Volcon reports 2022 financial and operational results
Volcon Inc. recently reported its operational highlights and financial results for the fiscal year 2022. The company’s revenue for fiscal 2022 was $4.6 million compared to $0.4 million for fiscal 2021. Volcon expects both the Grunt EVO and Runt to be available for sale in the second quarter of 2023.
Jordan Davis, CEO notes, “In the fourth quarter of 2022, we purposely slowed signing of powersports dealers as we expected product shortages as we transitioned the manufacturing of the Grunt to a third party manufacturer and dealt with the shortage of certain parts due to supply chain delays. In February 2023, we hired two new regional sales managers who will cover the Northeast and Southwest US, including California, where we already have dealers who have expressed an interest in carrying the Volcon product lineup.”
Davis continues: “We have also hired a regional sales manager to build our dealer network in Canada. We expect to have over 250 dealers in the US and Canada signed by the end of 2023. Pre-orders and interest for the Stag from dealers and consumers continue to be strong. As of the date of our third-quarter earnings release, we had received pre-orders exceeding our initial planned production volume for 2023 and we continued to take waitlist orders from interested dealers and end users alike during the fourth quarter of 2022.”
The Volcon Brat was launched in September 2022, and they began taking pre-orders during the third quarter of 2022, Davis notes. “We began shipping the Brat to customers in December 2022 and we recognized revenue of approximately $500,000 in the fourth quarter of 2022. In February 2023, we began selling Brats on a direct-to-consumer basis in the US. Customers can purchase a Brat from our website and have it delivered to a location specified by the customer. Davis notes “the launch of the Brat provides Volcon with an entry into the very popular E-Bike product category and it’s another way to connect with consumers who are interested in electric vehicle options.”
The Stag’s development progressed during the fourth quarter of 2022 and into early 2023. In early 2023, Volcon took delivery of the first three Stag validation units that include the Volcon-designed suspension, GM propulsion components, as well as Elka shocks.
Christian Okonsky, Chief Technology Officer notes, “Although there is still significant design and validation work to be completed, these advanced validation units have met our expectations for design and engineering and we expect to see continued improvement as we field additional iterations.”
Delivery of the Stag is expected to begin late in the second quarter of 2023. In 2023, Volcon received the first prototypes of the Grunt EVO, the replacement for the Grunt, which includes replacing the chain drive with a Gates belt drive, an improved rear suspension and an ergonomically improved seat, as well as modifications to styling. The Grunt EVO will also be available in three colors.
“We have taken feedback from customers on the Grunt and improved the product with the new features included in the Grunt EVO. We are also excited to finally bring the Runt to market as there has been interest in this product since we first announced we would design and build it in 2020. While we abhor delays, it was in the best interest of the company and shareholders to redesign the bike and explore more profitable choices for manufacturing and component sourcing.”
– Jordan Davis, CEO
In 2023 Volcon also received the first prototypes of the Runt, a smaller version of the Grunt for smaller riders.
Revenue
Volcon’s revenue for the fourth quarter of 2022 was $0.8 million, an increase of $0.5 million over the third quarter 2022, and an increase of $0.4 million over the revenue for the fourth quarter of 2021. The increase over the third quarter of 2022 was partially due to promotional rebates provided to dealers and distributors in the third quarter of 2022 on inventory held by them as of August 1, 2022 resulting in $0.8 million being recorded to reduce revenue.
Total Grunt unit sales were lower in the fourth quarter of 2022 compared to the third quarter of 2022 due to supply chain impacts, the moving of Grunt manufacturing to a third party, and the intentional winding down of production and delivery of the Grunt to prepare for the launch of the Grunt EVO. Lower Grunt sales were offset by sales of the Brat in the fourth quarter of 2022.
In fiscal 2021 the company had just begun selling the Grunt in September 2021.
Net loss
A net loss of $7.8 million for the fourth quarter of 2022 was reported, compared to a net loss of $7.9 million for the third quarter of 2022 and $14.8 million for the fourth quarter of 2021.
The net loss for the fiscal year 2022 was $34.2 million compared to $40.1 million for 2021. The fiscal year 2021 includes a stock compensation expense of $13.0 million related to warrants issued to entities controlled by the company’s founders.
