In October 2022, Volcon, Inc. entered into a distribution agreement and co-branding agreement with Torrot Electric Europa, S.A., which provided that the Company would be the exclusive distributor of Torrot and Volcon co-branded youth electric motorcycles in the United States and Latin America. In January 2024, the Company proposed a settlement offer after discussions held between both companies regarding the termination of the Distribution Agreement. In response to the Company?s notification, Torrot informed the Company that it believed the Company had not satisfied its obligations under the Distribution Agreement, that the Company?s termination of the Distribution Agreement would cause Torrot provable damages of not less than $3.691 million, and that Torrot intended to commence legal action in Barcelona, Spain.

The Company has disputed the claims made by Torrot and intends to vigorously defend against the claims made in any legal proceeding.