What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-16 · 401 added, 341 removed, 276 unchanged (73% of the section changed)

Financial Statements

Worksport Ltd.

Condensed Consolidated Balance Sheets

March 31, 2024

December 31, 2023

Consolidated Balance Sheets

30, 2024 (Unaudited)

Current Assets

Cash and cash equivalents

Cash and cash

Accounts receivable, net

2 unchanged sentences

Related party loan (note

Prepaid expenses and deposits (note 5)

Total Current Assets

expenses and deposits (note 5)

Current Assets

Investments (note 10)

Property and Equipment, net (note 6)

Right-Of-Use Asset, net (note 11)

Intangible Assets, net

Liabilities and Shareholders’ Equity

Property and Equipment,

Right-Of-Use Asset, net

Liabilities and Shareholders’

Current Liabilities

Accounts payable and accrued liabilities

Accounts payable and accrued

Payroll taxes payable

Related party loan (note

Loan payable (note 12)

Current lease liability (note 11)

Total Current Liabilities

Long Term – Lease Liability (note 11)

Total Liabilities

Current portion – Long term debt (note 12)

lease liability (note 11)

Current Liabilities

Long Term – Lease

Liability (note 11)

Term Debt (note 12)

Shareholders’ Equity

Series A & B Preferred Stock, $ 0.0001 par value, 100,100 shares authorized, 100 Series A and 0 Series B issued and outstanding, respectively (note 7)

Common stock, $ 0.0001 par value, 299,000,000 shares authorized, 24,100,201 and 20,320,503 shares issued and outstanding, respectively (note 7)

Series A & B Preferred Stock, $ 0.0001 par

value, 100,100 shares authorized, 100 Series A and 0 Series B issued and outstanding, respectively (note 7)

Common stock, $ 0.0001 par value, 299,000,000

shares authorized, 28,520,704 and 20,320,503 shares issued and outstanding, respectively (note 7)

Additional paid-in capital

4 unchanged sentences

( 48,313,177 )

Cumulative translation adjustment

Total Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

Cumulative translation

Shareholders’ Equity

Liabilities and Shareholders’ Equity

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

Consolidated Statements of Operations and Comprehensive Loss

the Three Months Ended March 31, 2024 and 2023

Three Months ended March 31,

Cost of Goods Sold

the Three and Six Months Ended June 30, 2024 and 2023

Three Months ended

of Goods Sold

Operating Expenses

2 unchanged sentences

Professional fees

Gain on foreign exchange

Total operating expenses

Loss from operations

loss on foreign exchange

operating expenses

from operations

( 3,910,748 )

( 3,738,719 )

( 7,550,214 )

( 7,268,667 )

Other Income (Expense)

2 unchanged sentences

Rental income (note 17)

Gain on settlement of debt

Total other income (expense)

on settlement of debt

other income (expense)

$ ( 4,013,399 )

$ ( 3,797,455 )

Loss per Share (basic and diluted)

Weighted Average Number of Shares (basic and diluted)

$ ( 7,728,056 )

$ ( 7,320,725 )

Loss per Share (basic

Weighted Average Number of Shares (basic

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

Consolidated Statements of Shareholders’ Equity

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

the Three Months Ended June 30, 2024 and 2023

Subscriptions

Stockholders’

at April 1, 2023

$ ( 36,907,489 )

Issuance for services and subscriptions payable

Issuance for services

and subscriptions payable

Share issuance

( 3,797,455 )

Balance at March 31, 2023

at June 30, 2023

$ ( 40,704,944 )

Balance at January 1, 2024

at April 1, 2024

$ ( 52,027,834 )

Issuance for services

and subscriptions payable

Warrant inducement (note

Warrant exercise (note 14)

( 4,013,399 )

Issuance for services and subscriptions payable

( 4,013,399 )

at June 30, 2024

$ ( 56,041,233 )

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

Consolidated Statements of Shareholders’ Equity

the Six Months Ended June 30, 2024 and 2023

Subscriptions

Stockholders’

at January 1, 2023

$ ( 33,384,219 )

Issuance for services

and subscriptions payable

Share issuance

( 7,320,725 )

at June 30, 2023

$ ( 40,704,944 )

at January 1, 2024

$ ( 48,313,177 )

Issuance for services

and subscriptions payable

Shares issued (note 7)

Warrant exercise

Warrant inducement (note

Warrant exercise (note 14)

( 7,728,056 )

Balance at March 31, 2024

at June 30, 2024

$ ( 56,041,233 )

2 unchanged sentences

Consolidated Statements of Cash Flows

the Three Months Ended March 31, 2024 and 2023

the Six Months Ended June 30, 2024 and 2023

Operating Activities

1 unchanged sentence

$ ( 7,320,725 )

Adjustments to reconcile net loss to net cash from operating activities:

Shares, options and warrants issued for services

Adjustments to reconcile net loss to net cash

from operating activities:

Shares, options and warrants

issued for services

Depreciation and amortization

Change in operating lease

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

operating activities

in operating lease

Adjustments to reconcile net income loss to cash provided

by (used in) operating activities

( 2,736,258 )

( 3,967,736 )

Changes in operating assets and liabilities (note 9)

Changes in operating

assets and liabilities (note 9)

( 1,429,494 )

Net cash used in operating activities

( 2,665,715 )

cash used in operating activities

( 6,421,292 )

Cash Flows from Investing Activities

Purchase of property and equipment

( 6,018,704 )

Net cash used in investing activities

Cash Flows from Investing

Purchase of property

and equipment

( 2,596,738 )

cash used in investing activities

( 2,663,046 )

Financing Activities

Shareholder assumption of debt

Net change in related party loan

Proceeds from warrant exercise

Proceeds from issuance of common share, net of issuance cost

Net cash received from financing activities

Proceeds from issuance of common share, net

of issuance cost

Proceeds from issuance of common stock

cash received from (used in) financing activities

Change in cash

( 8,718,522 )

Cash, restricted cash and cash equivalents - beginning of period

Cash, restricted cash and cash equivalents end of period

Supplemental Disclosure of non-cash investing and financing Activities

Shares issued for purchase of software

Supplemental Disclosure of cash flow information

restricted cash and cash equivalents - beginning of period

restricted cash and cash equivalents end of period

Supplemental Disclosure of non-cash operating and investing activities

Fixed asset additions included in accounts payable

Supplemental Disclosure

of non-cash investing and financing activities

Shares issued for purchase

Supplemental Disclosure of non-cash operating and financing activities

Warrant inducement issuance costs included in accounts payable

Disclosure of cash flow information

Income tax paid

11 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 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.

results for the three and six month periods ended June 30, 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

33 unchanged sentences

Going Concern

of March 31, 2024, the Company had $ 3,536,980 in cash and cash equivalents.

of June 30, 2024, the Company had $ 3,426,089 in cash and cash equivalents.

The Company has generated only limited revenues and has relied

2 unchanged sentences

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 .

As of June 30, 2024, the Company had an accumulated deficit of $ 56,041,233 .

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.

During the three and

six months ended June 30, 2024, the Company had net losses of $ 4,013,399 (2023 - $ 3,797,455 ) and $ 7,728,056 (2023 - $ 7,320,725 ).

June 30, 2024, the Company had working capital of $ 8,489,246 (December 31, 2023 – $ 1,956,894 ) and had an accumulated deficit of

$ 56,041,233 (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 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.

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 started to generate

revenue in the third quarter of 2023, registering its highest quarterly sales total in the Company’s history in the second quarter

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

8 unchanged sentences

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.

As of June 30, 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

19 unchanged sentences

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

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

of June 30, 2024 and December 31, 2023, inventory consists of the following:

Schedule of Inventory

March 31, 2024

December 31, 2023

Finished goods

1 unchanged sentence

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.

of June 30, 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, as well as their raw materials to capitalize on demand generated from the Company’s 2024 sales

Prepaid expenses and deposits

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

of June 30, 2024 and December 31, 2023, prepaid expenses and deposits consist of the following:

Schedule of Prepaid Expenses and Deposits

March 31, 2024

December 31, 2023

Consulting, services, and advertising

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 deposits relate to prepayments for

manufacturing components and finished goods.

Prepaid expenses and deposits,

of June 30, 2024, prepaid expenses and deposits consists of $ 55,003 (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 deposits relate to

prepayments for manufacturing components and finished goods.

Property and Equipment

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

of June 30, 2024 and December 31, 2023, major classes of property and equipment consist of the following:

Schedule of Property and Equipment

March 31, 2024

December 31, 2023

Manufacturing equipment

2 unchanged sentences

Property and Equipment, gross

Less accumulated depreciation

Less accumulated

( 2,279,299 )

( 1,664,580 )

Property and Equipment,

and Equipment, net

Shareholders’ Equity (Deficit)

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.

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

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 .

six months ended June 30, 2024, the following transactions occurred:

the six months ended June 30, 2024, the Company sold 504,921

shares of common stock for a total net proceeds

of $ 566,118 .

The sale 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.

Company recognized consulting expense of $ 595,863

to share subscriptions payable from restricted

shares and stock options to be issued.

As of June 30, 2024, the Company issued 317,148

restricted shares with a value of $ 369,700 .

the six months ended June 30, 2024, the Company closed a sale of 2,372,240 shares of common stock for net proceeds of $ 1,535,591 .

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 14, 15 and 16 for additional shareholders’ equity (deficit) details.

six months ended June 30, 2023, the following transactions occurred:

Company recognized consulting expense of $ 903,596 to

share subscriptions payable from restricted shares and stock options to be issued.

As of June 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 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 .

of June 30, 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 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.

During the six months ended June 30, 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 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 March 31, 2024, the Company has a receivable of $ 14,303 (December

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

the six months ended June 30, 2024, the Company recorded salaries expense of $ 230,026 (2023 - $ 210,394 ) for the Company’s CEO.

During the six months ended June 30, 2024, the Company recorded salaries expense of $ 164,937 (2023 – 148,927 ) to an officer and

director of the Company .

As of June 30, 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 three months ended March 31, 2024 and 2023 are as follows:

changes to the Company’s operating assets and liabilities for the six months ended June 30, 2024 and 2023 are as follows:

Schedule of Changes in Operating Assets and Liabilities

Decrease (increase) in accounts receivable

Decrease (increase) in accounts

$ ( 160,264 )

$ ( 263,874 )

Decrease (increase) in other receivable

1 unchanged sentence

( 2,755,252 )

Decrease (increase) in prepaid expenses and deposits

Increase (decrease) in taxes payable

Increase (decrease) in accounts payable and accrued liabilities

( 1,533,492 )

Decrease (increase) in prepaid expenses

Increase (decrease) in payroll taxes

Increase (decrease)

in accounts payable and accrued liabilities

in operating assets and liabilities

1 unchanged sentence

$ ( 2,665,715 )

the year ended December 31, 2019, the Company entered into an agreement to purchase 10,000,000

shares of a privately owned US-based mobile phone development company for $ 50,000 –

representing a 10 % equity stake.

During the year

ended December 31, 2019, the Company entered into an agreement to purchase 10,000,000

shares of a privately owned US-based mobile phone

development company for $ 50,000

– representing a 10 %

equity stake.

The shares have been issued to the Company.

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 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

As of June 30, 2024, and December 31, 2023, the Company had advanced a total

and is advancing tranches of capital as required by the Company.

During the six

months ended June 30, 2024, $ 66,308 ($ 90,000

CAD) of the Company’s Guaranteed Investment

Certificate (“GIC”) matured and the Company received $ 3,054

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

The GIC bears a variable interest

rate and will mature on February 27, 2025.

The anticipated earned interest on the GIC at maturity is $ 3,123

Operating Lease Obligations

9 unchanged sentences

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:

Company did not exercise the one year extension option for this facility.

the six months ended June 30, 2024, 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, 2024, for a monthly rent of $ 3,600 .

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 June 30, 2024, and December 31, 2023, are as follows:

Schedule Right-of-use Asset

March 31, 2024

December 31, 2023

Right-of-use asset

3 unchanged sentences

of Lease Costs

March 31, 2024

March 31, 2023

Operating lease cost

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:

following is a summary of cash paid during the six months ended June 30, 2024 and 2023 for amounts included in the measurement of lease

of Measurement of Lease Liabilities

March 31, 2024

March 31, 2023

Operating cashflow

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

following are future minimum lease payments as of June 30, 2024:

Schedule of Future Minimum Lease Payments

Total future minimum lease payments

Total future minimum lease

amount representing interest

Present value of future payments

Current portion

Long term portion

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

Long term Debt

On 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 ,

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

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 ,

of June 30, 2024, this account’s balance had changed to $ 386,164 ,

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 .

As of June 30, 2024, the outstanding principal

and the accrued interest was an aggregate of $ 5,325,664 .

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.

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

2 unchanged sentences

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

York failure to maintain 1.20 to 1.0 debt service coverage ratio of 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

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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

Event 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.

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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

from the Government of Canada as part of the COVID-19 small business relief program.

the balance of the loan on or before December 31, 2023 resulted in loan forgiveness of 25

percent ( 25 %).

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

has since refinanced this loan.

July 19, 2024, the Company, as the guarantor, and Worksport New York Operations Corporation as well as Worksport USA Operations Corporation,

entered into a $ 6,000,000

Revolving Financing and Assignment Agreement

with an external lending entity with a maturity of 24 months from initial funding (July 2026).

Upon transaction close, the Company drew

down approximately $ 5.06

million of the Revolving Credit Facility, net

of interest reserve required to be withheld to

ensure interest payments by the Company.

The Company used $ 4.73

million of the drawn down amount to refinance

the Company’s mortgage on the Company’s real property located at 2500 North America Dr.

in West Seneca, New York, and additionally

drew approximately $ 330,000 ,

leaving approximately $ 940,000

for Accounts Receivable financing under the Agreement as of the deal close date.

During the year ended December 31, 2020, the Company received $ 28,387

CAD) interest-free from the Government of Canada

as part of the COVID-19 small business relief program.

Repaying the balance of the loan on or before December 31, 2023 resulted in loan

forgiveness of 25 percent ( 25 %).

As of September 30, 2022, the Company made the repayment of $ 28,387

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

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

fully settled.

CAD) and, as of February 14, 2023, received the

forgiven debt of $ 7,493

As at June 30, 2024 and December 31, 2023,

there are no amounts owing, and the loan has been fully settled.

Loss per Share

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 three and six months ended June 30, 2024, loss per share is $ 0.15 and $ 0.33 (basic and diluted) compared to the three and six months

ended June 30, 2023, of $ 0.22 and $ 0.43 (basic and diluted) using the weighted average number of shares of 25,958,628 and 23,573,349 (basic

and diluted) as of June 30, 2024 and 17,165,533 and 17,162,471 (basic and diluted) as of June 30, 2023, respectively.

are 299,000,000 shares authorized with 28,520,704 and 17,413,810 shares issued and outstanding, as at June 30, 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

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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

As of June 30, 2024, the Company has 24,590,188

warrants convertible to 24,890,188 common shares, 357,018 restricted stock to be issued, and 5,462,256 stock options

exercisable for 5,462,256 common shares for a total underlying common shares of 30,709,462 .

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

warrants convertible to 4,239,924 common shares, 1,215,212 restricted stock to be issued, 300,000 performance stock units and 3,270,106

stock options exercisable for 3,270,106 common shares for a total underlying common shares of 9,025,242 .

the six months ended June 30, 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

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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 1,477,892

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 .

pre-warrants were exercised for 1,477,892 shares of common stock for $ 15 .

the year ended December 31, 2023, in connection with the sale of 1,925,000 shares of common stock 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 and

$ 1.34 , 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 six months ended

June 30, 2024, the remaining 688,000 pre-funded warrants were exercised for 688,000 shares of common stock for $ 69 .

Further, during this

same period, the Company induced the exercise of 7,000,000 warrants at a reduced exercise price of $ 0.5198 per share in consideration

for the Company to issue new warrants to purchase up to 12,950,000 additional shares of common stock – resulting in gross proceeds

of approximately $ 3,638,000 received by the Company.

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

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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:

of June 30, 2024, the Company has the following warrants outstanding:

Schedule of Warrants Exercise Price

Exercise price

Number outstanding

Remaining Contractual Life (Years)

Contractual Life (Years)

August 3, 2024

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September 20, 2029

November 26, 2029

average remaining contractual life of outstanding warrants that expire is 4.53

of Warrants Activity

March 31, 2024

December 31, 2023

Number of warrants

Weighted average price

Number of warrants

Weighted average price

Balance, beginning of year

Balance, end of period

average price

beginning of year

( 9,165,892 )

end of period

Stock Options and Performance Share Units

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units issued on November 11, 2022, and December 29, 2021, respectively, and replace them with 2,000,000 stock options, as described below.

November 11, 2022, 700,000 performance stock units (“PSUs”) granted on December 29, 2021, as described below, were modified

to include new terms pertaining to the PSU vesting schedule.

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.

November 11, 2022, 700,000 performance stock units (“PSUs”) granted on December 29, 2021, were modified to include new terms

pertaining to the PSU vesting schedule.

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 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 six months ended June 30, 2024, the Company issued 350,000 stock options to an employee with an exercise price of $ 0.78 and an expiration

date of June 28, 2034 .

the six months ended June 30, 2024, the Company issued 68,800 stock options to employees with an exercise price ranging from $ 0.57 to

$ 1.41 and expiration dates from February 1, 2029 to March 22, 2034.

Of these stock options, 8,300 were subsequently cancelled.

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 31, 2033 .

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

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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

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

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 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.

stock options were cancelled upon the departure of employees, and an additional 7,100 stock options were cancelled upon the departure

of an employee during the six months ended June 30, 2024.

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

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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

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

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

During the year ended December 31, 2023, 15,000

stock options were cancelled upon the departure of employees, and an additional 5,000

stock options were cancelled upon the departure of an employee during the six months ended June 30, 2024.

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

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on January 30, 2028 .

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

stock options to directors with an exercise price

and expiring on January

the year ended December 31, 2023, the Company issued 360,000 stock options to directors with an exercise price of $ 1.66 and expiring

on January 30, 2033.

Schedule of Stock Options Activity

March 31, 2024

December 31, 2023

Number of stock options

Weighted average price

Number of stock options

Weighted average price

Balance, beginning of year

Balance, end of period

of stock options

average price

of stock options

average price

beginning of period

end of period

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

Range of Exercise prices

Weighted average life (years)

Weighted average exercise price

Exercisable on March 31, 2024

of Exercise prices

average life (years)

average exercise price

on June 30, 2024

Stock options

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

of June 30, 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

March 31, 2024

December 31, 2023

Number of stock options

Weighted average price

Number of stock options

Weighted average price

Balance, beginning of year

Balance, end of period

of stock options

average price

of stock options

average price

beginning of period

end of period

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

Exercise prices

Weighted average life (years)

Weighted average exercise price

Exercisable on March 31, 2024

Stock options

of Exercise prices

average life (years)

average exercise price

on June 30, 2024

Warrant Inducement

May 9, 2024, the Company entered into a warrant inducement agreement (the “Inducement”) with the holder of existing warrants

to purchase an aggregate 7,000,000 shares at a reduced exercise price of $ 0.5198 .

Pursuant to the Inducement, the exercising holder of

the existing warrants received 12,950,000 inducement warrants and the Company received $ 3,639,000 from the exercise of the existing warrants.

As a result of the inducement and subsequent exercise, the Company determined the incremental fair value provided to the holder from

both the adjustment in exercise price of the existing warrants and the fair value of the inducement warrants issued using the Black Scholes

The total incremental fair value of $ 4,996,000 , is recorded as a non-cash deemed dividend.

The proceeds of the warrant inducement

and issuance of 2,840,000 shares of common stock are recorded as capital in excess of par.

The obligation to issue the remaining 4,160,000

shares is recorded as a share subscription payable.

Rental Income

the year ended December 31, 2022, the Company entered into a sublease agreement for its warehouse in Mississauga, Ontario, Canada.

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

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

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

the six months ended June 30, 2024, the Company recognized rental income of $ 76,866 (2023 - $ 94,835 ).

Subsequent Events

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.

Company has evaluated subsequent events through August 13, 2024.

The following events occurred after the three and six months ended

June 30, 2024:

July 19, 2024, the Company refinanced its $ 5.3

million loan by entering into a Revolving Financing and Assignment Agreement with a facility of $ 6

million with a maturity of 24

months from initial funding (July 2026).

Upon transaction close, the Company drew down approximately $ 5.06 million

of the Revolving Credit Facility, net of $ 790,000 of

interest reserve required to be withheld to ensure interest payments by the Company.

The Company used $ 4.73 million

of the drawn down amount to refinance the Company’s mortgage on the Company’s real property located at 2500 North

in West Seneca, New York, and additionally drew approximately $ 330,000 in

accounts receivables, leaving approximately $ 940,000 available

for Accounts Receivable financing under the Agreement as of the deal close date.

July 23, 2024, the Company engaged in stock option repricing for certain employees, executive

officers, and members of the board of directors of the Company.

All included options’

exercise prices were repriced to $ 0.7042 – the closing price per share of the Company’s

Common Stock as reported on The Nasdaq Stock Market on July 23, 2024.

The Repriced Options

consisted of certain outstanding stock options that had been granted under the Company’s

2015 Equity Incentive Plan, the 2021 Equity Incentive Plan and 2022 Stock Incentive Plan

as of the Effective Date.

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