 –

 4,570,085

 –

 4,570,085

 Issuance of common stock for exercise of stock options and vesting of restricted stock units

 –

 25,000

 –

 25,000

 Issuance of common stock units in public offering, net of issuance costs of $ 28,777

 –

 255,505

 –

 255,505

 Issuance of pre-funded warrant units, net of issuance costs of $ 342,071

 –

 –

 3,037,121

 –

 3,037,121

 Issuance of common stock for exercise of pre-funded warrants

 1,006

 –

 –

 Issuance of common stock for exercise of warrants

 –

 680,978

 –

 680,978

 Proceeds received for reduction of warrant exercise price

 –

 –

 346,500

 –

 346,500

 Reclassification of derivative liabilities to equity

 –

 –

 13,262,055

 –

 13,262,055

 Stock-based compensation

 –

 2,627,925

 –

 2,627,925

 –

 –

 –

)

)

 Balance at December 31, 2023

 1,291

 $
 –

 $
 101,175,117

 $
 ( 120,806,138
)

 $
 ( 19,631,021
)

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 2024

 2023

 Cash flow from operating activities:

 $
)

 $
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Loss on repayment of May 2024 Notes

 1,470,554

 –

 Loss on extinguishment of convertible notes

 1,314,065

 22,296,988

 Loss on conversion of convertible notes to common stock

 333,544

 –

 Loss (gain) on change in fair value of financial liabilities

 14,933,739

 ( 13,473,218
)

 Gain on exercise of Series B Warrants

 ( 165,355
)

 –

 Stock-based compensation

 310,961

 2,627,925

 Loss on write down of inventory and inventory deposits

 9,286,071

 4,282,321

 Loss on lease termination

 –

 85,756

 Loss on sale/write off of property & equipment

 844,945

 56,509

 Bad debt expense

 29,560

 105,688

 Non-cash interest expense

 553,803

 4,955,660

 Amortization of right-of-use assets

 396,979

 369,774

 Depreciation and amortization

 362,138

 249,207

 Changes in operating assets and liabilities:

 Accounts receivable

 85,496

 555,967

 Inventory

 ( 933,844
)

 ( 7,609,564
)

 Inventory deposits

 ( 767,410
)

 169,346

 Prepaid assets and other current assets

 871,498

 ( 53,531
)

 Accounts payable

 ( 445,859
)

 ( 205,444
)

 Accrued liabilities and vendor settlements

 1,592,444

 1,055,067

 Right-of-use liabilities - operating leases

 ( 399,609
)

 ( 359,347
)

 Customer deposits

 ( 200,963
)

 394,014

 Net cash used in operating activities

 ( 16,037,552
)

 ( 29,568,092
)

 Cash flow from investing activities:

 Purchase of property and equipment

 ( 312,090
)

 ( 949,722
)

 Proceeds from sale of property and equipment

 23,717

 –

 Proceeds from insurance settlement

 58,060

 –

 Proceeds from sale of vehicles

 –

 89,000

 Net cash used in investing activities

 ( 230,313
)

 ( 860,722
)

 Cash flow from financing activities:

 Repayment of notes payable

 ( 48,702
)

 ( 80,394
)

 Proceeds from issuance of common stock and pre-funded warrants from public offering, net of issuance costs of $ 1,210,753

 10,789,261

 –

 Repayment of May 2024 Notes

 ( 2,942,170
)

 –

 Proceeds from issuance of May 2024 Notes and warrants, net of issuance costs of $ 245,150

 2,255,851

 –

 Proceeds from exercise of Series B Warrants

 130,522

 –

 Proceeds from exercise of buy down warrants

 3,500

 –

 Proceeds from sale of common stock from the At the Market equity offering, net of issuance costs of $ 112,814

 184,830

 –

 Proceeds from issuance of common stock from public offering, net of issuance costs of $ 629,900

 –

 4,570,085

 Proceeds from issuance of convertible notes and warrants, net of issuance costs of $ 586,968

 –

 3,913,033

 Proceeds from issuance of common stock units, net of issuance costs of $ 28,777

 –

 255,505

 Proceeds from issuance of pre-funded warrant units, net of issuance costs of $ 342,071

 –

 3,037,121

 Proceeds for issuance of Series A and Series B warrants issued with common stock and pre-funded warrant units

 –

 14,336,490

 Proceeds from reduction of exercise price of warrants

 –

 346,500

 Proceeds from exercise of warrants

 –

 680,978

 Proceeds from exercise of stock options

 –

 25,000

 Net cash provided by financing activities

 10,373,092

 27,084,318

 NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 ( 5,894,773
)

 ( 3,344,496
)

 CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD

 8,193,346

 11,537,842

 CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

 $
 2,298,573

 $
 8,193,346

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 SUPPLEMENTAL CASH FLOW INFORMATION

 2024

 2023

 Supplemental disclosure of cash flow information:

 Cash paid for interest

 $
 88,710

 $
 15,935

 Cash paid for income taxes

 $
 –

 $
 –

 Non-cash transactions:

 Conversion of Convertible Notes for common stock

 $
 7,414,025

 $
 –

 Exchange of Convertible Notes for Preferred Stock

 $
 24,716,118

 $
 –

 Reclassification of warrant liability to equity for cashless exercise of Series A Warrants

 $
 17,352,653

 $
 –

 Reclassification of warrant liability to equity for modification of Series B Warrants

 $
 3,405,662

 $
 –

 Exchange of property & equipment in lieu of payments due for inventory purchases

 $
 60,000

 $
 –

 Exchange of finished goods inventory with vendor for raw materials inventory

 $
 417,285

 $
 –

 Conversion of preferred stock for common stock

 $

 $
 –

 Issuance of common stock for exercise of prefunded warrants

 $

 $
 –

 Acquisition of property and equipment with note payable

 $
 –

 $
 96,024

 Reclassification of derivative liabilities to equity

 $
 –

 $
 13,262,055

 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN

 Organization and Nature of Operations

 Volcon, Inc. ("Volcon" or the "Company")
was formed on February 21, 2020, as a Delaware corporation, under the name Frog ePowersports, Inc. The Company was renamed Volcon, Inc.
on October 1, 2020. Volcon designs and sells all-electric off-road powersport vehicles.

 On January 5, 2021, the Company created Volcon
ePowersports, LLC ("Volcon LLC"), a Colorado wholly-owned subsidiary of the Company, to sell Volcon vehicles and accessories
in the U. S. Volcon LLC is no longer used for selling vehicles and accessories.

 Going Concern

 The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses and has generated
negative cash flows from operations since inception.

 In February and March 2024, certain holders of
the May 2023 Convertible Notes issued in May 2023 converted approximately $ 7.4 million of principal to common stock. In March 2024, the
holders exchanged the remaining May 2023 Convertible Notes of $ 24.7 million for Series A Convertible Preferred Stock ("Preferred
Stock") with a $ 1,000 per share value and an initial conversation price of $ 1,064.00 per share for common stock (see Note 10). All
covenants from the Convertible Notes were terminated upon this exchange.

 As discussed further in Note 7 below, on May 22,
2024, the Company issued Senior Notes with an aggregate principal amount of $ 2,942,170 due May 22, 2025 (the "May 2024 Notes")
for net proceeds of $ 2,255,851. The holders of the May 2024 Notes also received fully vested warrants (the "May 2024 Note Warrants")
to purchase 12,686 shares of the Company's common stock at an exercise price of $ 232.00 per share. The May 2024 Note Warrants were
exercisable beginning November 23, 2024 and expire November 23, 2029.

 On July 12, 2024, the Company sold 102,605 shares
of the Company's common stock at a purchase price of $29.20 per share and pre-funded warrants to purchase 308,355 shares of common
stock at $29.19992 per pre-funded warrant. The Company received net proceeds of $ 10,789,261. Proceeds from this offering were used to
repay the May 2024 Notes.

 In October 2024, the Company established an At
the Market equity offering ("ATM") whereby the Company can sell up to $ 100 million of its common stock. Through February 4,
2025, the Company has raised net proceeds of $ 9,143,725. On February 6, 2025, the Company sold 430,000 common stock units and 5,570,000
pre-funded warrant units at $ 2.00 per unit. The Company received net proceeds of $ 10,703,882 from this offering.

 Management anticipates that our cash on hand as of December 31, 2024
plus the cash expected to be generated from operations, and cash raised from the ATM and the February 6, 2025 equity offering will not
be sufficient to fund planned operations beyond one year from the date of the issuance of the financial statements as of and for the year
ended December 31, 2024. There can be no assurance that additional funding, if needed, would be available to the Company on acceptable
terms, or at all. These factors raise substantial doubt regarding our ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

 Nasdaq Compliance

 On July 5, 2023, the Company received a notice
from Nasdaq that it was not in compliance with Nasdaq's Listing Rule 5550(b)(2), which requires that it maintain a market value
of listed securities ("MVLS") of $35 million. MVLS is calculated by multiplying the Company's shares outstanding by
the closing price of its common stock. On December 19, 2023, the Company received a notice from Nasdaq that it was not in compliance with
Nasdaq's Listing Rule 5550(a)(2), as the minimum bid price of its common stock had been below $1.00 per share for 30 consecutive
business days.

 On December 26, 2023, the Company was notified
by Nasdaq that it was not in compliance with Nasdaq's Listing Rule 5810(c)(3)(A)(iii) as the closing bid price of our common stock
had been below $0.10 for ten consecutive trading days from December 11, 2023 through December 22, 2023 and was subject to delisting on
January 2, 2024. On January 4, 2024, the Company received notice from Nasdaq that it did not meet the MVLS requirement and it was subject
to delisting. The Company submitted a hearing request to Nasdaq's Hearings Department for both of these matters, which stayed the
suspension of the Company's common stock. The Company participated in a hearing with Nasdaq's Hearings Department on March
26, 2024 and on April 2, 2024, they informed the Company that the Company has until June 24, 2024 to regain compliance with the above
listing rules.

 On June 11, 2024, the Company received a notice
from the Nasdaq that the Company no longer met the minimum 500,000 publicly held shares requirement for Nasdaq and, as such, it no longer
complied with Listing Rule 5550(a)(4). Furthermore, the notice indicated that this matter would serve as an additional basis for delisting
the Company's securities from Nasdaq, that the Panel would consider this matter in their decision regarding the Company's
continued listing on Nasdaq, and that the Company should present its views with respect to this additional deficiency to the Panel in
writing no later than June 18, 2024. On June 18, 2024, the Company submitted a letter to Nasdaq notifying them that the Company was in
compliance with Listing Rule 5550(a)(4) due to the issuance of additional shares of common stock from the conversion of preferred stock
to common stock by certain Preferred Stockholders.

 On July 17, 2024, Nasdaq informed the Company
that it had regained compliance with the above listing rules but will continue to be monitored for ongoing compliance.

 Employment Matters

 On January 13, 2024, the Company's Chief
Executive Officer ("CEO"), Jordan Davis, resigned his employment with the Company effective February 2, 2024. The Company
entered into a 30-day consulting agreement with Mr. Davis and paid him $ 12,500.

 On January 30, 2024, John Kim, an independent
board member of the Company signed an employment agreement with the Company to become the CEO effective February 3, 2024. Mr. Kim's
salary is $ 800,000 and he has an annual bonus of $ 250,000. Mr. Kim will also receive 5% of the gross proceeds or other consideration if
the Company completes a sale of substantially all of its assets or otherwise enters into a change of control transaction. Mr. Kim is also
entitled to an equity award equal to 10% of the Company's fully diluted equity, subject to stockholder approval of an increase in
the shares available under the 2021 Plan or a new equity plan.

 On January 30, 2024, Greg Endo, the Company's
Chief Financial Officer, signed a new employment agreement with the Company. Mr. Endo's salary was increased to $ 300,000 and he
will have an annual bonus of up to 50% of his salary as determined by the compensation committee of the board of directors. Mr. Endo had
agreed to a reduction in the salary to $238,500 through the end of 2024. On August 23, 2024 the compensation committee of the board of
directors resolved that effective August 16, 2024 Mr. Endo's annual salary would be restored to $300,000. Mr. Endo will also receive
5% of the gross proceeds or other consideration if the Company completes a sale of substantially all of its assets or otherwise enters
into a change of control transaction. Mr. Endo is also entitled to an equity award equal to 4% of the Company's fully diluted equity,
subject to stockholder approval of an increase in the shares available under the 2021 Plan or a new equity plan.

 On February 23, 2024, Katherine Hale resigned
her position as Chief Marketing Officer. Ms. Hale was provided a severance amount of $ 112,500 which was paid out in three monthly installments
beginning in March 2024.

 Impact of Russia and Ukraine Conflict

 On February 24, 2022, Russia invaded Ukraine.
The conflict between Russia and Ukraine could impact the availability of nickel, an element used in the production of lithium ion cells
used in batteries that power our vehicles. The shortage of these cells could have an impact on our ability to produce vehicles to meet
our customers' demands. In addition, sanctions against Russia could impact the price of elements, including nickel, that are used
in the production of batteries which would result in higher costs to produce our vehicles. These sanctions have also impacted the U.S.
and global economies and could result in an economic recession which could cause a broader disruption to the Company's supply chain
and distribution network and customer demand for our products.

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis of Presentation

 The basis of accounting applied is the United
States Generally Accepted Accounting Principles (U.S. GAAP). The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary. All intercompany accounts, transactions and balances have been eliminated in consolidation.

 As discussed in Note 10, the Company completed
a reverse 1 for 8 stock split on November 8, 2024, a reverse 1 for 100 stock split on June 6, 2024, a reverse 1 for 45 stock split on
February 2, 2024 and a reverse 1 for 5 stock split on October 13, 2023.

 Per the terms of the 1 for 8 reverse stock split
on November 8, 2024, the Company agreed that no fractional shares would be issued in connection with the reverse stock split and that
it would issue one full share of the post-reverse stock split common stock to any stockholder who would have been entitled to receive
a fractional share as a result of the process. On November 19, 2024, the Company received notice from DTCC on behalf of the brokerage
firms that hold the shares of Company common stock held in "street name" that in connection with the foregoing rounding of
shares the Company would need to issue 188,950 shares of common stock. The Company does not believe the number of shares being requested
is correct based on the historical number of shareholders of its common stock and is aware of similar occurrences in recent months for
other companies completing a reverse stock split. As such, the Company has begun an inquiry into the calculations set forth in the request.
During the pendency of this inquiry, the Company does not intend to issue any shares in connection with the fractional shares being requested.
The Company may face potential liability for its failure to issue the shares of common stock if it is determined that it is required to
issue such shares. These shares are not included in the shares outstanding as of December 31, 2024 or in the amounts included in the basic
and diluted net loss per share amounts. See Note 12 for further discussion of the impact to basic and diluted net loss per share.

 Use of Estimates

 The preparation of the financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of any contingent assets and liabilities as of the dates of the financial statements and the reported amounts of expenses
during the reporting periods.

 Making estimates requires management to exercise
judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed
at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to
one or more future confirming events. Accordingly, actual results could differ significantly from those estimates.

 Cash, Cash Equivalents and Restricted Cash

 Cash and cash equivalents include short-term investments
with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates
their fair value. There were no cash equivalents as of December 31, 2024 or 2023. Restricted cash includes cash restricted as collateral
for the Company's corporate credit cards.

 Revenue Recognition

 For sales to dealers or distributors, revenue
is recognized when transfer of control of the product is made as there is no acceptance period or right of return. Revenue is measured
as the amount of consideration the Company expects to receive in exchange for transferring control of vehicles, parts, and accessories.
Beginning in February 2023 the Company began selling the Brat E-Bike and Volcon Youth motorcycles directly to consumers in addition to
dealers. Beginning in the third quarter of 2024, the Company began selling the Grunt EVO motorcycles directly to consumers in addition
to dealers. Revenue for direct to consumer sales is recognized when transfer of control of the product is made to the consumer.

 Consideration that is received in advance of the
transfer of goods is recorded as customer deposits until delivery has occurred or the customer cancels their order, and the consideration
is returned to the customer. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from
revenue. The Company's sales do not presently have a financing component.

 Sales promotions and incentives. The Company
provides for estimated sales promotions and incentives, which are recognized as a component of sales in measuring the amount of consideration
the Company expects to receive in exchange for transferring goods or providing services. Examples of sales promotion and incentive programs
include rebates, distributor fees, dealer co-op advertising and volume incentives. Sales promotions and incentives are estimated based
on contractual requirements. The Company records these amounts as a liability in the balance sheet until they are ultimately paid. Adjustments
to sales promotions and incentives accruals are made as actual usage becomes known to properly estimate the amounts necessary to generate
consumer demand based on market conditions as of the balance sheet date.

 Shipping and handling charges and costs. The
Company records shipping and handling amounts charged to the customer and related shipping costs as a component of cost of goods sold
when control has transferred to the customer.

 Product Warranties

 The Company vehicles come with warranties that
vary depending on the vehicle and vehicle components. The Company accrues warranty reserves at the time revenue is recognized. Warranty
reserves include the Company's best estimate of the projected cost to repair or to replace any items under warranty, based on actual
warranty experience as it becomes available and other known factors that may impact the evaluation of historical data. The Company reviews
its reserves quarterly to ensure that the accruals are adequate to meet expected future warranty obligations and will adjust estimates
as needed. Factors that could have an impact on the warranty reserve include the following: changes in manufacturing quality, shifts in
product mix, changes in warranty coverage periods, product recalls and changes in sales volume. Warranty expense is recorded as a component
of cost of goods sold in the statement of operations and is recognized as a current liability.

 Inventory and Inventory Deposits

 Inventories and prepaid inventory deposits are
stated at the lower of cost (first-in, first-out method) or net realizable value.

 Certain vendors require the Company to pay an
upfront deposit before they manufacture and ship the Company's vehicles, parts or accessories. These payments are classified as
prepaid inventory deposits on the balance sheet until title and risk of loss transfers to the Company, at which time they are classified
as inventory.

 Raw materials inventory costs include the cost
of parts, including duties, tariffs and shipping related to manufacturing and assembly of vehicles. At December 31, 2023, raw materials
inventory represents parts associated with the manufacturing of the Stag. Finished goods also include spare parts for sale as replacement
parts or for service and warranty or accessories for vehicles. There are no raw materials as of December 31, 2024 (see Note 3 below for
further discussion).

 Property and Equipment

 Property and equipment are valued at cost. Additions
are capitalized and maintenance and repairs are charged to expense as incurred. Gains and losses on dispositions of equipment are reflected
in operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows:

 Schedule of estimated useful lives

 Category

 Estimated
 Useful Lives

 Machinery, tooling and equipment

 3 - 7 years

 Vehicles

 5 years

 Internal use manufactured vehicles

 1 year

 Furniture & Fixtures

 5 years

 Computers

 3 years

 Leasehold improvements are depreciated over the
shorter period of their estimated useful life or term of the lease.

 Intangible Assets

 The Company purchased the domain name VLCN.com
and is amortizing this asset over three years. Amortization expense was $ 1,427 for the year ended December 31, 2024.

 Long-Lived Assets

 The Company's long-lived assets are reviewed
for impairment whenever events or changes in circumstances indicate that the historical carrying cost value of an asset may no longer
be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result
from the asset to the carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment
loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the
long-lived asset.

 Leases

 Right-of-use ("ROU") assets represent
the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation
to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on
the estimated present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on
the balance sheet; the Company recognizes lease expenses for these leases on a straight-line basis over the lease term. The Company does
not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease
component associated with that lease component as a single lease component.

 ASC 842 defines initial direct costs as only the
incremental costs of signing a lease. Initial direct costs related to leasing that are not incremental are expensed as general and administrative
expenses in our statements of operations.

 The Company's operating lease agreements
primarily consist of leased real estate and are included within ROU assets – operating leases and ROU lease liabilities –
operating leases on the balance sheets. The Company's lease agreements may include options to extend the lease, which are not included
in minimum lease payments unless they are reasonably certain to be exercised at lease commencement. The Company's leases do not
provide implicit interest rates, therefore the Company uses its estimated incremental borrowing rate based on the information available
at commencement date in determining the present value of lease payments.

 Research and Development Expenses

 The Company records research and development expenses
in the period in which they are incurred as a component of product development expenses.

 Income Taxes

 Deferred taxes are determined utilizing the "asset
and liability" method, whereby deferred tax asset and liability account balances are determined based on the differences between
financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not
that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current
or non-current based on the underlying asset or liability or if not directly related to an asset or liability based on the expected reversal
dates of the specific temporary differences.

 Fair Value of Financial Instruments

ASC Topic 820 Fair Value Measurements and Disclosures ("ASC Topic 820") provides a framework for measuring fair value
in accordance with generally accepted accounting principles.

 ASC Topic 820 defines fair value
as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market
participant assumptions developed based on the best information available in the circumstances (unobservable inputs).

 The fair value hierarchy consists
of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are
described as follows:

 Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

 Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 Level 3 — Inputs that are unobservable for the asset or liability.

 The following section describes
the valuation methodologies that the Company used to measure different financial instruments at fair value.

 Debt

 The fair value of the Company's
debt, which approximated the carrying value of the Company's debt as of December 31, 2023. Factors that the Company considered when
estimating the fair value of its debt included market conditions, and term of the debt. The level of the debt would be considered as Level

 The Company relies on the guidance
provided by ASC Topic 480, Distinguishing Liabilities from Equity, to classify certain convertible instruments. The Company first
determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification
if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional
obligation that the Company must or may settle by issuing a variable number of its equity shares.

 The Company accounts for derivative
instruments in accordance with ASC Topic 815, Derivatives and Hedging ("ASC Topic 815"), and all derivative instruments
are reflected as either assets or liabilities at fair value on the consolidated balance sheets. The Company uses estimates of fair value
to value its derivative instruments. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction
between able and willing market participants. In general, the Company's policy in estimating fair values is to first look at observable
market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are
used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit
spreads, relying first on observable data from active markets. Depending on the availability of observable inputs and prices, different
valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and
may not be realizable. The Company categorizes its fair value estimates in accordance with ASC Topic 820, based on the hierarchical framework
associated with the three levels or price transparency utilized in measuring financial instruments at fair value as discussed above.

 Once the Company determines that a financial instrument
should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability
section and the equity section of the balance sheet ("temporary equity"). The Company will determine temporary equity classification
if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the
Company accounts for the financial instrument as permanent equity.

 Initial Measurement

 The Company records its financial
instruments classified as a liability, temporary equity or permanent equity at issuance at the fair value, or cash received.

 Subsequent Measurement -
Financial instruments classified as liabilities

 The Company records the fair
value of its financial instruments classified as liabilities at each subsequent measurement date. The changes in fair value of its financial
instruments classified as liabilities are recorded as other expense/income. The Monte Carlo simulation is used to determine the fair value
of derivatives for instruments with embedded conversion features and for free standing warrants as discussed further in Note 8.

 Additional Disclosures Regarding Fair Value
Measurements

 The carrying value of cash,
accounts receivable, inventory, other assets, and accounts payable and accrued expenses approximate their fair value due to the short-term
maturity of those items.

 Warrant Liabilities and Convertible Liabilities

 The fair value of the derivative liabilities and
warrant liabilities is classified as Level 3 within the Company's fair value hierarchy. Refer to Note 8, Derivative Instruments,
for further discussion of the measurement of fair value of the derivatives and their underlying assumptions.

 Stock-Based Compensation

 The Company has a stock-based incentive award
plan for employees, consultants and directors. The Company measures stock-based compensation at the estimated fair value on the grant
date and recognizes the amortization of stock-based compensation expense on a straight-line basis over the requisite service period, or
when it is probable criteria will be achieved for performance-based awards. Fair value is determined based on assumptions related to the
fair value of the Company common stock, stock volatility and risk-free rate of return. The Company has elected to recognize forfeitures
when realized.

 Concentration Risk

 The Company outsources certain portions of product
design and development for its vehicles to third parties. In addition, the Company has outsourced the manufacturing of all of its vehicles
to third party manufacturers.

 On January 8, 2024, the Company notified the manufacturer
of the Volcon Youth motorcycles that it was terminating the co-branding and distribution agreement with them due to lower than anticipated
sales of these units. In March 2024, the Company agreed to allow the manufacturer to keep all fully paid for units manufactured and held
by the manufacturer, cease selling the Volcon Youth motorcycles as of June 30, 2024, and pay cash of $ 2,070,000 which included a payment
of $370,000 in March 2024 and $100,000 monthly for seventeen months starting April 2024. All Volcon Youth inventory was written off as
of June 30, 2024.

 The settlement was recorded in the financial statements for the year
ended December 31, 2023. On October 2, 2024, the Company and the manufacturer amended the settlement agreement and the Company agreed
to pay the manufacturer $ 300,000 by October 31, 2024 to fully settle the remaining payments under the March 2024 agreement and to return
any remaining spare parts and finished goods held by the Company in its Texas warehouse. The Company recognized a reduction of expense
of $ 700,000 in cost of goods sold in the year ended December 31, 2024 related to this amendment.

 In June 2024, the Company was notified by the
manufacturer of a suspension component for the Stag that due to the Company's initial production forecast provided by the third
party manufacturer of the Stag, the vendor had acquired raw materials to fulfill several months' worth of this component needed
for the forecast. Although the Company had provided updated forecasts to the third party manufacturer of the Stag, the revised forecasts
were not provided timely to this vendor. The Company entered into an agreement to pay for the excess raw materials by making weekly payments
of $13,791 and to purchase remaining finished goods of $ 110,000. The Company recorded an expense
of $ 1,091,308 in cost of goods sold for the year ended December 31, 2024. The short-term and long-term liability as of December 31, 2024
is $ 661,586 and $ 109,163 respectively.

 On December 6, 2024, the Company
entered into a Settlement Agreement and Mutual Release ("Agreement") with GLV, the manufacturer of the Stag and Grunt EVO,
pursuant to which the Company and the manufacturer agreed to terminate the Supplier Agreement dated March 11, 2022 for the development
and engineering of the Volcon Stag vehicle prototypes; the Supplier Agreement dated May 29, 2022 for the manufacturing of the Volcon Grunt
EVO motorcycle; and the Supplier Agreement dated August 11, 2022 for the manufacturing of the Volcon Stag vehicle (collectively, the "Supplier
Agreements"). Pursuant to the Agreement, among other items, the Company and the manufacturer agreed to indemnify each other with
respect to certain outstanding vendor payables and the Company agreed to pay GLV a termination fee of $ 125,000 per month for a period
of twenty-two months.

 Recently Issued Accounting Pronouncements

 In November 2023, the FASB issued ASU 2023-07,
Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, requiring public companies to disclose information about
their reportable segments' significant expenses and other segment items on an interim and annual basis. Public companies with a
single report segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and
reconciliation requirements of ASU 2023-07 during the year ended December 31, 2024. The Company operates as one operating segment and
the Company's CEO is the chief operating decision maker ("CODM"). The CODM uses the consolidated statement of operations
to assess financial performance and allocate resources.

 The following table presents the selected financial
information with respect to the Company's single operating segment:

 Schedule of operating segment

 Years Ended December 31,

 2024

 2023

 Revenue

 $
 4,037,191

 $
 3,260,988

 Cost of goods sold

 ( 18,168,288
)

 ( 11,391,040
)

 Gross Margin

 ( 14,131,097
)

 ( 8,130,052
)

 Sales & Marketing

 2,548,953

 7,405,705

 Product Development

 2,668,330

 7,868,985

 General & Administrative

 7,665,647

 6,388,007

 Total Operating Expenses

 12,882,930

 21,662,697

 Loss from Operations

 ( 27,014,027
)

 ( 29,792,749
)

 Other Income (Expense)

 ( 18,496,282
)

 ( 15,278,462
)

 $
)

 $
)

 NOTE 3 – INVENTORY

 Inventory consists of the following:

 Schedule of inventory

 2024

 2023

 Raw materials

 $
 –

 $
 6,770,892

 Finished goods

 1,455,477

 2,202,242

 Total inventory

 $
 1,455,477

 $
 8,973,134

 During 2024, the Company lowered the sales price
of the Grunt EVO which was sold to dealers and distributors. Since the unit sales price was below the unit cost the Company paid to the
manufacturer, the Company wrote down the Grunt EVO finished goods inventory and recorded an expense of $ 674,379.
In March 2025, the Company sold all of the remaining Grunt EVO finished goods.

 In October 2024, the Company notified the manufacturer
of the Stag that the Company intended to terminate the manufacturing agreement between the parties due to, among other things, significant
cost increases for finished units over the original contracted cost. The Company wrote down all of the Stag raw materials inventory as
of September 30, 2024. The Company concluded it would not be able to recover the inventory since it was in the manufacturer's possession
at the time, and even if it could the Company does not believe that it could find another manufacturer who could build the Stag without
the Company incurring significant additional costs to have the manufacturer set up a production facility. In addition, the Company wrote
off all prepaid deposits and advances paid to vendors and the manufacturer of the Stag. The total write-off related to Stag inventory,
prepaid inventory and advances was $ 8,712,644. As noted above, the Company and the manufacturer entered into a settlement agreement and
terminated the manufacturing agreement which included giving all raw materials inventory to the manufacturer.

 In June 2023, the Company wrote down all remaining
Torrot branded inventory in the amount of $ 84,000. During 2023, the Company wrote down the Volcon co-branded Torrot youth motorcycles
in the amount of $ 2,674,352 to reduce their cost to the estimated net realizable value. The Company also wrote off all remaining Grunt
raw materials inventory of $ 1,564,643 upon transfer of the inventory to the Company's third party manufacturer.

 As of December 31, 2024, the Company has
purchase commitments for future payments due for inventory of $ 376,945.

 NOTE 4 – LONG – LIVED ASSETS

 Property and Equipment

 Property and equipment consist of the following:

 Schedule of property and equipment

 2024

 2023

 Machinery, tooling and equipment

 $
 145,192

 $
 1,015,568

 Vehicles

 185,482

 213,528

 Internal use manufactured vehicles

 109,268

 22,906

 Fixtures & furniture

 50,768

 90,768

 Leasehold improvements

 44,663

 44,663

 Computers

 217,341

 221,571

 752,714

 1,609,004

 Less: Accumulated depreciation

 ( 546,576
)

 ( 350,397
)

 Total property and equipment

 $
 206,138

 $
 1,258,607

 Depreciation expense for the years ended December
31, 2024 and 2023 was $ 360,711 and $ 243,394, respectively

 NOTE 5 – NOTES PAYABLE

 In March 2023, the Company entered into two financing
arrangements to purchase two vehicles. The total principal of these arrangements is $ 96,024 with interest rates of 11.44 % and 8.63 % and
monthly payments totaling $ 1,923 are due through February 2028 and $908 per month until February 2029. The vehicles are collateral for
these arrangements. In February 2024, one of the vehicles was involved in an accident and was totaled. The note payable associated with
this vehicle was paid off with the proceeds received from the insurance carrier.

 The following table provides the maturities of notes
payable as of December 31, 2024:

 Schedule of maturities of
notes payable

 2025

 $
 10,898

 2026

 10,898

 2027

 10,898

 2028

 10,898

 2029

 1,816

 Total future payments

 45,408

 Less: Interest

 ( 9,694
)

 Total notes payable

 35,714

 Less current portion

 ( 7,181
)

 Long-term notes payable

 $
 28,533

 NOTE 6 - CONVERTIBLE NOTES

 On August 24, 2022, the Company issued Senior
Convertible Notes ("Convertible Notes") with an aggregate principal amount of $ 27,173,913 due February 24, 2024. The holders
of the Convertible Notes also received fully vested warrants (the "Note Warrants") to purchase 51 shares of the Company's
common stock at an initial exercise price of $ 405,000.00 per share. The conversion and warrant exercise prices were subject to adjustment
if the Company declared a stock dividend, stock split or recapitalization. The Company incurred debt issuance costs of $ 3,316,409 upon
issuance of the Convertible Notes, which includes $ 616,730 for the fair value of the warrants issued to the placement agent of the Convertible
Notes as further described in Note 10. These debt issuance costs were amortized as additional interest expense through May 24, 2023 when
the Convertible Notes were exchanged as discussed below.

 The Company allocated the net proceeds received
from the issuance of the Convertible Notes and Note Warrants based on the relative fair values of each resulting in net proceeds of $ 15,122,345
being allocated to the Convertible Notes and net proceeds of $ 6,561,247 being allocated to the Note Warrants which was recorded in equity.
The Company recorded non-cash interest expense through May 24, 2023 to accrete the allocated value of the Convertible Notes using the
effective interest method and an interest rate of 39.6 %. Interest expense, including amortization of issuance costs, recorded for the
Convertible Notes for the year ended December 31, 2023 was $ 2,913,632, prior to the recognition of the unamortized discount and issuance
costs upon issuance of the additional Senior Convertible Notes noted below.

 On May 24, 2023, the Company issued additional
Senior Convertible Notes ("New Notes") with an aggregate principal amount of $ 4,934,783 due February 24, 2024 to the same
investors of the Convertible Notes. The New Notes had an initial conversion price of $ 457,200.00 per share of common stock, which was
adjusted to $135,000.00 upon stockholder approval received on August 3, 2023. The conversion price was also subject to further adjustment
if the Company completed an equity or convertible note offering with a price below $135,000.00, or completed a stock split, reverse stock
split or recapitalization where the lowest day's volume weighted average price ("VWAP") of the Company's stock
price is below $135,000.00 in the five days following the stock split, with a floor price of $0.22 (subject to stockholder approval, which
was obtained on August 3, 2023). The conversion price was also subject to further adjustment if the Company completed an equity or convertible
note offering with a price below $135,000.00. The New Notes were issued with an original issue discount of 8.8 % and did not bear interest
unless an event of default had occurred, upon which interest accrued at 10% per annum.

 The holders of the New Notes also received fully
vested warrants (the "New Warrants") to purchase 31 shares of the Company's common stock at an initial exercise price
of $ 196,200.00 per share. The New Warrants expire August 24, 2027.

 The Company incurred debt issuance costs of $ 586,968
upon issuance of the New Notes and New Warrants. The Company amortized these issuance costs as additional interest expense over the remaining
term of the New Notes.

 Concurrent with the issuance of the New Notes,
the Company exchanged the Convertible Notes into two new notes, Series A Notes and Series B Notes both due February 24, 2024 (collectively
the "Exchange Notes" and collectively with the New Notes the "May 2023 Notes"). The aggregate principal amount
of Series A Notes was $ 3,690,422 and these were convertible into the Company's common stock at an initial conversion price of $ 135,000.00
per share. The aggregate principal amount of the Series B Notes was $ 23,483,491 and were convertible into the Company's common stock
at an initial conversion price of $ 196,200.00 which was adjusted to $ 135,000.00 upon stockholder approval received on August 3, 2023.

 In September 2023, the holders of the May 2023
Notes agreed to modify the due date of these notes to January 31, 2025. The Company also executed a security interest to the holders for
substantially all of the assets of the Company.

 Events of default for the May 2023 Notes were
defined in the note agreements and the Company was in compliance with all covenants until the May 2023 Notes were exchanged for Series
A Convertible Preferred Stock ("Preferred Stock") on March 4, 2024 as discussed below.

 The fair value of the May 2023 Notes was estimated
based on the future cash flows discounted at an interest rate of 14.9%. The May 2023 Notes were recorded at their initial fair values
as follows:

 Schedule of convertible notes

 Fair Value

 Principal Amount

 New Notes

 $
 4,410,058

 $
 4,934,783

 Series A Exchange Notes

 3,298,012

 3,690,422

 Series B Exchange Notes

 20,986,449

 23,483,891

 Total May 2023 Notes

 $
 28,694,519

 $
 32,109,096

 The Company estimated the fair value of the conversion
features of the New Notes, Exchange Notes, New Warrants and Exchange Warrants as of May 24, 2023, as discussed in Note 8 below.

 The Company recognized interest expense of $ 314,838
and $ 2,042,078 in the years ended December 31, 2024 and 2023 for the accretion of the discount and amortization offering costs on the
May 2023 Notes.

 The Company also exchanged the 51 Note Warrants
with an exercise price of $513,000.00 per share issued with the Convertible Notes in August 2022 for 95 warrants which had an initial
exercise price of $196,200.00 per share (the "Exchange Warrants") and was adjusted to $135,000.00 per share upon stockholder
approval received on August 3, 2023. The Exchange Warrants expire August 24, 2027.

 The conversion prices of the Exchange Notes, and
the exercise prices of the New Warrants and Exchange Warrants (collectively the "May 2023 Warrants") were subject to further
adjustment in the event that the Company issues additional common stock, stock options, warrants or convertible notes with prices below
the exercise price in effect at the time of issuance, or completes a stock split, reverse stock split or recapitalization where the lowest
day's VWAP of the Company's stock price is below the then exercise price in the five days following the stock split with a
floor of $0.22 per share.

 The Company evaluated the issuance of the New
Notes and Exchange Notes and related warrants and determined that the Convertible Notes were extinguished based on the conclusion that
the terms of the New Notes and Exchange Notes are substantially different from the Convertible Notes in accordance with ASC 470, Debt.
In addition, the Company recognized a loss on the extinguishment of the Convertible Notes based on the carrying value of the Convertible
Notes at the transaction date, plus gross proceeds received from the issuance of New Notes and New Warrants, less the fair value of the
i) New Notes and conversion option, ii) New Warrants, iii) Exchange Notes and conversion options, and iv) Exchange Warrants. The resulting
loss on extinguishment of the Convertible Notes was $ 22,296,988 (including unamortized issuance costs of $ 1,330,296) which was recorded
in the year ended December 31, 2023.

 The May 2023 Notes contain certain conversion
limitations, providing that no conversion may be made if, after giving effect to the conversion, the holder, together with any of its
affiliates, would own in excess of 9.99% of the Company's outstanding shares of common stock after giving effect to such conversion.
The Company had the option to force conversion of the Series A and Series B Notes but the weighted average price of the Company's
common stock did not equal or exceed the amounts specified in the May 2023 Note agreements while these notes were outstanding.

 In September 2023, the Company and the holders
of the Exchange Warrants entered into a warrant inducement agreement whereby the Exchange Warrant holders agreed to exercise 11 Exchange
Warrants at a reduced exercise price of $63,000.00 per share. The Company issued the holders 11 warrants ("Reload Warrants")
with an initial exercise price of $ 90,000.00 per share. The Reload Warrants are immediately exercisable for unregistered shares of the
Company's common stock and have the same terms as the May 2023 Warrants and expire August 24, 2027. The Company recognized equity
issuance costs of $ 216,855 in the year ended December 31, 2023 for the issuance of the Reload Warrants.

 The May 2023 Warrants and Reload Warrants contained
certain conversion limitations, providing that a holder thereof may not exercise such warrants to the extent that, if after giving effect
to such conversion, the holder or any of its affiliates would beneficially own in excess of 4.99% of the outstanding shares of the Company's
common stock immediately after giving effect to such exercise. The May 2023 Warrants and Reload Warrants provide the holders the right
to exercise these warrants on a non-cash basis if the Company does not have an effective registration statement for the underlying shares
of common stock.

 Holders of the May 2023 Notes, the May 2023 Warrants
and Reload Warrants did not have voting rights to the extent they did not convert their notes or exercise their warrants.

 In September 2023, the Company completed a public
offering and sold 8 shares of common stock at $ 90,000.00 per share. The holders of the May 2023 Notes waived their right to reduce the
conversion price to the equity issuance price and agreed to reduce the conversion price to $99,000.00 per share. The exercise price of
the May 2023 Warrants was reduced to $ 90,000.00 per share as a result of the public offering.

 On October 13, 2023, the Company completed a 1
for 5 reverse stock split and the lowest day's VWAP in the five days following the reverse split was $49,284.00 per share and the
conversion price of the May 2023 Notes, and the exercise price of the May 2023 Warrants were reduced to $ 49,284.00 per share effective
October 20, 2023. On February 2, 2024, the Company completed a reverse 1 for 45 stock split. As a result, the conversion price of the
May 2023 Notes and exercise price of the May 2023 Warrants were subject to adjustment to the lowest day's VWAP in the five-day period
following the reverse split, which was $ 1,491.68 per share effective February 12, 2024.

 During the three months ended March 31, 2024,
$ 7,414,025 of principal of the May 2023 Notes were converted into 4,971 shares of common stock. The Company recognized a loss of $ 333,544
on the conversion including the write off of $ 55,490 of unamortized debt issuance costs in the year ended December 31, 2024. The remaining
principal of the May 2023 Notes of $ 24,716,118 was exchanged for 24,698 shares of Series A convertible Preferred Stock with a stated value
of $1,000 and an initial conversion price of $1,064.00. The Company recognized a loss on the exchange of the Convertible Notes for Preferred
Stock of $ 1,314,065, which includes unamortized issuance costs of $ 182,009, in the year ended December 31, 2024.

 As a result of the exchange for Preferred Stock,
the May 2023 Notes are no longer outstanding, there are no remaining covenants related to the May 2023 Notes that the Company must comply
with and the security interest on the assets of the Company has been released by the noteholders. The May 2023 Warrants exercise price
was reduced to $ 1,064.00 as a result of this exchange. See further discussion in Note 10.

 NOTE 7 - MAY 2024 SENIOR NOTES

 On May 22, 2024, the Company issued Senior Notes
with an aggregate principal amount of $ 2,942,170 due May 22, 2025 (the "May 2024 Notes") for proceeds before expenses of $ 2,501,001
(issuance costs were $ 245,150). The notes were issued with an original issue discount of 15% and do not bear interest unless an event
of default occurs, upon which interest will accrue at 10% per annum. Pursuant to the terms of the May 2024 Notes, if the Company completes
an equity or debt offering while any principal of the May 2024 Notes is outstanding, thirty percent of the proceeds from such offering
are required to be used to repay the outstanding principal of the May 2024 Notes until they are fully repaid. The holders of the May 2024
Notes also received fully vested warrants (the "May 2024 Note Warrants") to purchase 12,686 shares of the Company's
common stock at an exercise price of $ 232.00 per share. The May 2024 Note Warrants were exercisable beginning November 23, 2024 and expire
November 23, 2029. The number of warrants and the exercise price are subject to adjustment if the Company declares a stock dividend, stock
split or recapitalization.

 The Company allocated the net proceeds received
from the issuance of the May 2024 Notes and May 2024 Note Warrants based on the relative fair values of each resulting in net proceeds
of $ 1,232,651 being allocated to the May 2024 Notes recorded as a current liability in the balance sheet and net proceeds of $ 1,023,200
being allocated to the May 2024 Note Warrants which was recorded in equity.

 Schedule of senior notes

 Principal amount

 $
 2,942,170

 Unamortized discount and issuance costs

 ( 1,525,700
)

 Net carrying amount

 $
 1,416,470

 During the year ended December 31, 2024, the Company
recorded non-cash interest expense of $ 238,965 to accrete the allocated value of the May 2024 Notes, which includes the amortization of
debt issuance costs. As discussed further in Note 10, the May 2024 Notes were fully repaid on July 12, 2024 and a loss of $ 1,470,554 was
recognized in the year ended December 31, 2024 for the early extinguishment of these notes.

 NOTE 8 - DERIVATIVE FINANCIAL INSTRUMENTS AND
WARRANT LIABILITIES

 May 2023 Notes and May 2023 Warrants

 As discussed in Note 6, the Company recognized
a loss on the extinguishment of the Convertible Notes based on the fair values of the May 2023 Notes including the conversion feature,
and the May 2023 Warrants. The Company determined that there was a derivative liability associated with the conversion features in the
May 2023 Notes due to the conversion price being subject to stockholder approval in the conversion feature. Therefore, the Company separated
the conversion features from the May 2023 Notes and recorded them at fair value and continued to adjust them to fair value until stockholder
approval was received on August 3, 2023 as the conversion price is then only adjusted based on anti-dilutive provisions. The Company also
determined that the May 2023 Warrants were derivative liabilities due to the potential adjustment in the exercise prices being subject
to stockholder approval. Once stockholder approval was received on August 3, 2023, the exercise price of the warrants only adjusts based
on anti-dilutive provisions and they are no longer derivative liabilities

 The fair value of the conversion
features and warrant liabilities were calculated using a Monte Carlo simulation and the following assumptions and methodologies:

 Schedule of assumptions and methodologies

 May 24, 2023

 August 3, 2023

 Conversion Feature Liabilities

 Company stock price on valuation date

 $

 126,000.00

 $

 99,180.00

 Volatility (closing prices of guideline comparable public companies)

 86.3%

 84.1%

 Conversion price per share

 $

 135,000.00

 $

 135,000.00

 Note term (years)

 0.76

 0.56

 Risk free interest rate

 5.1%

 5.4%

 Warrant Liabilities

 Company stock price on valuation date

 $

 126,000.00

 $

 99,180.00

 Volatility (closing prices of guideline comparable public companies)

 119.2%

 115.0%

 Conversion price per share

 $

 135,000.00

 $

 135,000.00

 Warrant term (years)

 4.25

 4.06

 Risk free interest rate

 3.8%

 4.3%

 In addition to the above factors, the Company
also used a probability assessment for the initial and August 3, 2023 valuation to evaluate whether stockholder approval would be received
to lower the conversion and exercise prices. The Company utilized a 50/50 assessment that stockholders would or would not approve the
lower conversion and exercise price. Management notes that at the time of the assessment, the stockholder vote had not yet started therefore
there was no data to determine whether one scenario was more likely than another. Since the stockholders approved the lower conversion
and exercise price on August 3, 2023, no probability assessment was used.

 Based on the above factors, the estimated fair
value of the Company's derivative liabilities carried at fair value at May 24, 2023 and August 3, 2023 is as follows:

 Schedule of fair
value of derivative liabilities

 May 24, 2023

 August 3, 2023

 Conversion Feature - New Notes

 $
 663,096

 $
 557,168

 Conversion Feature - Series A Exchange Notes

 970,805

 416,672

 Conversion Feature - Series B Exchange Notes

 4,324,792

 2,651,436

 New Warrants

 3,123,682

 2,445,244

 Exchange Warrants

 9,287,474

 7,191,535

 Total

 $
 18,369,849

 $
 13,262,055

 On August 3, 2023, stockholders approved the adjustment
of the conversion price of the New Notes and Exchange Notes and the exercise price of the New Warrants and Exchange Warrants. The conversion
and exercise prices can adjust to a floor of $0.22 per share based on certain events defined in the agreements related to these instruments.
The Company concluded that as of August 3, 2023, the conversion feature of the May 2023 Notes and the May 2023 Warrants are no longer
derivative liabilities and reclassified them to equity on August 3, 2023. The Company recognized
a gain of $ 5,107,794 for the change in the fair values of the conversion features of the May 2023 Notes and May 2023 Warrants for the
year ended December 31, 2023.

 Series A and Series B Warrants

 As discussed in Note 10 below, the Company issued Series A and Series
B Warrants (the "November 2023 Warrants") in connection with the sale of common units and pre-funded warrant units. Under
the terms of the November 2023 Warrants, the number and exercise price are subject to adjustment if the Company completes certain transactions
specified in these warrant agreements. In addition, the Series A Warrants have a cashless exercise provision, if approved by stockholders,
that would allow holders to cashless exercise one warrant for three shares of the Company's common stock. Such adjustments were
subject to stockholder approval (which was received on January 12, 2024) and are further described in Note 10.

 The Company has determined that these warrants
should be classified as liabilities and has used a Monte Carlo simulation to estimate the fair value. The following assumptions were used
in the valuations:

 Schedule of warrants assumptions

 December 31, 2023

 Company stock price on valuation date

 $
 35.68

 Volatility

 141.4%

 Risk free interest rate

 3.78%

 Dividend yield

 0.00%

 Warrant term (years)

 4.9

 Time to future transaction (years)

 0.63

 Future transaction probability

 75%

 In addition to the above factors, the Company
also used a probability assessment for the initial and December 31, 2023 valuation to evaluate whether stockholder approval would be received
on January 12, 2024 to lower the conversion and exercise prices. Management notes that at the time of the assessment, the stockholder
vote had not yet started but there was a requirement in the offering that the board of directors, management, and a significant stockholder
vote in favor of these adjustments which included approximately 20.1% of the shares outstanding as of the transaction date. Further, significant
investors in the transaction held shares acquired prior to the record date for eligible stockholders to vote. Although these same investors
could not vote the shares received in the November 17, 2023 offering, they could abstain from voting those shares for the stockholder
vote and such shares would count towards whether a quorum of shares was received to hold the special meeting for the stockholder approval.
Finally, management notes that approval was overwhelmingly positive to adjust the conversion price for the May 2023 Notes and May 2023
Warrants and exercise prices. The Company concluded that it was 100% likely that stockholders would approve the provisions to adjust the
number of warrants and exercise price.

 Based on the above factors, the estimated fair
value of the Series A and Series B Warrant liabilities at December 31, 2023 is as follows:

 Schedule of estimated fair
value

 December 31, 2023

 Series A Warrant

 $
 0.2970

 Series B Warrant

 $
 0.0799

 The Company allocated the gross proceeds from
the issuance of the common units and pre-funded warrant units based on the relative fair values from the November 17, 2023 valuation resulting
in a value of $ 10,990,530 and $ 3,345,961 being allocated to the Series A and Series B warrants, respectively. An allocation of the issuance
costs from the offering was made based on the relative fair values of the common stock, pre-funded warrants, Series A and Series B warrants
and issuance costs of $ 1,451,249 that were allocated to the Series A and Series B Warrants were expensed in the fourth quarter of 2023.

 Subsequent to the approval by stockholders of
the cashless exercise provision of the Series A Warrant, the fair value of each Series A Warrant is the value of three shares of the Company's
common stock. Based on the closing price of the Company's common stock on December 31, 2024
of $ 4.37, the fair value of each Series A Warrant is $ 13.11 and based on the total number of warrants outstanding of 8,517, the warrant
liability for Series A Warrants is $ 111,658 at December 31, 2024.

 As discussed in Note 10 below, on May 17, 2024,
certain terms of the Series B Warrants were amended, including a cashless exercise provision, which resulted in the Series B warrants
no longer being liabilities. The fair value of each Series B warrant is the value of the closing stock price of the Company times 0.81,
the cashless exercise exchange ratio. Based on the closing price of the Company's common stock on May 17, 2024 of $ 231.20, the fair
value of each Series B Warrant is $ 187.27. A loss of $ 2,174,673 was recognized in th e year ended
December 31, 2024, for the change in fair value of the Series B Warrants from December 31, 2023 to May 17, 2024. The fair value
of the Series B Warrants of $ 3,405,662 as of May 17, 2024 was reclassified to equity.

 As discussed in Note 10, certain holders of the
Series A and Series B Warrants exercised their warrants. The Company reclassified the fair value of the Series A Warrants exercised on
a cashless basis to stockholders equity. The Company recognized a gain of $ 165,355 from the exercise of the Series B Warrants based on
the proceeds received from the exercise and the estimated fair value of the Series B Warrants on the date of exercise.

 The following represents the activity associated
with the Series A and Series B Warrants for the year ended December 31, 2024:

 Schedule of derivative activity

 Series A

 Series B

 Total

 Fair value on December 31, 2023

 $
 4,705,245

 $
 1,265,822

 $
 5,971,067

 Loss on changes in fair value

 12,759,066

 2,174,673

 14,933,739

 Exercise of warrants

 ( 17,352,653
)

 ( 34,833
)

 ( 17,387,486
)

 Reclassification to equity

 –

 ( 3,405,662
)

 ( 3,405,662
)

 Balance at December 31,2024

 $
 111,658

 $
 –

 $
 111,658

 NOTE 9 – RELATED PARTY TRANSACTIONS

 In March 2024, the Company entered into a consulting
agreement with Christian Okonsky, one of the Company's founders, former Chairman of the Board and former Chief Technology Officer,
pursuant to which he was entitled to a monthly fee of $ 5,000 and payment of 1% of the gross proceeds from any merger, sale or change of
control transaction ("Change of Control Payment") (as determined by the board of directors) entered into by the Company for
a period of up to 6 months following the termination of the consulting agreement. The consulting agreement had a 24 month term and was
cancellable by either party with 30 days notice. This consulting agreement terminates any remaining provisions of the Pink Possum agreement
noted below other than the warrants remain outstanding. On September 9, 2024, Mr. Okonsky resigned from the board of directors of the
Company. The consulting agreement was amended and the monthly fee was amended to $ 8,333 per month for twelve months and the Change of
Control Payment was eliminated. In October 2024, Ms. Karin-Joyce Tjon, a current independent board member, was appointed by the board
to be the chairman of the board.

 In December 2022, the Company entered into an
employment agreement with Mr. Okonsky whereby Mr. Okonsky became an employee on January 2, 2023 with an annual salary of $ 170,000 and
healthcare and other benefits that are also provided to all Company employees. The consulting agreement with Pink Possum, discussed below,
was terminated upon execution of the employment agreement. Mr. Okonsky informed the Company on January 27, 2024 that he would resign his
employment and forfeit his salary and benefits effective February 1, 2024.

 In November 2020 and February 2021, the Company
entered into an operating lease with an entity controlled by the Company's two founders for its future headquarters and production
facility in Liberty Hill, Texas. In October 2021, the Company began discussions for an additional amendment to the lease, in anticipation
of manufacturing vehicles at this location, which would have resulted in the monthly payment of $100,000 for the first year of the lease
and increasing annually throughout the term of the lease to $107,000 in the final year. Monthly payments for the initial lease and the
amended agreement would have begun at the time a certificate of occupancy was received by the landlord. No monthly rent payments were
made on these leases.

 On April 27, 2022, the Company informed the landlord
that it would be terminating the lease. On May 27, 2022, the landlord notified the Company that the landlord would refund $85,756 of the
prepaid rent and security deposit balance of $601,818 paid by the Company and the Company recognized a loss on the unrefunded prepaid
rent and security deposit amount in 2022. In October 2023, the landlord notified the Company that there were additional costs that exceeded
the amount of the refund, and the landlord released the Company from paying any amounts in excess of the original expected refund. The
landlord also released the Company from any remaining obligations under the lease and amendments. The Company recognized a loss on the
termination of this lease of $ 85,756 in the year ended December 31, 2023.

 On August 28, 2020, the Company entered into consulting
agreements with Pink Possum, an entity controlled by Mr. Okonsky, and Highbridge Consultants, LLC ("Highbridge"), an entity
controlled by Mr. Adrian James, a co-founder of the Company, pursuant to which Messrs. Okonsky and James provide the Company with services
in exchange for warrants. On March 26, 2021 and March 25, 2021, respectively, Pink Possum and Highbridge entered into amendments to the
consulting agreements agreeing to exchange the original warrants for new ten-year warrants to purchase 27 and 35 shares, respectively,
of common stock at an exercise price of $176,400.00. The Highbridge warrants were fully exercised on a cashless basis in 2021 and the
Pink Possum warrants remain outstanding as of December 31, 2024.

 In addition, pursuant to the consulting agreements,
upon the occurrence of a Fundamental Transaction (as defined below) for an aggregate gross sales price of $100.0 million or more, each
entity will receive a cash payment equal to 1% of such gross sales price. For the purposes of the consulting agreements, "Fundamental
Transaction" means any of the following: (i) a consolidation or merger involving the Company if the holders of the voting securities
of the Company that are outstanding immediately prior to the consummation of such consolidation or merger do not, immediately after the
consummation of such consolidation or merger, hold voting securities that collectively possess at least a majority of the voting power
of all the outstanding securities of the surviving entity of such consolidation or merger or such surviving entity's parent entity;
(ii) a transfer or issuance (in a single transaction or series of related transactions) by one or more of the Company and its stockholders
to one person or to any group of persons acting in concert, of shares of the Company's capital stock then collectively possessing
50% or more of the voting power of all then outstanding shares of the Company's capital stock (computed on an as-converted to common
stock basis); or (iii) any sale, license, lease, assignment or other disposition of all or substantially all of the assets of the Company.
Furthermore, commencing upon the completion of the Company's initial public offering of the shares of our common stock, if the Company's
market capitalization exceeds $300.0 million for a period of 21 consecutive trading days, each of the entities will receive an additional
cash payment equal to $15.0 million; provided that the Company will have the right, in its sole discretion, to make the foregoing $15.0
million payment by the issuance of shares of the Company's common stock. The foregoing amounts will be payable to the entities if
the above milestones occur any time prior to the ten-year anniversary of the original consulting agreements, or August 28, 2030. The foregoing
provision was terminated as to Pink Possum in connection with the consulting agreement between the Company and Mr. Okonsky described above.

 NOTE 10 – STOCKHOLDERS' EQUITY

 On June 14, 2023, the Company's stockholders
approved an increase in the Company's authorized shares of common stock from 100,000,000 to 250,000,000. In addition, the Company
is authorized to issue 5,000,000 shares of preferred stock with a par value of $ 0.00001. The specific rights of the preferred stock, when
so designated, shall be determined by the board of directors.

 On October 13, 2023, the Company completed a reverse
 1 for 5 stock split. On February 2, 2024, the Company completed a reverse 1 for 45 stock split. On June 6, 2024, the Company completed
a reverse 1 for 100 stock split. On November 8, 2024, the Company completed a reverse 1 for 8 stock split. Any fractional shares as a
result of the reverse stock splits were rounded up to one full share of common stock.

 Common Stock

 On May 24, 2023, the Company sold 34 shares of
its common stock in a public offering at $ 135,000.00 per share. The Company received net proceeds of $ 3,998,685 after underwriter commissions
and expenses of $ 501,300.

 On September 18, 2023, the Company sold 8 shares
of its common stock in a public offering at $ 90,000.00 per share. The Company received net proceeds of $ 571,400 after underwriter commissions
and expenses of $ 128,600. The underwriter was also issued a warrant to purchase 2 shares of the Company's common stock at an exercise
price of $ 112,500.00 per share that expires 5.5 years from the date of issuance. The underwriter agreement provided the underwriter with
a right of first refusal for any additional securities third parties offerings within twelve months of this offering.

 As discussed in Note 6 above, on May 24, 2023
the Company issued the May 2023 Notes and May 2023 Warrants, along with the warrants to the placement agent in August 2022 with the issuance
of the Convertible Notes. The Company received consent from the underwriter to issue such securities. In addition, the Company was required
to reserve 601 shares of common stock for future issuance of shares for the conversion of the May 2023 Notes and exercise of the May 2023
Warrants and 4 shares for the exercise of the placement agent warrants.

 On July 12, 2024, Company sold 102,605
shares of the Company's common stock at a purchase price of 29.20
per share and pre-funded warrants to purchase 308,355
shares of common stock at $ 29.19992
per pre-funded warrant. The Company received net proceeds of $ 10,789,261.
Through December 31, 2024, 226,250
pre-funded warrants were exercised and 82,105
remained outstanding and the remaining warrants were exercised in February 2025.

 On October 15, 2024 the Company and a holder of
the Company's common stock reached an agreement for the return by the holder of 96,822
shares of common stock to the Company. The holder had exceeded the percentage of shares that they were permitted to hold of the
Company's common stock. In exchange for the return of the shares the Company issued a prefunded warrant for 96,822
shares. These warrants were outstanding at December 31, 2024, and were subsequently
exercised in February 2025.

 As discussed above, on October 18, 2024, the Company established the
ATM under which it can sell its common stock. As of December 31, 2024, the Company received net proceeds of $ 184,830 from the sale of
 68,921 shares of its common stock. The Company has received $ 8.8 million for the sale of 1,764,113 shares of common stock from January
1, 2025 to February 4, 2025 through our ATM.

 On February 6, 2025, the Company received net proceeds of $ 10,703,882
from the sale of 430,000
common stock units, which consisted of 430,000
shares of common stock and 430,000
fully exercisable five year warrants to purchase the Company's common stock at $ 2.00
per share, and 5,570,000
pre funded warrant units, which consisted of 5,570,000
pre-funded fully exercisable warrants with an exercise price of $ 0.00001
and 5,570,000
fully exercisable five year warrants to purchase the Company's common stock at $ 2.00
per share. Through March 28, 2025, 1,230,001 pre-funded warrants were exercised. The Company cannot sell additional shares through
our ATM for 120 days following this offering.

 Series A Convertible Preferred Stock

 On March 4, 2024, the Company designated 25,000
shares of Preferred Stock as Series A Convertible Preferred Stock with a par value of $ 0.00001 per share and exchanged the remaining May
2023 Notes (principal of $ 24,694,670) for Preferred Stock. For each $1,000 of May 2023 Note principal, one share of Preferred Stock was
issued with a stated value of $1,000, and any principal held by an investor below $1,000 was granted one additional share of Preferred
Stock. A total of 24,698 shares were issued in connection with the exchange. The Preferred Stock is initially convertible into share of
the Company's common stock at $1,064.00 per share. Conversion of Preferred Stock to common stock of the Company by the holders of
the Preferred Stock is limited based on ownership restrictions of either 4.99% or 9.99%. The conversion price is subject to adjustment
for anti-dilution provisions with an initial floor of $784.00 per share, subject to adjustment to $400.00 per share if stockholder approval
is received. The stockholders approved this adjustment at the 2024 annual meeting held on May 28, 2024.

 The Preferred Stock conversion price per share
is subject to adjustment in the event of a stock split based on the lowest 5-day daily VWAP in the five days subsequent to the completion
of a stock split. As a result of the reverse stock split completed on June 6, 2024, the conversion price of the Preferred Stock was adjusted
to $ 51.59.

 As of December
31, 2024, all of the Preferred Stock ( 24,698 Preferred Shares) have been converted for 279,043 shares of common stock.

 November 2023 Common Units and Pre-Funded Warrant Units

 On November 17, 2023, the Company sold (i) 93
common units ("Common Units"), each consisting of one share of the Company's common stock, a Series A warrant to purchase
one share of common stock at an initial exercise price of $19,800.00 per share or pursuant to an alternative cashless exercise option
(described below), which warrant will expire on the five-year anniversary of the original issuance date (the "Series A Warrants")
and a Series B warrant to purchase one share of common stock at an initial exercise price of $30,240.00 per share, which warrant will
expire on the five-year anniversary of the original issuance date (the "Series B Warrants" and together with the Series A
Warrants, the "Warrants"); and (ii) 1,099 pre-funded units (the "Pre-funded Units" and together with the Common
Units, the "Units"), each consisting of one pre-funded warrant to purchase one share of common stock (the "Pre-funded
Warrants"), a Series A Warrant and a Series B Warrant. The purchase price of each Common Unit was $15,120.00, and the purchase price
of each Pre-Funded Unit was $15,119.64. The Pre-Funded Warrants were immediately exercisable and may be exercised at any time until all
of the Pre-Funded Warrants are exercised in full. As of December 31, 2023, 1,006 of the Pre-Funded Warrants were exercised and the remaining
Pre-Funded Warrants were exercised by January 9, 2024.

 In addition, the Company granted the underwriter
a 45-day option to purchase additional 179 shares of common stock and/or Pre-Funded Warrants, representing up to 15% of the number of
common stock and Pre-Funded Warrants sold in the Public Offering, and/or additional 24 Series A Warrants representing up to 15% of the
Series A Warrants sold in the Public Offering, and/or additional 24 Series B Warrants representing up to 15% of the Series B Warrants
sold in the Public Offering solely to cover over-allotments, if any. The underwriter partially exercised its over-allotment option with
respect to 24 Series A Warrants and Series B Warrants. A total of 441 each of Series A and B Warrants were issued in the transaction.
The net proceeds were approximately $ 16.2 million (gross proceeds of $18.0 million less fees and expenses of $1.8 million). The gross
proceeds and transaction cost were allocated to each of the instruments issued in the offering at their estimated relative fair values.
Transaction costs totaling $ 1,444,547 related to the Series A and Series B Warrants were expensed since these warrants were determined
to be liabilities and recorded at their estimated fair values (see Note 8).

 Series A Warrants

 Each Series A Warrant had an initial exercise
price per share equal to $ 19,800.00, was immediately exercisable upon issuance, and will expire on the five-year anniversary of the original
issuance date, or November 17, 2028.

 Share Combination Event Adjustments

 Conditioned upon the receipt
of the Warrant Stockholder Approval at a required special meeting of stockholders ("Special Meeting"), if at any time on or
after the date of issuance there occurs any share split, share dividend, share combination, recapitalization or other similar transaction
involving the Company's common stock (collectively a "Share Event") and the lowest daily VWAP during the five consecutive
trading days prior to the date of such event and the five consecutive trading days after the date of such event is less than the exercise
price then in effect, then the exercise price of the Series A Warrant shall be reduced to the lowest daily VWAP during such period and
the number of warrant shares issuable shall be increased such that the aggregate exercise price payable thereunder, after taking into
account the decrease in the exercise price, shall be equal to the aggregate exercise price on the date of issuance. Approval of this adjustment
by the stockholders was made on January 12, 2024.

 Cashless Exercise

 If at the time a holder exercises its Series A
Warrants, a registration statement registering the issuance of the shares of common stock underlying the Series A Warrants under the Securities
Act is not then effective or available and an exemption from registration under the Securities Act is not available for the issuance of
such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate
exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common
stock determined according to a formula set forth in the Series A Warrants.

 Conditioned upon the receipt of the Warrant Stockholder
Approval at a required Special Meeting, a holder of Series A Warrants may also provide notice and elect an "alternative cashless
exercise" pursuant to which they would receive an aggregate number of shares equal to the product of (x) the aggregate number of
shares of common stock that would be issuable upon a cash exercise of the Series A Warrant and (y) 3.0. Approval of this adjustment by
the stockholders was made on January 12, 2024.

 As discussed above, the Company completed a 1
for 45 reverse stock split on February 2, 2024. Prior to this reverse split, 24 Series A Warrants were exercised under the alternative
cashless exercise provision in the period from January 1, 2024 to February 2, 2024. As a result of the 1 for 45 reverse stock split, the
total number of Series A Warrants and exercise price for the remaining warrants was adjusted per the provisions of a Share Event and the
total number of Series A Warrants became 4,975 and the exercise price became $1,491.68. A total of 4,923 of the Series A Warrants were
exercised under the alternative cashless exercise provision subsequent to this reverse stock split and 53 remained outstanding prior to
the June 6, 2024 reverse stock split.

 The Company completed a 1 for 100 reverse stock
split on June 6, 2024. As a result of this reverse stock split, the total number of Series A Warrants and exercise price for the remaining
warrants was adjusted per the provisions of a Share Event and the total number of Series A Warrants became 1,520 and the exercise price
became $ 51.5888.

 The Company completed a 1 for 8 reverse stock
split on November 8, 2024. As a result of this reverse stock split, the total number of Series A Warrants and exercise price for the remaining
warrants was adjusted per the provisions of a Share Event and the total number of Series A Warrants became 8,517 and the exercise price
became $ 4.1866. These warrants remained outstanding at December 31, 2024.

 Series B Warrants

 Each Series B Warrant offered has an initial exercise
price per share equal to $ 30,240.00, was immediately exercisable upon issuance, and will expire on the five-year anniversary of the original
issuance date, or November 17, 2028.

 As a result of the reverse 1 for 45 stock split
completed on February 2, 2024, the total number of Series B Warrants and exercise price for the remaining warrants was adjusted per the
provisions of a Share Event and the total number of Series B Warrants became 8,922 and the exercise price became $1,491.68. A total of
88 of the Series B Warrants were exercised for proceeds of $130,522 and 8,834 remained outstanding as of March 4, 2024, when the Company
exchanged the May 2023 Notes for Series A Convertible Preferred Stock with a conversion price of $133.00 per share, as discussed above.
As a result of this exchange, the Series B Warrant amounts and exercise price were further adjusted based on certain anti-dilution provisions
and the new number of Series B Warrants is 18,183 and the exercise price is $724.72.

 On May 17, 2024, the Company entered into separate
warrant amendment agreements (collectively, the "Warrant Amendment") with the holders of a majority-in-interest of the holders
of the Company's Series B warrants issued November 2023. Pursuant to the Warrant Amendment, all outstanding Series B Warrants were
amended to delete the following sections: (i) a provision providing for the adjustment of the exercise price and number of shares issuable
pursuant to the Series B Warrants if the Company completed a future offering at a price per share less the exercise price of the Series
B Warrants then in effect; and (ii) a provision providing for the adjustment of the exercise price and number of shares issuable pursuant
to the Series B Warrants if price of the Company's common stock after the completion of a share split, share dividend, share combination,
recapitalization or other similar transaction is less the exercise price of the Series B Warrants then in effect. In addition, the Warrant
Amendment provides that the holders may also exercise the Series B Warrants on a cashless basis and receive an aggregate number of shares
equal the product of the aggregate number of shares of common stock that would be issuable upon exercise of the Series B Warrants by means
of a cashless exercise rather than a cash exercise, multiplied by 0.81.

 On May 17, 2024, after giving effect to the Warrant
Amendment, the Company and certain holders of Series B Warrants to purchase an aggregate of 17,222 shares of common stock (the "Holders")
entered into separate exchange agreements (the "Agreements") pursuant to which the Company agreed to exchange the Series B
Warrants held by the Holders for shares of Company common stock (or, at the option of the Holder, pre-funded warrants) at a ratio of 0.81
shares of Company common stock (or, at the option of the Holder, pre-funded warrants) for each whole Series B Warrant. A total of 9,178
pre-funded warrants with an exercise price of $ 0.001 and 4,773 shares of common stock were issued to the Holders.

 As of December
31, 2024, 141 Series B Warrants remain outstanding and all of the pre-funded warrants have been fully exercised.

 Other Warrants

 As discussed in Note 6, the Company issued the
Note Warrants, which were fully vested, to purchase 51 shares of the Company's common stock at an initial exercise price of $ 513,000.00.
The Note Warrants expire August 24, 2027. Also, the Company issued to the placement agent of the Convertible Notes, fully vested warrants
to purchase 4 shares of the Company's common stock at an exercise price of $ 641,250.00. The warrants were not exercisable until
February 24, 2023 and expire on February 24, 2028. The Company valued all of these warrants using the closing price of the Company's
common stock on August 24, 2022 of $439,200.00, volatility of 79.81% based on peer companies, risk free interest rate of 3.03%, no dividends
and an estimated life of 2.5 years.

 In May 2023, all of the Note Warrants to purchase 51 shares of the
Company's common stock were exchanged for Exchange Warrants to purchase 95 shares of the Company's common stock with an initial
exercise price of $196,200.00 per share (which was adjusted to $135,000.00 per share upon stockholder approval which was received on August
3, 2023). The Exchange Warrants expire August 24, 2027. In 2023 and 2024 certain holders of the Exchange Warrants exercised 32 of these
warrants. On November 8, 2024 holders of the remaining 63 warrants notified the Company that they were forfeiting these warrants.

 Also in May 2023, in connection with the issuance
of the New Notes, the Company also issued New Warrants (together with the Exchange Warrants the "May 2023 Warrants") to purchase
 31 shares of common stock at an initial exercise price of $196,200.00 (which was adjusted to $135,000.00 per share upon stockholder approval
which was received on August 3, 2023). The exercise price of the May 2023 Warrants were further adjusted due to the reverse 1 for 5,
1 for 45, 1 for 100 and 1 for 8 reverse stock splits completed in October 2023, February 2024, June 2024 and November 2024, respectively,
and for the issuance of the Preferred Stock discussed above to $51.59. On November 8, 2024 the holder of these warrants notified the
Company that it was forfeiting these warrants.

 As noted below, 11 of the Exchange Warrants were
exercised at a price of $63,000.00 per share and 11 Reload Warrants were issued with an exercise price of $ 90,000.00 per share. In October
2023, the Reload warrant exercise price was reduced to $49,284.00. The Reload warrants expire August 24, 2027. Due to the reverse 1 for
100 stock split completed in June 2024 and the 1 for 8 reverse stock split completed on November 8, 2024, the exercise price of the Reload
Warrants was adjusted to $51.59. On November 8, 2024 the holders of the Reload Warrants notified the Company that they were forfeiting
these warrants.

 On October 13, 2023, the Company entered into
an amendment (the "Amendment") to its Stag UTV development and Stag supplier agreements with GLV Ventures ("GLV").
Pursuant to the Amendment, GLV agreed to provide the Company with extended payment terms and provide the Company with credit against new
vehicles for the value of certain parts purchased by the Company. In consideration for entering into the Amendment No. 1, the Company
agreed to issue GLV (or its designee) five-year warrants to purchase 12 shares of Company common stock with an exercise price of $75,600.00
per share, which was equal to the closing price of the Company's common stock on the date of the Amendment No. 1, 6 warrants were
fully vested upon issuance and the remaining warrants vested 45 days from the issuance date.

 Warrant Inducements

 On October 13, 2023, the Company
entered into an inducement offer letter agreement (the "Inducement Letter") with the three holders (each, a "Holder")
of the May 2023 Warrants. The Company agreed to reduce the exercise price of up to 28 these warrants to the lesser of (i) $63,000.00 (after
giving effect to the stock splits noted above) and (ii) the exercise price in effect at the time of exercise of the Existing Warrants
if further adjusted in accordance with the terms of the May 2023 Warrants ($49,284.00 per share after adjustment for the lowest day's
VWAP for the five days following the reverse stock split). The reduction of the exercise price of such Existing Warrants remained in effect
until October 27, 2023 (the "Inducement Period"). In addition, pursuant to the Inducement Letter, the Holders who exercise
such Existing Warrants for cash on or prior to October 27, 2023 would receive a new warrant ("Reload Warrant") to purchase
the same number of shares of common stock equal to the number of shares of common stock exercised and at the same exercise price as the
Existing Warrants. The exercise price for any Warrants not exercised prior to the end of the Inducement Period would not result in a change
in the exercise price under the original terms of the Existing Warrants. The Holders exercised 5 warrants of the 28 warrants available
for exercise. Due to the reverse 1 for 100 stock split completed in June 2024 and the reverse 1 for 8 stock split completed in November
2024, the exercise price of the remaining Existing Warrants not exercised in this inducement and the Reload Warrants granted for the Existing
Warrants exercised were adjusted to $51.59. On November 8, 2024, the holders of the Reload Warrants notified the Company that they were
forfeiting these warrants.

 On October 29, 2023, in an effort
to raise cash, the Company entered into an inducement offer letter agreement (the "Inducement Reprice Letter") with the Holders
of the Company's May 2023 Warrants. Pursuant to the Inducement Reprice Letter, in exchange for an aggregate cash payment of $ 346,500,
the Company reduced the exercise price with respect to May 2023 Warrants exercisable into an aggregate of 12 shares of common stock from
$49,284 per share to $360.00 per share. On January 10, 2024, the Holders exercised these warrants.

 As discussed in Note 7, the Company issued the
May 2024 Note Warrants on May 22, 2024, which are fully vested, to purchase 12,686 shares of the Company's common stock at an exercise
price of $ 232.00. The Note Warrants are initially exercisable on November 23, 2024 and expire on November 23, 2029. The Company valued
these warrants using the closing price of the Company's common stock on May 22, 2024 of $176.00, volatility of 155.00% the Company's
historical volatility, risk free interest rate of 4.47%, no dividends and a life of 5.5 years.

 The following is the activity related to common
stock warrants during the year ended December 31, 2024:

 Schedule of warrants activity

 Common Stock Warrants

 Shares

 Weighted
 Average
 Exercise
 Price

 Weighted
 Average
 Remaining
 Life in years

 Intrinsic Value

 Outstanding at January 1, 2024

 7,041

 $
 2,551.75

 Granted

 452,980

 $
 30.55

 Forfeited

 ( 110
)

 $
 51.59

 Expired

 –

 $
 –

 Exercised

 ( 259,579
)

 $
 51.83

 Outstanding at December 31, 2024

 200,332

 $
 91.58

 4.65

 $
 781,897

 Exercisable at December 31, 2024

 200,332

 $
 91.58

 4.65

 $
 781,897

 NOTE 11 – STOCK-BASED COMPENSATION

 In January 2021, the Company's board of
directors adopted the Volcon, Inc. 2021 Stock Plan, (the "2021 Plan"). The 2021 Plan is a stock-based compensation plan that
provides for discretionary grants of stock options, stock awards, and restricted stock unit ("RSU") awards to employees, members
of the board of directors and consultants (including restricted stock units issued prior to the adoption of the plan as further discussed
below). The Company has reserved 39 shares of the Company's common stock for issuance under the 2021 Plan. To the extent that an
award, if forfeitable, expires, terminates or lapses, or an award is otherwise settled in cash without the delivery of shares of common
stock to the participant, then any unpaid shares subject to the award will be available for future grant or issuance under the 2021 Plan.
There are no shares available for issuance under the 2021 Plan as of December 31, 2024. Awards vest according to each agreement and as
long as the employee remains employed with the Company or the consultant continues to provide services in accordance with the terms of
the agreement.

 Restricted Stock Units

 There were no restricted stock units outstanding
in 2024 and no expense was recognized for RSUs in 2024. In February 2023, 1 RSU was subject to cancellation due to termination of employment.
However, the Company entered into a modification to allow the employee to fully vest in this RSU as part of a severance agreement. The
Company recorded additional expense of $ 31,487 in the year ended December 31, 2023 related to this modification.

 For the year ended December 31, 2023, the Company
recognized expense for RSUs of $ 61,623.

 Performance Shares

 In 2022 the compensation committee approved reserving
 2 shares from the 2021 Plan to issue based on achievement of the Company's 2022 performance milestones to employees who are employed
in 2022 and were active employees on the date of approval in 2023 by the compensation committee. On February 6, 2023 the compensation
committee of the board of directors approved a grant of 1 share for the achievement of some of the Company's 2022 performance milestones.
The Company recognized share-based compensation expenses of $ 257,717 related to the grant of these shares in the year ended December 31,
2023.

 In addition, the compensation committee also approved
reserving 2 shares from the 2021 Plan to issue to employees based on achievement of the Company's 2023 performance milestones to
employees who were employed in 2023 and are active employees on the date of approval in 2024 by the compensation committee. No shares
were approved for grant by the compensation committee for 2023 performance milestones.

 Stock Options

 The following summarizes activity relating to
common stock options to employees and consultants for services during the year ended December 31, 2024:

 Schedule of stock options activity

 Common Stock Options

 Shares

 Weighted
 Average
 Exercise
 Price

 Weighted
 Average
 Remaining
 Life in years

 Intrinsic Value

 Outstanding at January 1, 2024

 $
 354,819.26

 Granted*

 6,251

 $
 13.61

 Forfeited

 ( 11
)

 $
 85,854.55

 Canceled

 ( 17
)

 $
 460,849.41

 Outstanding at December 31, 2024

 6,284

 $
 1,775.40

 9.61

 $

 Exercisable at December 31, 2024

 $
 325,739.12

 7.63

 $

 *

 Includes 6,250 inducement options granted outside of the 2021 Plan.

 The Company valued the options using the closing
stock price of the Company's common stock on the date of grant and the following assumptions:

 Schedule of assumptions

 2024

 2023

 Volatility (based on the Company's volatility in 2024 and peer companies in 2023)

 152 % - 170 %

 79 % - 83 %

 Risk free interest rate

 4.0 % - 4.5 %

 3.54 % - 4.77 %

 Dividends

 None

 None

 Estimated life in years

 During the years ended December 31, 2024 and 2023,
the Company recognized share-based compensation expense of $ 310,961 and $ 1,896,585, respectively, related to common stock options. The
Company expects to recognize additional compensation expens e of $ 55,289 related to these
common stock options assuming all awards will vest.

 Total stock-based compensation recorded for the
year ended December 31, 2024 and 2023 for all stock-based compensation awards, including warrants, has been recorded as follows:

 Schedule of stock-based compensation expense

 2024

 2023

 Cost of Goods Sold

 $
 ( 11,827
)

 $
 211,981

 Sales and Marketing

 37,063

 693,559

 Product Development

 126,337

 837,271

 General and Administrative

 159,388

 885,114

 Total

 $
 310,961

 $
 2,627,925

 NOTE 12 – LOSS PER COMMON SHARE

 The basic net loss per common share is calculated
by dividing the Company's net loss available to common stockholders by the weighted average number of common shares during the year.
The diluted net loss per common share is calculated by dividing the Company's net loss available to common stockholders by the diluted
weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding
is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. Diluted net loss per common share
is equal to basic net loss per share due to the Company's net loss and any potentially issuable shares are anti-dilutive.

 Schedule of loss per common share

 2024

 2023

 Numerator:

 $
)

 $
 ( 45,071,210
)

 Denominator:

 Denominator for basic and diluted net loss per common share - weighted average of common shares

 309,798

 Basic and diluted net loss per common share

 $
 ( 146.90
)

 $
 ( 187,796.71
)

 As discussed in Note 2 above, the Company received
notice from DTCC on behalf of the brokerage firms that hold the shares of Company common stock held in "street name" that
in connection with the foregoing rounding of shares the Company would need to issue 188,950 shares of common stock which are not included
in the amounts above. If these shares had been issued as of November 19, 2024 when notice from DTCC was received, the amounts for basic
and diluted net loss per common share for 2024 would be as follows:

 Schedule of loss per common share

 Denominator:

 Denominator for basic and diluted net loss per common share - weighted average of common shares

 $
 331,997

 Basic and diluted net loss per common share

 $
 ( 137.08
)

 Common shares consisting of shares potentially
dilutive as of December 31, 2024 and 2023 are as follows:

 Schedule of common shares consisting of shares potentially dilutive

 2024

 2023

 Convertible Notes

 –

 Warrants

 200,332

 7,041

 Stock options

 6,284

 Total

 206,616

 7,754

 NOTE 13 – INCOME TAXES

 Deferred taxes are determined by applying the
provisions of enacted tax laws and rates for the jurisdictions in which the Company operates to the estimated future tax effects of the
differences between the tax basis of assets and liabilities and their reported amounts in the Company's financial statements. A
valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not
be realized.

 Due to losses since inception and for all periods
presented, no income tax benefit or expense has been recognized as a full valuation allowance has been established for any tax benefit
that would have been recognized for the loss in any period presented.

 The components of income tax expense (benefit)
for the year ended December 31, 2024 and 2023 are as follows:

 Schedule of components of income tax expense (benefit)

 2024

 2023

 Expected federal income tax benefit at statutory rate

 $
 ( 9,557,165
)

 $
 9,464,954

 Non-deductible expenses

 3,594,293

 1,183,767

 Write off of deferred tax asset for stock-based compensation

 3,235,732

 –

 Return to provision and true ups

 345,266

 108,959

 Change in valuation allowance

 2,381,874

 ( 10,757,680
)

 Income tax benefit

 $
 –

 $
 –

 The non-deductible expenses for the year ended
December 31, 2024 includes the loss on the extinguishment of the Convertible Notes of $ 345,998, interest expense on the Convertible Notes
of $ 66,116, and loss recognized on the November 2023 Warrants classified as liabilities of $ 3,101,361, and other non-deductible expenses
of $ 80,818. Due to the impact of the reverse stock split in June 2024 on the adjusted number of outstanding options and exercise prices,
the Company concluded that it was a remote possibility that any options will be exercised and therefore wrote off the deferred tax asset
and related valuation allowance for stock-based compensation.

 Significant components of the Company's
deferred tax assets and liabilities at December 31, 2024 and December 31, 2023 are as follows:

 Schedule of deferred tax assets and liabilities

 2024

 2023

 Deferred tax assets

 Net operating losses

 $
 20,932,619

 $
 15,468,757

 Debt basis difference

 –

 5,121,397

 Depreciation and amortization

 1,562,438

 1,701,768

 Research & development credit

 1,099,535

 1,099,535

 Lease liability

 162,786

 246,704

 Stock-based compensation

 –

 3,235,732

 Inventory

 –

 152,749

 Accrued expenses

 94,561

 66,909

 Capital loss carryover

 178,442

 176,950

 Dealer rebates

 12,052

 459,713

 Vendor settlements and reserves

 689,253

 –

 Other

 29,502

 21,828

 Total

 24,761,188

 27,752,042

 Valuation allowance

 ( 24,431,492
)

 ( 27,171,016
)

 Net deferred tax asset

 329,696

 581,026

 Deferred tax liabilities

 Prepaid expenses

 ( 174,457
)

 ( 342,421
)

 Right-of-use assets

 ( 155,239
)

 ( 238,605
)

 Total net deferred taxes deferred tax liabilities

 $
 –

 $
 –

 Management currently believes that since the Company
has a history of losses it is more likely than not that the deferred tax regarding the loss carry forwards and other temporary differences
will not be realized in the foreseeable future. The utilization of the Company's net operating losses and credit carryovers may
be subject to limitation due to the "change in ownership provisions" under Section 382 of the Internal Revenue Code. The Company's
cumulative net operating loss carry forward of $ 99.7 million as of December 31, 2024, may be limited in future years depending on future
taxable income in any given fiscal year. The net operating losses can be carried forward indefinitely.

 The Company has recorded no liability for income
taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized
tax benefits. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit.

 NOTE 14 – LEASES

 The components of lease cost for operating leases
for the year ended December 31, 2024 and 2023 is as follows:

 Schedule of lease cost
for operating leases

 2024

 2023

 Lease Cost

 Operating lease cost

 $
 468,996

 $
 468,997

 Short-term lease cost

 169,051

 215,289

 Total lease cost

 $
 638,047

 $
 684,286

 Supplemental cash flow information related to
leases for the year ended December 31, 2024 and 2023, is as follows:

 Schedule of supplemental cash flow information related to leases

 2024

 2023

 Other Lease Information

 Cash paid for amounts included in the measurement of lease liabilities:

 Operating cash flows from operating leases

 $
 399,609

 $
 359,347

 Amortization of right-of-use assets

 $
 396,979

 $
 369,774

 The following table summarizes the lease-related
assets and liabilities recorded on the balance sheet at December 31, 2024 and December 31, 2023:

 Schedule of lease-related assets and liabilities

 2024

 2023

 Lease Position

 Operating Leases:

 Operating lease right-of-use assets

 $
 739,234

 $
 1,136,213

 Right-of-use liabilities operating leases short-term

 443,950

 399,611

 Right-of-use liabilities operating leases long-term

 331,222

 775,170

 Total operating lease liabilities

 $
 775,172

 $
 1,174,781

 The Company utilizes the incremental borrowing
rate in determining the present value of lease payments unless the implicit rate is readily determinable.

 Schedule of present value lease payments

 Lease Term and Discount Rate

 December 31, 2024

 Weighted-average remaining lease term (years):

 Operating leases

 1.7

 Weighted-average discount rate:

 Operating leases

 6.82 %

 The following table provides the maturities of lease liabilities
at December 31, 2024:

 Schedule of maturities of lease liabilities

 Operating

 Leases

 2025

 485,702

 2026

 340,591

 Total future undiscounted lease payments

 826,293

 Less: Interest

 ( 51,121
)

 Present value of lease liabilities

 $
 775,172

 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.

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures

 Our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit
under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the appropriate time periods,
and that such information is accumulated and communicated to the Chief Executive Officer, who is our principal executive officer, and
Chief Financial Officer, who is our principal financial officer, as appropriate, to allow timely discussions regarding required disclosure.
We, under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer,
have evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were ineffective as of December
31, 2024.

 Management's Report on Internal Control
over Financial Reporting

 Management is responsible for establishing and
maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United
States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions or because the degree of compliance with policies or procedures may deteriorate.

 Management has determined that internal controls
over financial reporting are ineffective as the material weaknesses identified by our independent registered public accounting firm in
our internal control over financial reporting in our 2020 audit have not been remediated as of December 31, 2024. These material weaknesses
are as follows:

 Inadequate segregation of duties within account processes due to limited personnel

 Insufficient formal written policies and procedures for accounting, IT, financial reporting and record keeping

 This Annual Report on Form 10-K does not include
an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for an "emerging
growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the
Jumpstart Our Business Startups Act of 2012

 Changes in Internal Control Over Financial Reporting

 There were no changes to our internal control over
financial reporting during the three months ended December 31, 2024, that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.

 ITEM 9B. OTHER INFORMATION

 During the three months ended December 31, 2024,
no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading
arrangement," as each term is defined in Item 408(a) of Regulation S-K.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS

 Not applicable.

 ITEM 10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE

 Information as to Item 10 is incorporated by reference
from the information in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, which we will file pursuant
to Regulation 14A with the SEC within 120 days after the close of the year ended December 31, 2024.

 We have adopted a Code of Ethics, which is applicable
to all directors, officers and employees, including our Chief Executive Officer and Chief Financial Officer. The code is available on
our corporate web site at  and in print to any stockholder who requests a copy. To
the extent required by SEC rules, we intend to disclose any amendments to our Code of Ethics, and any waiver of a provision of the code
with respect to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing
similar functions, on our web site referred to above within four business days following any such amendment or waiver, or within any other
period that may be required under SEC rules from time to time.

 We have adopted
an Insider Trading Policy. A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report.

 ITEM 11. EXECUTIVE COMPENSATION

 Information as to Item 11 is incorporated by reference
from the information in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, which we will file pursuant
to Regulation 14A with the SEC within 120 days after the close of the year ended December 31, 2024.

 ITEM 12. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 Information as to Item 12 is incorporated by reference
from the information in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, which we will file pursuant
to Regulation 14A with the SEC within 120 days after the close of the year ended December 31, 2024.

 ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 Information as to Item 13 is incorporated by reference
from the information in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, which we will file pursuant
to Regulation 14A with the SEC within 120 days after the close of the year ended December 31, 2024.

 ITEM 14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES

 Information as to Item 14 is incorporated by reference
from the information in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, which we will file pursuant
to Regulation 14A with the SEC within 120 days after the close of the year ended December 31, 2024.

 ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

 (1) Financial Statements

 The consolidated financial statements of Volcon,
Inc. and the Report of Independent Registered Public Accounting Firm are included in Part II, "Item 8.— Financial Statements
and Supplementary Data" of this Annual Report. Reference is made to the accompanying Index to Financial Statements.

 (2) Financial Statement Schedules

 All financial statement schedules have been omitted,
since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because
the information required is included in the consolidated financial statements and notes thereto.

 (3) Index to Exhibits

 The information required by this Item 15(a)(3)
is set forth on the exhibit index, which immediately precedes the signature page to this report and is incorporated herein by reference.

 ITEM 16. FORM 10-K SUMMARY

 We have elected not to provide summary information.

 INDEX TO EXHIBITS

 Exhibit

 Number

 Description

 3.1

 Amended and Restated Certificate of Incorporation of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed October 8, 2021)

 3.2

 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed June 15, 2023)

 3.3

 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed October 16, 2023)

 3.4

 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed February 5, 2024)

 3.5

 Form of Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed March 4, 2024)

 3.6

 Form of Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed March 25, 2024)

 3.7

 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed June 7, 2024)

 3.8

 Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed November 8, 2024)

 3.9

 Second Amended and Restated Bylaws of Volcon, Inc. (incorporated by reference to exhibit 3.1 of the Form 8-K filed April 5, 2024)

 4.1

 Form of common stock (incorporated by reference to exhibit 4.1 of the Form S-1 file number 333-259468)

 4.2

 Form of Warrant issued to Pink Possum, LLC and Highbridge Consulting, LLC (incorporated by reference to exhibit 4.2 of the Form S-1 file number 333-259468)

 4.3

 Form of Underwriter Warrant (incorporated by reference to exhibit 4.3 of the Form S-1 file number 333-262343)

 4.4

 Form of Underwriter Warrant issued in IPO (incorporated by reference to Exhibit 4.3 of the Form S-1 file number 333-259468)

 4.5

 Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 10.4 of the Form 8-K filed with the SEC on August 24, 2022)

 4.6

 Placement Agent Warrant (incorporated by reference to Exhibit 10.6 of the Form 8-K filed with the SEC on August 24, 2022)

 4.7

 Form of New Warrants issued in May 2023 (incorporated by reference to Exhibit 4.2 of the Form 8-K filed with the SEC on May 22, 2023)

 4.8

 Form of Exchange Warrants issued in May 2023 (incorporated by reference to Exhibit 4.4 of the Form 8-K filed with the SEC on May 22, 2023)

 4.9

 Form of Underwriter Warrant dated September 15, 2023, with Aegis Capital Corp. (incorporated by reference to Exhibit 4.1 of the Form 8-K filed with the SEC on September 18, 2023)

 4.10

 Form of New Warrants issued in September 2023 warrant inducement (incorporated by reference to Exhibit 4.1 of the Form 8-K filed with the SEC on October 2, 2023)

 4.11

 Form of Warrant issued to GLV Ventures (incorporated by reference to Exhibit 4.1 of the Form 8-K filed with the SEC on October 16, 2023)

 4.12

 Form of Pre-Funded Warrant issued in November 2023 (incorporated by reference to exhibit 4.1 of Form 8-K filed on November 20, 2023)

 4.13

 Form of Series A Warrant issued in November 2023 (incorporated by reference to exhibit 4.2 of Form 8-K filed on November 20, 2023)

 4.14

 Form of Series B Warrant issued in November 2023 (incorporated by reference to exhibit 4.3 of Form 8-K filed on November 20, 2023)

 4.15

 Form of Series B Warrant Amendment (incorporated by reference to exhibit 4.1 of Form 8-K filed on May 17, 2024)

 4.16

 Form of Amended and Restated Warrant issued in November 2023 (incorporated by reference to exhibit 4.5 of Form 8-K filed on November 20, 2023)

 4.17

 Form of Pre-Funded Warrant issued in May 2024 (incorporated by reference to exhibit 4.2 of Form 8-K filed on May 17, 2024)

 4.18

 Form of Notes issued in May 2024 (incorporated by reference to exhibit 4.1 of Form 8-K filed on May 20, 2024)

 4.19

 Form of Warrants issued in May 2024 (incorporated by reference to exhibit 4.2 of Form 8-K filed on May 20, 2024)

 4.20

 Form of Pre-Funded Warrants issued in July 2024 (incorporated by reference to exhibit 4.1 of Form 8-K filed on July 12, 2024)

 4.21

 Form of Pre-Funded Warrants issued in October 2024 (incorporated by reference to exhibit 4.1 of Form 8-K filed on October 16, 2024)

 4.22

 Form of Warrants issued in February 2025 (incorporated by reference to exhibit 4.1 of Form 8-K filed on February 6, 2025)

 4.23

 Form of Pre-Funded Warrants issued in February 2025 (incorporated by reference to exhibit 4.2 of Form 8-K filed on February 6, 2025)

 4.24*

 Description of Registrant's Securities

 10.1

 2021 Stock Plan of Volcon, Inc., as amended (incorporated by reference to exhibit 10.1 of the Form S-1 file number 333-259468)

 10.2

 Consulting Agreement, as amended, between Volcon, Inc. and Highbridge Consulting, LLC (incorporated by reference to exhibit 10.3 of the Form S-1 file number 333-259468)

 10.3

 Employment Agreement between Volcon, Inc. and Greg Endo dated January 30, 2024 (incorporated by reference to exhibit 10.2 of the Form 8-K filed February 5, 2024)

 10.4

 Employment Agreement between Volcon, Inc. and Jordan Davis dated August 5, 2021 (incorporated by reference to exhibit 10.8 of the Form S-1 file number 333-259468)

 10.5

 Placement Agent Agreement for Convertible Notes (incorporated by reference to exhibit 10.5 of the Form 8-K filed August 24, 2022)

 10.6

 Amendment to the Volcon, Inc. 2021 Stock Plan (as amended and restated) (incorporated by reference to exhibit 10.1 of the Form 8-K filed July 27, 2022)

 10.7

 Underwriting Agreement by and among Volcon, Inc. and Aegis Capital Corp., dated January 28, 2022 (incorporated by reference to exhibit 1.1 of Form 8-K filed on April 28, 2022)

 10.8

 Placement Agent Agreement by and among the Company and Aegis Capital Corp. (incorporated by reference to Exhibit 10.3 of the Form 8-K filed with the SEC on May 22, 2023)

 10.9

 Underwriting Agreement by and among Volcon, Inc. and Aegis Capital Corp., dated May 22, 2022 (incorporated by reference to exhibit 1.1 of Form 8-K filed on May 25, 2023)

 10.10

 Amendment No. 2 to the Volcon, Inc. 2021 Stock Plan (as amended and restated) (incorporated by reference to exhibit 10.1 of the Form 8-K filed July 14, 2023)

 10.11

 Form of Indemnification Agreement with the Company's directors and executive officers (incorporated by reference to Exhibit 10.1 of the Form 8-K filed with the SEC on September 12, 2023)

 10.12

 Underwriting Agreement by and among Volcon, Inc. and Aegis Capital Corp., dated September 15, 2023 (incorporated by reference to exhibit 1.1 of Form 8-K filed on November 20, 2023)

 10.13

 Underwriting Agreement by and among Volcon, Inc. and Aegis Capital Corp., dated November 16, 2023 (incorporated by reference to exhibit 1.1 of Form 8-K filed on November 20, 2023)

 10.14

 Employment Agreement between Volcon, Inc. and John Kim dated January 30, 2024 (incorporated by reference to exhibit 10.2 of the Form 8-K filed February 5, 2024)

 10.15

 Consulting Agreement between Volcon, Inc. and Jordan Davis dated February 1, 2024 (incorporated by reference to exhibit 10.3 of the Form 8-K filed February 5, 2024)

 10.16

 Form of Note Exchange Agreement dated March 3, 2024 (incorporated by reference to exhibit 10.1 of Form 8-K filed on March 4, 2024)

 10.17

 Form of Exchange Agreement dated May 17, 2024 (incorporated by reference to exhibit 10.1 of Form 8-K filed on May 17, 2024)

 10.18

 Form of Securities Purchase Agreement by and among the Company and the Investors, dated May 20, 2024 (incorporated by reference to exhibit 10.1 of Form 8-K filed on May 20, 2024)

 10.19

 Placement Agency Agreement dated May 19, 2024 (incorporated by reference to exhibit 10.2 of Form 8-K filed on May 20, 2024)

 10.20

 Form of Securities Purchase Agreement by and among the Company and the Investors, dated July 11, 2024 (incorporated by reference to exhibit 10.1 of Form 8-K filed on July 12, 2024)

 10.21

 Placement Agency Agreement dated July 11, 2024 (incorporated by reference to exhibit 10.2 of Form 8-K filed on July 12, 2024)

 10.22

 Form of Exchange Agreement dated October 15, 2024 (incorporated by reference to exhibit 10.1 of Form 8-K filed on October 16, 2024)

 10.23

 At-The-Market Issuance Sales Agreement, dated October 18, 2024, by and between Volcon, Inc. and Aegis Capital Corp. (incorporated by reference to exhibit 1.1 of Form 8-K filed on October 18, 2024)

 10.24*+

 Settlement Agreement and Mutual Release dated December 6, 2024 between and among Volcon, Inc. and GLV Ventures

 10.25

 Distribution Agreement, dated January 31, 2025, by and between Volcon, Inc. and Super Sonic Company Limited (incorporated by reference to exhibit 10.1 of Form 8-K filed on February 4, 2025)

 10.26

 Underwriting Agreement, dated February 5, 2025, with Aegis Capital (incorporated by reference to exhibit 1.1 of Form 8-K filed on February 6, 2025)

 10.27

 Supplier Agreement, dated February 25, 2025, by and between Volcon, Inc. and Venom-EV (incorporated by reference to exhibit 10.1 of Form 8-K filed on February 27, 2025)

 19.1*

 Volcon, Inc. Insider Trading Policy

 21.1

 List of subsidiaries (incorporated by reference to exhibit 21.1 of the Form S-1 file number 333-259468)

 23.1*

 Consent of MaloneBailey LLP

 31.1*

 Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

 31.2*

 Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

 32.1*(1)

 Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2*(1)

 Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 Dodd-Frank Restatement Recoupment Policy (incorporated by reference to exhibit 97 of Form 10-K filed on March 28, 2024)

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 *

 Filed herewith.

 +

 Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit.

 Indicates management contract or compensatory plan, contract or arrangement.

 (1)

 The certifications on Exhibit 32 hereto are deemed not "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

 SIGNATURES

 Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 SIGNATURE

 TITLE

 DATE

 /s/ John Kim

 Chief Executive Officer and Director

 March 31, 2025

 John Kim

 (principal executive officer)

 /s/ Greg Endo

 Chief Financial Officer

 March 31, 2025

 Greg Endo

 (principal financial and accounting officer)

 Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on March
31, 2025.

 Signature

 Title

 /s/ John Kim

 Chief Executive Officer

 John Kim

 (Principal Executive Officer)

 Director

 /s/ Greg Endo

 Chief Financial Officer

 Greg Endo

 (Principal Financial Officer and

 Principal Accounting Officer)

 /s/ Karin-Joyce Tjon

 Chairman of the Board, Director

 Karin Joyce Tjon

 /s/ Jonathan P. Foster

 Director

 Jonathan P. Foster

 /s/ Adrian Solgaard

 Director

 Adrian Solgaard

 /s/ Orn Olason

 Director

 Orn Olason