What changed in this filing

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Item 1. Financial Statements

2024-05-16 compared with 2023-11-14 · 324 added, 545 removed, 293 unchanged (75% of the section changed)

Financial Statements

Consolidated Balance Sheets

September 30, 2023

Worksport Ltd.

Condensed Consolidated Balance Sheets

March 31, 2024

December 31, 2023

4 unchanged sentences

Inventory (note 4)

Related party loan (note 8)

Prepaid expenses and deposits (note 5)

13 unchanged sentences

Long Term – Lease Liability (note 11)

Loan Payable (note 13)

Total Liabilities

13 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

the Three and Nine Months Ended September 30, 2023 and 2022

Three Months ended

September 30,

Nine Months ended

the Three Months Ended March 31, 2024 and 2023

Three Months ended March 31,

Cost of Goods Sold

8 unchanged sentences

( 3,529,948 )

( 11,188,176 )

( 9,048,799 )

Other Income (Expense)

6 unchanged sentences

$ ( 3,523,270 )

$ ( 11,270,023 )

$ ( 9,067,588 )

Loss per Share (basic and diluted)

2 unchanged sentences

Consolidated Statements of Shareholders’ Equity

the Three Months Ended September 30, 2023 and 2022

Paid-in Capital

Subscriptions Receivable

Subscription Payable

Accumulated Deficit

Translation Adjustment

Stockholders’ Equity (Deficit)

Balance at July 1, 2022

$ ( 27,039,733 )

Share issuance

Issuance for services and subscriptions payable

Warrant exercise (note 15)

( 2,877,660 )

Balance at September 30, 2022

$ ( 29,917,393 )

Balance at July 1, 2023

$ ( 40,704,944 )

Issuance for services and subscriptions payable

Shares issued (note 8)

Stock option forfeiture (note 16)

( 3,949,298 )

Balance at September 30, 2023

$ ( 44,654,242 )

accompanying notes form an integral part of these condensed consolidated financial statements.

Consolidated Statements of Shareholders’ Equity

the Nine Months Ended September 30, 2023 and 2022

Paid-in Capital

Subscriptions Receivable

Subscription Payable

Translation Adjustment

Stockholders’ Equity (Deficit)

the Three Months Ended March 31, 2024 and 2023

Preferred Stock

Additional Paid-in

Share Subscriptions

Cumulative Translation

Stockholders’ Equity

Balance at January 1, 2023

1 unchanged sentence

Issuance for services and subscriptions payable

Share issuance

Warrant exercise (note 15)

( 3,523,270 )

Balance at September 30, 2022

Balance at March 31, 2023

$ ( 36,907,489 )

4 unchanged sentences

Shares issued (note 7)

Stock option forfeiture (note 16)

Warrant exercise

( 3,714,657 )

Balance at September 30, 2023

Balance at March 31, 2024

$ ( 52,027,834 )

2 unchanged sentences

Consolidated Statements of Cash Flows

the Nine Months Ended September 30, 2023 and 2022

the Three Months Ended March 31, 2024 and 2023

Operating Activities

4 unchanged sentences

Depreciation and amortization

Accrued interest

Change in operating lease

Adjustments to reconcile net income loss to cash provided

by (used in) operating activities

Adjustments to reconcile net income loss to cash provided by (used in)

operating activities

( 2,087,959 )

2 unchanged sentences

( 1,039,238 )

( 1,398,690 )

Net cash used in operating activities

4 unchanged sentences

( 1,086,921 )

( 10,212,245 )

Net cash used in investing activities

( 1,153,229 )

( 10,212,245 )

Financing Activities

Shareholder assumption of debt

Repayments on loan payable

Proceeds from issuance of common stock

Proceeds from warrant exercise

Proceeds from issuance of common share, net of issuance cost

Net cash received from financing activities

1 unchanged sentence

( 4,131,543 )

( 11,288,072 )

Cash, restricted cash and cash equivalents - beginning of year

Cash, restricted cash and cash equivalents - beginning of period

Cash, restricted cash and cash equivalents end of period

1 unchanged sentence

Shares issued for purchase of software

Shares base compensation

Cashless warrant exercise

Supplemental Disclosure of cash flow information

Income tax paid

Interest paid

accompanying notes form an integral part of these condensed consolidated financial statements.

9 unchanged sentences

statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature.

results for the three- and nine-month periods ended September 30, 2023 are not necessarily indicative of the results that may be expected

for the year ending December 31, 2023.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction

with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023.

results for the three months period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year

ending December 31, 2024.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the

Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 28, 2024.

(together with its subsidiaries, the “Company”) was incorporated in the State of Nevada on April 2, 2003 under the name

8 unchanged sentences

and distributes truck tonneau covers in Canada and the United States.

May 21, 2021, the Board of Directors authorized the submission of a Certificate of Change/Amendment to the Nevada Secretary of State

in which the Company sought to affect a reverse split of its common stock at the rate of 1-for-20 for the purpose of increasing the per

share price for the Company’s stock in an effort to meet the minimum listing requirements of the NASDAQ.

The Certificate of Change

was submitted to the Nevada Secretary of State on May 21, 2021, and the FINRA corporate action was announced on August 3, 2021.

1-for-20 reverse stock split effective on August 4, 2021.

(“Terravis”) was incorporated in the State of Colorado on May 5, 2021.

On August 20, 2021, the Company was issued

100 shares of common stock at par value of $ 0.0001 per share for a controlling interest in Terravis.

During the year ended December 31,

2022, the Company was issued an additional 9,990,900 shares of common stock of Terravis at par value of $ 0.0001 per share.

January 20, 2022, the Board of Directors of Terravis and the Board of Directors of the Company, as the sole stockholder of Terravis,

adopted the Terravis Energy, Inc.

2022 Equity Incentive Plan (the “Terravis 2022 Plan”).

Under the Terravis 2022 Plan, Terravis’

Board of Directors or a committee designated by the Board of Directors may grant incentive stock options, nonqualified stock options,

shares of restricted stock, restricted stock units, performance shares, performance units and stock appreciation rights to eligible participants

consisting of employees of Terravis, member of Terravis’ Board of Directors, advisors and consultants to Terravis.

Board of Directors authorized and reserved 1,500,000 shares of Terravis common stock under the Terravis 2022 Plan, subject to adjustment

for any stock splits of Terravis’ common stock or reorganization, recapitalization, or acquisition of Terravis.

April 6, 2022, Lorenzo Rossi and Steven Rossi, both of whom are members of Terravis’ Board of Directors, were granted non-qualified

stock options under the Terravis 2022 Plan exercisable for 750,000 and 250,000 shares of Terravis’ common stock, respectively,

with exercise prices of $ 0.01 per share exercisable from the date of grant until the tenth anniversary of the date of grant.

April 12, 2022, Steven Rossi, William Caragol, and Ned L.

Siegel, all of whom are members of Terravis’ Board of Directors, were

granted non-qualified stock options under the Terravis 2022 Plan exercisable for 250,000 , 50,000 , and 50,000 shares of Terravis’

common stock, respectively, with exercise prices of $ 0.01 per share exercisable from the date of grant until the tenth anniversary of

the date of grant.

November 4, 2022, Terravis filed an amendment to its articles of incorporation with the Colorado Secretary of State, pursuant to

which the Terravis Board of Directors attached a certificate of designation designating 1,000

shares of its authorized preferred stock as Series A Preferred Stock with a par value $ 0.0001

According to the certificate of designation, holders of the Series A Preferred Stock do not have any dividend, conversion

or liquidation rights.

Unless otherwise prohibited by law or the Series A Preferred Stock certificate of designation, the Series A

Preferred Stock shall vote together with the outstanding shares of common stock of Terravis as one class on any matter put forth

before the common stockholders.

For so long as the Series A Preferred Stock is outstanding, the holders of the Series A Preferred

Stock shall be entitled to 51 %

of the total votes on all matters regardless of the actual number of shares of Series A Preferred Stock then outstanding, and the

holders of the common stock and any other shares of capital stock of Terravis shall be entitled to their proportional share of the

remaining 49 %

of the total votes based on their respective voting power.

On November 4, 2022, the Company issued 1,000

shares of Series A Preferred Stock to Steven Rossi, the Chief Executive Officer and President of the Company.

the year ended December 31, 2022, Worksport New York Operations Corporation and Worksport USA Operations Corporation were incorporated

in the states of New York and Colorado, respectively.

During the year ended December 31, 2022, the Company was issued 1,000 shares of

common stock at par value of $ 0.0001 of Worksport USA Operations Corporation.

On April 1, 2022, the Company was issued 10,000 shares

of common stock of Worksport New York Operations Corporation.

Statement of Compliance

23 unchanged sentences

Going Concern

of September 30, 2023, the Company had $ 2,965,578 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.

Since the Company’s acquisition of

Worksport in fiscal year 2014, it has never generated a profit.

As of September 30, 2023, the Company had an accumulated deficit of $ 44,654,242 .

accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going

concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.

the three and nine months ended September 30, 2023, the Company had net loss es of

$ 3,949,298 (2022 - $ 2,877,660 )

and $ 11,270,023 (2022 -

$ 9,067,588 ), respectively.

As of September 30, 2023, the Company had working capital of $ 330,423

(December 31, 2022 – $ 15,870,377 )

and had an accumulated deficit of $ 44,654,242

(December 31, 2022 - $ 33,384,219 ).

The Company has not generated profit from operations since inception and to date has relied on debt and equity financings for

continued operations.

The Company’s ability to continue as a going concern is dependent upon the ability to generate cash

flows from operations and obtain equity and/or debt financing.

The Company intends to continue funding operations through equity and

debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements

in the long term.

There can be no assurance that the steps management is taking will be successful.

Company has historically operated at a loss, although that may change as sales volumes increase.

As of September 30, 2023, the

Company had working capital of $ 330,423

(December 31, 2022 – $ 15,870,377 )

and an accumulated deficit of $ 44,654,242

(December 31, 2022 - $ 33,384,219 ).

As of September 30, 2023, the Company had cash and cash equivalents of $ 2,965,578

(December 31, 2022 - $ 14,620,757 ).

Despite the Company having mostly completed its purchasing of large manufacturing machinery, operational costs are expected to

remain elevated and, thus, further decrease cash and cash equivalents.

Concurrently, the Company intends to continue its start of

manufacturing and increasing sales volumes in 2023, which should mitigate the effects of operational costs on cash and cash

this view is supported by the fact that the manufacturing facility of the Company is near completion and has started

to generate revenue in the third quarter of 2023.

of March 31, 2024, the Company had $ 3,536,980 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.

Since the Company’s acquisition of Worksport

in fiscal year 2014, it has never generated a profit.

As of March 31, 2024, the Company had an accumulated deficit of $ 52,027,834 .

accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern,

which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.

During the three months

ended March 31, 2024, the Company had net losses of $ 3,714,657 (2023 - $ 3,523,270 ).

As of March 31, 2024, the Company had working capital

of $ 2,901,401 (December 31, 2023 – $ 1,956,894 ) and had an accumulated deficit of $ 52,027,834 (December 31, 2023 - $ 48,313,177 ).

The Company has not generated profit from operations since inception and to date has relied on debt and equity financing for continued

The Company’s ability to continue as a going concern is dependent upon the ability to generate cash flows from operations

and obtain equity and/or debt financing.

The Company intends to continue funding operations through equity and debt financing arrangements,

which may be insufficient to fund its capital expenditures, working capital and other cash requirements in the long term.

no assurance that the steps management is taking will be successful.

Despite the Company having mostly completed its purchasing

of large manufacturing machinery, operational costs are expected to remain elevated and, thus, further decrease cash and cash equivalents.

Concurrently, the Company intends to continue its ramp-up of manufacturing and increasing sales volumes in 2024, which should mitigate

the effects of operational costs on cash and cash equivalents;

this view is supported by the fact that the manufacturing facility of

the Company was completed for initial production output in 2023 and has started to generate revenue in the third quarter of 2023.

Company has successfully raised cash, and it is positioned to do so again if deemed necessary or strategically advantageous.

3 unchanged sentences

statement on Form S-3, which was declared effective by the SEC on October 13, 2022, allowing the Company to issue up to $ 30,000,000 of

common stock and prospectus supplement covering the offering, issuance and sale of up to $ 13,000,000 of common stock that may be

issued and sold under an At The Market Offering Agreement dated September 30, 2022 (“ATM Agreement”), with H.C.

common stock and prospectus supplement covering the offering, issuance and sale of up to $ 13,000,000 of common stock that may be issued

and sold under an At The Market Offering Agreement dated September 30, 2022 (“ATM Agreement”), with H.C.

Co., LLC, as the sales agent (“HCW”).

Pursuant to the ATM Agreement, HCW is entitled to a commission equal to 3.0 %

of the gross sales price of the shares of common stock sold.

As of September 30, 2023, the Company has sold and issued 27,429 shares

of common stock in consideration for net proceeds of $ 95,541 under the ATM Agreement.

On November 2, 2023, the Company closed a sale of 1,925,000 shares of common

stock and 1,575,000 pre-funded warrants for a total net proceeds of $ 4,261,542 .

In association with sale, the Company also issued 7,000,000

warrants convertible for 7,000,000 shares of common stock at an exercise price of $ 1.34 .

The warrants are exercisable six months after

issuance and will expire five and a half years from the issuance date.

Pursuant to the ATM Agreement, HCW is entitled to a commission equal to 3.0 % of the

gross sales price of the shares of common stock sold.

As of March 31, 2024, the Company has sold and issued 604,048 shares of common

stock in consideration for net proceeds of $ 780,356 under the ATM Agreement.

November 2, 2023, the Company consummated a registered direct offering pursuant to which the Company issued 1,925,000 shares

of common stock and 1,575,000 pre-funded

warrants to an institutional investor for a total net proceeds of $ 4,261,542 .

Concurrently with the registered direct offering, the Company issued the same institutional investor 7,000,000 warrants

in a private sale.

The warrants are exercisable for 7,000,000

shares of common stock for $ 1.34 per share

six months after issuance and until five

and a half years from

the issuance date, subject to beneficial ownership limitations as described in the warrants.

The Company registered the 7,000,000

shares of common stock underlying the warrants on a Form S-1 (333-276241) which was declared effective by the SEC on December 29, 2023.

March 20, 2024, the Company consummated a registered direct offering pursuant to which the Company issued 2,372,240

shares of common stock and 1,477,892

pre-funded warrants to the same institutional investor as in the Company’s registered direct offering on November 2, 2023, for

a total net proceeds of $ 2,629,083 .

Concurrently with the registered direct offering, the Company issued the institutional investor 7,700,264

warrants in a private sale.

The warrants are exercisable for 7,700,264

shares of common stock for $ 0.74

per share six months after issuance until five and a half years from the issuance date, subject to beneficial ownership limitations

as described in the warrants.

The Company registered the 7,700,264 shares of common stock underlying the warrants on a Form S-1

(333-278461) which was declared effective by the SEC on April 8, 2024.

date, the Company’s principal sources of liquidity consist of net proceeds from public and private securities offerings and cash

exercises of outstanding warrants.

During the nine months ended September 30, 2023, the Company received nominal proceeds from public

offerings, private placement offerings, and from the exercise of any outstanding warrants or options.

Management is focused on transitioning

towards revenue as its principal source of liquidity by growing existing product offerings as well as the Company’s customer base.

The Company cannot give assurance that it can increase its cash balances or limit its cash consumption and thus maintain sufficient cash

balances for planned operations or future business developments.

Future business development and demands may lead to cash utilization

at levels greater than recently experienced.

The Company may need to raise additional capital in the future.

However, the Company cannot

provide assurances it will be able to raise additional capital on acceptable terms, or at all.

has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s

Management is focused on transitioning towards revenue as its principal source of liquidity by growing

existing product offerings as well as the Company’s customer base.

The Company cannot give assurance that it can increase its cash

balances or limit its cash consumption and thus maintain sufficient cash balances for planned operations or future business developments.

Future business development and demands may lead to cash utilization at levels greater than recently experienced.

The Company may need

to raise additional capital in the future.

However, the Company cannot provide assurances it will be able to raise additional capital

on acceptable terms, or at all.

Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s

ability to continue as a going concern within one year after the date the financial statements are issued.

5 unchanged sentences

Significant Accounting Policies

accounting polices used in the preparation of these condensed consolidated interim financial statements are consistent with those of

accounting policies used in the preparation of these condensed consolidated interim financial statements are consistent with those of

the Company’s audited financial statements for the year ended December 31, 2023.

of September 30, 2023 and December 31, 2022, inventory consists of the following:

of March 31, 2024 and December 31, 2023, inventory consists of the following:

Schedule of Inventory

September 30, 2023

March 31, 2024

December 31, 2023

2 unchanged sentences

Raw materials

of March 31, 2024, the value of finished goods on-hand increased due to stockpiling of hard tonneau covers, which have higher values

than stockpiled soft tonneau covers, in preparation for 2024 sales campaigns.

Prepaid expenses and deposits

of September 30, 2023 and December 31, 2022, prepaid expenses and deposits consists of the following:

of March 31, 2024 and December 31, 2023, prepaid expenses and deposits consist of the following:

Schedule of Prepaid Expenses and Deposits

September 30, 2023

March 31, 2024

December 31, 2023

Consulting, services, and advertising

Prepaid expenses and deposits,

of September 30, 2023, prepaid expenses and deposits consists of $ 0 (December 31, 2022 - $ 1,313,799 ) in prepaid consulting, services and

expenses and deposits, net

of March 31, 2024, prepaid expenses and deposits consists of $ 59,009 (December 31, 2023 - $ 5,215 ) in prepaid consulting, services, and

advertising for third party consultants through the issuance of shares and stock options.

Amounts in deposit relate to prepayment for

Amounts in deposits relate to prepayments for

manufacturing components and finished goods.

Property and Equipment

of September 30, 2023 and December 31, 2022, major classes of property and equipment consist of the following:

of March 31, 2024 and December 31, 2023, major classes of property and equipment consist of the following:

Schedule of Property and Equipment

September 30, 2023

March 31, 2024

December 31, 2023

Manufacturing equipment

Product molds

3 unchanged sentences

( 2,047,100 )

( 1,664,580 )

Property and Equipment,

Promissory Notes

following tables shows the balance of the notes payable as of September 30, 2023, December 31, 2022, and December 31, 2021:

Schedule of Notes Payable

Balance as of December 31, 2021

Balance as of December 31, 2022 and September 30, 2023

the year ended December 31, 2022, the Company and the promissory note holder reached an agreement to settle all outstanding promissory

notes and interest for $ 100,000 .

As a result of the settlement, the Company recognized a gain on settlement of debt of $ 163,211 .

Additionally,

as a part of this settlement, there was accrued interest on these promissory notes included in accounts payable on the accompanying condensed

consolidated balance sheets totaling $ 139,121 that was also settled;

accordingly, the Company recognized a gain on settlement of debt

for this amount.

the year ended December 31, 2019, the note holder advanced $ 88,120 to the Company.

As of the date the amount was advanced, the terms

of the note were under negotiation and, as a result, the note was due on demand.

During the year ended December 31, 2022, the promissory

note holder reached an agreement to settle all outstanding promissory notes and interest, noted above.

the year ended December 31, 2016, the Company issued a secured promissory note in the principal amount of $ 73,452 ($ 123,231 CAD).

the year ended December 31, 2018, the Company issued two additions to the original unsecured promissory note of July 2016, totaling $ 22,639

($ 30,884 CAD).

The secured promissory note bore interest at a rate of 18 % per annum.

The payment terms of the original note including

these additions were due “upon completion of going public on the Canadian Securities Exchange, with no change in interest rate.”

The secured promissory note was secured by all present and after-acquired property and assets of the Company.

During the year ended December

31, 2019, the Company extended the maturity dates of the secured promissory notes to be due on April 1, 2021.

During the year ended December

31, 2022, the Company and promissory note holder reached an agreement to settle all outstanding promissory notes and interest, noted

As of December 31, 2022, principal balance owing was $ nil .

As of September 30, 2023, and December 31, 2022, the accrued interest

on this note payable was $ nil .

the year ended December 31, 2016, the Company issued secured promissory notes in the aggregate principal amount of $ 79,000 .

promissory notes bore interest at a rate of 18 % per annum, payable monthly.

The secured promissory notes were secured by all present

and after-acquired property and assets of the Company.

During the year ended December 31, 2019, the Company extended the maturity dates

of all secured promissory notes to be due on April 1, 2021.

During the year ended December 31, 2022, the Company and promissory note

holder reached an agreement to settle all outstanding promissory notes and interest, noted above.

As of September 30, 2023, and December

31, 2022, the principal balance owing was $ nil .

Shareholders’ Equity (Deficit)

nine months ended September 30, 2023, the following transactions occurred:

the nine months ended September 30, 2023, the Company sold 27,429 shares of common stock for a total net proceeds of $ 95,541 .

three months ended March 31, 2024, the following transactions occurred:

the three months ended March 31, 2024, the Company sold 504,921 shares of common stock for a total net proceeds of $ 566,118 .

of shares was in connection with the shelf registration statement on Form S-3 effective on October 13, 2022, allowing the Company to

issue up to $ 30,000,000 of common stock and prospectus supplement covering the offering, issuance

and sale of up to $ 13,000,000 of common stock that may be issued and sold under an At The Market Offering Agreement dated

as of September 30, 2022.

issue up to $ 30,000,000 of common stock and prospectus supplement covering the offering, issuance and sale of up to $ 13,000,000 of common

stock that may be issued and sold under an At The Market Offering Agreement dated as of September 30, 2022.

Company recognized consulting expense of $ 407,621 to share subscriptions payable from restricted shares and stock options to be issued.

As of September 30, 2023, the restricted shares have not been issued.

During the same period, the Company issued 250,000 shares of common

stock for consulting services valued at $ 635,000 .

to notes 16 for additional shareholders’ equity (deficit).

nine months ended September 30, 2022, the following transactions occurred:

the nine months ended September 30, 2022, the Company issued 10,000 common shares to a consultant for services received valued at $ 86,000 ,

of which $ 66,329 was issued from share subscriptions payable.

During the same period the Company issued 80,000 common shares for consulting,

advisory services and employee compensation valued at $ 240,000 .

the nine months ended September 30, 2022, the Company issued 45,000

shares of restricted stock to members of the board valued at $ 260,100

from share subscriptions payable.

the nine months ended September 30, 2022, the Company recognized consulting expenses of $ 186,107 to share subscriptions payable from restricted

shares and stock options to be issued.

As of September 30, 2022, the restricted shares have not been issued.

to note 16 for additional shareholders’ equity (deficit).

of September 30, 2023, the Company was authorized to issue 299,000,000 shares of its common stock with a par value of $ 0.0001 .

As of March 31, 2024, the Company issued 214,537 restricted shares with a value of $ 304,188 .

the three months ended March 31, 2024, the Company closed a sale of 2,372,240

shares of common stock for net proceeds of $ 1,535,591 .

In association with the sale of common stock, the Company issued 1,477,892

pre-funded warrants and 7,700,264

warrants totaling proceeds of $ 1,093,492 .

Refer to note 14.

to note 15 for additional shareholders’ equity (deficit) details.

three months ended March 31, 2023, the following transactions occurred:

The Company recognized consulting expense of $ 631,822 to share subscriptions payable from restricted shares and stock options to be issued.

As of March 31, 2023, the restricted shares have not been issued.

to note 15 for additional shareholders’ equity (deficit) details.

of March 31, 2024, the Company was authorized to issue 299,000,000 shares of its common stock with a par value of $ 0.0001 .

were ranked equally with regard to the Company’s residual assets.

During the three and nine months ended September 30, 2023, the

Company was authorized to issue 100 shares of its Series A and 100,000 Series B Preferred Stock with a par value of $ 0.0001 .

preferred Stock have voting rights equal to 299 shares of common stock, per share of preferred stock.

Series B preferred Stock have voting

rights equal to 10,000 shares of common stock per share of preferred stock.

During the three months ended March 31, 2024, the Company was

authorized to issue 100 shares of its Series A and 100,000 Series B Preferred Stock with a par value of $ 0.0001 .

Series A preferred Stock

have voting rights equal to 299 shares of common stock, per share of preferred stock.

Series B preferred Stock have voting rights equal

to 10,000 shares of common stock, per share of Preferred Stock.

Related Party Transactions

the nine months ended September 30, 2023, the Company recorded salaries expense of $ 299,505

(2022 - $ 231,432 )

for the Company’s CEO.

During the nine months ended September 30, 2023, the Company recorded salaries expense of $ 210,719

(2022 - $ 192,589 )

the three months ended March 31, 2024, the Company recorded salaries expense of $ 121,752 (2023 - $ 121,410 ) for the

Company’s CEO.

During the three months ended March 31, 2024, the Company recorded salaries expense of $ 77,155 (2023

- $ 76,938 ) to an officer and director of the Company.

As of September 30, 2023, the Company has a payable of $ 2,192

(2022 - $ 46,096 ) to the CEO.

to note 16 for additional related party transactions.

As of March 31, 2024, the Company has a receivable of $ 14,303 (December

31, 2023 – payable of $ 2,192 ) from the CEO.

Changes in Cash Flows from Operating Assets and Liabilities

changes to the Company’s operating assets and liabilities for the nine months ended September 30, 2023 and 2022 are as follows:

changes to the Company’s operating assets and liabilities for the three months ended March 31, 2024 and 2023 are as follows:

Schedule of Changes in Operating Assets and Liabilities

Decrease (increase) in accounts receivable

$ ( 455,509 )

Decrease (increase) in other receivable

2 unchanged sentences

Decrease (increase) in prepaid expenses and deposits

( 1,063,680 )

Increase (decrease) in lease liability

Increase (decrease) in taxes payable

Increase (decrease) in accounts payable and accrued liabilities

Changes in operating assets

and liabilities

in operating assets and liabilities

$ ( 706,645 )

4 unchanged sentences

The shares have been issued to the Company.

As of September

31, 2024, and December 31, 2023, the Company had advanced a total of $ 24,423 and is advancing

tranches of capital as required by the Company.

the nine months ended September 30, 2023, the Company purchased $ 66,308 ($ 90,000 CAD) of

Guaranteed Investment Certificate (“GIC”).

The GIC bears a variable interest

rate and will mature on February 27, 2024.

The anticipated earned interest on the GIC at

maturity is $ 2,818 ($ 3,825 CAD).

the three months ended March 31, 2024, $ 66,308

CAD) of the Company’s Guaranteed Investment Certificate (“GIC”) matured and the Company received $ 3,054

($ 4,129 CAD)

in interest income.

During the same period, the Company reinvested the principal amount of $ 66,308

CAD) in a GIC.

The GIC bears a variable interest rate and will mature on February 27, 2025 .

The anticipated earned interest on

the GIC at maturity is $ 3,167

Operating Lease Obligations

7 unchanged sentences

The Company also pays approximately $ 4,418 in additional fees per month, which varies year to year.

Company has accounted for its leases upon adoption of ASC 842 whereby it recognizes a lease liability and a right-of-use asset at the

date of initial application beginning January 1, 2019.

The lease liability is measured at the present value of the remaining lease payments,

discounted using the Company’s incremental borrowing rate of 10 %.

The Company has measured the right-of-use asset at an amount

equal to the lease liability.

Company’s right-of-use asset and lease liability as of September 30, 2023, and December 31, 2022, are as follows:

the year ended December 31, 2023, the Company signed a lease agreement for office space to be used as an R&D facility pursuant to

a one-year lease with an option to extend the lease for an additional year, dated June 1, 2023, for a monthly rent of $ 3,350 .

Company has accounted for its leases upon adoption of ASC 842 whereby it recognizes a lease liability and a right-of-use asset at

the date of initial application beginning January 1, 2019.

The lease liability is measured at the present value of the remaining

lease payments, discounted using the Company’s incremental borrowing rate of 10 %.

The Company has measured the right-of-use asset at an initial amount equal to the lease liability.

Company’s right-of-use asset and lease liability as of March 31, 2024, and December 31, 2024, are as follows:

Schedule Right-of-use Asset

September 30, 2023

March 31, 2024

December 31, 2023

3 unchanged sentences

following is a summary of the Company’s total lease costs:

Schedule of Lease Costs

September 30, 2023

September 30, 2022

of Lease Costs

March 31, 2024

March 31, 2023

Operating lease cost

following is a summary of cash paid during the nine months ended September 30, 2023 and 2022 for amounts included in the measurement

of lease liabilities:

Schedule of Measurement of Lease Liabilities

September 30, 2023

September 30, 2022

following is a summary of cash paid during the three months ended March 31, 2024 and 2023 for amounts included in the measurement of

lease liabilities:

of Measurement of Lease Liabilities

March 31, 2024

March 31, 2023

Operating cashflow

following are future minimum lease payments as of September 30, 2023:

following are future minimum lease payments as of March 31, 2024:

Schedule of Future Minimum Lease Payments

4 unchanged sentences

Long term portion

the year ended December 31, 2022, the Company entered into a loan agreement with a third

party for the purchase of property located in West Seneca, New York, the details of which

are disclosed in the Company’s Form 8-K filed with the United States Securities and

Exchange Commission on May 11, 2022.

The Company received $ 5,300,000 with an interest rate

of prime plus 2.25 % with an initial maturity date of May 10, 2024, and the option to extend

the loan for an additional year.

In order to service the loan throughout the term, the Company

deposited $ 667,409 in a restricted account.

As of September 30, 2023, the balance in the

restricted account was $ 869,728 (December 31, 2022 - $ 411,016 ) and is included in cash and

cash equivalents on the accompanying balance sheet.

During the nine months ended September 30, 2023, the Company failed certain debt covenants relative to this loan .

Subsequently,

the loan holder decided to waive the failure of the debt covenants, requiring the Company to provide certain quarterly financial information.

May 4, 2022, the Company, as the guarantor, and Worksport New York Operations Corporation (“Worksport New York”), as

the borrower (the “Borrower”) entered into a secured loan agreement (the “Loan Agreement”) with an external

banking entity (the “Lender”) relating to the Company’s purchase of a 152,847

square-foot building situated on two parcels of land aggregating 18 acres of land located in West Seneca, New York (collectively,

the “Property”) for a total purchase price of $ 8,150,000

on May 6, 2022.

Under the terms of the Loan Agreement, the Borrower procured a total principal sum of $ 5,300,000 ,

bearing an interest rate of the prime rate plus 2.25 %

annually, for the Company’s purchase of the Property and covering associated costs.

To ensure the loan’s servicing over

its duration, the Company allocated $ 667,409

into a specially designated account.

By the close of March 31, 2024, this account’s balance had changed to $ 558,358 ,

which is recorded under cash and cash equivalents in the accompanying financial statements.

As of March 31, 2024, the outstanding

principal and the accrued interest was an aggregate of $ 5,347,479 .

This outstanding balance and accrued interest are due on August 10, 2024.

The Company disclosed the material terms of

the Loan Agreement in a Current Report on Form 8-K filed with the Securities and Exchange Commission on May 11, 2022.

February 4, 2024, the Company and Worksport New York entered into a Forbearance Agreement with the Lender in connection with the Loan

Pursuant to the Forbearance Agreement, the Lender agreed to forbear from commencing an action for judgement of foreclosure

and sale, seeking an appointment of a receiver or collecting default accrued interest under the Loan until the occurrence of a Termination

Event (as defined in the Forbearance Agreement) and the Company and Worksport waived all defenses in connection with the Worksport New

York failure to maintain 1.20 to 1.0 debt service coverage ratio of net operating income to debt service under the Loan for each of the

trailing twelve (12) months ended December 31, 2023, and the indirect sale of equity securities of Worksport New York as a result of

the Company’s sale equity securities in November 2023 (the “Existing Defaults”).

Pursuant to the Forbearance Agreement,

the definition of “Permitted Transfers” in the Loan Agreement was amended to include the transfer of direct or indirect interest

in the Company solely through a stock sale for capital raising purposes, subject to certain conditions, including no occurrence of an

Events of Default (other than the Existing Defaults), change in ownership or control of the Company, no new 10% or greater owners, and

no involvement of Sanctioned Persons.

The Borrower must provide prior notice to Lender and satisfactory reporting of the results of the

capital raise.

On May 14, 2024, the Company successfully negotiated an extension of the maturity date for its $5.3 million Loan Agreement

(Note 12) that was originally due on May 20th, 2024.

The Company entered into an agreement with the lender to extend the maturity date

to August 10th, 2024.

See “Note 17 Subsequent Events.”

the year ended December 31, 2020, the Company received $ 28,387 ($ 40,000 CAD) interest-free

4 unchanged sentences

CAD) and, as of February 14, 2023, received the forgiven debt of $ 7,493 ($ 10,000 CAD).

at September 30, 2023 and December 31, 2022, there are no amounts owing, and the loan has

been fully settled.

at March 31, 2024 and December 31, 2023, there are no amounts owing, and the loan has been

fully settled.

Loss per Share

the three and nine months ended September 30, 2023, basic and diluted loss per share is $ 0.23

compared to the three and nine months ended September

30, 2022 having basic and diluted loss per share of $ 0.17

These losses per share are calculated using the weighted average number of shares of 17,429,685

and 17,252,521

for the three and nine months ended September

30, 2023, respectively, and weighted

average number of shares of 17,164,505 and 17,059,021

for the three and nine months ended September

30, 2022, respectively.

For the periods presented, our potentially dilutive shares relating to stock options and restricted stock units

were not included in the computation of diluted net loss per share, as the effect of including these shares in the calculation would

have been anti-dilutive.

The potentially dilutive shares totaling 20,541,911

and 20,254,411

for the three and nine months ended September

30, 2023 were excluded from the calculation of diluted net loss per share.

are 299,000,000 shares

authorized and 17,436,805 and

17,189,104 shares

issued and outstanding, as of September 30, 2023 and 2022, respectively.

The computation of loss per share is based on the weighted average

number of shares outstanding during the period in accordance with ASC Topic No.

260, “Earnings Per Share.” Shares underlying

the Company’s outstanding warrants and stock options were excluded due to the anti-dilutive effect they would have on the computation.

As of September 30, 2023, the Company has 3,939,924

warrants convertible to 4,239,924

shares of common stock, 170,212

restricted stock to be issued, 300,000

performance stock units and stock options exercisable

for 3,576,256

shares of common stock, for a total underlying

shares of common stock of 8,286,392 .

As of September 30, 2022, the Company had 4,439,924

warrants convertible to 5,239,914

common shares, 772,500

stock options exercisable for 772,500

common shares and performance stock units of

common shares, for a total underlying common shares

of 6,712,414 .

the nine months ended September 30, 2023, the Company and a stock options holder reached an agreement to cancel all 400,000 stock options

in exchange for extending the exercisable period of 300,000 warrants to December 31, 2024.

the year ended December 31, 2022, an aggregate of 250,121 warrants were exercised primarily on a cashless basis for 73,321 shares of

common stock, and 1,599,179 Reg-A public offering and private placement warrants expired.

the year ended December 31, 2022, the Company and a warrant holder reached an agreement to extend the exercisable period of 300,000 warrants,

convertible to 2 shares of common stock each, for an additional 12 months.

the year ended December 31, 2021, the Company and warrant holder reached an agreement to amend a previous warrant agreement.

issued an additional 150,000 warrants for a total of 250,000 warrants valued at $ 37,000 .

The exercisable period of the warrants was also

amended to a period of five years beginning on January 14, 2021 .

The warrants are convertible to 1 share of common stock, each exercisable

at $ 2 per share.

During the year ended December 31, 2022, the warrants were exercised on a cashless basis for 73,321 shares of common

the year ended December 31, 2021, the Company issued 130,909 representative warrants to the Company’s underwriters.

The representative

warrants were not exercisable until January 30, 2022.

The representative warrants are exercisable for 130,909 shares of common stock

at $ 6.05 per share until August 3, 2024.

As of December 31, 2022, the Company recognized a value of $ 273,993 for the representative warrants

to share issuance cost.

of September 30, 2023, the Company has the following warrants outstanding:

the three months ended March 31, 2024, loss per share is $ 0.18 (basic and diluted) compared to that of the three months ended March 31,

2023, of $ 0.21 (basic and diluted) using the weighted average number of shares of 21,188,070 (basic and diluted) and 17,159,376 (basic

and diluted), respectively.

are 299,000,000 shares authorized with 24,100,201 and 17,159,376 shares issued and outstanding, as at March 31, 2024 and 2023, respectively.

The computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with

ASC Topic No.

260, “Earnings Per Share.” Shares underlying the Company’s outstanding warrants and convertible promissory

notes were excluded due to the anti-dilutive effect they would have on the computation.

As of March 31, 2024, the Company has 20,118,080

warrants convertible to 20,418,080 common shares, 357,018 restricted stock to be issued, and 5,132,656 stock options exercisable for

5,132,656 common shares for a total underlying common shares of 25,907,754 .

As of March 31, 2023, the Company has 3,939,924 warrants

convertible to 4,239,924 common shares, 2,815,212 restricted stock to be issued, 700,000 performance stock units and 1,195,106 stock

options exercisable for 1,195,106 common shares for a total underlying common shares of 8,950,242 .

the three months ended March 31, 2024, in connection with the sale of 2,372,240 shares of common stock, the Company also sold 1,477,892

pre-funded warrants and issued 7,700,264 warrants exercisable for a total of 7,700,264 shares of common stock for

$ 0.0001 and $ 0.74 , respectively, per share.

The Company received net proceeds of $ 1,093,492 associated with the sale of the pre-funded warrants.

The pre-funded warrants are immediately exercisable until all of the pre-funded warrants are exercised.

the year ended December 31, 2023, in connection with the sale of 1,925,000

shares of common stock the Company in a registered direct offering, the Company also sold 1,575,000

pre-funded warrants and 7,000,000

warrants exercisable for 7,000,000 shares of common stock for $ 0.0001

respectively, per share.

The Company received net proceeds of $ 2,110,342

associated with the sale of the pre-funded warrants.

During the same period 887,000

pre-funded warrants were exercised for 887,000

shares of common stock for $ 89 .

During the three months

ended March 31, 2024, the remaining 688,000

pre-funded warrants were exercised for 688,000

shares of common stock for $ 69 .

the year ended December 31, 2023, the Company and a stock options holder agreed to cancel all 400,000 stock options in exchange for extending

the exercisable period of 300,000 warrants to December 31, 2024.

Later in the year ended December 31, 2023, the expiration date for these

warrants was extended to December 31, 2026, and the stock option holder was issued an additional 400,000 restricted stock units.

of March 31, 2024, the Company has the following warrants outstanding:

Schedule of Warrants Exercise Price

4 unchanged sentences

August 6, 2024

December 31, 2024

March 20, 2025

Schedule of Warrants Activity

December 31, 2026

September 20, 2029

average remaining contractual life of outstanding warrants that expire is 3.97

of Warrants Activity

March 31, 2024

December 31, 2023

4 unchanged sentences

Balance, beginning of year

( 1,593,691 )

Balance, end of period

16 unchanged sentences

to include new terms pertaining to the PSU vesting schedule.

The PSUs vest in 5% increments according to the modified schedule that correlates

with the Company’s stock price.

The first 5% of the PSUs vest upon the Company’s stock price closing at $2.25, 50% will have

vested at a closing price of $5.31, and 100% will have vested at a closing price of $13.76 as measured using the volume weighted average of the Company’s common stock for ten (10) consecutive trading

days, with over $ 100,000 of trading volume on each of those days.

The fair value of the PSUs was estimated

to be $ 1,254,460 .

As of September 30, 2023, 75,000 PSUs have vested, and the Company recognized $ 128,433 (2022 - $ 0 ) in consulting expenses.

December 29, 2021, the Company granted 400,000 and 300,000 performance stock units (“PSUs”) to the Company’s Chief

Executive Officer and a director, respectively.

The PSUs were to vest in 5% increments according to a schedule that correlates with the

Company’s stock price.

The first 5% of the PSUs was to have vested upon the Company’s stock price closing at $3.00, 50% was

to have vested at a closing price of $16.50, and 100% was to have vested at a closing price of $31.50.

The fair value of the PSUs was

estimated to be $ 1,344,570 .

As of September 30, 2023, no PSUs have vested, and the Company recognized $ 0 (2022 - $ 201,686 ) in consulting

On December 29, 2021, the Company granted 400,000 and 300,000 performance

stock units (“PSUs”) to the Company’s Chief Executive Officer and a director, respectively.

Company uses the Black-Scholes option pricing model to determine fair value of stock options on the grant date.

the nine months ended September 30, 2023, the Company issued 321,150

the three months ended March 31, 2024, Company issued 68,800 stock options to employees with an exercise price ranging from $ 0.57 to

$ 1.41 and an expiration from January 31, 2029 to March 21, 2034.

the year ended December 31, 2023, the Company issued 1,500,000

stock options to Steven Rossi.

The stock options

have an exercise price of $ 1.44

and an expiration date of October

the year ended December 31, 2023, the Company issued 12,100 and 25,000 stock options to employees with an exercise price of $ 1.70 and

$ 1.44 , respectively.

The stock options will expire 10 years from the grant date.

the year ended December 31, 2023, the Company issued 321,150

stock options to employees, consultants and directors with an exercise price ranging from $ 2.55

of the stock options will expire 5

years from the date of grant.

options shall vest in two equal installments on the first and second anniversary of the grant date.

10,000 of the stock options will

vest entirely on September 27, 2024, 47,000 of the stock options shall vest in three installments 15,000 will vest on first and

second anniversary of grant date, with the remaining 17,000 to vest on the third anniversary of grant date .

The fair value of

the options on the grant date was estimated to be $ 1,116,856 .

The Company recognized $ 100,901

in wages and salary and consulting expenses during the nine months ended September 30, 2023.

the nine months ended September 30, 2023, the Company issued 2,000,000 stock options to Steven Rossi.

The stock options have an exercise

price of $ 1.74 and an expiration date of May 1, 2033 .

The options shall vest in increments of 10% for each dollar that the Company’s

stock price increases between $2.00 and $11.00, as measured using the volume weighted average of the Company’s common stock for

ten consecutive trading days.

The fair value of the options on the grant date was estimated to be $ 2,821,572 .

The Company recognized

$ 658,367 in wages and salary during the nine months ended September 30, 2023.

the nine months ended September 30, 2023, the Company issued 75,000 stock options to an employee with an exercise price of $ 2.43 and

expiring on May 18, 2033 .

The options shall vest in two installments, 25,000 on May 18, 2024, and 50,000 on August 1, 2024.

The fair value

of the options on the grant date was estimated to be $ 182,025 .

The Company recognized $ 22,380 in wages and salary expenses during the

nine months ended September 30, 2023.

the nine months ended September 30, 2023, the Company issued 65,000

stock options to employees and a consultant with an exercise price of $ 1.53

and expiring on March

options shall vest in two equal installments on March 14, 2024, and 2025 .

The fair value of the options on the grant date was

estimated to be $ 98,670 .

The Company recognized $ 24,130

in wages and salary and consulting expenses during the nine months ended September 30, 2023.

During the nine months ended September

30, 2023, 15,000

to $ 4.20 which will expire at various points though August 23, 2033.

During the year ended December 31, 2023, 49,500

stock options were cancelled upon the departure of employees.

as a result the Company recognized $ 19,406

in wages and salary expense during the period.

the nine months ended September 30, 2023, the Company issued 85,106 stock options to an employee with an exercise price of $ 1.53 and

expiring on March 14, 2033 .

The options shall vest in two installments;

a) one fiscal quarter in which the Company generates $3,600,000

in sales with at least 20% unit margin and b) one fiscal quarter in which the Company generates $5,400,000 in sales with at least 30%

unit margin .

The fair value of the options on the grant date was estimated to be $ 129,191 .

The Company recognized $ 56,557 in wages and

salary expenses during the nine months ended September 30, 2023.

the nine months ended September 30, 2023, the Company issued 300,000 stock options to a consultant with an exercise price of $ 1.66 and

expiring on January 30, 2028 .

The options shall vest in three equal installments on January 30, 2023, March 1, 2023, and September 1,

The fair value of the options on the grant date was estimated to be $ 486,600 .

The Company recognized $ 486,600 in consulting expenses

during the nine months ended September 30, 2023.

the nine months ended September 30, 2023, the Company issued 360,000 stock options to directors with an exercise price of $ 1.66 and expiring

the year ended December 31, 2023, the Company issued 2,000,000 stock options to Steven Rossi.

The stock options have an exercise price

of $ 1.74 and an expiration date of May 1, 2033 .

the year ended December 31, 2023, the Company issued 75,000 stock options to an employee with an exercise price of $ 2.43 and expiring

on May 18, 2033 .

the year ended December 31, 2023, the Company issued 65,000 stock options to employees and a consultant with an exercise price of $ 1.53

and expiring on March 14, 2033 .

During the year ended December 31, 2023, 15,000 stock options were cancelled upon the departure of employees.

the year ended December 31, 2023, the Company issued 85,106 stock options to an employee with an exercise price of $ 1.53 and expiring

on March 14, 2033 .

the year ended December 31, 2023, the Company issued 300,000 stock options to a consultant with an exercise price of $ 1.66 and expiring

on January 30, 2028 .

The options shall vest in six equal installments on January 30, 2023, July 31, 2023, January 30, 2024, July 30,

2024, January 30, 2025, and July 30, 2025 .

The fair value of the options on the grant date was estimated to be $ 592,560 .

recognized $ 157,799 in consulting expenses during the nine months ended September 30, 2023.

the year ended December 31, 2022, the Company granted 10,000 and 50,000 options to advisors with an exercise price of $ 2.19 and $ 2.37 ,

respectively, expiring on February 7, 2027 , and May 5, 2032 , respectively.

The options vested immediately upon issuance.

The fair values

of the options on the grant date were estimated to be $ 21,780 and $ 261,400 , respectively.

The Company recognized $ 0 (2022 - $ 283,180 )

in consulting expenses during the nine months ended September 30, 2023.

the year ended December 31, 2022, the Company granted 12,500 options to a consultant with an exercise price of $ 1.60 expiring on November

The options are earned in four equal installments on February 27, 2023, May 29, 2023, August 29, 2023, and November 27, 2023.

The options shall vest one year after being earned on February 27, 2024, May 29, 2024, August 29, 2024, and November 27, 2024 .

value of the options on the grant date was estimated to be $ 18,725 .

The Company recognized $ 14,159 (2022 - $ 0 ) in consulting expenses

during the nine months ended September 30, 2023.

the year ended December 31, 2022, Terravis Energy, Inc., a subsidiary of the Company, granted an aggregate of 1,350,000 of Terravis Energy,

stock options to its officers and directors.

The stock options have an exercise price of $ 0.01 and will expire on April 12, 2032 .

The options vested immediately upon issuance.

The fair value of the options on the grant date was estimated to be immaterial.

July 23, 2021, the Company granted 15,000 options to a director with an exercise price of $ 5.50 and an expiry date of July 23, 2026 .

The stock options vested on January 1, 2022 .

The fair value of the options on the grant date was estimated to be $ 129,480 .

recognized $ 0 (2022 - $ 799 ) to consulting expenses during the nine months ended September 30, 2023.

August 6, 2021, the Company granted 140,000 options to directors, advisors, and officers with an exercise price of $ 5.50 and an expiry

date of August 6, 2026 .

The stock options vested on January 1, 2022.

The fair value of the options on the grant date was estimated to

be $ 754,189 .

The Company recognized $ 0 (2022 - $ 5,096 ) to consulting expenses during the nine months ended September 30, 2023.

September 1, 2021, the Company granted 400,000 options to a consultant with an exercise price of $ 5.32 and an expiry date of September

100,000 shall vest on March 1, 2022, 100,000 shall vest on September 1, 2022, 100,000 shall vest on March 1, 2023, and 100,000

shall vest on September 1, 2023.

The fair value of the options on the grant date was estimated to be $ 2,112,000 .

The Company recognized

$ 87,514 (2022 - $ 790,541 ) to consulting expenses during the nine months ended September 30, 2023.

During the nine months ended September

30, 2023, the Company and the stock options holder reached an agreement to cancel all 400,000 stock options in exchange for extending

the exercisable period of 300,000 warrants to December 31, 2024.

October 7 and November 2, 2021, the Company granted advisors 5,000 and 62,500 options with exercise prices of $ 5.50 and $ 5.24 , respectively.

The options will expire on October 7, 2026 , and November 2, 2026 , respectively.

The stock options fully vested on January 1, 2022.

fair value of the options on the grant date was estimated to be $ 353,230 .

The Company recognized $ 0 (2022 - $ 32,856 ) to consulting expenses

during the nine months ended September 30, 2023.

December 29, 2021, the Company granted an aggregate of 90,000 options to members of the board with an exercise price of $ 2.51 .

will expire on December 29, 2026 .

For each of these three option grants, 10,000 vested on December 29, 2022, 10,000 shall vest on December

29, 2023, and 10,000 shall vest on December 29, 2024.

The fair value of the options on the grant date was estimated to be $ 224,280 .

Company recognized $ 56,326 (2022 - $ 56,326 ) in consulting expenses during the nine months ended September 30, 2023.

the year ended December 31, 2023, the Company issued 360,000

stock options to directors with an exercise price

and expiring on January

Schedule of Stock Options Activity

September 30, 2023

March 31, 2024

December 31, 2023

stock options

average price

stock options

average price

Number of stock options

Weighted average price

Number of stock options

Weighted average price

Balance, beginning of year

4 unchanged sentences

Weighted average exercise price

Exercisable on September 30, 2023

Exercisable on March 31, 2024

Stock options

$ 1.53 - 5.50

of September 30, 2023 and December 31, 2022, Terravis Energy Inc.

has the following options outstanding:

of March 31, 2024 and December 31, 2023, Terravis Energy Inc., a wholly owned subsidiary of the Company, has the following options outstanding:

Schedule of Stock Options Activity

September 30, 2023

March 31, 2024

December 31, 2023

stock options

average price

stock options

average price

Number of stock options

Weighted average price

Number of stock options

Weighted average price

Balance, beginning of year

Balance, end of period

Schedule of Share-based Payment Arrangement, Option, Exercise Price Range

Range of Exercise prices

of Share-based Payment Arrangement, Option, Exercise Price Range

Exercise prices

Weighted average life (years)

Weighted average exercise price

Exercisable on September 30, 2023

Exercisable on March 31, 2024

Stock options

2 unchanged sentences

sublease commenced on September 15, 2022 , and will end on May 31, 2024 at $ 15,515 ($ 19,992 CAD) per month.

the year ended December 31, 2022, the Company entered into a lease agreement in relation to its West Seneca property.

Initially, the

Company entered into a lease agreement with a third-party from July 1 to December 31, 2022 at $ 33,750 per month.

On September 23, 2022,

a mutual agreement was reached to terminate the lease agreement.

the nine months ended September 30, 2023, the Company recognized rental income of $ 139,892 (2022 - $ 204,770 ).

the three months ended March 31, 2024, the Company recognized rental income of $ 45,353 (2023 - $ 44,456 ).

Subsequent Events

Company has evaluated subsequent events through November 14, 2023.

The following events occurred after the quarter-ended September 30,

to September 30, 2023, the Company sold a total of 71,698 shares of common stock for total

net proceeds of $ 118,697 .

The sale of the shares of common stock was in connection with the

Form S-3 shelf registration statement, which was declared effective by the SEC on October

13, 2022 allowing the Company to issue up to $ 30,000,000 of shares of common stock and prospectus

supplement covering the offering, issuance and sale of up to $ 13,000,000 of shares

of common stock that may be issued and sold under the At The Market Offering Agreement dated

as of September 30, 2022.

● Subsequent to September 30, 2023, 47,000 stock options with an estimated

valuation of $ 168,213 were cancelled upon the termination of the employee.

● On October 31, 2023, the Company granted 10,000 non-qualified stock options

to an employee with an exercise price of $ 1.44 and an expiry date of October 31, 2033.

The options shall vest in full on October 31, 2035.

● On November 2, 2023, the Company closed a sale of 1,925,000 shares of common

stock and 1,575,000 pre-funded warrants for a total net proceeds of $ 4,261,542 .

In association with sale, the Company also issued 7,000,000

warrants convertible for 7,000,000 shares of common stock at an exercise price of $ 1.34 .

The warrants are exercisable six months after

issuance and will expire five and a half years from the issuance date.

Company has evaluated subsequent events through May 15, 2024.

The following events occurred after the three months ended March 31, 2024:

April 29, 2024, 13,300 stock options issued during the three months ended March 31, 2024 were

forfeited with the termination of the employee with the Company.

● 16,667 RSU units were granted onto a Contractor on May 1, 2024 in consideration for services rendered in Q1 2024.

● On May 6, 2024, 1,477,892 pre-funded warrants issued during the three months ended March 31, 2024 were exercised for 1,477,892

shares of common stock for $ 148 .

May 8, 2024, the Company announced its receipt of a major grant from New York State Excelsior Jobs Program worth up to $ 2.8

grant, following a strategic low-cost power award from New York Power Authority (NYPA) in April 2024, signifies additional

state-level investment in the Company’s expanding operations.

With growth exceeding NY State’s forecasts, the

Company expects to create up to or over 280 new jobs from 2025 to 2030 and if achieved will receive cash benefits for the

creation of these jobs, amounting to $2.8 million received over the next 10 years.

● On May 14, 2024, the Company and Worksport New York Operations Corporation (“Worksport New York”) entered

into an Omnibus Amendment of Loan Documents (the “Loan Amendment”) with Northeast Bank (the “Lender”) in connection

with that certain secured loan agreement, dated May 4, 2022 (the “Loan Agreement”), by and among the Company, as the guarantor

(the “Guarantor”), Worksport New York, as the borrower (the “Borrower”), and the Lender in connection with the

Company’s purchase of its 152,847 square foot facility and 18 acres of land in West Seneca, New York on May 6, 2022 for a total

purchase price of $ 8,150,000 .

Pursuant to the Loan Amendment, effective as of May 10, 2024, the Lender extended the initial maturity date

of the Loan from May 10, 2024 to August 10, 2024 (the “Extended Maturity Date”).

The Company also agreed to pay the Lender

an extension fee of $ 106,000 (the “Extension Fee”) which was deemed fully earned as of the date of the Loan Amendment.

the Lender agreed to postpone payment of the Extension Fee until the occurrence of (i) the Loan not being repaid in full by or on the

Extended Maturity Date;

or (ii) Loan being accelerated following an Event of Default or Termination Date (as defined in the Forbearance

If the Loan is repaid in full on or prior to the Extended Maturity Date, the Lender has agreed to waive the Extension Fee.

In addition to the Extension Fee, the Company agreed to pay the Lender an exit fee of $ 106,000 (the “Exit Fee”) in the event

the Loan is not repaid in full on or prior to the Extended Maturity Date or if the Loan has been accelerated following an Event of Default

or in connection with a Termination Event (as defined in the Forbearance Agreement).

If the Loan is repaid in full on or prior to the

Extended Maturity Date (and not as a result of an acceleration following a Termination Event), the Company will not be required to pay

the Exit Fee.

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 1. Financial Statements