STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2025

Equity [Abstract]

STOCK-BASED COMPENSATION

NOTE 10 – STOCK-BASED COMPENSATION

In January 2021, the Company’s Board 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 awards to employees, members of the Board and consultants (including restricted stock units issued prior to the adoption of the plan as further discussed below). The Company has reserved five 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 June 30, 2025. 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.

As discussed in Note 8 above, fully vested stock options were granted to the Company’s CEO and CFO to purchase a total of 252,525 shares of the Company’s common stock at $4.56 per share. The Company recognized share-based compensation of $1,125,802 related to these stock options in the three and six months ended June 30, 2025. On July 17, 2025, the CEO and CFO amended these stock options to reset the exercise price to $10.00 per share. There will not be an impact to share-based compensation for this modification as the fair value immediately after the modification was less than the fair value immediately before the modification.

In August 2024, as part of the compensation package for the Company’s Chief Sales Officer (“CSO”), the Company granted 782 stock options outside of the 2021 Plan with an exercise price of $104.32. In June 2025, the Company cancelled these stock options and paid $4,252 to the CSO. The Company recognized a net benefit of $30,932 for the share-based compensation expense previously recognized on the unvested stock options less the cash paid.

Stock Options

The following summarizes activity relating to common stock options to employees and consultants for services during the six months ended June 30, 2025:

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, 2025			816			$	14,203.20							$	–
Granted			252,525			$	4.56
Forfeited			–
Canceled			(782	)		$	104.32
Outstanding at June 30, 2025			252,559			$	576.03				9.91				–
Exercisable at June 30, 2025			252,559			$	576.03				9.91			$	–

Total stock-based compensation recorded for the three and six months ended June 30, 2025 and 2024 for all stock-based compensation awards, has been recorded as follows:


		Three Months Ended June 30, 2025				Three Months Ended June 30, 2024				Six Months Ended June 30, 2025				Six Months Ended June 30, 2024
Cost of Goods Sold		$	–			$	(1,186	)		$	–			$	(11,828	)
Sales and Marketing			(35,184	)			67,001				(25,132	)			11,930
Product Development			–				83,733				–				126,337
General and Administrative			1,125,802				138,203				1,125,802				159,390
Total		$	1,090,618			$	287,751			$	1,100,670			$	285,829

The Company does not expect to recognize any future expense related to these options. As stated above, the inducement stock options were cancelled in June 2025 and the options granted to the Company’s CEO and CFO were fully vested and expensed upon grant. The Company expects to recognize future expense for the stock options granted in conjunction with the Private Placements as discussed in Note 13.