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Item 8. Financial Statements and Supplementary Data

2026-03-26 compared with 2025-03-27 · 649 added, 505 removed, 621 unchanged (65% of the section changed)

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TO FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm

Consolidated Balance Sheets at December 31, 2024 and 2023

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2024 and 2023

Consolidated Statements of Cash Flow for the years ended December 31, 2024 and 2023

to Audited Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Audited Consolidated Balance Sheets at December 31, 2025 and 2024

Audited Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024

Audited Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025 and 2024

Audited Consolidated Statements of Cash Flow for the years ended December 31, 2025 and 2024

Notes to Audited Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

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Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due

to error or fraud, and performing procedures that respond to those risks.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

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of December 31, 2025, the Company’s inventory balance was approximately $9.5 million.

As reported in Note 3, inventory has increased over

the past year as the Company has shifted to full scale production in its West Seneca manufacturing facility.

As reported in Note 3, inventory has increased

over the past year as the Company has shifted to full scale production in its West Seneca manufacturing facility.

The Company evaluates

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of the Matter

discussed in Notes 7, 15, and 16 to the consolidated financial statements, the Company has issued a significant amount of equity securities.

The tracking of these transactions can be complicated and require management to estimate the value of equity securities using a Black

Scholes option pricing model.

We identified the fair market value of equity transactions to be a critical audit matter, as the calculations

can be complex and subject to error.

discussed in Notes 7, 14, and 15 to the consolidated financial statements, the Company has issued a significant amount of equity

The tracking of these transactions can be complicated and require management to estimate the value of equity securities using

a Black Scholes option pricing model.

We identified the fair market value of equity transactions to be a critical audit matter, as the

calculations can be complex and subject to error.

We Addressed the Matter in Our Audit

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Current assets

Cash and cash

Cash and cash equivalents

Accounts receivable, net

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Inventories, net (Note 3)

expenses and deposits (Note 6)

Current assets

Prepaid expenses and deposits (Note 6)

Total Current assets

Investment (Note 11)

Property and equipment,

Operating lease right-of-use

assets (Note 12)

assets, net (Note 5)

LIABILITIES AND SHAREHOLDERS’

Property and equipment, net (Note 4)

Operating lease right-of-use assets (Note 11)

Intangible assets, net (Note 5)

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Accounts payable

Accrued liabilities and

Accrued liabilities and other

Accrued compensation

Related party loan

Long-term debt, current

portion (Note 13)

liability, current portion (Note 12)

current liabilities

Lease liability, excluding

current portion (Note 12)

Long-term debt, current portion (Note 12)

Lease liability, current portion (Note 11)

Total current liabilities

Lease liability, excluding current portion (Note 11)

Long-term debt, excluding current portion (Note 12)

Total liabilities

Shareholders’ equity

Series A & B Preferred Stock, $ 0.001 par

value, 10,010 shares authorized, 100 Series A and 0 Series B issued and outstanding, respectively (Note 7)

Common stock, $ 0.001 par value, 29,900,000

shares authorized, 4,016,205 and 2,032,050 shares issued and outstanding, respectively (Note 7)

Series A, B and Series C Preferred Stock, $ 0.001 par value, 10,000,000 shares authorized, 100 Series A,

0 Series B, and 427,812 Series C (for 2025) issued and outstanding, respectively (Note 7)

Series A, B and Series C Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 100 Series A,

0 Series B, and 427,812 Series C (for 2025) issued and outstanding, respectively (Note 7)

Common stock, $ 0.001 par value, 45,000,000 shares authorized, 9,814,665 and 4,016,205 shares issued and outstanding, respectively (Note 7)

Additional paid-in capital

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( 64,476,966 )

Cumulative translation

shareholders’ equity

liabilities and shareholders’ equity

accompanying Notes to Consolidated Financial Statements.

Cumulative translation adjustment

Total shareholders’ equity

Total liabilities and shareholders’ equity

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

Statements of Operations and Comprehensive Loss

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Sales and marketing

Professional fees

on foreign exchange

operating expenses

from operations

Gain on foreign exchange

Total operating expenses

Loss from operations

( 18,813,426 )

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Interest expense

Interest income

Rental income (Note 17)

other income (expense)

Total other income (expense)

( 19,352,297 )

( 16,163,789 )

Loss per share (basic

Weighted average number

of shares (basic and diluted)

accompanying Notes to Consolidated Financial Statements.

Loss per share (basic and diluted) (Note 13)

Weighted average number of shares (basic and diluted)

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

Statements of Shareholders’ Equity

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Shares issued (Note 7)

( 3,858,464 )

Warrant inducement (Note 14)

Warrant exercise (Note 14)

Stock option forfeiture (Note 16)

( 16,163,789 )

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Shares issued (Note 7)

( 3,858,464 )

Warrant inducement (Note 14)

Warrant exercise (Note 15)

Issuance of preferred shares pursuant to Reg-A

Conversion of Series C preferred shares

( 2,646,774 )

Dividends on preferred shares

Issuance of warrants pursuant to Reg-A

( 19,352,297 )

Balance at December 31,

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$ ( 83,873,790 )

accompanying Notes to Consolidated Financial Statements.

$ 101,357,686

$ ( 83,873,790 )

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

Statements of Cash Flows

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$ ( 16,163,789 )

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

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( 11,436,825 )

Changes in operating assets

and liabilities (Note 10)

( 3,852,297 )

cash used in operating activities

Changes in operating assets and liabilities (Note 10)

( 3,069,494 )

Net cash used in operating activities

( 17,314,390 )

Cash flows from investing

Purchase of property and

( 10,138,798 )

cash used in investing activities

Cash flows from investing activities

Investments and intangible assets

Purchase of property and equipment

Net cash used in investing activities

( 1,119,503 )

Financing activities

Proceeds from issuance of common shares, net

of issuance cost

Proceeds from issuance of common shares, net of issuance cost

Proceeds from warrant exercise (Note 14)

Proceeds from issuance of preferred stock, net of issuance cost

Proceeds from issuance of warrants, net of issuance cost

Proceeds from line of credit

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( 15,939,691 )

( 6,758,422 )

Proceeds from long-term debt

Related party loan

Repayments on short term

and long-term debt

Repayments on short-term and long-term debt

( 5,325,249 )

cash provided by financing activities

Related party loan

Net cash provided by financing activities

Change in cash

( 11,254,979 )

and cash equivalents - beginning of year

and cash equivalents end of year

Supplemental disclosure

of non-cash activities

Shares issued for purchase of intangible assets

disclosure of cash flow information

Cash and cash equivalents - beginning of year

Cash and cash equivalents end of year

Supplemental disclosure of cash flow information

Income tax paid

Interest paid

accompanying Notes to Consolidated Financial Statements.

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

to the Consolidated Financial Statements

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Company’s corporate history and business overview are described in detail in our most recent registration statement on Form S-3,

filed with the SEC on July 3, 2024, which is incorporated herein by reference.

filed with the SEC on January 20, 2026, which is incorporated herein by reference.

For a description of material developments the Company

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balances and unrealized gains or losses from intercompany transactions have been eliminated upon consolidation.

currency translation and presentation – The consolidated financial statements are presented in United States Dollars.

The functional

currency of the Company and all its subsidiaries is the United States Dollar.

Transactions denominated in foreign currencies are initially

recorded in the functional currency using exchange rates in effect at the dates of the transactions.

Monetary assets and liabilities

denominated in foreign currencies are translated into the functional currency using exchange rates in effect at the dates of the transactions.

All exchange gains and losses are included in the statement of operations and comprehensive loss.

of estimates – The preparation of financial statements in conformity with U.S.

generally accepted accounting principles requires

currency translation and presentation – The consolidated financial statements are presented in USD.

The functional currency

of the Company and all its subsidiaries is USD.

Transactions denominated in foreign currencies are initially recorded in the functional

currency using exchange rates in effect at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies

are translated into the functional currency using exchange rates in effect at the dates of the transactions.

All exchange gains and losses

are included in the statement of operations and comprehensive loss.

of estimates – The preparation of financial statements in conformity with GAAP requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

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results could differ from these estimates and assumptions.

recognition – In accordance with Accounting Standards Codification (ASC) 606 Revenue from Contracts with Customers, sales are

recognized when (1) products are shipped, with no right of return except for defective products, and the title and risk of loss has passed

to customers;

and (2) when they are delivered based on the terms of the sale, and there is an identifiable contract with a customer with

defined performance obligations, the transaction price is determinable, and the entity has fulfilled its performance obligation.

related to shipping and handling costs billed to customers is included cost of sales and presented net of related shipping and handling costs.

of sales – Includes costs of products sold, which include but are not limited to:

purchased product, raw material, direct labor,

recognition – In accordance with ASC 606 , sales are recognized when (1) products are shipped, with no right of return except

for defective products, and the title and risk of loss has passed to customers;

and (2) when they are delivered based on the terms of

the sale, and there is an identifiable contract with a customer with defined performance obligations, the transaction price is determinable,

and the entity has fulfilled its performance obligation.

Revenue related to shipping and handling costs billed to customers is included

cost of sales and presented net of related shipping and handling costs.

of sales – Includes costs of products sold, which include but are not limited to purchased product, raw material, direct labor,

shipping and handling costs, depreciation and amortization, indirect costs and overhead charges.

and development – Research and development costs are expensed as incurred and include consulting and material

Advertising costs – The Company expenses

advertising costs as incurred and includes expenses in selling and marketing.

and development – Research and development costs are expensed as incurred and include consulting and material costs.

costs – The Company expenses advertising costs as incurred and includes expenses in sales and marketing.

payments - The Company offers a share option plan for its directors, officers, employees, and consultants.

“Compensation – Stock Compensation” prescribes accounting and reporting standards for all share-based payment

transactions in which employee services are acquired.

Transactions include incurring liabilities, or issuing or offering to issue

shares, options, and other equity instruments such as stock appreciation rights.

Share-based payments to employees, including grants

of employee stock options, are recognized as compensation expense in the financial statements based on their fair values at the time

ASC 718 prescribes accounting

and reporting standards for all share-based payment transactions in which employee services are acquired.

Transactions include incurring

liabilities, or issuing or offering to issue shares, options, and other equity instruments such as stock appreciation rights.

payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements

based on their fair values at the time of grant.

Compensation expense is included in general and administrative expenses.

Compensation expense is recognized over the estimated

period during which an employee is required to provide services in exchange for the award, known as the requisite service period

(usually the vesting period).

The Company elected to account for forfeitures when the forfeiture of the underlying awards occur.

expense is recognized over the estimated period during which an employee is required to provide services in exchange for the award, known

as the requisite service period (usually the vesting period).

The Company elected to account for forfeitures when the forfeiture of the

underlying awards occur.

of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:

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upon examination by the tax authorities.

The Company recognizes interest accrued related to

unrecognized tax benefits in interest expenses and penalties in operating expenses.

The Company treats tax on the Global Intangible Low-Tax

Income (“GILTI”) as a current period cost included in tax expense in the year incurred.

The Company does not measure the impact

of GILTI in the determination of deferred taxes.

Company recognizes interest accrued related to unrecognized tax benefits in interest expenses and penalties in operating expenses.

Company treats tax on the Global Intangible Low-Tax Income (“GILTI”) as a current period cost included in tax expense in

the year incurred.

The Company does not measure the impact of GILTI in the determination of deferred taxes.

and cash equivalents - All highly liquid investments with an original maturity of three months or less are considered cash equivalents.

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to concentrations of credit risk.

Cash and cash equivalents includes restricted cash at December 31, 2023 of $ 730,802 and primarily represents

funds held to satisfy obligations related to a financing arrangement.

There is no restricted cash at December 31, 2024 (see Note 13).

There is no restricted cash at December 31, 2025 or 2024.

to the Consolidated Financial Statements

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Description of Business and Significant Accounting Policies (continued)

receivable, net – Accounts receivable primarily

consists of amounts that are due and payable from distributors, wholesalers, and private label partners.

Receivables are stated at net

realizable value, which approximates fair value.

Receivables are reduced by an allowance for credit losses for amounts that may be uncollectible

in the future.

The allowance is determined by considering factors such as historical experience, credit quality, age

of the accounts receivable, economic conditions and reasonable forecasted financial information that may affect a customer’s ability

The allowance for credit losses at December 31, 2024 and 2024 is $ 15,000 and $ 0 , respectively.

receivable, net – Accounts receivable primarily consists of amounts that are due and payable from distributors, wholesalers,

and private label partners.

Receivables are stated at net realizable value, which approximates fair value.

Receivables are reduced by

an allowance for credit losses for amounts that may be uncollectible in the future.

The allowance is determined by considering factors

such as historical experience, credit quality, age of the accounts receivable, economic conditions and reasonable forecasted financial

information that may affect a customer’s ability to pay.

The allowance for credit losses at December 31, 2025 and 2024 was $ 15,000 .

- Inventories are stated at the lower of cost or net realizable value.

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of Estimated Useful Lives of Property and Equipment

and equipment

Furniture and equipment

Leasehold improvements

15 years or lease term, if shorter

Manufacturing

Manufacturing equipment

assets - The Company recognizes leases in accordance with ASC 842, which requires lessees to recognize operating leases on the balance

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assets – Patents and other intangibles are amortized using the straight-line method over their estimated useful lives.

Intangible assets, such as trademarks with indefinite lives, are not amortized.

assets, such as trademarks with indefinite lives, are not amortized.

of long-lived assets – Intangible assets are evaluated for impairment at least annually or when events or circumstances arise

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warranties - The Company currently offers a three-year limited warranty against defective products out-of-the-box.

Customers who are not satisfied with their purchase may attempt to have their purchases reimbursed outside of the warranty

instruments - FASB ASC 825, Disclosures about Fair Value of Financial Instruments, requires disclosures of the fair value of financial

The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts

receivable, and accounts payable and accrued liabilities, approximates their fair values because of the short-term maturities of these

The carrying value of the loan payable approximates fair value as its interest rate fluctuates with market interest rates.

Customers who

are not satisfied with their purchase may attempt to have their purchases reimbursed outside of the warranty period.

instruments - ASC 825, requires disclosures of the fair value of financial instruments.

The carrying value of the Company’s

current financial instruments, which include cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities,

approximates their fair values because of the short-term maturities of these instruments.

The carrying value of the loans payable approximate

fair value as its interest rate fluctuates with market interest rates.

We do not hold or issue financial instruments for trading purposes.

party transactions - All transactions with related parties are in the normal course of operations and are measured at the exchanged

Reclassifications

– Certain prior year amounts have been reclassified to conform to current year’s presentation.

The Company reclassified

accrued liabilities of $ 800,283 and $ 190,896 for the fiscal years ended December 31, 2024 and 2023, respectively, which were reclassified

from accounts payable and accrued liabilities to accrued liabilities and other to better align functional classification of obligations.

The Company also reclassified research and development costs of $ 2,289,940 and $ 1,669,318 for the fiscal years ended December 31, 2024

and 2023, 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.

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

Reclassifications – Certain prior year amounts have been reclassified to conform to current year’s presentation.

The Company reclassified professional fees of $ 3,136,869 and $ 3,030,931 for the fiscal years ended December 31, 2025 and 2024, respectively,

which were classified from professional fees to general and administrative expense on the Consolidated Statements of Operations and Comprehensive

This change improves the disclosure of costs as the company continues to increase its size and decrease its reliance on consulting

arrangements with third parties to grow its operations.

accounting pronouncements

accounting pronouncements adopted

November 2023, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) 2023-07 “ Segment Reporting

(Topic 280) :

Improvements to Reportable Segment Disclosures ” which expands annual and interim disclosure requirements

for reportable segments, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for our

annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted.

this standard for the year ended December 31, 2024, and applied the amendments retrospectively to all prior periods presented.

to Note 18, Segment Reporting.

The adoption of this standard did not have a material effect on the financial statements and related disclosures.

December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09 “ Income Taxes (Topics 740) :

to Income Tax Disclosures ” to expand the disclosure requirements for income taxes, specifically related to the rate

reconciliation and income taxes paid.

ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption

We adopted this standard for the year ended December 31, 2025, and applied the amendments on a prospective basis.

to Note 8, Income Taxes.

The adoption of this standard did not have a material effect on the financial statements and related

November 2023, the FASB issued ASU 2023-07 “ Segment Reporting (Topic 280) :

Improvements to Reportable Segment Disclosures ”

which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant

segment expenses.

ASU 2023-07 is effective for our annual periods beginning January 1, 2024, and for interim periods beginning January

1, 2025, with early adoption permitted.

We adopted this standard for the year ended December 31, 2024, and applied the amendments retrospectively

to all prior periods presented.

Refer to Note 16, Segment Reporting.

The adoption of this standard did not have a material effect on

the financial statements and related disclosures.

accounting pronouncements not yet adopted

December 2023, the FASB issued ASU 2023-09 “ Income Taxes (Topics 740) :

Improvements to Income Tax Disclosures ”

to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

is effective for our annual periods beginning January 1, 2025, 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

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

September 2025, the FASB issued ASU 2025-06, Intangibles- Goodwill and Other- Internal-Use Software (Subtopic 350-40):

Targeted Improvements

to the Accounting for Internal-Use Software .

This ASU removes all references to prescriptive and sequential software development

stages and will now require PBEs to start capitalizing software costs when management has authorized and committed to funding the software

project and it is probable that the project will be completed and the software will be used to perform the function intended.

also specifies that the disclosures in Subtopic 360-10, Property, Plant, and Equipment- Overall are required for all capitalized internal-use

software costs.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.

December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

This ASU amends Topic 270,

by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable.

The amendments also

provide additional guidance on what disclosures should be provided in interim reporting periods.

Additionally, the amendment requires

entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the disclosure requirements of this standard and the impact on its consolidated financial statements.

Company considers the applicability and impact of all ASUs.

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Going Concern

of December 31, 2024, the Company had $ 4,883,099

in cash and cash equivalents.

The Company also has availability on its revolving line of credit of $ 892,000 .

The Company has

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

of December 31, 2025, the Company had $ 5,945,894 in cash and cash equivalents.

The Company also has availability on its revolving line

of credit of $ 3,448,016 .

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 December 31, 2024,

the Company had an accumulated deficit of $ 64,476,966 .

accompanying 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 year ended December 31, 2024,

the Company had net losses of $ 16,163,789 (2023 - $ 14,928,958 ).

As of December 31, 2024, the Company had working capital of $ 7,304,110

(2023 – $ 1,956,894 ) and had an accumulated deficit of $ 64,476,966 (2023 - $ 48,313,177 ).

The Company has not generated profit from

operations since inception and to date has relied on debt and equity financing for continued operations.

The Company’s ability

to continue as a going concern is dependent upon the ability to generate cash flows from operations and obtain equity and/or debt financing.

The Company intends to continue funding operations through equity and debt financing arrangements, which may be insufficient to fund

its capital expenditures, working capital and other cash requirements in the long term.

There can be no assurance that the steps management

is taking will be successful.

As of December 31, 2025, the Company had an accumulated deficit of $ 83,873,790 .

The accompanying 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 year ended December 31, 2025, the Company had net losses of $ 19,352,297 (2024 - $ 16,163,789 ).

As of December 31, 2025, the Company had working capital of $ 10,061,578 (2024 – $ 7,304,110 ) and had an accumulated deficit of $ 83,873,790

(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.

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

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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.

began improving output and sales during 2024 and 2025.

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

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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 December 31, 2024, the Company has sold and issued 761,408 shares

of common stock in consideration for net proceeds of $ 6,247,097 under the ATM Agreement.

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

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 December 31, 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.

This agreement was amended in November 2025.

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

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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 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.

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

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declared effective by the SEC on April 8, 2024.

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.

to the Consolidated Financial Statements

31, 2025 and 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 $ 5.198 per warrant.

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

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 of 1,295,000 May 2024

Warrants at a price of $ 5.198 per share.

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

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 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 Company completed the Regulation A offering in October 2025.

The Company completed

32 tranches and received proceeds of $ 9,092,414 (net of issuance costs of $ 899,997 ).

November 14, 2025, Worksport filed a registration statement containing two prospectuses:

(1) a base prospectus, which covers the potential

offering, issuance, and sale by the registrant of up to a maximum aggregate offering price of $ 30,000000 of the registrant’s common

stock, preferred stock, debt securities, warrants and units, and (2) an “at the marketing offering” offering prospectus supplement,

which covers issuance and sale by the Company of up to a maximum aggregate offering price of $ 4,000,000 of the Company’s common

stock that may be issued and sold under that certain At the Market Offering agreement, dated September 22, 2022, as amended on November

14, 2025 between the Company and H.C.

Wainwright & Co., LLC, as sales agent.

December 11, 2025, the Company entered into a warrant inducement agreement (the “Inducement”) with the holder of existing

warrants to purchase an aggregate of 2,194,526 shares at a reduced exercise price of $ 2.90 .

Pursuant to the Inducement, the exercising

holder of the existing warrants received 3,840,421 inducement warrants and the Company received $ 6,364,000 from the exercise of the existing

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 $ 4,485,000 is recorded as a non-cash deemed dividend.

The proceeds of the warrant

inducement and issuance of 916,000 shares of common stock are recorded as additional paid in capital.

The obligation to issue the remaining

1,278,526 shares is recorded as a component of equity.

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

32 unchanged sentences

Electrical equipment

Property and equipment,

Property and equipment, at cost

Less accumulated depreciation

1 unchanged sentence

( 3,032,025 )

Property and equipment,

the years ended December 31, 2024 and 2023, the Company recognized depreciation expense of $ 1,367,445 and $ 1,107,292 , respectively.

Property and equipment, net

the fiscal years ended December 31, 2025 and 2024, the Company recognized depreciation expense of $ 1,448,472 and $ 1,367,445 , respectively.

During the fiscal year ended December 31, 2025, the Company recognized

a non-cash loss on disposal of property and equipment of $ 296,726 .

The loss primarily relates to leasehold improvements whereby the underlying

lease agreement was not renewed.

This loss is included in the Consolidated Statement of Operations and Comprehensive Loss as a component

of general and administrative expense.

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.

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

2014 and 2024 .

The patents and software are amortized on a straight-line basis over their useful life.

The Company’s trademark,

licenses, and other indefinite life intangible assets are reassessed every year for impairment.

The Company determined that impairment

is not necessary for the current year ended December 31, 2024.

The components of intangible assets as of December 31, 2024

and 2023 are as follows:

assets consist primarily of costs incurred in establishing the Company’s intellectual property and other non-physical rights, including

patents and patent applications (including related utility patents and design registrations), trademarks and trade names, copyrights,

certain licenses and other contractual rights, and capitalized software and qualifying website and application development costs.

Company’s utility patents and design registrations were issued between 2014 and 2024.

The patents and software are amortized on

a straight-line basis over their useful life.

The Company’s trademark, licenses, and other indefinite life intangible assets are

reassessed every year for impairment.

The Company determined that impairment is not necessary for the current year ended December 31,

The components of intangible assets as of December 31, 2025 and 2024 are as follows:

Schedule of Components of Intangible Assets

Intangible assets, gross carrying amount

Less accumulated amortization

Intangible assets, net

expense for the years ended December 31, 2024 and 2023 was $ 385,840 and $ 2,450 , respectively.

assets, gross carrying amount

accumulated amortization

expense for the fiscal years ended December 31, 2025 and 2024 was $ 385,836 and $ 385,840 , respectively.

to the Consolidated Financial Statements

2 unchanged sentences

amortization of the patent and software over the next five years and beyond December 31, 2025 is as follows:

Amortization of Patent and Software

of Estimated Amortization of the patent and Software

Prepaid Expenses and Deposits

2 unchanged sentences

Consulting, services and advertising

Prepaid expenses

include prepayments for manufacturing equipment and raw materials used in the production of finished goods.

Shareholders’ Equity

Prepaid expenses and deposits

include prepayments for research and development services, manufacturing equipment and raw materials used in the production of finished

Shareholders’ Equity (Deficit)

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 stock.

stock – The Company is authorized to issue up to 45,000,000 shares of common stock.

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.

Series A 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

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.

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

dividend preferences nor receive any liquidation preferences.

As of December 31, 2025, the Company has not issued shares of Series

B preferred stock.

2025, the Company created its Series C preferred stock for its Regulation A offering.

Refer to Note 14, 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 December 31, 2025, the

Company issued 3,074,586 shares of Series C preferred stock and converted 2,646,774 Series C preferred shares to common stock at the

shareholder’s request.

The Company recognized dividends paid and payable to Series C preferred shareholders as of December 31,

2025, of $ 17,192 and $ 27,335 , respectively.

year ended December 31, 2025, the following transactions occurred:

the year ended December 31, 2024, the Company sold 758,995 shares of common stock for a total net proceeds of $ 6,032,789 .

the year ended December 31, 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 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 $ 747,366 to share subscriptions payable from restricted shares and stock options to be issued.

of December 31, 2024, the restricted shares have not been issued.

As of December 31, 2024, the Company issued 84,594 restricted shares with

a value of $ 438,992 .

During the year ended December 31, 2024, in

connection with the sale of 237,224 shares of common stock, the Company also sold 147,789 pre-funded warrants and issued 770,026

warrants exercisable for a total of 770,026 shares of common stock for $ 0.001 and $ 7.40 , respectively, per share.

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 the pre-funded warrants are exercised.

During the period, 147,790 warrants were exercised for 147,790 shares

of common stock for $ 150 .

Refer to Note 15, Warrants.

the year ended December 31, 2024, the Company closed a sale of 95,000 shares of common stock for proceeds of $ 380,000 .

In connection

with the sale of common stock, the Company issued 190,000 warrants.

Refer to Note 15, Warrants.

As of December 31, 2024, the shares have not been

Refer to Note 15, Warrants and Note 16, Equity Compensation

for additional disclosures related to shareholders’ equity.

in connection with the Shelf Registration Statement and the ATM Agreement described in Note 2, Going Concern.

Company recognized consulting expense of $ 13,000 and salary expense of $ 4,843 to share subscriptions payable from restricted shares and

stock options to be issued.

As of December 31, 2025, the $ 17,843 of the restricted shares have not been issued.

The Company recognized

consulting expense of $ 215,667 related to warrants issued pursuant to a service agreement.

the year ended December 31, 2025, in connection with the inducement of 1,295,091 warrants at $ 5.198 per share, the Company sold 1,424,500

warrants exercisable at $ 6.502 per share.

The Company received proceeds of $ 6,731,410 before deducting placement agent fees of $ 346,570

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

In addition, in connection with

the inducement of 2,194,526 warrants at $ 2.90 per share, the Company sold 770,026 warrants exercisable at $ 7.40 per share and 1,424,500

warrants exercisable at $ 6.502 per share.

The Company received proceeds of $ 6,364,125 before deducting placement aging fees of $ 328,206

and other offering expenses payable by the Company upon the exercise of February 2024 and February 2025 warrants, respectively.

the year ended December 31, 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 3,074,586 Units, received proceeds of $ 9,092,414 (net of issuance costs of $ 899,997 ).

the year ended December 31, 2025, certain Series C preferred shareholders converted 2,646,774 shares into the Company’s common

to the Consolidated Financial Statements

31, 2025 and 2024

Shareholders’ Equity (continued)

Shareholders’ Equity (Deficit) (continued)

year ended December 31, 2024, the following transactions occurred:

the year ended December 31, 2024, the Company sold 758,995 shares of common stock for a total net proceeds of $ 6,032,789 .

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.

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 $ 747,366 to share subscriptions payable from restricted shares and stock options to be issued.

As of December 31, 2024, the restricted shares have not been issued.

During the same period, the Company issued 25,000 shares of common

stock for consulting services valued at $ 635,000 .

the year ended December 31, 2023, the Company closed a sale of 192,500 shares of common stock for $ 2,579,500 .

The Company incurred share

issuance expense of $ 428,300 .

In association with the sale of common shares, the Company also issued 157,500 pre-funded warrants and

700,000 warrants.

the years ended December 31, 2024 and 2023, the Company was authorized to issue 29,900,000 shares of its common stock with a par value

All shares were ranked equally with regards to the Company’s residual assets.

During 2024 and 2023, the Company was

authorized to issue 10 shares of its Series A and 10,000 of its Series B Preferred Stock with a par value of $ 0.001 .

Series A Preferred

Stock have voting rights equal to 30 shares of common stock, per share of Preferred Stock.

Series B Preferred Stock have voting rights

equal to 1,000 shares of common stock, per share of Preferred Stock .

The income tax expense for the years ended December 31, 2024 and 2023 is reconciled per the schedule below:

Schedule of Reconciliation of Income Tax

Loss before income taxes

As of December 31, 2024, the Company issued 84,594 restricted shares

with a value of $ 438,992 .

the year ended December 31, 2024, in connection with the sale of 237,224 shares of common stock, the Company also sold 147,789 pre-funded

warrants and issued 770,026 warrants exercisable for a total of 770,026 shares of common stock for $ 0.001 and $ 7.40 , respectively, per

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 the pre-funded warrants are exercised.

During the period, 147,790 warrants were exercised for 147,790

shares of common stock for $ 150 .

Refer to Note 14, Warrants.

the year ended December 31, 2024, the Company closed a sale of 95,000 shares of common stock for proceeds of $ 380,000 .

In connection

with the sale of common stock, the Company issued 190,000 warrants.

Refer to Note 14, Warrants.

As of December 31, 2024, the shares have

not been issued.

Company adopted ASU 2023-09 on a prospective basis as of January 1, 2025, which resulted in additional income tax disclosures for the

rate reconciliation and related to income taxes paid for 2025.

Given that the Company elected to adopt ASU 2023-09 prospectively, the

2024 rate reconciliation is not disaggregated in accordance with 2023-09 and the income taxes paid is not presented by jurisdiction.

following table summarizes disaggregated loss from continuing operations before income tax expense:

of Disaggregated Loss from Continuing Operations Before Income Tax Expense

Loss before income tax expense from continuing operations

$ ( 10,934,578 )

4 unchanged sentences

( 6,704,808 )

continuing operation

$ ( 12,647,489 )

$ ( 6,704,808 )

$ ( 19,352,297 )

tax expense (benefit) from continuing operations or the fiscal year ended December 31, 2025 consisted of the

Tax Expense (benefit) from Continuing Operations

$ ( 2,042,695 )

( 1,641,617 )

$ ( 4,201,000 )

Valuation allowance

Income tax expense

provision for income taxes for the fiscal year ended December 31, 2025 differed from the amount computed by applying the federal

statutory income tax rate due to:

Schedule of Statutory U.S Federal

Income Tax Rate

Federal Statutory Income Tax and Rate

$ ( 2,656,369 )

Federal statutory income tax rate

State and Local Income Taxes, Net of Federal Income Tax Effect (1)

Foreign Tax Effects

( 1,641,617 )

Changes in Unrecognized Tax Benefits

Share compensation

Income tax benefit

Research and Development Tax Credit

Nontaxable and nondeductible items

Share Based Compensation

Changes in Valuation Allowance

Effective Tax Rate

State taxes in Florida, New York, New Jersey and Massachusetts make up the majority (more than 50%) of the tax effect of this category.

to the Consolidated Financial Statements

31, 2025 and 2024

Income Taxes (continued)

reconciliation of the statutory U.S.

federal income tax rate to the effective tax rate for the period before the adoption of ASU 2023-09

was as follows:

Federal statutory income tax rate

State taxes, net of federal benefits

Share based compensation

Limitation on depreciation and amortization deduction

Capitalized research and development expenditures

Effective income tax rate

1 unchanged sentence

( 3,383,000 )

( 2,606,000 )

Estimated research and development credit

1 unchanged sentence

Provision for income taxes

to the Consolidated Financial Statements

31, 2024 and 2023

Income Taxes (continued)

Deferred Income Tax Assets

taxes paid (net or refunds) consisted of the following:

Taxes Paid (Net or Refunds)

Total income taxes paid

taxes paid (net of refunds) was $ 62 for the year ended December 31, 2024.

taxes paid, net of refunds, exceeded five (5) percent of total income taxes paid (net of refunds) in the following jurisdictions:

Massachusetts

Total income taxes paid

tax effects of temporary differences that give rise to the deferred income tax assets at December 31, 2025 and 2024 are as follows:

1 unchanged sentence

Net operating loss carry forwards

Differences in bases of depreciation of

property and equipment

Lease liability

Differences in basis of depreciation of property and equipment

Share based compensation

8 unchanged sentences

Within Each Jurisdiction

United States

Deferred income taxes

Valuation allowance

( 16,227,000 )

( 12,026,000 )

Net deferred tax asset

Cumulative Net Operating Losses

Company has non-capital losses carried forward of approximately $ 58,867,000 available to reduce future years’ taxable income.

1 unchanged sentence

Schedule of Cumulative Non-capital Losses

United States

Non-capital losses carried forward Total

Effective for 2023, the Tax Cuts and Jobs Act (“TCJA” of 2017 requires taxpayers to capitalize and amortize research and development

costs pursuant to IRC Section 174.

Domestic expenses are amortized over a 5 year period and foreign over a 15 year period.

of the TCJA, a deferred tax asset was established beginning in 2023 and is reflected in the table above.

Realization of deferred tax assets is dependent, in part,

upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considers

projected future taxable income, tax planning strategies and carryback opportunities in making its assessment of the recoverability of

operating loss carryforwards of approximately $ 43,399,000 may be offset against future taxable income.

No tax benefit from these losses have

been reported in the December 31, 2024 consolidated financial statements since the potential tax benefit is offset by a valuation allowance

of the same amount.

to the Consolidated Financial Statements

1 unchanged sentence

Income Taxes (continued)

of deferred tax assets is dependent, in part, upon the generation of future taxable income during the periods in which those temporary

differences become deductible.

Management considers projected future taxable income, tax planning strategies and carryback opportunities

in making its assessment of the recoverability of tax assets.

Net operating loss carryforwards of approximately $ 58,867,000 may be offset against

future taxable income.

No tax benefit from these losses have been reported in the December 31, 2025 consolidated financial statements

since the potential tax benefit is offset by a valuation allowance of the same amount.

to change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes

1 unchanged sentence

Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future

Company complies with the provisions of FASB ASC 740 in accounting for its uncertain tax positions.

Company complies with the provisions of ASC 740 in accounting for its uncertain tax positions.

ASC 740 addresses the determination

6 unchanged sentences

Company does not expect the amount of unrecognized tax benefits to materially change within the next twelve months.

The Company is subject to income taxes in the U.S.

in various states and foreign jurisdictions.

Tax regulations with each jurisdiction are subject to the interpretation of the related tax

laws and regulations and require the application of significant judgment.

The Company is no longer subject to U.S.

federal, state, and local income tax examinations by tax authorities for tax years ending before

December 31, 2020 in the U.S.

Company is subject to income taxes in the U.S.

and in various states and foreign jurisdictions.

Tax regulations with each jurisdiction

are subject to the interpretation of the related tax laws and regulations and require the application of significant judgment.

is no longer subject to U.S.

federal, state, and local income tax examinations by tax authorities for tax years ending before December

31, 2020 in the U.S.

The Company is no longer subject to non-U.S.

income tax examinations by tax authorities for tax years ending

before December 31, 2014.

income tax examinations by tax authorities for tax years ending before

December 31, 2014.

Financial Instruments and Fair Value

8 unchanged sentences

data, some of which is internally developed and considers risk premiums that a market participant would require.

Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, revolving line of credit,

and long-term debt.

The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying

value because of the short-term nature of these instruments.

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 December 31, 2024.

The Company’s financial instruments include cash and cash equivalents,

accounts receivable, accounts payable, revolving line of credit, and long-term debt.

The fair values of cash and cash equivalents, accounts

receivable and accounts payable approximate their carrying value because of the short-term nature of these instruments.

The Company’s

long-term debt is based on a fixed interest rate, and its carrying amount approximates fair value at December 31, 2024.

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.

revolving line of credit and long-term debt are based on a variable interest rate, and are reflected in the financial statements at carrying

value which approximates fair value at December 31, 2025.

The fair value of the revolving line of credit and long-term debt is classified

as Level 2 within the fair value hierarchy.

Company is exposed to market risks such as fluctuation in foreign currency exchange rates and interest rates.

21 unchanged sentences

materials and is increasing its purchasing from the supplier in Foshan to lower supplier concentration risk.

Further, the Company

has established domestic assembly of its hard tonneau cover product line to further reduce the risk associated with this concentration

of finished good suppliers.

The company primarily sources raw materials for domestic production and assembly from vendors in Europe,

Southeast Asia, and North America.

Further, the Company has

established domestic assembly of its hard tonneau cover product line to further reduce the risk associated with this concentration of

finished good suppliers.

The Company primarily sources raw materials for domestic production and assembly from vendors in Europe, Southeast

Asia, and North America.

Strategic inventories are managed based on demand.

To date, the Company has been able to obtain adequate

supplies of the materials used in the production of its products in a timely manner from existing sources.

The loss of these key suppliers

or a delay in shipments could have an adverse effect on fulfillment of soft tonneau cover orders.

To date, the Company has been able to obtain adequate supplies

of the materials used in the production of its products in a timely manner from existing sources.

The loss of these key suppliers or

a delay in shipments could have an adverse effect on fulfillment of soft tonneau cover orders.

Concentration

of Customer Risk

customer is considered to be significant if they account for greater than 10 % of the Company’s annual sales.

The loss of any key

customer could have an adverse effect on the Company’s business.

the year ended December 31, 2024, 37 %

of the Company’s revenue is comprised of one customer.

For the year ended December 31, 2023, 93 %

of the Company’s revenue was comprised of one customer.

customer is considered to be significant if they account for greater than 10 % of the Company’s annual net sales.

any key customer could have an adverse effect on the Company’s business.

For the year ended December 31, 2025, there are no customers with net sales

greater than 10 %.

For the year ended December 31, 2024, 37 % of the Company’s net sales was comprised of one customer.

Changes in Cash Flows from Operating Assets and Liabilities

1 unchanged sentence

Schedule of Changes in Operating Assets and Liabilities

Decrease (increase) in accounts

Decrease (increase) in accounts receivable

$ ( 461,382 )

3 unchanged sentences

( 1,558,562 )

Decrease (increase) in prepaid expenses

Increase (decrease)

in accounts payable and accrued liabilities

Decrease (increase) in prepaid expenses and deposits

Increase (decrease) in accounts payable and accrued liabilities

in operating assets and liabilities

$ ( 3,069,494 )

the year ended December 31, 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).

to the Consolidated Financial Statements

31, 2025 and 2024

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

now secondary 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 averaged $ 5,250 per month in 2024

not inclusive of taxes.

Company accounts for leases 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 by the Company’s incremental borrowing rate.

The Company measured

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

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

1 unchanged sentence

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

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

the date of initial application beginning January 1, 2019.

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

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

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

The lease was not renewed after

the initial extension period ended May 31, 2025.

The Company’s incremental borrowing rate used to initially measure the present

value of the remaining lease payments was 10 %.

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’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 December 31, 2025 and 2024 is as follows:

5 unchanged sentences

of Lease Cost

Operating lease cost

following is a summary of cash paid in 2025 and 2024 for amounts included in the measurement of lease liabilities:

of Measurement of Lease Liabilities

Operating cashflow

of lease liability are as follows:

minimum lease payments as of December 31, 2025:

Schedule of Future Minimum Lease Payments

of Future Minimum Annual Lease Payments

Total future minimum lease payments

amount representing

amount representing interest

Present value of future payments

3 unchanged sentences

31, 2025 and 2024

Long-term debt consists

debt consists of:

Schedule of Long Term Debt

December 31, 2024

December 31, 2023

Secured Loan Agreement (a)

Revolving Credit Facility (b)

Revolving Credit Facility (a)

Long-term debt

3 unchanged sentences

Long-term debt

May 4, 2022, the Company entered into a secured loan agreement (the “Loan Agreement”)

with an external banking entity 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 Company 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.

The loan’s outstanding balance and accrued interest were due on August 10, 2024.

Company disclosed the material terms of the Loan Agreement in a Current Report on Form 8-K

filed with the Securities and Exchange Commission on May 11, 2022.

February 4, 2024, the Company and Worksport New York Operations Corporation entered into a Forbearance Agreement with the Lender

in connection with the Loan Agreement.

On May 14, 2024, the Company successfully negotiated an extension of the maturity date for

its $ 5.3 million Loan Agreement from an original due date of May 20, 2024 to a new maturity date of August 10, 2024.

has since refinanced this loan.

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

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to fund operations.

At December 31, 2024, the outstanding balance of this loan was $ 3,591,247

(net of issuance costs of $ 216,778 ).

At December 31, 2025, the outstanding balance of this loan was $ 1,431,131 (net

of issuance costs of $ 10,534 ).

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 December 31, 2024, the Company had an available balance of $ 892,000 to borrow on the Revolving Credit Facility.

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 December

31, 2025, the Company had an available balance of $ 3,448,016 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 ).

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.

credit and security agreement with an external lending entity with a maturity date of September 1, 2027 , which is 36 months from initial

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.

At December 31, 2025, the outstanding balance of this loan was $ 1,206,159 (net

of issuance costs of $ 27,334 ).

Company is in compliance with all covenants.

Loss per Share

the year ended December 31, 2024, loss per share is $ 5.84 (basic and diluted) compared to that of the year ended December 31, 2023 of

$ 8.44 (basic and diluted) using the weighted average number of shares of 2,768,732 (basic and diluted) and 1,768,991 (basic and diluted),

respectively.

the year ended December 31, 2025, loss per share is $ 3.16

(basic and diluted) compared to that of the year ended December

31, 2024 of $ 5.84 (basic

and diluted) using the weighted average number of shares of 6,143,122

(basic and diluted) and 2,768,732

(basic and dilu ted), respectively.

are 45,000,000

3 unchanged sentences

The computation of loss per share is based on the

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

260, “Earnings Per

Share.” Shares underlying the Company’s outstanding warrants and convertible promissory notes were excluded due to the

anti-dilutive effect they would have on the computation.

weighted average number of shares outstanding during the period in accordance with ASC 260.

Shares underlying the Company’s

outstanding warrants and convertible promissory notes were excluded due to the anti-dilutive effect they would have on the

As of December 31, 2025, the Company has 7,335,008

warrants convertible to 7,365,008

common shares, 117,018

restricted stock to be issued, and 192,784

common shares, 472,812 Series C preferred shares convertible to 472,812 common shares, 46,504

shares of restricted stock to be issued, and 298,623

stock options exercisable for 298,623

8 unchanged sentences

31, 2025 and 2024

December 11, 2025, the Company entered into a warrant inducement agreement with the holder of existing warrants to purchase an aggregate

2,194,526 shares at a reduced exercise price of $ 2.90.

Pursuant to the inducement, the existing holder of the existing warrants received

3,840,421 inducement warrants and the Company received $ 6,364,000 from the exercise of the existing warrants.

As a result of the inducement

and subsequent exercise, the Company determined the incremental fair value provided to the holder from both the adjustment in exercise

price of the existing warrants and the fair value of the inducement warrants issued using the Black Scholes model.

The total incremental

value of $ 4,485,000 is recorded as a non-cash deemed dividend as a reduction of additional paid in capital based on the Company’s history

of net operating losses.

The proceeds of the warrant inducement and issuance of 916,000 shares of common stock are recorded as additional

paid in capital.

The obligation to issue the remaining 1,278,526 shares is recorded as a component of equity.

On September 2, 2025, the Company entered into a consulting agreement with a third party to perform certain services

for a six month period in exchange for both cash consideration and the issuance of warrants.

The warrant agreement was issued on March

2, 2026 and gives the holder the right to purchase 100,000 shares at $ 4.00 and 100,000 common shares at $ 5.00 .

The warrants expire two

years from the date of issuance.

The Company determined the fair value provided to the holder at the date of the consulting agreement

using the Black Scholes model, as the warrants were earned by the holder over the term of the consulting agreement.

For the fiscal year

ended December 31, 2025, the Company recognized $ 216,000 as a component of general and administrative expense.

On June 13, 2025, the Company 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.

On October 15, 2025, the Company completed the Regulation A offering.

Through December 31, 2025, the Company

issued 3,074,586 warrants to investors.

On 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.

Pursuant to the inducement, the exercising holder of the

existing warrants received 1,425,000 inducement warrants and the Company received $ 6,731,000 from the exercise of the existing warrants.

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

inducement warrants issued using the Black Scholes model.

The total incremental fair value of $ 7,602,000 , is recorded as a non-cash deemed

dividend as a reduction of additional paid in capital based on the Company’s history of net operating losses.

The proceeds of the

warrant inducement and issuance of 1,295,000 shares of common stock are recorded as additional paid-in capital.

the year ended December 31, 2024, in connection with the sale of 237,224 shares of common stock, the Company also sold 147,789 pre-funded

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having an exercise price of $ 60.50 , expired.

the year ended December 31, 2023, in connection with the sale of 192,500

shares of common stock the Company also sold

pre-funded warrants and 700,000

warrants convertible for 857,500

shares of common stock at an exercise price of

and $ 13.40 ,

respectively.

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

associated with the sale of the pre-funded warrants.

During the same period, 88,700

pre-funded warrants were exercised for 88,700

shares of common stock for $ 89 .

During the year ended December 31, 2024, the remaining 68,800

pre-funded warrants were exercised for 68,800

shares of common stock for $ 69 .

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.

On 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 as a reduction of additional paid in capital based on the Company’s history of net operating

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 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.

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

During the same period, 88,700 pre-funded

warrants were exercised for 88,700 shares of common stock for $ 89 .

During the year ended December 31, 2024, the remaining 68,800 pre-funded

warrants were exercised for 68,800 shares of common stock for $ 69 .

the year ended December 31, 2023, the Company and a stock options holder agreed to cancel all 40,000 stock options in exchange for extending

10 unchanged sentences

warrants were not exercisable until January 30, 2022.

The representative warrants were exercisable for 13,091 shares of common stock at

$ 60.50 per share until August 3, 2024.

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

to share issuance cost.

The representative warrants were exercisable for 13,091 shares of common stock

at $ 60.50 per share until August 3, 2024.

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

warrants to share issuance cost.

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

of December 31, 2025, the Company has the following warrants outstanding:

Schedule of Warrants Exercise Price

March 20, 2025

of Warrants Exercise Price

Exercise price

December 31, 2026

September 21, 2029

November 26, 2029

June 30, 2031

March 2, 2028

June 13, 2028 – October 24, 2028

average remaining contractual life of outstanding warrants that expire is 4.39 years.

2 unchanged sentences

average price

beginning of year

end of period

beginning of fiscal year

( 3,489,526 )

end of fiscal year

Equity Compensation

5 unchanged sentences

Equity Compensation (continued)

equity-settled, share-based payments are ultimately recognized as an expense in the statement of operations with a corresponding credit

to “Additional Paid in Capital.” If vesting periods or other non-market vesting conditions apply, the expense is allocated

over the vesting period, based on the best available estimate of the number of share options expected to vest.

Estimates are subsequently

revised if there is any indication that the number of share options expected to vest differs from previous estimates.

Any cumulative

adjustment prior to vesting is recognized in the current period.

No adjustment is made to any expense recognized in prior periods if

share options ultimately exercised are different than that estimated on vesting.

All equity-settled, share-based payments are ultimately recognized as an

expense in the statement of operations with a corresponding credit to additional paid in capital.

If vesting periods or other non-market

vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share

options expected to vest.

Estimates are subsequently revised if there is any indication that the number of share options expected to vest

differs from previous estimates.

Any cumulative adjustment prior to vesting is recognized in the current period.

No adjustment is made

to any expense recognized in prior periods if share options ultimately exercised are different than that estimated on vesting.

May 1, 2023, the Company and Steven Rossi reached an agreement to modify 160,000 restricted stock units and 40,000 performance stock

1 unchanged sentence

as described below.

November 11, 2022, 40,000 and 30,000 PSUs granted on December 29, 2021, as described below, were modified to include new terms pertaining

to the PSU vesting schedule.

The PSUs vest in 5% increments according to the modified schedule that correlates with the Company’s

The first 5% of the PSUs vest upon the Company’s stock price closing at $22.50, 50% will have vested at a closing

price of $53.10, and 100% will have vested at a closing price of $137.60 as measured using the volume weighted average of the Company’s

common stock for ten (10) consecutive trading days, with over $ 100,000 of trading volume on each of those days.

The fair value of the

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

As of December 31, 2024, 7,500 PSUs of the remaining 30,000 PSUs had vested, and the Company recognized

$ 107,525 (2023 - $ 155,314 ) in consulting expenses.

On November 11, 2022, 40,000 and 30,000 PSUs granted on December 29, 2021,

as described below, were modified to include new terms pertaining to the PSU vesting schedule.

The PSUs vest in 5% increments according

to the modified schedule that correlates with the Company’s stock price.

The first 5% of the PSUs vest upon the Company’s

stock price closing at $22.50, 50% will have vested at a closing price of $53.10, and 100% will have vested at a closing price of $137.60

as measured using the volume weighted average of the Company’s common stock for ten (10) consecutive trading days, with over $ 100,000

of trading volume on each of those days.

The fair value of the PSUs was estimated to be $ 1,254,460 .

As of December 31, 2025, 7,500 PSUs

of the remaining 30,000 PSUs had vested, and the Company recognized $ 107,525 (2024 - $ 107,525 ) in consulting expenses.

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 year ended December 31, 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 7, 2035

stock options vesting ratably over two years, with an exercise price of $ 3.09 and an expiration date of April 4, 2035

stock options vesting ratably over two years, with an exercise price of $ 3.80 and an expiration date of July 12, 2035

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

the year ended December 31, 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 4, 2035

stock options vesting based on various service periods, with an exercise price of $ 3.80 and an expiration date of July 12, 2035

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

the year ended December 31, 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 4, 2035

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

5 unchanged sentences

Of these stock options, 2,040 were subsequently

the year ended December 31, 2023, the Company issued 474,336 stock options to employees, directors, and consultants with exercise prices

ranging from $ 14.40 to $ 42.00 and expiration dates ranging from January 30, 2028 to October 31, 2033 .

Of these stock options, 15,720 were

subsequently cancelled.

to the Consolidated Financial Statements

1 unchanged sentence

Equity Compensation (continued)

Schedule of Stock Options Activity

of Stock Options Activity

December 31, 2025

December 31, 2024

stock options

2 unchanged sentences

average price

beginning of period

end of period

Balance, beginning of fiscal year

Balance, end of fiscal year

of Share Based Payment Arrangement, Option, Exercise Price Range

1 unchanged sentence

exercise price

$ 5.70 - 55.00

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

Schedule of Stock Options Activity

December 31, 2025

December 31, 2024

stock options

2 unchanged sentences

average price

beginning of period

end of period

Balance, beginning of fiscal year

Balance, end of fiscal year

of Share Based Payment Arrangement, Option, Exercise Price Range

1 unchanged sentence

exercise price

Rental Income

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

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

the year ended December 31, 2024, the Company recognized rental income of $ 76,413 (2023 - $ 184,564 ).

Exercisable on

Stock options

to the Consolidated Financial Statements

9 unchanged sentences

The CODM also uses net income for evaluating pricing

strategy and to assess the performance for determining the compensation of certain employees.

strategy and to assess performance for determining the compensation of certain employees.

Significant segment expenses reviewed,

3 unchanged sentences

Tonneau Covers

/ Eliminations

Tonneau Covers

/ Eliminations

the year ended December 31, 2024

the year ended December 31, 2023

Tonneau Covers

/ Eliminations

For the year ended December 31, 2025

For the year ended December 31, 2024

Tonneau Covers

/ Eliminations

Cost of sales

16 unchanged sentences

( 1,206,499 )

Net loss from continuing operations

( 1,753,285 )

Net loss from operations

( 7,442,421 )

4 unchanged sentences

( 4,043,409 )

( 15,465,834 )

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

of Net Sales Disaggregated by Geographic Area

Tonneau Covers

United States

7 unchanged sentences

The following events occurred after year-end:

Through March 27, 2025, the Company has sold and issued 22,725 shares of

common stock in consideration for net proceeds of $ 185,875 under the ATM Agreement.

On February 27, 2025, the

Company entered into a warrant inducement agreement (the “Inducement”) with the holder of existing warrants to purchase

an aggregate 1,295,000 shares at a revised price of $ 5.20 in consideration for the Company to issue new warrants to purchase

up to 1,424,500 additional shares of common stock at an exercise price of $ 6.502 each – resulting in gross proceeds of approximately

$ 6,734,000 received by the Company.

On March 18, 2025, Worksport effectuated a 1-for-10 reverse stock split

of its common stock.

The Company’s common stock continues to trade on the Nasdaq under the Company’s existing trading symbol,

“WKSP”, and a new CUSIP number, 98139Q308, was assigned as a result of the reverse stock split.

● Through March 26, 2026, the Company has sold and issued 2,070,654 shares of common stock in consideration for net proceeds

of $ 2,113,000 under the ATM Agreement.

● Through March 26, 2026, 200 shares of Series C Preferred stock were converted to 200 shares

of common stock at the request of the investor.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data