What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-15 compared with 2021-08-16 · 123 added, 107 removed, 79 unchanged (74% of the section changed)

34 unchanged sentences

condition, cash flows, liquidity or capital and financial resources.

the six months ended June 30, 2021, aspects of the Company’s business continued to be affected by the COVID-19 pandemic

with respect to its manufacturing practices and sales.

Combined with decreased consumer confidence, Management expects the Company to

generate less revenues than in previous periods.

the nine months ended September 30, 2021, aspects of the Company’s business continued to be affected by the COVID-19 pandemic with

respect to its manufacturing practices and sales.

Combined with decreased consumer confidence, Management expects the Company to generate

less revenues than in previous periods.

full extent of the future impact of the COVID-19 pandemic on the Company’s operational and financial performance is currently uncertain

5 unchanged sentences

OF OPERATIONS

Months Ended June 30, 2021 compared to Three Months Ended June 30, 2020

the three months ended June 30, 2021, revenue generated from sales was $186,239, compared to $66,102 for the three months ended June

Months Ended September 30, 2021 compared to Three Months Ended September 30, 2020

the three months ended September 30, 2021, revenue generated from sales was $93,408, compared to $116,491 for the three months ended

September 30, 2020.

Total revenues decreased by approximately 20% compared to the same period in the prior year.

decreased for the three months ended September 30, 2021 compared to the same period the prior year due to the Company shifting its

focus to building up its inventory to mitigate against potential supply chain issues in anticipation of launching its e-commerce platform,

while it repositions to domestic manufacturing.

the three months ended September 30, 2021 total revenues generated in Canada were $0 compared to a loss of $935 in the prior period.

For the three-months ended September 30, 2021, total revenue generated in the United States decreased by 20% from $117,426 in the prior

period to $93,408.

Similar to above, the decrease in revenue was a result of the Company shifting its focus to building up its inventory

to mitigate against potential supply chain issues in anticipation of launching its e-commerce platform, while it repositions to domestic

manufacturing.

the three months ended September 30, 2021, online revenues decreased by 20% from $116,482 in the prior period to $93,408.

Online revenue

accounted for 100% of total revenue for the three months ended September 30, 2021 compared to 99% for the same period in 2020.

the three months ended September 30, 2021 cost of sales decreased by 13% from $94,134 in the prior period to $81,810.

Cost of sales,

as a percentage of sales, was approximately 88% for three months ended September 30, 2021 compared to 81% for the same period in 2020,

respectively.

The increase in cost of sales as a percentage of sales was primarily due to increased cost associated with

acquiring inventory for the nine months ended September 30, 2021 compare to the same prior period

and freight costs accounted for 55% of the total cost of sales during the three months ended September 30, 2021, compared to 40% for

the same period in 2020.

margin percentage for the three months ended September 30, 2021 was 12% compared to 19% for the same period in 2020.

The decrease in

gross margin reflects the increased cost of inventory due to increased costs of manufacturing.

expenses increased for the three months ended September 30, 2021 by $1,658,593 from $392,970 in the prior periods to $2,051,563.

and administrative expense increased by $466,899 from $50,836 in the prior period to $517,735.

The increase related to research and

development and salaries as the Company seeks to expand its operations and further develop its products.

Sales and marketing expenses increased by $374,783 from

$59,122 in the prior period to $433,905.

The increase in sales and marketing is a result of building brand and product awareness.

Company realized a gain on foreign exchange of $11,175 during the three months ended September 30, 2021, an increase of $13,774 compared

to a loss of $2,599 during the prior period.

The gain on foreign exchange can be attributed to operating expenses denominated in

the Canadian Dollar.

fees which include accounting, legal and consulting fees, increased from $280,413 for the three months ended September 30, 2020 to

$1,111,098 for the three months ended September 30, 2021.

The increase was due to the employment of various third-party consultants

to help expand the Company’s business operations.

Income and Expenses

income and expenses for the three months ended September 30, 2021 was $24,316 compared to $234,377 the prior period, a decrease of $210,061.

The change can be attributed to the Company’s decrease in interest expense.

loss for the three months ended September 30, 2021 was $2,064,281 compared to $604,990 for the three months ended September 30, 2020,

a change of $1,459,291 or 241%.

The increase in the net loss can be attributed to the increase of various operating expenses as the Company

focuses on expanding its operations, research and development, manufacturing and supply chain.

Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020

the nine months ended September 30, 2021, revenue generated from sales was $287,297, compared to $223,620 for the nine months ended September

Total revenues increased by approximately 28% compared to the same period in the prior year.

increased for the three months ended June 30, 2021 compared to the same period the prior year due to [_______________].

the three months ended June 30, 2021 total revenues generated in Canada increased by 7,906% from $546 in the prior period to $43,713.

For the three months ended June 30, 2021, total revenue generated in the United States increased by 135% from $65,556 in the prior period

The increase in revenue generated in Canada and United States can be attributed to the Company’s focus on enhancing

its manufacturing and logistics supply chain for the introduction of new products into the market [IS THIS TRUE]

the three months ended June 30, 2021, online revenues increased by 138% from $64,597 in the prior period to $153,810.

increased for the nine months ended September 30, 2021 compared to the same period the prior year due to the increased demand for the

Company’s products during the first six months of the year as Covid-19 restrictions were eased.

the nine months ended September 30, 2021 total revenues generated in Canada increased by 370% from $10,990 in the prior periods to $40,645.

For the nine months ended September 30, 2021, total revenue generated in the United States increased by 16% from $212,620 in the prior

period to $246,652.

The increase in revenue generated in Canada and United States can be attributed to the easing of Covid-19 restrictions.

the nine months ended September 30, 2021, online revenues increased by 18% from $208,554 in the prior period to $246,701.

Online revenue

accounted for 78% of total revenue for the three months ended June 30, 2021 compared to 95.4% for the same period in 2020.

the three months ended June 30, 2021, revenues based on distributors were $43,378 compared

to $93 for the same period in 2020.

currently works with a total of nine dealers and distributors, however, given current market conditions Worksport plans to focus on online

sales during 2021.

Management believes that increasing sales through online retailers will continue to outpace the traditional distribution

business model during 2021.

Management further believes that online retailer’s customers tend to provide larger sales volumes,

greater profit margins and greater protection against price erosion.

the three months ended June 30, 2021 cost of sales increased by 133% from $58,883 in the prior period to $137,333.

Cost of sales, as

a percentage of sales, was approximately 74% for three months ended June 30, 2021 compare to 89% for the same period in 2020, respectively.

The increase in cost of sales was primarily due to increased sales for the three months ended June 30, 2021 compare to the same prior

and freight costs accounted for 26% of total cost of sales during the three months ended June 30, 2021, compared to 28% for the same

accounted for 86% of total revenue for the nine months ended September 30, 2021 compared to 98% for the same period in 2020.

the nine months ended September 30, 2021, revenues based on sales to distributors were $40,311

compared to $8,845 for the same period in 2020.

the nine months ended September 30, 2021 cost of sales increased by 55% from $180,028 in the prior periods to $279,364.

Cost of sales,

as a percentage of sales, was approximately 97% for nine months ended September 30, 2021 compared to 81% for the same periods in 2020,

respectively.

The increase in cost of sales as a percentage of sales was primarily due to increased cost associated with acquiring

inventory for the nine months ended September 30, 2021 compare to the same prior period.

and freight costs accounted for 38% of total cost of sales during the nine months ended September 30, 2021, compared to 42% for the same

period in 2020.

The decrease in the percentage of the cost of sales was due to [_____].

margin percentage for the three months ended June 30, 2021 was 26% compared to 11% for the same period in 2020.

The increase in gross

margin reflects the Company’s focus on enhancing its manufacturing and logistics supply chain in decreasing cost of sales.

expenses increased for the three months ended June 30, 2021 by $710,966 from $140,496 in the prior periods to $851,462.

General and administrative expense increased by $259,198 from $12,824 in the prior period to $272,022.

The increase related to research and development and salaries as the Company seeks to expand its operations and products.

The Company realized a loss on foreign exchange of $3,799 during the three months ended June 30, 2021, a increase of $3,517 compared to $282 during the prior period.

The increase on loss on foreign exchange can be attributed to operating expenses denominated in the Canadian Dollar.

Professional fees which include accounting, legal and consulting fees, increased from $119,469 for the three months ended June 30, 2020 to $410,485 for the three months ended June 30, 2021.

The increase was due to the employment of various third party consultants to help expand the Company’s business operations.

margin percentage for the nine months ended September 30, 2021 was 3% compared to 19% for the same period in 2020.

The decrease in gross

margin reflects the Company’s increased costs of procuring inventory as the Company seeks to gain greater control over its manufacturing

expenses increased for the nine months ended September 30, 2021 by $3,180,343 from $671,937 in the prior periods to $3,852,280.

and administrative expense increased by $826,473 from $97,566 in the prior period to $924,041.

The increase was related to research

and development and salaries as the Company seeks to expand its operations and further develop its products.

Sales and marketing expenses increased by $691,843 from

$69,869 in the prior period to $761,712.

The increase in sales and marketing is a result of building brand and product awareness.

Company realized a gain on foreign exchange of $2,170 during the nine months ended September 30, 2021, a decrease of $2,675 compared

to $4,845 during the prior period.

The decrease in gain on foreign exchange can be attributed to the weakening of the Canadian Dollar

against the United States Dollar.

fees which include accounting, legal and consulting fees, increased from $509,347 for the nine months ended September 30, 2020 to

$2,168,697 for the nine months ended September 30, 2021.

The increase was due to the employment of various third-party consultants

to help expand the Company’s business operations.

Income and Expenses

income and expenses for the three months ended June 30, 2021 was $18,100 compared to $58,908 the prior period, a decrease of $40,808.

The difference can be attributed to the Company’s increased interest expense [IS THIS TRUE?].

loss for the three months ended June 30, 2021 was $811,659 compared to $192,185 for the three months ended June 30, 2020, a change of

$619,474 or 322%.

The increase in the net loss can be attributed to the increase of various operating expenses as the Company focuses

on expanding its operations, research and development and supply chain.

Months Ended June 30, 2021 compared to Six Months Ended June 30, 2020

the six months ended June 30, 2021, revenue generated from sales was $193,889, compared to $107,129 for the six months ended June 30,

Total revenues increased by approximately 81% compared to the same period in the prior year.

increased for the six months ended June 30, 2021 compared to the same period the prior year due to [_______________].

the six months ended June 30, 2021 total revenues generated in Canada increased by 265% from $11,815 in the prior periods to $43,078.

For the six months ended June 30, 2021, total revenue generated in the United States increased by 69% from $95,314 in the prior period

The increase in revenue generated in Canada and United States can be attributed to the Company’s focus on enhancing

its manufacturing and logistics supply chain for the introduction of new products into the market.

the six months ended June 30, 2021, online revenues increased by 93% from $83,654 in the prior period to $161,519.

Online revenue accounted

for 79% of total revenue for the six months ended June 30, 2021 compared to 83% for the same period in 2020.

the six months ended June 30, 2021, revenues based on distributors were $[__] compared to

$11,355 for the same period in 2020.

currently works with a total of nine dealers and distributors, however, given current market conditions Worksport plans to focus on online

income and expenses for the nine months ended September 30, 2021 was $255,112 compared to $321,096 the prior period, a decrease of $65,984.

The difference can be attributed to the Company’s gain on settlement of debt and interest income.

loss for the nine months ended September 30, 2021 was $4,099,459 compared to $949,441 for the nine months ended September 30, 2020, a

change of $3,150,018 or 332%.

The increase in the net loss can be attributed to the increase of various operating expenses as the Company

focuses on expanding its operations, research and development programs and manufacturing and supply chains.

currently works with a total of ten dealers and distributors, however, given current market conditions Worksport plans to focus on online

sales during 2021.

3 unchanged sentences

greater profit margins and greater protection against price erosion.

the six months ended June 30, 2021 cost of sales increased by 130% from $85,894 in the prior periods to $197,554.

Cost of sales, as a

percentage of sales, was approximately 102% for six months ended June 30, 2021 compared to 80% for the same periods in 2020, respectively.

The increase in cost of sales was primarily due to increased sales for the three and six months ended June 30, 2021 compare to the same

prior period.

and freight costs accounted for 35% of total cost of sales during the six months ended June 30, 2021, compared to 23% for the same period

The increase in the percentage of the cost of sales was due to increased sales correlating in increased shipping expenses.

margin percentage for the six months ended June 30, 2021 was negative 2% compared to 20% for the same period in 2020.

The decrease in

gross margin reflects [_______] .

expenses increased for the six months ended June 30, 2021 by $1,521,750 from $278,967 in the prior periods to $1,800,717.

General and administrative expense increased by $359,576 from $46,730 in the prior period to $406,306.

The increase related to research and development and salaries as the Company seeks to expand its operations and products.

The Company realized a loss on foreign exchange of $9,005 during the six months ended June 30, 2021, a decrease of $16,449 compared to a gain of $7,444 during the prior period.

The increase on loss on foreign exchange can be attributed to operating expenses denominated in the Canadian Dollar.

Professional fees which include accounting, legal and consulting fees, increased from $228,934 for the six months ended June 30, 2020 to $1,057,599 for the six months ended June 30, 2021.

The increase was due to the employment of various third party consultants to help expand the Company’s business operations.

Income and Expenses

income and expenses for the six months ended June 30, 2021 was $249,000 compared to $86,719 the prior period, an increase of $162,281.

The difference can be attributed to the Company’s increased interest expense.

loss for the six months ended June 30, 2021 was $2,035,178 compared to $344,451 for the six months ended June 30, 2020, a change of $1,690,727

The increase in the net loss can be attributed to the increase of various operating expenses as the Company focuses on expanding

its operations, research and development and supply chain.

AND CAPITAL RESOURCES

of June 30, 2021, the Company had $12,266,597 in cash and cash equivalents.

The Company has generated only limited revenues and has relied

primarily upon capital generated from public and private offerings of its securities.

of September 30, 2021, the Company had $30,920,477 in cash, restricted cash and cash equivalents.

The Company has generated only limited

revenues and has relied primarily upon capital generated from public and private offerings of its securities.

the Company’s acquisition of Worksport in fiscal 2014, it has never generated a profit.

of June 30, 2021 the Company had an accumulated deficit of $14,901,211.

of September 30, 2021 the Company had an accumulated deficit of $17,052,179.

Flow Activities

receivable increased at June 30, 2020 by $35,406 and decreased at June 30, 2021 by $16,504.

The decrease was due to the Company’s

collection of receivables from customers.

Other receivable decreased at June 30, 2021 and 2020 by $116,997 and $9,657 respectively, due

to funds received from a sales tax refund and capital raised in the Reg-A offering.

decreased at June 30, 2020 by $60,136 and increased at June 30, 2021 by $212,344.

Prepaid expenses increased by $220,841 at June 30,

2021 and increased at June 30, 2020 by $20,925, due to increased consulting and marketing expenditures during the quarter ended June

payable and accrued liabilities decreased at June 30, 2021 and 2020 by $34,428 and $1,042 respectively.

increased from $21,111 at June 30, 2020 to $12,266,597 at June 30, 2021, an increase of $12,245,486 or 58,005%.

The increase in cash

was primarily due to its warrants exercised, Reg A and private placement offerings which generated of approximately $12,300,000.

of June 30, 2021, the Company had current assets of $13,120,449 and current liabilities of $1,684,764.

cash used by operating activities for the six months ended June 30, 2021 was $995,925, compared to $229,553 in the prior period.

primary difference was due to the issuance of shares and warrants for services.

cash used in investing activities for the six months ended June 30, 2021 was $321,575 compared to $8,764 in the prior period.

The increase in investing activities was primarily due to the purchase of property and equipment of $257,305 and the advance of $5,507

of a short term receivable.

cash provided by financing activities for the six months ended June 30, 2021was $12,476,286 compared to $247,435 in the prior period.

the six months ended June 30, 2021 the Company received $12,689,106 of proceeds from Reg-A public offering, private placement offering

and exercises of warrants incurring share issuance cost of $123,984.

During the six months ended June 30, 2021 the Company made repayment

of $62,905 of promissory notes and repayment of $25,931 of shareholder loans.

receivable increased at September 30, 2020 by $122,606 and September 30, 2021 by $32,479.

The increase was due to the Company increased

sale near quarter end.

Other receivable decreased at September 30, 2021 and 2020 by $69,603 and $22,970 respectively, due to funds received

from a sales tax refund.

decreased at September 30, 2020 by $44,423 and increased at September 30, 2021 by $156,822.

Prepaid expenses increased by $223,582 at

September 30, 2021 and decreased at September 30, 2020 by $48,642, due to increased consulting and marketing expenditures during the

quarter ended September 30, 2021.

payable and accrued liabilities increased at September 30, 2021 $221,979 and decreased at September 30, 2020 by and $73,201 respectively.

increased from $467,133 at September 30, 2020 to $30,920,477 at September 30, 2021, an increase of $30,453,343 or 6,519%.

in cash was primarily due to warrants exercises, public offerings and private placement offerings which generated of approximately $32,000,000.

of September 30, 2021, the Company had current assets of $36,762,621 and current liabilities of $1,728,043.

cash used by operating activities for the nine months ended September 30, 2021 was $2,031,966, compared to $382,352 in the prior period.

cash used in investing activities for the nine months ended September 30, 2021 was $764,090 compared to $16,727 in the prior period.

The increase in investing activities was primarily due to the purchase of property and equipment of $734,883 and intangible assets of

cash provided by financing activities for the nine months ended September 30, 2021 was $32,608,720 compared to $854,219 in the

prior period.

the nine months ended September 30, 2021 the Company received $32,805,825 of proceeds from public offerings, private placement offering

and exercises of warrants net of share issuance cost.

During the nine months ended September 30, 2021 the Company made repayment of $62,905

of promissory notes and repayment of $48,861 of shareholder loans.

2021, the Company intends to introduce several new tonneau covers as well as the Terravis system.

24 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis