Volcon, Inc.

Kurta Law is investigating broker recommendations of Volcon, Inc. (NASDAQ: VLCN). These investments were high-risk and may have been unsuitable for many investors. Unsuitable investments violate FINRA Rule 2111, which requires brokers to consider their investor’s risk tolerance. Regulation Best Interest also requires brokers to exercise reasonable care and skill when they make recommendations.

If a broker recommended unsuitable investments to you, you may have a case for a securities lawyer. Call (877) 600-0098 or email info@kurtalawfir.com for a free case evaluation.

About Volcon, Inc.

According to the prospectus, Volcon Inc. is an all-electric, off-road vehicle company that is developing and building electric, two and four-wheel motorcycles and utility terrain vehicles. At the time of the prospectus, Volcon Inc. was preparing to sell off-road motorcycles called “the Grunt” and “the Runt.”

The Offering

According to the prospectus dated April 19, 2024, Volcon Inc. was offering 3,025,000 shares of common stock for $5.50 per share. As of April 19, 2024, Volcon Inc. stock traded for $0.22 per share.

Risks Related to Volcon Inc. Stock Offering

The prospectus states, “Investing in our common stock involves a high degree of risk. You should carefully consider the following risks.” All of the following information was readily available to brokers.

Losses from Operations

According to the prospectus, losses from operations could continue to raise substantial doubt regarding the firm’s ability to continue as a going concern.

Internal Control Over Financial Reporting

In connection with an audit, the company’s auditor identified material weaknesses in Volcon Inc.’s internal control over financial reporting. This included inadequate segregation of duties within account processes due to limited personnel.

Early-Stage Company

At the time of the prospectus, Volcon. Inc. had not yet delivered any vehicles to customers. It was taking orders for Grunt, and if that vehicle failed to perform as expected, the company’s reputation could be harmed.

Unproven Appeal to Customers

The prospectus points out that the company’s ability to produce vehicles of sufficient quality and appeal to customers was as yet unproven.

Delays or Complications in Design, Manufacture and Launch

We may encounter unanticipated challenges, such as supply chain constraints, that lead to initial delays in producing our vehicles and ramping up or our production.

Suppliers

Volcon Inc., is dependent on its suppliers, the majority of which are single-source suppliers. The inability of these suppliers to deliver necessary components could have an adverse effect on the company’s financial condition and operating results.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.