What changed in this filing

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Item 1. Financial Statements

2024-11-13 compared with 2024-08-13 · 348 added, 348 removed, 329 unchanged (68% of the section changed)

1 unchanged sentence

Consolidated Balance Sheets

30, 2024 (Unaudited)

September 30, 2024 (Unaudited)

December 31, 2023

Current Assets

Cash and cash

Cash and cash equivalents

Accounts receivable, net

2 unchanged sentences

Related party loan (note 8)

expenses and deposits (note 5)

Current Assets

Prepaid expenses and deposits (note 5)

Total Current Assets

Investments (note 10)

Property and Equipment,

Right-Of-Use Asset, net

Liabilities and Shareholders’

Property and Equipment, net (note 6)

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

Intangible Assets, net

Liabilities and Shareholders’ Equity

Current Liabilities

Accounts payable and accrued

Accounts payable and accrued liabilities

Payroll taxes payable

1 unchanged sentence

Current portion – Long term debt (note 12)

lease liability (note 11)

Current Liabilities

Long Term – Lease

Liability (note 11)

Term Debt (note 12)

Current lease liability (note 11)

Total Current Liabilities

Long Term – Lease Liability (note 11)

Long Term Debt (note 12)

Total Liabilities

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, 28,520,704 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, 30,920,397 and 17,436,805 shares issued and outstanding, respectively (note 7)

Additional paid-in capital

4 unchanged sentences

( 48,313,177 )

Cumulative translation

Shareholders’ Equity

Liabilities and Shareholders’ Equity

Cumulative translation adjustment

Total Shareholders’ Equity

Total 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 and Six Months Ended June 30, 2024 and 2023

the Three and Nine Months Ended September 30, 2024 and 2023

Three Months ended

of Goods Sold

September 30,

Cost of Goods Sold

Operating Expenses

2 unchanged sentences

Professional fees

loss on foreign exchange

operating expenses

from operations

(Gain) loss on foreign exchange

Total operating expenses

Loss from operations

( 3,905,216 )

6 unchanged sentences

Rental income (note 17)

on settlement of debt

other income (expense)

Gain on settlement of debt

Total other income (expense)

$ ( 4,134,917 )

2 unchanged sentences

$ ( 11,270,023 )

Loss per Share (basic

Weighted Average Number of Shares (basic

Loss per Share (basic and diluted)

Weighted Average Number of Shares (basic and diluted)

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

Consolidated Statements of Shareholders’ Equity

the Three Months Ended June 30, 2024 and 2023

Subscriptions

Stockholders’

at April 1, 2023

the Three Months Ended September 30, 2024 and 2023

Additional Paid-in

Share Subscriptions

Share Subscription

Cumulative Translation

Stockholders’ Equity

Balance at July 1, 2023

$ ( 40,704,944 )

Issuance for services

and subscriptions payable

Issuance for services and subscriptions payable

Share issuance

Stock option forfeiture

( 3,949,298 )

at June 30, 2023

Balance at September 30, 2023

$ ( 44,654,242 )

at April 1, 2024

Balance at July 1, 2024

$ ( 56,041,233 )

Issuance for services

and subscriptions payable

Warrant inducement (note

Warrant exercise (note 14)

Issuance for services and subscriptions payable

Share issuance (note 16)

( 2,210,269 )

( 4,134,917 )

at June 30, 2024

( 4,134,917 )

Balance at September 30, 2024

$ ( 60,176,150 )

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

the Nine Months Ended September 30, 2024 and 2023

Additional Paid-in

Share Subscriptions

Share Subscription

Cumulative Translation

Stockholders’

at January 1, 2023

Balance at January 1, 2023

$ ( 33,384,219 )

Issuance for services

and subscriptions payable

Issuance for services and subscriptions payable

Share issuance

Stock option forfeiture

( 11,270,023 )

at June 30, 2023

Balance at September 30, 2023

$ ( 44,654,242 )

at January 1, 2024

Balance at January 1, 2024

$ ( 48,313,177 )

Issuance for services

and subscriptions payable

Shares issued (note 7)

Issuance for services and subscriptions payable

Share issuance (note 7)

( 2,210,269 )

Shares issued

( 2,210,269 )

Warrant inducement (note 16)

2 unchanged sentences

( 11,862,973 )

at June 30, 2024

Balance at September 30, 2024

$ ( 60,176,150 )

2 unchanged sentences

Consolidated Statements of Cash Flows

the Six Months Ended June 30, 2024 and 2023

the Nine Months Ended September 30, 2024 and 2023

Operating Activities

1 unchanged sentence

$ ( 11,270,023 )

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

in operating lease

Change in operating lease

Adjustments to reconcile net income loss to cash provided

2 unchanged sentences

( 5,554,603 )

Changes in operating

assets and liabilities (note 9)

( 1,429,494 )

Changes in operating assets and liabilities (note 9)

( 2,639,744 )

cash used in operating activities

Net cash used in operating activities

( 7,959,212 )

( 8,194,347 )

Cash Flows from Investing

Purchase of property

and equipment

Cash Flows from Investing Activities

Purchase of property and equipment

( 3,446,161 )

cash used in investing activities

Net cash used in investing activities

( 3,512,469 )

2 unchanged sentences

Proceeds from warrant exercise

Proceeds from issuance of common share, net

of issuance cost

Proceeds from issuance of common stock

cash received from (used in) financing activities

Proceeds from issuance of common share, net of issuance cost

Proceeds from line of credit

Net proceeds from long term debt

Repayment of line of credit

( 3,450,785 )

Repayment of long term debt

( 5,300,000 )

Net cash received from financing activities

Change in cash

( 1,508,093 )

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

( 11,655,179 )

Cash, restricted cash and cash equivalents - beginning of year

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

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 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.

results for the three and nine month periods ended September 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

35 unchanged sentences

Going Concern

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

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

of September 30, 2024, the Company had $ 1,857,685 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, 2024, the Company had an accumulated deficit of $ 60,176,150 .

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

1 unchanged sentence

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

nine months ended September 30, 2024, the Company had net losses of $ 4,134,917

(2023 - $ 3,949,298 )

and $ 11,862,973 (2023

- $ 11,270,023 ).

As of September 30, 2024, the Company had working capital of $ 5,880,926

(December 31, 2023 –

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.

year ended December 31, 2021, the Company, through its Reg-A public offering, private placement offering, underwritten public offering,

and exercises of warrants, raised an aggregate of approximately $ 32,500,000 .

$ 1,956,894 )

and had an accumulated deficit of $ 60,176,150

(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.

the Company having completed its purchasing of large manufacturing machinery for current output needs, 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 and beyond, 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 third quarter of 2024.

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

During the year

ended December 31, 2021, the Company, through its Reg-A public offering, private placement offering, underwritten public offering, and

exercises of warrants, raised an aggregate of approximately $ 32,500,000 .

On September 30, 2022, the Company filed a shelf registration

5 unchanged sentences

gross sales price of the shares of common stock sold.

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.

As of September 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

38 unchanged sentences

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

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

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

Schedule of Inventory

September 30, 2024

December 31, 2023

Finished goods

1 unchanged sentence

Raw materials

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

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

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

Schedule of Prepaid Expenses and Deposits

September 30, 2024

December 31, 2023

Consulting, services, and advertising

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.

of September 30, 2024, prepaid expenses and deposits consists of $ 237,594 (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 June 30, 2024 and December 31, 2023, major classes of property and equipment consist of the following:

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

Schedule of Property and Equipment

September 30, 2024

December 31, 2023

Manufacturing equipment

2 unchanged sentences

Property and equipment, gross

Less accumulated

Less accumulated depreciation

( 2,682,566 )

2 unchanged sentences

Shareholders’ Equity (Deficit)

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 .

nine months ended September 30, 2024, the following transactions occurred:

the nine months ended September 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

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 $ 753,069 to share subscriptions payable from restricted shares and stock options to be issued.

As of September 30, 2024, the Company issued 333,841 restricted shares with a value of $ 382,700 .

the nine months ended September 30, 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.

the nine months ended September 30, 2024, the Company closed a sale of 950,000 shares of common stock for proceeds of $ 380,000 .

In connection

with the sale of common stock, the Company issued 1,900,000 warrants.

Refer to note 14.

As of September 30, 2024, the shares have not been

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 .

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

Company sold 27,429 shares of common stock for a total net proceeds of $ 95,541 .

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 $ 1,022,963 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 note 15 for additional shareholders’ equity (deficit) details.

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 .

of September 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 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 .

During the nine months ended September 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 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 )

As of September 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 six months ended June 30, 2024 and 2023 are as follows:

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

Schedule of Changes in Operating Assets and Liabilities

Decrease (increase) in accounts

$ ( 160,264 )

Decrease (increase) in accounts receivable

$ ( 455,509 )

3 unchanged sentences

( 2,205,697 )

Decrease (increase) in prepaid expenses

Increase (decrease) in payroll taxes

Increase (decrease)

in accounts payable and accrued liabilities

Decrease (increase) in prepaid expenses and deposits

Increase (decrease) in payroll taxes payable

Increase (decrease) in accounts payable and accrued liabilities

in operating assets and liabilities

1 unchanged sentence

$ ( 2,639,744 )

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 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.

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 $ 3,123

As of September

30, 2024, and December 31, 2023, the Company had advanced a total of $ 24,423 and is advancing tranches of capital as required by the

the nine months ended September 30, 2024, $ 66,308 ($ 90,000 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 ($ 90,000 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 $ 3,123 ($ 4,275 CAD).

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 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

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

the nine months ended September 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 .

5 unchanged sentences

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:

Company’s right-of-use asset and lease liability as of September 30, 2024, and December 31, 2023, are as follows:

Schedule Right-of-use Asset

September 30, 2024

December 31, 2023

Right-of-use asset

2 unchanged sentences

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

of Lease Costs

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 Lease Cost

September 30, 2024

September 30, 2023

Operating lease cost

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

of lease liabilities:

of Measurement of Lease Liabilities

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

September 30, 2024

September 30, 2023

Operating cashflow

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

Schedule of Future Minimum Lease Payments

Total future minimum lease

Total future minimum lease payments

amount representing interest

Present value of future payments

Current portion

Long term portion

Long term Debt

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

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

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.

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 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.

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

To ensure the loan’s servicing over its duration, the Company allocated $ 667,409 into a specially designated account.

the close 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 June 30, 2024, the outstanding principal and the accrued interest was an aggregate of $ 5,325,664 .

This outstanding balance and accrued interest were 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.

This loan was subsequently refinanced, which is addressed in more detail

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 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

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.

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

capital raise.

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 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 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.

The Borrower was required to provide prior notice to Lender and satisfactory reporting of the results of the capital raise.

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

2 unchanged sentences

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.

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 $ 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 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

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

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

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

to fund operations.

At September 30, 2024, the outstanding balance of this loan was $ 3,888,740 (net of issuance costs).

September 4, 2024, the Company, through its wholly owned subsidiary, Worksport USA Operations Corporation, entered into a $ 1,487,200 credit

and security agreement with an external lending entity with a maturity of 36 months

from initial funding (September 2027).

Upon transaction close, the Company received net proceeds of $ 1,437,998

(net of issuance costs).

The Company and its

wholly owned subsidiary, Worksport New York Operations Corporation, serve as guarantors on the loan.

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.

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 ($ 40,000 CAD) and, as of February 14, 2023,

received the forgiven debt of $ 7,493 ($ 10,000 CAD).

As at September 30, 2024 and December 31, 2023, there are no amounts owing, and the

loan has been fully settled.

Loss per Share

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 three and nine months ended September 30, 2024, loss per share is $ 0.14 and $ 0.47 (basic and diluted) compared to the three and nine

months ended September 30, 2023, of $ 0.23 and $ 0.65 (basic and diluted) using the weighted average number of shares of 29,432,794 and

25,540,754 (basic and diluted) as of September 30, 2024 and 17,429,685 and 17,252,521 (basic and diluted) as of September 30, 2023, respectively.

are 299,000,000 shares authorized with 30,920,397 and 17,436,805 shares issued and outstanding, as at September 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

2 unchanged sentences

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

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

As of September 30, 2024, the Company has 22,912,764

warrants convertible to 23,212,764 common shares, 357,018 restricted stock to be issued, 300,000 performance stock units and 5,848,056

stock options exercisable for 5,848,056 common shares for a total underlying common shares of 29,717,838 .

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

and $ 0.74 , respectively, per share.

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 .

the nine months ended September 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 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.

During the same period 1,477,892

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

The pre-funded

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

During the same period, 1,477,892 pre-warrants

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

the nine months ended September 30, 2024, the Company closed a sale of 950,000 shares of common stock.

In connection with the sale of

common stock the Company issued 1,900,000 warrants.

The warrants have an exercise price of $ 0.40 and an expiration date of September

the nine months ended September 30, 2024, 130,909 warrants issued on August 3, 2021 and 3,446,515 warrants issued on August 6, 2021,

all of which having an exercise price of $ 6.05 , expired.

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

3 unchanged sentences

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

During the nine months

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

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

4 unchanged sentences

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

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

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

Schedule of Warrants Exercise Price

Contractual Life (Years)

August 3, 2024

August 6, 2024

Exercise price

Number outstanding

Remaining Contractual Life (Years)

March 20, 2025

1 unchanged sentence

September 20, 2029

September 21, 2029

November 26, 2029

average remaining contractual life of outstanding warrants that expire is 4.53

average remaining contractual life of outstanding warrants that expire is 5.03 years.

of Warrants Activity

average price

beginning of year

September 30, 2024

December 31, 2023

Number of warrants

Weighted average price

Number of warrants

Weighted average price

Balance, beginning of year

( 3,577,414 )

end of period

( 9,165,892 )

Balance, end of period

Stock Options and Performance Share Units

18 unchanged sentences

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

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.

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.

5,388,956 stock options’ exercise prices were repriced to $ 0.7042 , and all other criteria were unchanged.

result of the modification in exercise prices, the Company recognized additional expense of $ 93,140 on the date of modification.

During the nine months ended September 30, 2024, the

Company issued 804,600 stock options to employees and directors with exercise prices ranging from $ 0.57 to $ 1.37 and expiration dates

ranging from February 1, 2029 to July 28, 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

$ 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 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, 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.

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

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

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 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.

During the year ended December 31, 2023, the Company issued 4,743,356 stock

options to employees, directors, and consultants with exercise prices ranging from $ 1.44 to $ 4.20 and expiration dates ranging from January

30, 2028 to October 31, 2033 .

Of these stock options, 81,600 were subsequently cancelled.

Schedule of Stock Options Activity

of stock options

average price

of stock options

average price

beginning of period

end of period

September 30, 2024

December 31, 2023

Number of stock options

Weighted average price

Number of stock options

Weighted average price

Balance, beginning of period

Balance, end of period

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

of Exercise prices

average life (years)

average exercise price

on June 30, 2024

Range of Exercise prices

Weighted average life (years)

Weighted average exercise price

Exercisable on September 30, 2024

Stock options

of June 30, 2024 and December 31, 2023, Terravis Energy Inc., a wholly owned subsidiary of the Company, has the following options outstanding:

of September 30, 2024 and December 31, 2023, Terravis Energy Inc., a wholly owned subsidiary of the Company, has the following options

Schedule of Stock Options Activity

of stock options

average price

of stock options

average price

beginning of period

end of period

September 30, 2024

December 31, 2023

Number of stock options

Weighted average price

Number of stock options

Weighted average price

Balance, beginning of period

Balance, end of period

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

of Exercise prices

average life (years)

average exercise price

on June 30, 2024

Range of Exercise prices

Weighted average life (years)

Weighted average exercise price

Exercisable on September 30, 2024

Stock options

Warrant Inducement

9 unchanged sentences

The obligation to issue the remaining 4,160,000

shares is recorded as a share subscription payable.

shares was originally recorded as a share subscription payable.

During the nine months ended September 30, 2024, the Company issued 2,383,000 out

of the 4,160,000 shares to be issued.

Rental Income

1 unchanged sentence

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 ).

the nine months ended September 30, 2024, the Company recognized rental income of $ 76,866 (2023 - $ 139,892 ).

Subsequent Events

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.

Company has evaluated subsequent events through November 13, 2024.

The following events occurred after the quarter ended September 30, 2024:

October 3, 2024, the Company announced its first partnership with a government agency for the sale of Worksport tonneau covers.

government agency has a fleet of an estimated two million pickup trucks nationwide.

October 9, 2024, the Company announced it is expanding its product line to include tonneau covers compatible with the Rivian R1T

electric pickup truck.

October 17, 2024, the Company announced a strategic cost-saving initiative to cut $ 1.5 million in annual expenses without negatively

impacting revenues.

October 17, 2024, the Company announced The Nasdaq Stock Market LLC provided formal notice that the Company is eligible for an additional

180 calendar days to regain compliance with the minimum $ 1 bid requirement under Nasdaq Listing Rule 5550(a)(2).

October 23, 2024, the Company announced its targeted market release of its highly anticipated AL4 Premium Tonneau Cover to be dated

December 15 th , 2024, with a complementary preorder campaign announced as of October 29, 2024.

October 31, 2024, the Company announced that it’s SOLIS Solar tonneau cover has been improved to operate at 60V, thereby bringing

a substantial cost savings to consumers and enabling a wider breadth of battery integrations.

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