What changed in this filing

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Item 1. Financial Statements

2025-11-13 compared with 2025-08-13 · 472 added, 346 removed, 426 unchanged (66% of the section changed)

1 unchanged sentence

Consolidated Balance Sheets

June 30, 2025

September 30, 2025

December 31, 2024

22 unchanged sentences

Shareholders’ equity

Series A, B & C Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, 100 Series A, 0 Series B, and 49,335 Series C issued and outstanding, respectively (Note 7)

Preferred stock, value

Series A, B Preferred & Series C Convertible Preferred stock, $ 0.001

par value, 10,000,000

shares authorized, 100

Series B, and 371,784

Series C issued and outstanding, respectively (Note 7)

Series A, B Preferred & Series C Convertible Preferred stock, $0.001 par value, 10,000,000 shares authorized, 100 Series

A, 0 Series B, and 371,784 Series C issued and outstanding, respectively (Note 7)

Common stock, $ 0.001 par value, 45,000,000 shares authorized, 7,589,036 and 4,016,205 shares issued and outstanding, respectively (Note 7)

10 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

the Three and Six Months Ended June 30, 2025 and 2024

Three Months ended June 30,

Six Months ended June 30,

Cost of sales

the Three and Nine Months Ended September 30, 2025 and 2024

Months ended September 30,

and development

and administrative

and marketing

loss on foreign exchange

operating expenses

Research and development

General and administrative

Sales and marketing

Professional fees

(Gain) loss on foreign exchange

Total operating expenses

Loss from operations

from operations

( 4,792,771 )

2 unchanged sentences

( 11,455,430 )

income (expense)

other income (expense)

Interest expense

Interest income

Rental income

Total other income (expense)

$ ( 4,928,679 )

2 unchanged sentences

$ ( 11,862,973 )

Loss per share (basic and diluted)

Weighted average number of shares (basic and diluted)

per share (basic and diluted)

average number of shares (basic and diluted)

accompanying Notes to Condensed Consolidated Financial Statements which form an integral part of the Condensed Consolidated Financial

Consolidated Statements of Shareholders’ Equity

the Three Months Ended June 30, 2025 and 2024

the Three Months Ended September 30, 2025 and 2024

Subscriptions

Stockholders’

at April 1, 2024

Balance at July 1, 2024

$ ( 56,041,233 )

for services and subscriptions payable

inducement (Note 15)

exercise (Note 15)

Issuance for services and subscriptions payable

Share issuance

( 2,210,269 )

( 4,134,917 )

at June 30, 2024

( 4,134,917 )

at April 1, 2025

Balance at September 30, 2024

$ ( 60,176,150 )

for services and subscriptions payable

Warrant exercise (Note 15)

Balance at July 1, 2025

$ ( 72,671,914 )

Issuance for services and subscriptions payable

Share issuance

Issuance of preferred shares pursuant to Reg-A

Conversion of Series C preferred shares

( 1,977,418 )

Issuance of warrants pursuant to Reg-A

Dividend payable on Series C preferred shares

( 4,928,679 )

at June 30, 2025

Balance at September 30, 2025

$ ( 512,392 )

$ ( 77,617,726 )

accompanying Notes to Condensed Consolidated Financial Statements which form an integral part of the Condensed Consolidated Financial

Consolidated Statements of Shareholders’ Equity

the Six Months Ended June 30, 2025 and 2024

the Nine Months Ended September 30, 2025 and 2024

Subscriptions

Stockholders’

at January 1, 2024

for services and subscriptions payable

issuance (Note 7)

inducement (Note 15)

exercise (Note 15)

at June 30, 2024

Balance at January 1, 2024

$ ( 48,313,177 )

Issuance for services and subscriptions payable

Share issuance (Note 7)

( 2,210,269 )

Warrant inducement (Note 15)

Warrant exercise (Note 15)

( 11,862,973 )

Balance at September 30, 2024

$ ( 60,176,150 )

at January 1, 2025

2 unchanged sentences

exercise (Note 15)

Issuance of preferred shares pursuant to Reg-A

Issuance of warrants pursuant to Reg-A

at June 30, 2025

of preferred shares pursuant to Reg-A

of Series C preferred shares

of warrants pursuant to Reg-A

payable on Series C preferred shares

at September 30, 2025

accompanying Notes to Condensed Consolidated Financial Statements which form an integral part of the Condensed Consolidated Financial

Consolidated Statements of Cash Flows

the Six Months Ended June 30, 2025 and 2024

the Nine Months Ended September 30, 2025 and 2024

Operating Activities

11 unchanged sentences

( 1,545,993 )

( 1,429,494 )

Net cash used in operating activities

6 unchanged sentences

Net cash used in investing activities

( 1,067,257 )

Financing Activities

Shareholder assumption of debt

Net change in related party loan

Proceeds from warrant exercise

2 unchanged sentences

Proceeds from line of credit

Proceeds from long-term debt

Repayments on line of credit

( 10,910,449 )

( 3,450,785 )

Repayments on long-term debt

Proceeds from issuance of common share, net of issuance cost

Net cash received from (used in) financing activities

( 5,300,000 )

Proceeds from issuance of common shares, net of issuance cost

Net cash provided by (used in) financing activities

Change in cash

( 1,121,409 )

Cash, restricted cash and cash equivalents - beginning of period

Cash, 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 operating and financing activities

Warrant inducement issuance costs included in accounts payable

( 1,508,093 )

Cash and cash equivalents - beginning of period

Cash and cash equivalents - end of

Supplemental Disclosure of cash flow information

1 unchanged sentence

Interest paid

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

See accompanying Notes to Condensed Consolidated Financial Statements which form an integral part of the Condensed

Consolidated Financial Statements.

to the Condensed Consolidated Financial Statements

Description of Business and Significant Accounting Policies

accompanying unaudited consolidated condensed financial statements have been prepared in accordance with U.S.

generally accepted accounting

principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

In the opinion

of management, all adjustments consisting of normal recurring adjustments considered necessary for the fair presentation of results for

the interim period have been included.

The results of operations for the three and six months ended June 30, 2025 are not necessarily

indicative of the results expected for the full year.

The accompanying unaudited consolidated condensed financial statements should be

read in conjunction with the financial statements and notes thereto included in our Form 10-K for the fiscal year ended December 31,

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted

accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

the opinion of management, all adjustments consisting of normal recurring adjustments considered necessary for the fair presentation

of results for the interim period have been included.

The results of operations for the three and nine months ended September 30,

2025 are not necessarily indicative of the results expected for the full year.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our Form

10-K for the fiscal year ended December 31, 2024.

All references to years in these financial statements are fiscal years.

2 unchanged sentences

The Company reclassified research

and development of $ 304,833 and $ 1,045,864 for the three months ended June 30, 2025 and 2024, respectively, which were reclassified from general

and administrative expense, to research and development expense.

The Company reclassified research and development of $ 674,434 and $ 1,415,465 for

the six months ended June 30, 2025 and 2024, respectively, which were reclassified from general and administrative expense to research

and development expense.

This change improves the disclosure of costs to develop new products and technologies and reflects the Company’s

ongoing investment in innovation.

The change also provides a more accurate depiction of the Company’s operating performance.

and development of $ 301,095 and $ 396,446 for the three months ended September 30, 2025 and 2024, respectively, which were reclassified from

general and administrative expense to research and development expense.

The Company reclassified research and development of $ 975,529 and

$ 1,811,911 for the nine months ended September 30, 2025 and 2024, respectively, which were reclassified from general and administrative expense

to research and development expense.

This change improves the disclosure of costs to develop new products and technologies and reflects

the Company’s ongoing investment in innovation.

The change also provides a more accurate depiction of the Company’s operating

accounting pronouncements

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potential effect that the updated standard will have on the financial statements and related disclosures.

November 2024, the FASB issued ASU 2024-03, “ Income Statement – Reporting Comprehensive Income – Expense

Disaggregation Disclosures” to enhance disclosure of specified categories of expenses (purchases of inventory, employee

compensation, depreciation and amortization) included in certain expense captions presented on the face of the income statement.

2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning

after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the potential effect that the updated

standard will have on the financial statements and related disclosures.

November 2024, the FASB issued ASU 2024-03, “ Income Statement – Reporting Comprehensive Income – Expense Disaggregation

Disclosures” to enhance disclosure of specified categories of expenses (purchases of inventory, employee compensation, depreciation

and amortization) included in certain expense captions presented on the face of the income statement.

ASU 2024-03 is effective for annual

periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early

adoption permitted.

The Company is currently evaluating the potential effect that the updated standard will have on the financial statements

and related disclosures.

company considers the applicability and impact of all ASUs.

2 unchanged sentences

Going Concern

of June 30, 2025, the Company had $ 1,393,140 in cash and cash equivalents.

The Company also has availability on its revolving line of credit

of $ 4,763,700 .

The Company has generated only limited revenues and has relied primarily upon capital generated from public and private offerings

of its securities.

of September 30, 2025, the Company had $ 3,761,690

in cash and cash equivalents.

The Company also has availability

on its revolving line of credit of $ 3,291,250 .

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 2014, it has never generated a profit.

As of June 30, 2025,

As of September 30, 2025,

the Company had an accumulated deficit of $ 77,617,726 .

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

The accompanying unaudited 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 June 30,

2025, the Company had net losses of $ 3,734,484 (2024 - $ 4,013,399 ).

During the six months ended June 30, 2025, the Company had net losses of $ 8,194,948

During the three months ended

September 30, 2025, the Company had net losses of $ 4,928,679

(2024 - $ 4,134,917 ).

As of June 30, 2025, the Company had working capital of $ 4,758,042 (December 31, 2024 – $ 7,304,110 ) and had an accumulated

deficit of $ 72,671,914 (December 31, 2024 - $ 64,476,966 ).

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.

During the nine months ended September 30, 2025, the Company had net losses of $ 13,123,627

(2024 - $ 11,862,973 ).

of September 30, 2025, the Company had working capital of $ 6,311,857

(December 31, 2024 – $ 7,304,110 )

and had an accumulated deficit of $ 77,617,726

(December 31, 2024 - $ 64,476,966 ).

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 to make the Company profitable will be

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

As of June 30, 2025,

the Company had cash and cash equivalents of $ 1,393,140 (December 31, 2024 - $ 4,883,099 ).

Despite the Company having completed its purchasing

of large manufacturing machinery for phase one output levels, 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

2025, which should mitigate the effects of operational costs on cash and cash equivalents as it releases new product lines;

is supported by the fact that the manufacturing facility of the Company was completed for initial production output in 2023 and quickly

began improving output and sales during 2024 and into 2025.

As of September

30, 2025, the Company had cash and cash equivalents of $ 3,761,690

(December 31, 2024 - $ 4,883,099 ).

Despite the Company having completed its purchasing of large manufacturing machinery for phase one output levels, 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 2025 and 2026, which should mitigate the effects of operational costs

on cash and cash equivalents as it releases new product lines;

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

the Company was completed for initial production output in 2023 and quickly began improving output and sales during 2024 and into

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 .

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

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

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

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

Co., LLC, as the sales agent (“HCW”).

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

gross sales price of the shares of common stock sold.

Through June 30, 2025, the Company has sold and issued 784,133 shares of common stock

in consideration for net proceeds of $ 6,432,971 under the ATM Agreement.

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 statement on Form S-3, which was declared effective by the U.S.

Securities and Exchange Commission (the “SEC”) on October 13, 2022 (the “Shelf Registration Statement”), allowing the Company to issue up to $ 30,000,000

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

of common stock that may be issued and sold under an At The Market Offering Agreement dated September 30, 2022 (“ATM

Agreement”), with H.C.

Wainwright & Co., LLC, as the sales agent (“HCW”).

Pursuant to the ATM Agreement, HCW

is entitled to a commission equal to 3.0 %

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

Through September 30, 2025, the Company cumulatively sold and issued 872,027

shares of common stock in consideration for net proceeds of $ 6,751,381

under the ATM Agreement.

The Shelf Registration Statement expired in October 2025 and the Company will file a new shelf registration statement

in November 2025.

November 2, 2023, the Company consummated a registered direct offering pursuant to which the Company issued 192,500 shares of common

stock and 157,500 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 700,000 warrants in a private sale.

The warrants are

exercisable for 700,000 shares of common stock for $ 13.40 per share six months after issuance and until five and a half ( 5.5 ) years

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

The Company registered the 700,000

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

Concurrently with the registered

direct offering, the Company issued the same institutional investor 700,000 warrants in a private sale.

The warrants are exercisable

for 700,000 shares of common stock for $ 13.40 per share six months after issuance and until five and a half ( 5.5 ) years from the issuance

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

The Company registered the 700,000 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 237,224 shares of common stock

8 unchanged sentences

declared effective by the SEC on April 8, 2024.

May 29, 2024, Worksport sent an inducement letter to a shareholder offering an option to exercise their warrants at a reduced exercise

price of $ 0.5198 per warrant.

In turn for doing so, Worksport offered the shareholder new warrants to purchase up to 1,295,000 warrant

shares with an exercise price of $ 0.5198 .

The shares had a term of 5.5 years, with a 6-month required holding period.

December 13, 2024, the Company filed a Prospectus Supplement to amend Amendment No.

1 to the prospectus supplement dated as of November

5, 2024, prospectus supplement dated as of October 13, 2022, and the prospectus dated as of October 13, 2022 to increase the maximum

amount of shares that we are eligible to sell pursuant to the Sales Agreement under General Instruction I.B.6.

to $ 4,962,092 of shares

of our common stock not including whatever had been sold prior to this filing date.

February 27, 2025, Worksport entered into a warrant inducement agreement with a shareholder to exercise 755,558 of their 1,295,000 May

2024 Warrants at price of $ 5.198 per share.

The remaining unexercised 539,442 warrants are included in share subscription payable.

return, the Company issued 1,424,500 new 2025 Inducement Warrants.

Each Inducement Warrant has an exercise price of $ 6.502 , will become

exercisable six months after issuance, and have a 5.5 -year life.

Worksport raised approximately $ 6,731,000 in gross proceeds before fees

and expenses, with the funds earmarked for general corporate and working capital purposes.

On June 13, 2025, Worksport completed the initial closing of its Regulation A offering whereby up to 3,100,000 units may be sold at an offering price of $ 3.25 per unit.

Each unit consists of one share of 8 % Series C Convertible Preferred Stock, par value $ 0.001 per share (the “Series C Preferred Stock”) and one warrant for the right to purchase one (1) share of common stock, $ 0.001 par value at an exercise price of $ 4.50 per share.

May 29, 2024, Worksport sent an inducement letter to a shareholder offering an option to exercise their warrants at a reduced

exercise price of $ 5.198

In turn for doing so, Worksport offered the shareholder new warrants to purchase up to 1,295,000

shares of common stock with an exercise price of $ 5.198 .

The warrants had a term of 5.5

years, with a 6-month required holding period prior to exercise.

December 13, 2024, the Company filed a prospectus supplement to amend and supplement a prospectus supplement dated as of November 5,

2024, as well as the prospectus supplement dated as of October 13, 2022, and the prospectus dated as of October 13, 2022 to increase

the maximum amount of shares that we are eligible to sell pursuant to the ATM Agreement under General Instruction I.B.6.

to $ 4,962,092

of shares of our common stock not including whatever had been sold prior to this filing date.

February 27, 2025, Worksport entered into a warrant inducement agreement with a shareholder to exercise 755,558

May 2024 Warrants at a price of $ 5.198

The remaining unexercised 539,442

warrants are included in share subscription payable.

In return, the Company issued 1,424,500

new 2025 Inducement Warrants.

Each Inducement Warrant has an exercise price of $ 6.502 ,

will become exercisable six months after issuance, and have a 5.5 -year

Worksport raised approximately $ 6,731,000

in gross proceeds before fees and expenses, with the funds earmarked for general corporate and working capital purposes.

June 13, 2025, Worksport completed the initial closing of its Regulation A offering whereby up to 3,100,000

Units may be sold at an offering price of $ 3.25

Each Unit consists of one share of 8 %

Series C Convertible Preferred Stock, par value $ 0.001

per share (the “Series C Preferred Stock”) and one warrant for the right to purchase one (1) share of common stock,

par value with an exercise price of $ 4.50

The qualified Regulation A offering is expected to generate gross proceeds of $ 10,000,000 .

Through June 30, 2025, the Company completed one tranche and received gross proceeds of $ 160,339 .

Through September 30, 2025, the Company completed twenty-four tranches and received proceeds of $ 6,469,202

(net of issuance costs of $ 665,905 ) and recognized share subscriptions

receivable of $ 458,720 (net of issuance costs of $ 41,130 ).

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

9 unchanged sentences

on acceptable terms, or at all.

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

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

Still, certain factors indicate

the existence of a material uncertainty that cast substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

These adjustments

could be material.

of June 30, 2025 and December 31, 2024, inventory consists of the following:

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

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

certain factors indicate the existence of a material uncertainty that cast substantial doubt about the Company’s ability to

continue as a going concern.

The accompanying unaudited condensed consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

These adjustments could be material.

of September 30, 2025 and December 31, 2024, inventory consists of the following:

Schedule of Inventory

September 30, 2025

December 31, 2024

Raw materials

5 unchanged sentences

Schedule of Property and Equipment

September 30, 2025

December 31, 2024

Manufacturing equipment

7 unchanged sentences

( 3,032,025 )

Property and equipment,

expense for the three months ended June 30, 2025 and 2024 was $ 347,443

and $ 232,199 ,

respectively.

Depreciation expense for the six months ended June 30, 2025 and 2024 was $ 695,950

and $ 614,719 ,

respectively.

Property and equipment, net

expense for the three months ended September 30, 2025 and 2024 was $ 374,195 and $ 403,267 , respectively.

Depreciation expense for the nine months

ended September 30, 2025 and 2024 was $ 1,070,145 and $ 1,017,988 , respectively.

Intangible Assets

assets consist of costs incurred to establish the patent rights related to the quick latch and soft vinyl quad-fold tonneau cover technologies,

Worksport trademarks, licenses, and software costs.

Intangible assets consist of patents, trademarks, copyrights, licenses, and software owned by Worksport and its subsidiaries.

The Company’s utility patents and design registrations were issued between

4 unchanged sentences

The Company determined that impairment

is not necessary for the prior year ended December 31, 2024 and for the three and six months ended June 30, 2025.

is not necessary for the prior year ended December 31, 2024 and for the three and nine months ended September 30, 2025.

components of intangible assets are as follows:

Schedule of Components of Intangible Assets

September 30, 2025

December 31, 2024

Intangible assets, gross carrying amount

Accumulated amortization

Intangible assets,

expense for the three months ended June 30, 2025 and 2024 was $ 96,459 and $ 627 , respectively.

Amortization expense for the six months ended

June 30, 2025 and 2024 was $ 192,918 and $ 1,253 , respectively.

amortization of the patent and software over the next five calendar years and beyond June 30, 2025 is as follows:

Intangible assets, net

expense for the three months ended September 30, 2025 and 2024 was $ 96,459 and $ 627 , respectively.

Amortization expense for the nine months

ended September 30, 2025 and 2024 was $ 289,377 and $ 1,879 , respectively.

amortization of the patent and software over the next five calendar years and beyond September 30, 2025 is as follows:

of Estimated Amortization of the patent and Software

Prepaid Expenses and Deposits

of June 30, 2025 and December 31, 2024, prepaid expenses and deposits consist of the following:

of September 30, 2025 and December 31, 2024, prepaid expenses and deposits consist of the following:

Schedule of Prepaid Expenses and Deposits

services, and advertising

September 30, 2025

December 31, 2024

Consulting, services, and advertising

expenses and deposits

Shareholders’ Equity (Deficit)

the six months ended June 30, 2025, the following transactions occurred:

the six months ended June 30, 2025, the Company sold 22,725 shares of common stock for total gross proceeds of $ 185,874 .

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.

The Company is authorized to issue up to 55,000,000

shares of capital stock, par value $ 0.001 per share.

Capital stock is divided into two classes designated as common stock and preferred

Common stock –

The Company is authorized to issue up to 45,000,000

shares of common stock.

Preferred stock – The Company is authorized

to issue up to 10,000,000 shares of preferred stock.

The board of directors may authorize, without further shareholder action, the issuance

of preferred stock in one or more classes or series.

Preferred stock ranks senior to common stock with respect to payment of dividends

and the distribution of assets on liquidation.

Each class or series of preferred stock, when issued, must include its designation and

a description of certain rights, including voting privileges, dividend preferences, conversion features, restrictions and redemption rights.

2019, the Company created and issued 100 shares of its Series A preferred stock.

preferred shareholders vote together as a single class and are entitled to 51% of the voting

rights on all matters regardless of the number of Series A preferred shares outstanding.

Series A preferred stock does not have conversion rights, is not entitled to receive dividends nor receive any liquidation

2020, the Company created the Series B preferred stock.

Series B preferred shareholders have

the right to vote for each share of common stock outstanding after the issuance date.

B preferred stock does not have conversion rights, is not entitled to receive dividend preferences

nor receive any liquidation preferences.

As of September 30, 2025, the Company has not issued

share of Series B preferred stock.

- During 2025, the

Company created its Series C preferred stock for its Regulation A offering.

Refer to Note 15, Warrants for a description of units

available in the Regulation A offering.

Series C preferred stock ranks senior to common stock and future classes or series of

preferred stock as to dividend and liquidation rights.

Series C preferred shareholders may convert holdings on a 1:1 basis to common

stock at any time.

Series C preferred shareholders are entitled to cumulative dividends at a rate of 8.00% of the $3.25 liquidation

preference per share per year for a period of two (2) years from the date of issuance.

As of September 30, 2025, the Company

issued 2,349,202

shares of Series C preferred stock and converted 1,977,418

Series C preferred shares to common stock at the shareholder’s request.

The Company recognized dividends payable to Series C

preferred shareholders for the three months ended September 30, 2025 of $ 17,132 .

the nine months ended September 30, 2025, the following transactions occurred:

the nine months ended September 30, 2025, the Company sold 110,619

shares of common stock for total net proceeds of $ 504,372 .

The sale of shares was in connection with the Shelf Registration Statement and the ATM Agreement described in Note 2, Going Concern.

Company recognized consulting expense of $ 13,000

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

As of June 30, 2025, the $ 13,000 of the

restricted shares have not been issued.

During the six months ended June 30, 2025, the Company issued 90,076

and marketing expense of $ 97,250 to share subscriptions payable from restricted shares and stock options to be issued.

September 30, 2025, the $ 110,250

of the restricted shares have not been issued.

During the nine months ended September 30, 2025, the Company issued 94,670

restricted shares with a value of $ 465,100 .

the six months ended June 30, 2025, in connection with the inducement of 1,295,091 warrants at $ 5.198 per share, the Company also sold

the nine months ended September 30, 2025, in connection with the inducement of 1,295,091 warrants at $ 5.198 per share, the Company also sold

1,424,500 warrants exercisable at $ 6.502 per share.

1 unchanged sentence

offering expenses payable by the Company upon the exercise of the May 2024 Existing Warrants.

to Note 15, Warrants and Note 16, Equity Compensation for additional disclosures related to shareholders’ equity.

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

the six months ended June 30, 2024, the Company sold 50,492 shares of common stock for a total net proceeds of $ 566,118 .

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.

During the nine months ended September 30, 2025,

in connection with the Regulation A offering of up to 3,100,000 Units at an offering price of $ 3.25 per Unit, the Company issued 2,349,202

Units, received proceeds of $ 6,469,202 (net of issuance costs of $ 665,905 ), and recognized share subscriptions receivable of $ 458,720 (net

of issuance costs of $ 41,130 ).

During the nine months ended September 30, 2025, certain Series C preferred

shareholders converted 1,977,418 shares into the Company’s common stock.

to Note 15, Warrants and Note 16, Equity Compensation for additional disclosures.

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 and the ATM 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 June 30, 2024, the Company issued 31,715 restricted shares with a value of $ 369,700 .

the six months ended June 30, 2024, the Company closed a sale of 237,224 shares of common stock for net proceeds of $ 1,535,591 .

association with the sale of common stock, the Company issued 147,789 pre-funded warrants and 770,026 warrants totaling proceeds

of $ 1,093,492 .

effective tax rate for the six months ended June 30, 2025 and 2024 was 22.9 % before 100 % allowance adjustments on net deferred income

The effective tax rate for the six months ended June 30, 2025 and 2024 was higher than expected from applying the U.S.

statutory rate of 21 % to loss before income taxes due to tax benefits on losses generated outside the U.S.

with higher statutory rates.

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 .

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 15.

As of September 30, 2024, the shares have no t

effective tax rate for the nine months ended September 30, 2025 and 2024 was 22.9 % before 100 % allowance adjustments on net deferred income

The effective tax rate for the nine months ended September 30, 2025 and 2024 was higher than expected from applying the U.S.

federal statutory rate of 21 % to loss before income taxes due to tax benefits on losses generated outside the U.S.

with higher statutory

Financial Instruments and Fair Value

13 unchanged sentences

The Company’s revolving line of credit is based on a variable interest

rate and is reflected in the financial statements at carrying value which approximates fair value at June 30, 2025.

rate and is reflected in the financial statements at carrying value which approximates fair value at September 30, 2025.

The Company’s

long-term debt is based on a fixed interest rate, and its carrying amount approximates fair value at June 30, 2025.

The fair value of

the revolving line of credit and long-term debt is classified as Level 2 within the fair value hierarchy and is estimated based on quoted

market prices.

long-term debt is based on a fixed interest rate, and its carrying amount approximates fair value at September 30, 2025.

The fair value

of the revolving line of credit and long-term debt is classified as Level 2 within the fair value hierarchy and is estimated based on

quoted market prices.

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, 2025 and 2024 are as follows:

changes to the Company’s operating assets and liabilities for the nine months ended September 30, 2025 and 2024 are as follows:

Schedule of Changes in Operating Assets and Liabilities

Decrease (increase) in accounts

$ ( 253,372 )

Decrease (increase) in accounts receivable

$ ( 472,485 )

2 unchanged sentences

( 1,645,437 )

Decrease (increase) in prepaid expenses

Increase (decrease)

in accounts payable and accrued liabilities

( 2,506,568 )

Decrease (increase) in prepaid expenses and deposits

Increase (decrease) in accounts payable and accrued liabilities

in operating assets and liabilities

1 unchanged sentence

$ ( 225,941 )

the six months ended June 30, 2025, $ 66,308 ($ 90,000 CAD) of the Company’s Guaranteed Investment Certificate (“GIC”) matured

and the Company received $ 2,500 ($ 3,604 CAD) in interest income.

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

($ 90,000 CAD) in a GIC.

the nine months ended September 30, 2025, $ 66,308 of

the Company’s Guaranteed Investment Certificate (“GIC”) matured and the Company received $ 2,500 in

interest income.

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

The GIC bears a variable interest rate and will mature on February 27, 2026.

The anticipated earned interest on the GIC at maturity is $ 2,500 ($ 3,604 CAD).

During the six

months ended June 30, 2025 the Company invested $ 56,373 ($ 77,000 CAD) in a second Guaranteed Investment Certificate (“GIC”)

bearing a variable interest rate and will mature on June 5, 2026.

The anticipated earned interest on the GIC

at maturity is $ 1,270 ($ 1,730 CAD).

the year ended December 31, 2022, the Company signed a lease agreement for approximately 20,296 square feet to be used as its primary

corporate office and R&D facility pursuant to a five-year lease, dated June 1, 2022 , for a variable rate averaging $ 20,242 per month

over the lifetime of the lease not inclusive of additional fees, which also vary and average $ 5,033 per month in 2025 not inclusive of

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

to a one-year

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

The lease was renewed effective June 1, 2024 at a rate of $ 3,600

per month with a termination

date of May 31, 2025 .

The lease was not renewed.

The Company accounted for the lease under ASC 842 whereby it recognizes a

lease liability and a right-of-use asset.

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 anticipated earned interest on the GIC at

maturity is $ 2,500 .

During the nine months ended September 30, 2025, the Company invested $ 56,373 in

a second Guaranteed Investment Certificate (“GIC”) bearing a variable interest rate and will mature on June 5, 2026.

anticipated earned interest on the GIC at maturity is $ 1,270 .

Company accounts for leases under Accounting Standards Codification (“ASC”) 842, Leases, whereby it recognizes a lease liability and a right-of-use asset.

lease liability is measured at the present value of the remaining lease payments, discounted by the Company’s incremental

borrowing rate.

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

On April 1, 2025, the Company signed a lease agreement for 12,500 square feet of office space to be used as a R&D facility pursuant

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

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

was renewed effective June 1, 2024 at a rate of $ 3,600 per month with a termination date of May 31, 2025.

The lease was not renewed.

The Company’s incremental borrowing rate used to initially measure the present value of the remaining lease payments

April 1, 2025, the Company signed a lease agreement for 12,500 square feet of office space to be used as a R&D facility pursuant

to a three-year lease with an option to extend the lease for an additional two years.

The lease was effective on May 1, 2025 at a rate

of $ 9,659 per month with a termination date of April 30, 2028.

The Company accounted for the lease under ASC 842 whereby it recognizes

a lease liability and a right-of-use asset.

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

using the Company’s incremental borrowing rate of 15 %.

The Company measured the right-of-use asset at the initial amount equity

to the lease liability.

Company’s right-of-use asset and lease liability as of June 30, 2025, and December 31, 2024, are as follows:

The lease was effective on May 1, 2025 at a

rate of $ 9,659 per month with a termination date of April 30, 2028.

The Company’s incremental borrowing rate used to initially

measure the present value of the remaining lease payments was 15 %.

July 14, 2025, the Company signed a lease agreement for 1,992

square feet of office space to be used as an R&D facility for its Terravis Energy subsidiary pursuant to a two-year

lease effective July 18, 2025 for an average monthly rent of $ 3,154 .

The Company’s incremental borrowing rate used to initially measure the present value of the remaining lease payments was 15 %.

Company’s right-of-use asset and lease liability as of September 30, 2025, and December 31, 2024, are as follows:

Schedule Right-of-use Asset

lease liability

following is a summary of the Company’s total lease costs during the six months ended June 30, 2025 and 2024:

September 30, 2025

Right-of-use asset

Current lease liability

Long-term lease liability

following is a summary of the Company’s total lease costs during the nine months ended September 30, 2025 and 2024:

of Lease Cost

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Operating lease cost

following is a summary of cash paid during the six months ended June 30, 2025 and 2024 for amounts included in the measurement of lease

following is a summary of cash paid during the nine months ended September 30, 2025 and 2024 for amounts included in the measurement

of lease liabilities:

of Measurement of Lease Liabilities

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Operating cashflow

following are future minimum annual lease payments as of June 30, 2025:

following are future minimum annual lease payments as of September 30, 2025:

of Future Minimum Annual Lease Payments

Total future minimum lease payments

amount representing

amount representing interest

Present value of future payments

3 unchanged sentences

Schedule of Long Term Debt

June 30, 2025

September 30, 2025

December 31, 2024

Revolving Credit Facility (a)

2 unchanged sentences

Less current installments

( 1,774,307 )

Long-term debt

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 date of July 18, 2026, or 24

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

to fund operations.

Interest on the

outstanding Revolving Credit Facility is based on the greater of the prime rate or 6.0 % plus an additional 300 basis points.

30, 2025, the outstanding balance of this loan was $ 1,126,961

entered into a $ 6,000,000 Revolving Financing and Assignment Agreement with an external lending entity with a maturity date of July

18, 2026, or 24 months.

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

in West Seneca, New York, and additionally drew approximately $ 330,000 to fund operations.

Interest on the outstanding Revolving

Credit Facility is based on the greater of the prime rate or 6.0 % plus an additional 300 basis points.

At September 30, 2025, the

outstanding balance of this loan was $ 1,523,937 (net of issuance costs of $ 62,095 ).

collateral, the lender holds a first position on the Company’s major asset classes (accounts receivable, the factory in New York,

and inventory) other than the Company’s equipment.

A non-usage fee of 0.25 % is assessed quarterly and applied to the difference

between the quarter’s average daily outstanding loan balance and the total credit facility amount.

As of September 30, 2025, the

Company had an available balance of $ 3,291,250 to borrow on the Revolving Credit Facility.

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 date of September 1, 2027 , which is 36 months from

initial funding.

Upon transaction close, the Company received net proceeds of $ 1,412,750 (net of issuance costs of $ 43,735 ).

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

For collateral,

the lender holds a first position on the Company’s equipment, which is primarily manufacturing and warehousing equipment.

on the loan is based on the prime rate plus 700 basis points per annum.

At September 30, 2025, the outstanding balance of this loan was $ 1,264,412

(net of issuance costs of $ 31,435 ).

For collateral, the lender holds a first position on the Company’s major asset classes (accounts receivable, the factory in New York, and inventory) other than the Company’s equipment.

A non-usage fee of 0.25 % is assessed quarterly and applied to the difference between the quarter’s average daily outstanding loan balance and the total credit facility amount.

As of June 30, 2025, the Company had an available balance of $ 4,763,700 to borrow on the Revolving Credit Facility.

On 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 date of September 1, 2027 , which is 36 months from initial funding.

Upon transaction close, the Company received net

proceeds of $ 1,412,750 (net of issuance costs of $ 43,735 ).

The Company and its wholly owned subsidiary, Worksport New York Operations

Corporation, serve as guarantors on the loan.

For collateral, the lender holds a first position on the Company’s equipment, which

is primarily manufacturing and warehousing equipment.

Interest on the loan is based on the prime rate plus

700 basis points per annum.

is in compliance with all covenants.

Company is in compliance with all covenants.

Loss per Share

the three and six months ended June 30, 2025, loss per share is $ 0.71 and $ 1.71 (basic and diluted) compared to the three and six months

ended June 30, 2024, of $ 1.55 and $ 3.28 (basic and diluted) using the weighted average number of shares of 5,285,705 and 4,778,426 (basic and diluted)

as of June 30, 2025 and 2,595,863 and 2,357,335 (basic and diluted) as of June 30, 2024, respectively.

are 45,000,000 shares authorized with 5,519,130 and 2,852,070 shares issued and outstanding, as at June 30, 2025 and 2024, respectively.

the three and nine months ended September 30, 2025, loss per share is $ 0.75

and $ 2.44 (basic and diluted) compared to the three and nine months ended September 30, 2024, of $ 1.40

(basic and diluted) using the weighted average number of shares of 6,563,228

and 5,377,750

(basic and diluted) as of September 30, 2025 and 2,943,279

and 2,554,075

(basic and diluted) as of September 30, 2024, respectively.

are 45,000,000 shares authorized with 7,589,036 and 3,092,040 shares issued and outstanding, at September 30, 2025 and 2024, respectively.

The computation

2 unchanged sentences

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

February 27, 2025, the Company entered into a warrant inducement agreement (the “Inducement”) with the holder of existing

On June 13, 2025, Worksport completed the initial closing of its Regulation A offering whereby up to 3,100,000 units

may be sold at an offering price of $ 3.25 per unit.

Each unit consists of one share of 8% Series C Convertible Preferred Stock, par value

$0.001 per share (the “Series C Preferred Stock”) and one warrant for the right to purchase one (1) share of common stock,

$0.001 par value, with an exercise price of $4.50 per share.

The qualified Regulation A offering is expected to generate gross proceeds of

$ 10,000,000 .

The proceeds from the Regulation A offering and issuance of units are recorded as additional paid-in capital.

Through September

30, 2025, the Company issued 2,349,202 warrants to investors.

February 27, 2025, the Company entered into a warrant inducement agreement with the holder of existing

warrants to purchase an aggregate 1,295,000 shares.

19 unchanged sentences

having an exercise price of $ 60.50 , expired.

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

to purchase an aggregate 700,000 shares at a reduced exercise price of $ 5.198 in consideration for the Company to issue new warrants

to purchase up to 1,295,000 additional shares of common stock – resulting in gross proceeds of approximately $ 3,638,000 received

by the Company.

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 model.

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 284,000 shares of common stock are recorded as capital in excess of par.

The obligation to issue the

remaining 416,000 shares was originally recorded as a share subscription payable.

During the twelve months ended December 31, 2024, the

Company issued 416,000 out of the 416,000 shares to be issued.

May 9, 2024, the Company entered into a warrant inducement agreement with the holder of existing warrants to purchase an aggregate 700,000

shares at a reduced exercise price of $ 5.198

in consideration for the Company to issue new warrants to purchase up to 1,295,000

additional shares of common stock with an exercise price of $ 5.198 – resulting in gross proceeds of approximately $ 3,638,000

received by the Company.

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 model.

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 284,000

shares of common stock are recorded as capital in excess of par.

The obligation to issue the remaining 416,000

shares was originally recorded as a share subscription payable.

During the twelve months ended December 31, 2024, the Company issued 416,000

out of the 416,000

shares to be issued.

the year ended December 31, 2023, in connection with the sale of 192,500 shares of common stock the Company also sold 157,500 pre-funded

warrants and 700,000 warrants convertible for 857,500 shares of common stock at an exercise price of $ 0.001 and $ 13.40 , respectively.

warrants and 700,000 warrants convertible for 857,500 shares of common stock with an exercise price of $ 0.001 and $ 13.40 , respectively.

The Company received net proceeds of $ 2,110,342 associated with the sale of the pre-funded warrants.

17 unchanged sentences

During the year ended December 31, 2024, these representative warrants expired.

of June 30, 2025, the Company has the following warrants outstanding:

of September 30, 2025, the Company has the following warrants outstanding:

Schedule of Warrants Exercise Price

Exercise price

06/13/2028 - 09/30/2028

average remaining contractual life of outstanding warrants that expire is

of Warrants Activity

September 30, 2025

December 31, 2024

average price

beginning of year

Balance, beginning of year

( 1,295,000 )

end of period

Balance, end of period

Equity Compensation

22 unchanged sentences

PSUs was estimated to be $ 1,254,460 .

As of June 30, 2025, 7,500 PSUs of the remaining 30,000 PSUs had vested.

As of September 30, 2025, 7,500 PSUs of the remaining 30,000 PSUs had vested.

December 29, 2021, the Company granted 40,000 and 30,000 PSUs to the Company’s Chief Executive Officer and a director, respectively.

5 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, 2025, the Company issued 10,000 stock options to a director with an exercise price of $ 5.95 and an expiration

date of March 7, 2035 .

During the six months ended June 30, 2025, the Company issued 102,600 stock options to various employees and directors

with an exercise price of $ 3.09 and an expiration date of April 4, 2035 .

During the six months ended June 30, 2025, the Company issued 30,000

stock options to Steven Rossi with an exercise price of $ 3.09 and an expiration date of April 4, 2035 .

the nine months ended September 30, 2025, the Company issued the following stock options to various directors:

stock options vesting ratably over two years, with an exercise price of $ 5.95

and an expiration date of March

14,000 stock options vesting ratably over two years, with an exercise price of $ 3.09 and an expiration date of April

30,000 stock options vesting ratably over two years, with an exercise price of $ 3.80 and an expiration date of July

50,000 stock options vesting pursuant to a performance milestone and an expiration date of July 12, 2035

the nine months ended September 30, 2025, the Company issued the following stock options to various employees and consultants:

stock options vesting based on various service periods, with an exercise

price of $ 3.09

and an expiration date of April

81,940 stock options vesting based on various service periods, with an exercise price of $ 3.80 and an expiration

date of July 12, 2035

76,500 stock options vesting pursuant to performance milestones and an expiration date of July 12, 2035

the nine months ended September 30, 2025, the Company issued the following stock options to Steven Rossi:

stock options vesting 50% at the end of the first two anniversaries of the grant date, with an exercise price of $ 3.09

and an expiration date of April

215,000 stock options vesting 50% at the end of the first two anniversaries of the grant date, with an exercise price

of $ 3.80 , and an expiration date of July 12, 2035 .

July 23, 2024, the Company engaged in stock option repricing for certain employees, executive officers, and members of the board of directors

6 unchanged sentences

of Stock Options Activity

September 30, 2025

December 31, 2024

stock options

average price

7 unchanged sentences

Weighted average

exercise price

Exercisable on

of June 30, 2025 and December 31, 2024, Terravis Energy Inc., a wholly owned subsidiary of the Company, has the following options outstanding:

September 30, 2025

Stock options

$ 3.09 - 55.00

of September 30, 2025 and December 31, 2024, Terravis Energy Inc., a wholly owned subsidiary of the Company, has the following options

Schedule of Stock Options Activity

September 30, 2025

December 31, 2024

stock options

6 unchanged sentences

Exercise prices

Weighted average

exercise price

June 30, 2024

Exercisable on

September 30, 2025

Stock options

Segment Reporting

11 unchanged sentences

of Revenue and Segment Net Loss

For the three months ended June 30, 2025

For the three months ended June 30, 2024

Corporate / Other / Eliminations

For the three months ended September 30, 2025

For the three months ended September 30, 2024

Corporate / Other / Eliminations

Cost of sales

2 unchanged sentences

( 1,211,933 )

( 2,875,186 )

Selling, general and administrative

14 unchanged sentences

$ ( 3,905,216 )

For the six months ended June 30, 2025

For the six months ended June 30, 2024

Corporate / Other / Eliminations

For the nine months ended September 30, 2025

For the nine months ended September 30, 2024

Corporate / Other / Eliminations

Cost of sales

3 unchanged sentences

( 2,454,131 )

( 4,975,277 )

Selling, general and administrative

5 unchanged sentences

( 5,162,620 )

( 11,016,821 )

Depreciation and amortization

( 1,268,853 )

( 1,359,522 )

( 1,019,867 )

Loss from continuing operations

7 unchanged sentences

following table presents the Company’s net sales disaggregated by geographic area:

of Net Sales Disaggregated by Geographic Area

of Net Sales Disaggregated by Geographic Area for the nine months ended September 30,:

United States

asset information has been provided for the reported segments as the CODM does not regularly review asset information by reportable segment.

As of June 30, 2025 and December 31, 2024, assets held in the U.S.

accounted for 88 % of total assets, respectively.

asset information has been provided for the reported segments as the CODM does not regularly review asset information by reportable

As of September 30, 2025 and December 31, 2024, assets held in the U.S.

accounted for 90 % and 88 % of total assets,

respectively.

Commitments and Contingencies

1 unchanged sentence

Subsequent Events

Company has evaluated subsequent events through August 13, 2025.

The following events occurred after the period ended

June 30, 2025:

On July 12, 2025, the Company granted employees an aggregate of 91,940

stock options priced at the closing stock price on July 11, 2025, vesting 50 % at the end of the following two annual anniversaries from

the grant date, and expiring 10 years from grant date.

Under these same terms, the Company granted directors an aggregate of 10,000 stock

On July 12, 2025, the Company granted Steven Rossi 215,000 stock options

priced at the closing stock price on July 11, 2025, vesting 50 % at the end of the following two annual anniversaries from the grant date,

and expiring 10 years from grant date.

On July 12, 2025, the Company granted a director 50,000 stock options priced

at the closing stock price on July 11, 2025, vesting pursuant to a performance milestone, and expiring 10 years from the grant date.

On July 12, 2025, the Company granted a consultant 76,500 stock options

priced at the closing stock price on July 11, 2025, vesting pursuant to performance milestones, and expiring 10 years from the grant date.

On July 14, 2025, the Company signed a lease agreement for 1,992 square feet of office space to be used as an R&D

facility for its Terravis Energy subsidiary pursuant to a two-year lease effective July 18,2025 for an average monthly rent of $ 3,154 .

On August 1, 2025, the Company submitted a $ 3 million purchase order and placed a deposit with an established manufacturing

equipment supplier for additional machinery, with delivery currently expected in the second quarter of 2026.

This additional equipment

is expected to meaningfully increase production capacity at the Company’s West Seneca, NY manufacturing facility, enabling the Company

to meet anticipated customer demand more efficiently, improve operational throughput, and support future revenue growth.

Company has evaluated subsequent events through November 13, 2025.

The following events occurred after the period ended September 30,

October 6, 2025 the Company announced its subsidiary Terravis Energy was selected for the

NREL Technical Assistance Program award to analyze its ZeroFrost cold-weather heat pump technology

October 15, 2025 the Company announced the successful completion of its Regulation A offering

October 23, 2025 the Company announced its new HD3 Heavy-Duty tonneau cover officially

entered production.

The HD3 is a new hard-folding truck bed cover engineered

for commercial and fleet applications, building on the success of the Company’s

AL3 and AL4 series.

October 30, 2025 the Company announced the official launch date for its flagship SOLIS Solar

Tonneau Cover and COR Portable Energy Storage System, both available

for order starting November 28, 2025.

● From October 1, 2025 through November 13, 2025, certain

Series C preferred shareholders converted 661,606

shares into the Company’s common stock.

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