What changed in this filing

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Item 1A. Risk Factors

2025-03-27 compared with 2024-03-28 · 298 added, 430 removed, 347 unchanged (68% of the section changed)

business is subject to many risks and uncertainties, which may affect our future financial performance.

If any of the events or circumstances

described below occur, our business and financial performance could be adversely affected, our actual results could differ materially

from our expectations, and the price of our stock could decline.

The risks and uncertainties discussed below are not the only ones we

There may be additional risks and uncertainties not currently known to us or that we currently do not believe are material that

may adversely affect our business and financial performance.

You should carefully consider the risks described below, together with all

other information included in this report including our financial statements and related notes, before making an investment decision.

The statements contained in this report that are not historic facts are forward-looking statements that are subject to risks and uncertainties

that could cause actual results to differ materially from those set forth in or implied by forward-looking statements.

If any of the

following risks actually occurs, our business, financial condition or results of operations could be harmed.

In that case, the trading

price of our common stock could decline, and investors in our securities may lose all or part of their investment.

addition to the other information set forth in this report, you should carefully consider the following factors, which could materially

affect our business, financial condition or future results.

The risks described below are not the only risks we face.

Additional risks

and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial

condition or results of operations.

The risks are listed below in no particular order.

Related to Our Business

Going Concern Risk Factor

has incurred significant losses since its inception, including a net loss of $14,928,958 for the year ended December 31, 2023, and has

an accumulated deficit of $48,313,177 as of December 31, 2023.

These factors, among others, raise substantial doubt about the Company’s

ability to continue as a going concern.

The Company’s continuation as a going concern is dependent upon its ability to generate

positive cash flows from operations and to secure additional sources of equity and/or debt financing.

Despite the Company’s intent to

fund operations through equity and debt financing arrangements, there is no assurance that such financing will be available on terms acceptable

to the Company, if at all.

Our independent

auditors have included an explanatory paragraph in their audit report regarding the Company’s ability to continue as a going concern.

This going concern risk may materially limit our ability to raise additional funds through the issuance of new debt or equity or may adversely

affect the terms upon which such capital may be available.

The inability to obtain sufficient financing on acceptable terms could have

a material adverse effect on the Company’s financial condition, results of operations, and business prospects.

The Company is actively

pursuing strategies to mitigate these risks, focusing on transitioning towards revenue generation from its existing product offerings

and expanding its customer base.

However, there can be no assurance that these efforts will prove successful or that the Company will

achieve its intended financial stability.

The failure to successfully address these going concern risks may materially and adversely affect

the Company’s business, financial condition, and results of operations.

Investors should consider the substantial risks and uncertainties

inherent in the Company’s business before investing in the Company’s securities.

business, results of operations and financial condition may be adversely impacted by resurgences of the global COVID-19 pandemic or other

Various factors raise substantial doubt about

the Company’s ability to continue as a going concern.

Company has incurred significant losses since its inception, including a net loss of $16,163,789 for the year ended December 31, 2024,

and has an accumulated deficit of $64,476,966 as of December 31, 2024.

These factors, among others, raise substantial doubt about the

Company’s ability to continue as a going concern.

The Company’s continuation as a going concern is dependent upon its ability

to generate positive cash flows from operations and to secure additional sources of equity and/or debt financing.

Despite the Company’s

intent to fund operations through equity and debt financing arrangements, there is no assurance that such financing will be available

on terms acceptable to the Company, if at all.

independent auditors have included an explanatory paragraph in their audit report regarding the Company’s ability to continue as

a going concern.

This going concern risk may materially limit our ability to raise additional funds through the issuance of new debt

or equity or may adversely affect the terms upon which such capital may be available.

The inability to obtain sufficient financing on

acceptable terms could have a material adverse effect on the Company’s financial condition, results of operations, and business

Company is actively pursuing strategies to mitigate these risks, focusing on transitioning towards revenue generation from its existing

product offerings and expanding its customer base.

However, there can be no assurance that these efforts will prove successful or that

the Company will achieve its intended financial stability.

The failure to successfully address these going concern risks may materially

and adversely affect the Company’s business, financial condition, and results of operations.

Investors should consider the substantial

risks and uncertainties inherent in the Company’s business before investing in the Company’s securities.

business, results of operations and financial condition could be adversely affected by the effects of widespread public health pandemics,

such as COVID-19, that are beyond our control.

significant outbreak, epidemic or pandemic of contagious diseases in any geographic area in which we operate or plan to operate could

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Such results could have a materially adverse effect on our business.

continued global COVID-19 pandemic created significant volatility, uncertainty and economic disruption.

To date, this pandemic has affected

nearly all regions around the world.

In the United States, businesses as well as federal, state and local governments implemented significant

actions to mitigate this public health crisis.

We cannot predict the occurrence, duration, or scope of future COVID-19 resurgences or

other pandemics, and we know from the COVID-19 pandemic that such events can have material impacts on supply networks, in-person labor

availability, and global financial markets volatility.

the extent the COVID-19 pandemic or a similar public health threat has an impact on our business, it is likely to also have the effect

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We believe net

operating losses will decrease or become net income in the near future as we ramp up sales of our soft covers and AL3 tonneau covers,

although we do intend to concurrently invest further into research and development of our AL4 tonneau cover, SOLIS cover, and COR energy

storage systems;

the market releases for these additional product lines may occur later than we expect or not at all.

We are unsure whether

we will be profitable in the near future while we continue to ramp up our product offerings, bolster our sales channels, and increase

output capacity, and we cannot assure you that we will ever achieve or be able to maintain profitability in the future.

Even if we can

successfully develop our additional products and attract customers, there can be no assurance that we will be financially successful.

For example, as we expand our product portfolio, and expand internationally, we will need to manage costs effectively to sell those products

at our expected margins.

Failure to become profitable would materially and adversely affect the value of your investment.

If we are ever

to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of our consumer

products, and our services, which may not occur.

have only sold tonneau covers, the market size of which is limited.

Our long-term results depend upon our ability to successfully introduce

and market new products, which may expose us to new and increased challenges and risks.

date, we have only sold tonneau covers, the market size of which is limited.

Our growth strategy depends, in part, on our ability to

successfully introduce and market new products, such as our SOLIS and COR, as well as develop new products.

As we introduce new products

or refine, improve or upgrade versions of existing products, we cannot predict the level of market acceptance or the amount of market

share these products will achieve, if any.

We cannot assure you that we will not experience material delays in the introduction of new

products and services in the future.

Consistent with our strategy of offering new products and product refinements, we expect to continue

to use a substantial amount of capital for product refinement, research and development, and sales and marketing, which may not provide

a return on investment in the event we fail to bring potential products to market.

We will need additional capital for product development

and refinement, and this capital may not be available on terms favorable to us, if at all, which could adversely affect our business,

prospects, financial condition, results of operations, and cash flows.

If we are unable to successfully introduce, integrate, and market

new products and services, our business, prospects, financial condition, results of operations, and cash flows may be materially and

adversely affected.

operating losses will decrease or become net income in the near future as we ramp up sales of our AL3 tonneau covers and launch highly-anticipated

product lines, such as our AL4 and SOLIS tonneau covers;

however, these product launches will require additional investments, and we

will need to invest in additional research and development for our COR energy storage systems and future product lines.

The market releases

for these additional product lines may occur later than we expect or not at all.

We are unsure whether we will be profitable in the near

future while we continue to ramp up our product offerings, bolster our sales channels, and increase output capacity, and we cannot assure

you that we will ever achieve or be able to maintain profitability in the future.

Even if we can successfully develop our additional

products and attract customers, there can be no assurance that we will be financially successful.

For example, as we expand our product

portfolio, and expand internationally, we will need to manage costs effectively to sell those products at our expected margins.

to become profitable would materially and adversely affect the value of your investment.

If we are ever to achieve profitability, it

will be dependent upon the successful development and commercial introduction and acceptance of our consumer products, and our services,

which may not occur.

may not succeed in establishing, maintaining and strengthening our brand, which would materially and adversely affect customer acceptance

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business and prospects heavily depend on our ability to develop, maintain and strengthen the Worksport brand.

If we are not

able to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers.

to develop, maintain and strengthen our brand will depend heavily on our ability to provide high quality products and engage with our

customers as intended, as well as depend on the success of our customer development and marketing efforts.

The automobile accessory and

parts industry is intensely competitive, and we may not be successful in building, maintaining and strengthening the Worksport brand.

Many of our current and potential competitors have greater name recognition, broader customer relationships and substantially greater

marketing resources than we do.

If we do not develop and maintain a strong brand, our business, prospects, financial condition, results

of operations and cash flows could be materially and adversely impacted.

If we are not able to establish,

maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers.

Our ability to develop, maintain

and strengthen our brand will depend heavily on our ability to provide high quality products and engage with our customers as intended,

as well as depend on the success of our customer development and marketing efforts.

The automobile accessory and parts industry is intensely

competitive, and we may not be successful in building, maintaining and strengthening the Worksport brand.

Many of our current and potential

competitors have greater name recognition, broader customer relationships and substantially greater marketing resources than we do.

we do not develop and maintain a strong brand, our business, prospects, financial condition, results of operations and cash flows could

be materially and adversely impacted.

addition, we could be subject to adverse publicity.

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could adversely affect consumer perception about our products.

related to outstanding loan repayment and refinancing efforts.

mortgage loan with Northeast Bank matures on May 10th, 2024.

Failure to refinance the mortgage may result in legal proceedings being

brought by the lender, up to and including foreclosure.

The company has received term sheets to refinance the property and is strategically

evaluating next steps.

US Central Bank has provided forward-looking guidance of high interest rates for the near future.

US Central Bank has provided forward-looking guidance of relatively high interest rates plateauing for the near future.

may need to invest in additional machinery, equipment and land if demand for our products is higher than anticipated or if we secure

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High interest rates increase the amount that we must pay

for our mortgage on our West Seneca, New York property.

At the same time, it lowers the attractiveness of refinancing, despite the fact

that our anticipated positive future cash flows would allow us to seek financing from a broader selection of lenders.

for our mortgage on our West Seneca, NY property.

At the same time, it lowers the attractiveness of refinancing, despite the fact that

our anticipated positive future cash flows would allow us to seek financing from a broader selection of lenders.

uncertain economic conditions, including inflation and the risk of a global recession could impair our ability to forecast and may harm

our business, operating results, including our revenue growth and profitability, financial condition and cash flows.

inflation rates have come down from their 2022 highs, the U.S.

economy is still experiencing higher than target inflation rates,

and high levels of inflation persist in many countries around the world.

inflation rates have come down substantially from their 2022 highs, the U.S.

economy is still experiencing higher than target inflation

rates, and high levels of inflation persist in many countries around the world.

Historically, we have not experienced significant inflation

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Commercial real estate values

may also decrease, which would lower the value of our production facility in West Seneca, New York.

Our business and operations would suffer

in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity or a natural disaster.

There are growing risks related

to the security, confidentiality and integrity of personal and corporate information stored and transmitted electronically due to increasingly

diverse and sophisticated threats to networks, systems and data security.

Potential attacks span a spectrum from attacks by criminal hackers,

hacktivists, and nation state or state-sponsored actors, to employee malfeasance and human or technological error.

Cyberattacks against

companies have increased in frequency and potential harm over time, and the methods used to gain unauthorized access constantly evolve,

making it increasingly difficult to anticipate, prevent, and/or detect incidents successfully in every instance.

Despite the implementation of

security measures, our internal computer systems, and those of third parties on which we rely (including our vendors, contractors and

other third-party partners who process information on our behalf or have access to our systems), are vulnerable to damage from computer

viruses, malware, ransomware, phishing attacks and other forms of social engineering, denial-of-service attacks, third party or employee

theft or misuse and other negligent actions, natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks

or cyber-intrusions over the internet, security incidents, disruptions, attachments to emails, persons inside our organization, or persons

with access to systems inside our organization.

The risk of a security breach or disruption, particularly through cyberattacks or cyber

intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity

and sophistication of attempted attacks and intrusions from around the world have increased.

If such an event were to occur and cause

interruptions in our operations, it could result in a material disruption of our product development programs.

To the extent that any

disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential

or proprietary information, we could incur material legal claims (including class claims) and liability, substantial remediation costs,

regulatory enforcement, liability under data protection laws, additional reporting requirements and damage to our reputation, and the

further development of our product candidates could be delayed.

US is in a state of low unemployment, and many companies that provide wage-based jobs are having trouble filling open positions.

need to fill certain positions that do not require specialized knowledge or experience, and we offer competitive pay and benefits in

order to attract people as we compete with other local businesses for employment.

Competing with local businesses may delay hiring time

as well as production scaling timelines.

Offering more competitive compensation packages also damages our profits and sets forward-looking

compensation expectations.

have demonstrated historical success in less capital-intensive manufacturing in China, but we have not demonstrated success in low-cost,

domestic, highly capital-intensive manufacturing.

we have begun manufacturing in our West Seneca production facility, we are still increasing manufacturing efficiencies by decreasing

direct labor, overhead, materials, and scrap costs.

Doing so currently demands manufacturing engineering resources, supply chain research,

and purchasing negotiations.

We may require the assistance of or rely on the availability of third parties to assist us in properly establishing

improved processes due to a lack of in-house, capital-intensive domestic manufacturing experience.

Lack of experience may create delays

and cost inefficiencies in production scaling and difficulty identifying necessary process improvements.

may also decrease, which would lower the value of our production facility in West Seneca, NY.

business and operations would suffer in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity or a

natural disaster.

are growing risks related to the security, confidentiality and integrity of personal and corporate information stored and transmitted

electronically due to increasingly diverse and sophisticated threats to networks, systems and data security.

Potential attacks span a

spectrum from attacks by criminal hackers, hacktivists, and nation state or state-sponsored actors, to employee malfeasance and human

or technological error.

the implementation of security measures, our internal computer systems, and those of third parties on which we rely (including our vendors,

contractors and other third-party partners who process information on our behalf or have access to our systems), are vulnerable to damage

from computer viruses, malware, ransomware, phishing attacks and other forms of social engineering, denial-of-service attacks, third

party or employee theft or misuse and other negligent actions, natural disasters, terrorism, war, telecommunication and electrical failures,

cyberattacks or cyber-intrusions over the internet, security incidents, disruptions, attachments to emails, persons inside our organization,

or persons with access to systems inside our organization.

The risk of a security breach or disruption, particularly through cyberattacks

or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number,

intensity and sophistication of attempted attacks and intrusions from around the world have increased.

If such an event were to occur

and cause interruptions in our operations, it could result in a material disruption of our product development programs.

To the extent

that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure

of confidential or proprietary information, we could incur material legal claims (including class claims) and liability, substantial

remediation costs, regulatory enforcement, liability under data protection laws, additional reporting requirements and damage to our

reputation, and the further development of our product lines could be delayed.

mitigate risks associated with cybersecurity attacks, we have cybersecurity insurance coverage in the aggregate amount of $1,000,000

per annual policy period, which covers damages from a range of potential cybersecurity issues including but not limited to property damage,

privacy liability, privacy regulatory defense, cyber extortion, and post breach remediation.

may not be able to accurately estimate the demand for our tonneau covers, which could result in inefficiencies in our production and

hinder our ability to generate revenue.

hinder our ability to generate profits.

we fail to accurately predict our manufacturing requirements, we will incur the risk of having to pay for production capacities that

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To accommodate growth and compete effectively, we will need working capital to maintain adequate

inventory levels, develop additional procedures and controls and increase, train, motivate and manage our work force.

inventory levels, develop additional procedures and controls and increase, train, motivate and manage our workforce.

There is no assurance

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purchase all of our soft tonneau covers from two supplier sources in China.

We carry significant strategic inventories of these finished goods to reduce the risk associated with this concentration of suppliers.

We carry significant strategic inventories of these finished

goods to reduce the risk associated with this concentration of suppliers.

Strategic inventories are managed based on demand.

While we are now manufacturing hard covers in the United States, the loss of one or

both of these suppliers or a delay in shipments could have a material adverse effect on our soft tonneau cover sales and business.

rely on a small number of customers for the majority of our sales.

loss of any significant customer could have an adverse effect on our business.

A customer is considered to be significant if they account

for greater than 10% of our annual sales.

For the year ended December 31, 2023, the Company had one significant customer accounting for

93% of the Company’s revenue.

For the year ended December 31, 2022, two customers made up approximately 50% (38% and 12% individually)

of prior year revenue.

The loss of any of these key customers could have an adverse effect on our business.

are now manufacturing hard covers in the United States, the loss of one or both of these suppliers or a delay in shipments could have

a material adverse effect on our soft tonneau cover sales and business.

will need additional financing in order to grow our business.

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success also will depend in large part on the continued service of our key operational and management personnel, including executive,

staff, research and development, engineering, marketing and sales staff.

Most specifically, this includes Steven Rossi, our President

and Chief Executive Officer, who oversees the implementation of new products, key customer acquisition and retention, and our overall

management and future growth.

Any failure on our part to hire, train and retain a sufficient number of qualified professionals could

impair our business.

research and development, engineering, marketing and sales staff.

Most specifically, this includes Steven Rossi, our President and Chief

Executive Officer, who oversees the implementation of new products, key customer acquisition and retention, and our overall management

and future growth.

Any failure on our part to hire, train and retain a sufficient number of qualified professionals could impair our

depend on intellectual property rights that may be infringed upon, and we may infringe upon the intellectual property rights of others.

success depends to a significant degree upon our ability to develop, maintain and protect proprietary products and technologies.

December 31, 2023, we own thirteen utility patents, seven design registrations, and seventy-four pending utility and design patent applications.

December 31, 2024, we own 18 utility patents, 23 design registrations, and 79 pending utility and design patent applications worldwide.

However, patents provide only limited protection of our intellectual property.

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as our ability to maintain adequate intellectual property protection for our technologies, product candidates, and any future products

in the United States and other countries.

and other countries.

If we do not adequately protect our technology, product candidates and future products, competitors

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applications pending.

There is no assurance that the applications still pending or which may be filed in the future

will result in the issuance of any patents.

Furthermore, there is no assurance as to the breadth and degree of protection any issued

patents might afford us.

There is no assurance that the applications still pending or which may be filed in the future will result in the

issuance of any patents.

Furthermore, there is no assurance as to the breadth and degree of protection any issued patents might afford

Disputes may arise between us and others as to the scope and validity of these or other patents.

of the patents could prove costly and time-consuming, and there can be no assurance that we will be in a position, or deem it advisable,

to carry on such a defense.

Any defense of the patents could

prove costly and time-consuming, and there can be no assurance that we will be in a position, or deem it advisable, to carry on such

A suit for patent infringement could result in increasing costs as well as delaying or halting development.

Other private and public entities, including universities, may have filed applications for, may have been issued, or may obtain additional

patents and other proprietary rights to technology potentially useful or necessary to us.

We are not currently aware of any such patents,

but the scope and validity of such patents, if any, and the cost and availability of such rights are impossible to predict.

Other private

and public entities, including universities, may have filed applications for, may have been issued, or may obtain additional patents

and other proprietary rights to technology potentially useful or necessary to us.

We are not currently aware of any such patents, but

the scope and validity of such patents, if any, and the cost and availability of such rights are impossible to predict.

trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.

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The following examples are illustrative:

may be able to develop technologies that are similar to our technology platforms but that

are not covered by the claims of any patents, should they issue, that we own or license;

or our licensors might not have been the first to make the inventions covered by the issued

patents or pending patent applications that we own or license;

or our licensors might not have been the first to file patent applications covering certain

aspects of our inventions;

may independently develop similar or alternative technologies or duplicate any of our technologies

without infringing our intellectual property rights;

may be able to develop technologies that are similar to our technology platforms but that are not covered by the claims of any patents,

should they issue, that we own or license;

or our licensors might not have been the first to make the inventions covered by the issued patents or pending patent applications

that we own or license;

or our licensors might not have been the first to file patent applications covering certain aspects of our inventions;

may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual

property rights;

is possible that our pending patent applications will not lead to issued patents;

patents that we own or license may not provide us with any competitive advantages, or may

be held invalid or unenforceable as a result of legal challenges;

competitors might conduct research and development activities in the United States and other

countries that provide a safe harbor from patent infringement claims for certain research

and development activities, as well as in countries where we do not have patent rights, and

then use the information learned from such activities to develop competitive products for

sale in our major commercial markets;

patents that we own or license may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result

of legal challenges;

competitors might conduct research and development activities in the United States and other countries that provide a safe harbor

from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent

rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial

may not develop additional proprietary technologies that are patentable;

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The situations in which we may become parties to such litigation or proceedings

or other proceedings we may initiate against third parties to enforce our patent rights or

other intellectual property rights;

or other proceedings we or our licensee(s) may initiate against third parties seeking to

invalidate the patents held by such third parties or to obtain a judgment that our products

do not infringe such third parties’ patents;

or other proceedings third parties may initiate against us to seek to enforce their patents

and/or invalidate our patents.

or other proceedings we may initiate against third parties to enforce our patent rights or other intellectual property rights;

or other proceedings we or our licensee(s) may initiate against third parties seeking to invalidate the patents held by such third

parties or to obtain a judgment that our products do not infringe such third parties’ patents;

or other proceedings third parties may initiate against us to seek to enforce their patents and/or invalidate our patents.

third parties initiate litigation claiming that our products infringe their patent or other intellectual property rights, we will need

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unable to supply enough product amid periods of high product demand, the opportunity costs of which could be substantial.

risk is partially offset by the fact that we domestically manufacture our line of hard tonneau covers, which is responsible for a larger

portion of our sales than our outsource manufactured soft tonneau covers.

are risks associated with domestic production that may result in slower or more expensive production.

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that compete in this market include Real Truck (formerly Truck Hero), Truck Accessories Group, and Agri-Cover, Inc., among others.

Many of our current competitors are significantly better funded and have longer operating histories than we do.

of our current competitors are significantly better funded and have longer operating histories than we do.

addition, some of our competitors sell their products at prices lower than ours, and we compete primarily on the basis of product quality,

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or lawsuits against us.

While we had insurance coverage of $2,000,000 for the year ended December 31, 2023, we have no assurance

that this insurance will be adequate to protect us from all material judgments and expenses related to potential future claims or that

these levels of insurance will be available at economical prices, if at all.

To that extent, product liability insurance is conditional

and up for further investigation.

While we had insurance coverage of $2,000,000 for the year ended December 31, 2024, we have no assurance that

this insurance will be adequate to protect us from all material judgments and expenses related to potential future claims or that these

levels of insurance will be available at economical prices, if at all.

To that extent, product liability insurance is conditional and

up for further investigation.

A successful product liability claim could result in substantial costs for us.

Even if we are fully

insured as it relates to a claim, a claim could nevertheless diminish our brand and divert management’s attention and resources,

which could have a negative impact on our business, financial condition and results of operations.

Even if we are fully insured

as it relates to a claim, a claim could nevertheless diminish our brand and divert management’s attention and resources, which

could have a negative impact on our business, financial condition and results of operations.

may produce products of inferior quality which would cause us to lose customers.

we make an effort to ensure the high quality of our light truck tonneau cover products, they could from time to time contain defects,

anomalies or malfunctions that are undetectable at the time of shipment.

These defects, anomalies or malfunctions could be discovered

after our products are shipped to customers, resulting in the return or exchange of our products, customers’ claims for compensatory

damages or discontinuation of the use of our products, which could negatively impact our operating results.

We do not presently have

product recall (or similar function) insurance that protects a company against broad-scale product manufacturing defects, engineering

defects and the costs related to a broad product recall such as shipping, replacement or repairs.

Even if in place, there is no guarantee

that the full costs of any reimbursements or claims, lawsuits or litigation would be covered by such insurance.

we make an effort to ensure the high quality of our products, they could from time to time contain defects, anomalies or malfunctions

that are undetectable at the time of shipment.

These defects, anomalies or malfunctions could be discovered after our products are shipped

to customers, resulting in the return or exchange of our products, customers’ claims for compensatory damages or discontinuation

of the use of our products, which could negatively impact our operating results.

We do not presently have product recall (or similar

function) insurance that protects a company against broad-scale product manufacturing defects, engineering defects and the costs related

to a broad product recall such as shipping, replacement or repairs.

Even if in place, there is no guarantee that the full costs of any

reimbursements or claims, lawsuits or litigation would be covered by such insurance.

conditions, including direct or indirect acts of war or terrorism, could have an adverse effect on our operations and financial results.

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similar events.

In February 2022, Russia initiated significant military action against Ukraine.

In April 2023, the paramilitary Rapid

Support Forces within Sudan began fighting the Sudanese Armed Forces over tensions related to the paramilitary’s transition towards

civilian rule.

In October 2023, Hamas initiated an attack on Israel that has resulted in a war in Gaza, emboldened Houthi attacks against

commercial cargo ships in the Red Sea, and waning or paused diplomatic progress between Israel and its neighboring countries.

and wars persist in many other countries, including, but not limited to, Ethiopia and Myanmar.

response to Russia’s invasion of Ukraine, the U.S.

and certain other countries imposed significant sanctions and export controls

against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business, and financial organizations,

and certain other countries could impose further sanctions, trade restrictions, and other retaliatory actions should the

conflict continue or worsen.

It is not possible to predict the broader consequences of this conflict nor those of other global conflicts,

although such consequences can include related rising geopolitical tensions, rising regional instability, geopolitical shifts, cyberattacks

or the disruption of energy exports for the parties involved, neighboring parties, or supporting parties of these conflicts or their

resulting sanctions.

Such consequences could materially adversely affect global trade, currency exchange rates, regional economies and

the global economy.

These situations remain uncertain, and while it is difficult to predict the impact of any of the foregoing, these

conflicts and actions taken in response to these conflicts could increase our costs, disrupt our supply chain, reduce our sales and earnings,

impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business,

financial condition, and results of operations.

currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal

Deposit Insurance Corporation (“FDIC”), the loss of such assets would have a severe negative affect on our operations and

may maintain our cash assets at certain financial institutions in the U.S.

in amounts that may be in excess of the Federal Deposit Insurance

Corporation (“FDIC”) insurance limit of $250,000.

In the event of a failure of any financial institutions where we maintain

our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which could have a material

adverse effect upon our liquidity, financial condition and our results of operations.

Associated with Manufacturing in China

It is not possible to predict the broader consequences of current global conflicts, although such consequences can include

rising geopolitical tensions, rising regional instability, geopolitical shifts, cyberattacks or the disruption of energy exports for

the parties involved, neighboring parties, or supporting parties of these conflicts or their resulting sanctions.

Such consequences could

materially adversely affect global trade, currency exchange rates, regional economies and the global economy.

These situations remain

uncertain, and while it is difficult to predict the impact of any of the foregoing, these conflicts and actions taken in response to

these conflicts could increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional

capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.

Associated with Outsourced Manufacturing and Foreign Sourcing

trade regulations and policies with China may in the future have a material and adverse effect on our business, financial condition

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Any restrictions or tariffs imposed on products that we or our suppliers

import for sale or production in the United States would adversely and directly impact our cost of goods sold.

In addition, changes in

trade regulations and policies could have an adverse impact on trade relations between the United States and certain foreign countries,

which could materially and adversely affect our relationships with our international suppliers and reduce the supply of goods available

Further, we cannot predict the extent to which the United States will adopt changes to existing trade regulations and policies,

which creates uncertainties in planning our sourcing strategies and forecasting our margins.

If additional tariffs are imposed on our

products, or other retaliatory trade measures are taken, our costs could increase, and we may be required to raise our prices, which

could materially and adversely affect our results.

import for sale or production in the U.S.

would adversely and directly impact our cost of sales.

In addition, changes in U.S.

trade regulations

and policies could have an adverse impact on trade relations between the U.S.

and certain foreign countries, which could materially and

adversely affect our relationships with our international suppliers and reduce the supply of goods available to us.

Further, we cannot

predict the extent to which the U.S.

will adopt changes to existing trade regulations and policies, which creates uncertainties in planning

our sourcing strategies and forecasting our margins.

If additional tariffs are imposed on our products , or other retaliatory trade

measures are taken, our costs could increase, and we may be required to raise our prices, which could materially and adversely affect

trade policy, including the imposition of tariffs and the resulting consequences, could adversely affect our results of operations.

Many of our raw materials are purchased from suppliers in a variety of non-U.S.

trade policy with countries where we source our products may change based on a number of factors, including, but not limited to, political

and economic factors.

For instance, the U.S.

government has imposed tariffs on certain foreign goods, including steel and certain commercial

vehicle parts, which have resulted in increased costs for goods imported into the U.S.

In response to these tariffs, a number of U.S.

trading partners have imposed retaliatory tariffs on a wide range of U.S.

If we are unable to pass price increases on to our

customer base or otherwise mitigate the costs, or if demand for our products decreases due to the higher cost, our results of operations

could be materially adversely affected.

In addition, further tariffs have been proposed by the United States and its trading partners

and additional trade restrictions could be implemented.

are risks associated with outsourced production in China, and their laws which may have a material adverse effect on our financial stability.

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as we would be required to support sales at an acceptable cost and might have relatively limited time to adapt.

We have not manufactured

our own soft tonneau covers in the past and are not planning to do so in the short term.

That is because developing these technological

capabilities and building or purchasing a facility will increase our expenses with no guarantee that we will be able to recover our investment

in our manufacturing capabilities.

We have mitigated such

risks by stockpiling soft tonneau covers for domestic sales, but we will still rely on outsource manufacturing for additional soft cover

production, as we have not manufactured our own soft tonneau covers in the past and are not planning to do so in the short term.

engage in cross-border sales transactions which present tax risks among other obstacles.

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to, changing regulations, wait times, customs inspection and lost or damaged product.

are subject to foreign currency risk which may adversely affect our net profit.

are subject to foreign exchange risk as we manufacture our products in China, market extensively in both Canadian and U.S.

employee people residing in both the U.S.

Meanwhile, we report results of operations in U.S.

Dollars (USD or US$).

our Canadian customers pay in Canadian Dollars, we are subject to gains and losses due to fluctuations in the USD relative to the Canadian

While having our soft tonneau covers manufactured in China, our manufacturers are paid in USD to better avoid the relatively

greater fluctuation of the Chinese Yuan (RMB).

Any large fluctuations in the exchange between the RMB and USD may cause product costs

to increase, therefore affecting revenues and profits, potentially adversely.

are subject to foreign currency risk which may adversely affect profitability.

are subject to foreign exchange risk.

We manufacture soft tonneau covers in China , source raw materials for hard tonneau covers

from the U.S., Canada and China, work with U.S.

and Canada-based service providers, and employ individuals in the U.S.

we report results of operations in U.S.

Dollars (USD).

Large fluctuations in the exchange between foreign currencies and USD may adversely

affect profitability.

Changes in U.S.

policies or regulations, including potential rollbacks of electric vehicle initiatives, could adversely affect our business, strategy,

and growth prospects.

Our business strategy may rely,

in part, on regulatory support for electric vehicle adoption, including incentives, mandates, infrastructure investment and emissions

However, President Donald Trump has signed an executive order titled Unleashing American Energy , indicating that his

administration intends to reverse electric vehicle mandates implemented by the prior administration.

In addition, President Trump has

paused billions of dollars in federal funding allocated toward EV charging infrastructure.

The actions reflect a shift in

federal energy and transportation policy, and the future of the U.S.

regulatory environment surrounding electric vehicles remains uncertain.

Any reduction or elimination of governmental support for EV adoption or related infrastructure development could negatively impact market

demand, hinder our growth initiatives and materially affect our financial condition and results of operations.

Related to the Ownership of Our Securities

have a large number of authorized but unissued shares of our common stock which will dilute existing ownership positions when issued.

December 31, 2023, our authorized capital stock consists of 299,000,000 shares of common stock, of which approximately 278,679,497 remain

available for issuance, including shares of common stock issuable upon the exercise of outstanding warrants.

Our management will continue

to have broad discretion to issue shares of our common stock in a range of transactions, including capital-raising transactions, mergers,

acquisitions and other transactions, without obtaining stockholder approval, unless stockholder approval is required under law or the

rules of Nasdaq or any other trading market on which our common stock may be listed.

If our management determines it be appropriate to

issue shares of our common stock from the large pool of authorized but unissued shares for any purpose in the future and is not required

to obtain stockholder approval, your ownership position would be diluted without your further ability to vote on that transaction.

December 31, 2024, our authorized capital stock consists of 29,900,000 shares of common stock, of which approximately 25,883,795 remain available

for issuance, including shares of common stock issuable upon the exercise of outstanding warrants.

Our management will continue to have

broad discretion to issue shares of our common stock in a range of transactions, including capital-raising transactions, mergers, acquisitions

and other transactions, without obtaining stockholder approval, unless stockholder approval is required under law or the rules of Nasdaq

or any other trading market on which our common stock may be listed.

If our management determines it be appropriate to issue shares of

our common stock from the large pool of authorized but unissued shares for any purpose in the future and is not required to obtain stockholder

approval, your ownership position would be diluted without your further ability to vote on that transaction.

common stock or warrants may be affected by limited trading volume and price fluctuations, which could adversely impact the value of

our common stock or warrants.

our common stock.

common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely

affect the market prices of our common stock or warrants without regard to our operating performance.

In addition, we believe that factors

such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets

could cause the market prices of our common stock and warrants to fluctuate substantially.

These fluctuations may also cause short sellers

to periodically enter the market in the belief that we will have poor results in the future.

We cannot predict the actions of market

participants and, therefore, can offer no assurances that the market for our common stock and warrants will be stable or appreciate over

investment in our securities is speculative, and there can be no assurance of any return on any such investment.

investment in our securities is speculative, and there can be no assurance that investors will obtain any return on their investment.

Investors may be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.

affect the market prices of our common stock without regard to our operating performance.

In addition, we believe that factors such as

quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause

the market prices of our common stock and warrants to fluctuate substantially.

These fluctuations may also cause short sellers to periodically

enter the market in the belief that we will have poor results in the future.

We cannot predict the actions of market participants and,

therefore, can offer no assurances that the market for our common stock and warrants will be stable or appreciate over time.

may need, but be unable, to obtain additional funding on satisfactory terms, which could dilute our stockholders or impose burdensome

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Any debt financing or other financing of securities senior to the common stock will likely include financial and other

covenants that will restrict our flexibility.

Any failure to comply with these covenants would have a material adverse effect on our

business, prospects, financial condition and results of operations because we could lose our existing sources of funding, and our ability

to secure new sources of funding could be impaired.

Chief Executive Officer and Chairman, Steven Rossi, has significant control over stockholder matters, and the minority stockholder will

have little or no control over our affairs.

covenants that will restrict our financing and/or operational flexibility.

Any failure to comply with these covenants would have a material

adverse effect on our business, prospects, financial condition and results of operations because we could lose our existing sources of

funding, and our ability to secure new sources of funding could be impaired.

stock ownership structure has the effect of concentrating voting control with our Chief Executive Officer and Chairman, Steven Rossi,

which will limit the ability of other shareholders to influence the outcome of important decisions.

Rossi currently owns 100% of our outstanding Series A Preferred Stock which entitles him to 51% of the voting power of our outstanding

13 unchanged sentences

to stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions.

have identified material weaknesses in our internal control over financial reporting.

Failure to maintain effective internal controls

could cause our investors to lose confidence in us and adversely affect the market price of our common stock.

If our internal controls

are not effective, we may not be able to accurately report our financial results or prevent fraud.

404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we maintain internal control over financial reporting that meets

applicable standards.

We may err in the design or operation of our controls, and all internal control systems, no matter how well designed

and operated, can provide only reasonable assurance that the objectives of the control system are met.

Because there are inherent limitations

in all control systems, there can be no assurance that all control issues have been or will be detected.

elsewhere in this Annual Report on Form 10-K, we disclose that our management has assessed and identified several material weaknesses

in our internal controls over financial reporting (“ICFR”) and concluded that our IFCR was not effective as of December 31,

The material weaknesses included our failure to design written policies and procedures at a sufficient level of precision to support

the operating effectiveness of the controls to prevent and detect potential errors.

We also did not maintain adequate documentation to

evidence the operating effectiveness of certain control activities.

Lastly, we did not maintain appropriate access to certain systems

and did not maintain appropriate segregation of duties related to processes associated within those systems.

we have taken several steps to remediate the material weaknesses in our IFCR and continue to do so, there can be no assurances given

that our actions will be effective.

Any continued failure of our internal control over financial reporting could have a material adverse

effect on our stated results of operations and harm our reputation.

If we are unable to implement these changes effectively or efficiently,

it could harm our operations, financial reporting or financial results and could result in an adverse opinion on internal controls from

our independent auditors.

Furthermore, investor perceptions of our Company may suffer, and this could cause a decline in the market price

of our common stock.

Additionally,

the expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing.

These increased

costs will require us to divert a significant amount of money that we could otherwise use to develop our business.

If we are unable to

satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory

action and potentially civil litigation.

requirements of being a public company may strain our resources, divert management’s attention and affect our results of operations.

a public company in the United States, we face increased legal, accounting, administrative and other costs and expenses.

We are subject

to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002 (the “Sarbanes Oxley-Act”).

Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control

over financial reporting.

For example, Section 404 requires that our management report on the effectiveness of our internal controls

structure and procedures for financial reporting.

Section 404 compliance may divert internal resources and will take a significant amount

of time and effort to complete.

If we fail to maintain compliance under Section 404, we could be subject to sanctions or investigations

by Nasdaq, the SEC, or other regulatory authorities.

Furthermore, investor perceptions of our Company may suffer, and this could cause

a decline in the market price of our common stock.

Any continued failure of our internal control over financial reporting could have

a material adverse effect on our stated results of operations and harm our reputation.

If we are unable to implement these changes effectively

or efficiently, it could harm our operations, financial reporting or financial results and could result in an adverse opinion on internal

controls from our independent auditors.

We may need to hire a number of additional employees with public accounting and disclosure experience

in order to meet our ongoing obligations as a public company, particularly if we become fully subject to Section 404 and its auditor

attestation requirements, which will increase costs, and evaluate the costs of our current service providers.

We expect these rules and

regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although

we are currently unable to estimate these costs with any degree of certainty.

A number of those requirements will require us to carry

out activities we have not done previously.

Our management team and other personnel will need to devote a substantial amount of time

to new compliance initiatives and to meeting the obligations that are associated with being a public company, which may divert attention

from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations.

Additionally,

the expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing.

These increased

costs will require us to divert a significant amount of money that we could otherwise use to develop our business.

If we are unable to

satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory

action and potentially civil litigation.

laws, regulations, and standards relating to corporate governance and public disclosure may create uncertainty for public companies,

increase legal and financial compliance costs and make some activities more time consuming.

laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result,

may evolve over time as new guidance is provided by the courts and other bodies.

This could result in continuing uncertainty regarding

compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

If our efforts to comply

with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related

to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business may be adversely

a “smaller reporting company” under applicable law, we are subject to lessened disclosure requirements, which could leave

our stockholders without information or rights available to stockholders of more mature companies.

as long as we remain a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act, we will elect to take advantage

of certain exemptions from various reporting requirements that are applicable to other public companies that are not “smaller reporting

companies” including, but not limited to:

permitted to provide only two years of audited financial statements, in addition to any required

unaudited interim financial statements disclosure;

disclosure obligations regarding executive compensation in our periodic reports, proxy statements

and registration statements.

expect to take advantage of these reporting exemptions until we are no longer a “smaller reporting company.” Because of these

lessened regulatory requirements, our stockholders are not provided with information or rights available to stockholders of more mature

We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions.

If some investors

find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price

may be more volatile.

research analysts do not publish research about our business, or if they issue unfavorable commentary or downgrade our common stock,

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If we do not maintain adequate research coverage, or if any of the analysts who cover us downgrade our stock or publish inaccurate or

unfavorable research about our business, the price of our common stock and warrants could decline.

If one or more of our research analysts

ceases to cover our business or fails to publish reports on us regularly, demand for our securities could decrease, which could cause

the price of our common stock and warrants or trading volume to decline.

unfavorable research about our business, the price of our common stock could decline.

If one or more of our research analysts ceases

to cover our business or fails to publish reports on us regularly, demand for our securities could decrease, which could cause the price

of our common stock or trading volume to decline.

Anti-takeover

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things, our Articles of Incorporation and Bylaws:

the issuance of “blank check” preferred stock that could be issued by our Board

in response to a takeover attempt;

that vacancies on our Board, including newly created directorships, may be filled only by

a majority vote of directors then in office, except a vacancy occurring by reason of the

removal of a director without cause shall be filled by vote of the stockholders;

the issuance of “blank check” preferred stock that could be issued by our Board in response to a takeover attempt;

that vacancies on our Board, including newly created directorships, may be filled only by a majority vote of directors then in office,

except a vacancy occurring by reason of the removal of a director without cause shall be filled by vote of the stockholders;

who may call special meetings of stockholders.

1 unchanged sentence

stockholders.

We currently do not intend to declare dividends on our

common stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our

common stock.

We currently do not

expect to declare any dividends on our common stock in the foreseeable future.

Instead, we anticipate that all our earnings in the foreseeable

future will be used to provide working capital to support our operations and to finance the growth and development of our business.

decision to declare or pay dividends in the future will be at the discretion of our Board, subject to applicable laws and dependent upon

several factors, including our earnings, capital requirements and overall financial conditions.

In addition, terms of any future debt

or preferred securities may further restrict our ability to pay dividends on our common stock.

Accordingly, your only opportunity to

achieve a return on your investment in our common stock may be if the market price of our common stock appreciates and you sell your

shares at a profit.

The market price for our common stock may never exceed, and may fall below, the price that you pay for such common

See Part II, Item 5 “ Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities —Dividend Policy .”

do not intend to pay dividends in the foreseeable future.

currently do not expect to declare any dividends on our common stock in the foreseeable future.

Any decision to declare or pay dividends

in the future will be at the discretion of our board of directors.

Accordingly, your only opportunity to achieve a return on your investment

in our common stock may be if the market price of our common stock appreciates and you sell your shares at a profit.

The market price

for our common stock may never exceed, and may fall below, the price that you pay for such common stock.

See Part II, Item 5 “ Market

for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividend Policy .”

Associated with Holding Cryptocurrency Reserves

bitcoin acquisition strategy may expose us to various risks associated with bitcoin.

is a highly volatile asset.

Bitcoin is a highly volatile asset that has traded below $38,000 per bitcoin and above $99,000 per bitcoin

on Coinbase in the 12 months preceding the date of this prospectus supplement.

The trading price of bitcoin was significantly lower during

prior periods, and such decline may occur again in the future.

in our ownership of bitcoin could have accounting, regulatory and other impacts.

While we currently intend to own bitcoin directly,

we may investigate other potential approaches to owning bitcoin, including indirect ownership (for example, through ownership interests

in a fund that owns bitcoin).

If we were to own all or a portion of our bitcoin in a different manner, the accounting treatment for our

bitcoin, our ability to use our bitcoin as collateral for additional borrowings, and the regulatory requirements to which we are subject,

may correspondingly change.

may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business,

financial condition, and results of operations.

bitcoin, XRP and other digital assets are relatively novel and the application of state and federal securities laws and other laws and

regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries

may interpret or apply existing laws and regulations in a manner that adversely affects the price of bitcoin.

federal government,

states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement

or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own

or transfer bitcoin.

For examples, see “— Bitcoin and other digital assets are novel assets, and are subject to significant

legal, commercial, regulatory and technical uncertainty ” above.

acceptance of blockchain and digital assets as payment on our platform introduces significant risks, including, without limitation, regulatory

uncertainty, market volatility, and operational challenges.

accept digital assets as a form of payment from our customers.

Digital assets are subject to evolving legal and regulatory

frameworks in the U.S.

and internationally.

Any change in laws regulating or enforcement actions pertaining to digital assets may

restrict the use of these assets, including bitcoin and XRP, expose us to penalties and increase compliance costs, among other

Our ability to convert digital asset payments into fiat currency may be impaired during periods of market instability, while

funds stored in digital assets lack protections offered by institutions such as the Federal Deposit Insurance Corporation or the

Securities Investor Protection Corporation.

The integration of blockchain payment systems may expose us to risks of cyberattacks,

fraud, or technical failures, potentially resulting in financial losses or reputational damage.

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 1A. Risk Factors