What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-13 · 506 added, 466 removed, 211 unchanged (82% of the section changed)

1 unchanged sentence

Consolidated Balance Sheets

September 30, 2024 (Unaudited)

March 31, 2025

December 31, 2024

4 unchanged sentences

Inventory (Note 3)

Related party loan (note 8)

Prepaid expenses and deposits (Note 6)

2 unchanged sentences

Property and equipment, net (Note 4)

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

Intangible Assets, net

Operating lease right-of-use assets (Note 12)

Intangible assets, net (Note 5)

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued liabilities

Payroll taxes payable

Related party loan (note 8)

Current portion – Long term debt (note 12)

Current lease liability (note 11)

Accounts payable

Accrued liabilities and other

Accrued compensation

Long-term debt, current portion (Note 13)

Lease liability, current portion (Note 12)

Total current liabilities

Long Term – Lease Liability (note 11)

Long Term Debt (note 12)

Lease liability, excluding current portion (Note 12)

Long-term debt, excluding current portion (Note 13)

Total liabilities

Shareholders’ Equity

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

Common stock, $ 0.0001 par value, 299,000,000 shares authorized, 30,920,397 and 17,436,805 shares issued and outstanding, respectively (note 7)

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, 4,795,521 and 4,016,205 shares issued and

outstanding, respectively (Note 7)

Additional paid-in capital

7 unchanged sentences

Total liabilities and shareholders’ equity

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

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

Financial Statements.

Consolidated Statements of Operations and Comprehensive Loss

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

Three Months ended

September 30,

Cost of Goods Sold

the Three Months Ended March 31, 2025 and 2024

Three Months ended March 31,

Cost of sales

Operating expenses

Research and development

General and administrative

1 unchanged sentence

Professional fees

(Gain) loss on foreign exchange

Gain on foreign exchange

Total operating expenses

2 unchanged sentences

( 3,639,466 )

( 11,455,430 )

( 11,188,176 )

Other income (expense)

1 unchanged sentence

Interest income

Rental income (note 17)

Gain on settlement of debt

Rental income

Total other income (expense)

1 unchanged sentence

$ ( 3,714,657 )

$ ( 11,862,973 )

$ ( 11,270,023 )

Loss per share (basic and diluted)

Weighted average number of shares (basic and diluted)

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

Consolidated Statements of Shareholders’ Equity

the Three Months Ended September 30, 2024 and 2023

Additional Paid-in

Share Subscriptions

Share Subscription

Cumulative Translation

Stockholders’ Equity

Balance at July 1, 2023

$ ( 40,704,944 )

Issuance for services and subscriptions payable

Share issuance

Stock option forfeiture

( 3,949,298 )

Balance at September 30, 2023

$ ( 44,654,242 )

Balance at July 1, 2024

$ ( 56,041,233 )

Issuance for services and subscriptions payable

Share issuance (note 16)

( 2,210,269 )

( 4,134,917 )

Balance at September 30, 2024

$ ( 60,176,150 )

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

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

Financial Statements.

Consolidated Statements of Shareholders’ Equity

the Nine Months Ended September 30, 2024 and 2023

Additional Paid-in

Share Subscriptions

Share Subscription

Cumulative Translation

the Three Months Ended March 31, 2025 and 2024

Subscriptions

Stockholders’

Balance at January 1, 2023

$ ( 33,384,219 )

Issuance for services and subscriptions payable

Share issuance

Stock option forfeiture

( 11,270,023 )

Balance at September 30, 2023

at January 1, 2024

$ ( 48,313,177 )

Balance at January 1, 2024

for services and subscriptions payable

issued (Note 7)

( 3,714,657 )

Issuance for services and subscriptions payable

Share issuance (note 7)

at March 31, 2024

$ ( 52,027,834 )

Shares issued

at January 1, 2025

$ ( 64,476,966 )

Warrant inducement (note 16)

Warrant exercise (note 14)

$ ( 64,476,966 )

for services and subscriptions payable

issued (Note 7)

Exercise (Note 15)

( 4,460,464 )

Balance at September 30, 2024

( 4,460,464 )

at March 31, 2025

$ 68,937,430 )

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

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

Financial Statements.

Consolidated Statements of Cash Flows

the Nine Months Ended September 30, 2024 and 2023

the Three Months Ended March 31, 2025 and 2024

Operating activities

10 unchanged sentences

Changes in operating assets and liabilities (Note 10)

( 2,639,744 )

Net cash used in operating activities

3 unchanged sentences

Purchase of property and equipment

( 3,446,161 )

Purchase of intangible assets

Net cash used in investing activities

( 3,512,469 )

Financing activities

Net change in related party loan

Shareholder assumption of debt

Proceeds from warrant exercise

Proceeds from issuance of common share, net of issuance cost

Proceeds from line of credit

Net proceeds from long term debt

Repayment of line of credit

( 3,450,785 )

Repayment of long term debt

Repayments on line of credit

( 2,131,871 )

Repayments on long-term debt

Proceeds from issuance of common share, net of issuance cost

Net cash received from financing activities

Change in cash

( 1,508,093 )

( 11,655,179 )

Cash, restricted cash and cash equivalents - beginning of year

Cash, restricted cash and cash equivalents - beginning of period

Cash, restricted cash and cash equivalents end of period

Supplemental Disclosure of non-cash investing and financing activities

Shares issued for purchase of software

Supplemental Disclosure of cash flow information

1 unchanged sentence

Interest paid

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

to the Condensed Consolidated Financial Statements

Basis of Presentation and Business Condition

Interim Financial Information

accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting

principles in the United States (“GAAP”) for interim financial information pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (SEC).

Accordingly, they do not include all of the information and notes required by GAAP for complete

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

Financial Statements.

In the opinion of management, all adjustments and reclassifications considered necessary in order to make the financial

statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature.

results for the three and nine month periods ended September 30, 2024 are not necessarily indicative of the results that may be expected

for the year ending December 31, 2024.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction

with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 28, 2024.

(together with its subsidiaries, the “Company”) was incorporated in the State of Nevada on April 2, 2003 under the name

Franchise Holdings International, Inc.

In May 2020, FNHI changed its name to Worksport Ltd.

During the year ended

December 31, 2014, the Company completed a reverse acquisition transaction (the “Reverse Acquisition”) with TruXmart Ltd.

(“TruXmart”).

On May 2, 2018, TruXmart legally changed its name to Worksport Ltd.

(“Worksport”).

Worksport designs

and distributes truck tonneau covers in Canada and the United States.

Statement of Compliance

Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States

(“GAAP”) as issued by the Financial Accounting Standards Board (“FASB”).

Basis of Measurement

Company’s financial statements have been prepared on the accrual basis.

Consolidation

Company’s condensed consolidated financial statements consolidate the accounts of the Company.

All intercompany transactions, balances

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

Functional and Reporting Currency

condensed consolidated financial statements are presented in United States dollars (USD or US$).

The functional currency of the Company

and its subsidiaries are United States dollar.

For purposes of preparing these condensed consolidated financial statements, transactions

denominated in Canadian dollars (CAD or C$) were converted to United States dollars at the spot rate.

Transaction gains and losses resulting

from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized

as incurred in the accompanying condensed consolidated statement of operations.

Use of Estimates

preparation of condensed unaudited financial statements in conformity with accounting principles generally accepted in the United States

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

assets and liabilities at the date of the condensed interim financial statements and the reported amounts of revenues and expenses during

the reporting period.

Actual results could differ from these estimates.

to the Condensed Consolidated Financial Statements

Description of Business and Significant Accounting Policies

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

generally accepted accounting

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

In the opinion

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

the interim period have been included.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative

of the results expected for the full year.

The accompanying unaudited consolidated condensed financial statements should be read in conjunction

with the financial statements and notes thereto included in our Form 10-K for the fiscal year ended December 31, 2024.

All references

to years in these financial statements are fiscal years.

Reclassifications

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

The Company reclassified research

and development of $ 369,601 and $ 381,000 for the three months ended March 31, 2025 and 2024, respectively, which were reclassified from

general and administrative expense, to research and development expense.

This change improves the disclosure of costs to develop new

products and technologies and reflects the Company’s ongoing investment in innovation.

The change also provides a more accurate

depiction of the Company’s operating performance.

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 17, 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

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

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

ASU 2024-03 is effective beginning

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

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

company considers the applicability and impact of all ASUs.

ASUs not listed were assessed and determined to be either not applicable

or had or are expected to have an immaterial impact on the financial statements and related disclosures.

Going Concern

of September 30, 2024, the Company had $ 1,857,685 in cash and cash equivalents.

The Company has generated only limited revenues and has

relied primarily upon capital generated from public and private offerings of its securities.

Since the Company’s acquisition of

Worksport in fiscal year 2014, it has never generated a profit.

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

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

which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.

During the three and

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

(2023 - $ 3,949,298 )

and $ 11,862,973 (2023

of March 31, 2025, the Company had $ 5,080,372 in cash and cash equivalents.

The Company also has availability on its revolving line of

credit of $ 2,858,700 .

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.

of March 31, 2025, the Company had an accumulated deficit of $ 68,937,430 .

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 three months

ended March 31, 2025, the Company had net losses of $ 4,460,464

(2024 - $ 3,714,657 ).

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

March 31, 2025, the Company had working capital of $ 7,936,250

(December 31, 2024 – $ 2,901,401 )

$ 1,956,894 )

and had an accumulated deficit of $ 68,937,430

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

$ 48,313,177 ).

The Company has not generated profit from operations since inception and to date has relied on debt and equity financing for continued

The Company’s ability to continue as a going concern is dependent upon the ability to generate cash flows from operations

and obtain equity and/or debt financing.

The Company intends to continue funding operations through equity and debt financing arrangements,

which may be insufficient to fund its capital expenditures, working capital and other cash requirements in the long term.

no assurance that the steps management is taking will be successful.

the Company having completed its purchasing of large manufacturing machinery for current output needs, operational costs are

expected to remain elevated and, thus, further decrease cash and cash equivalents.

Concurrently, the Company intends to continue its

ramp-up of manufacturing and increasing sales volumes in 2024 and beyond, which should mitigate the effects of operational costs on cash and

cash equivalents;

this view is supported by the fact that the manufacturing facility of the Company was completed for initial

production output in 2023 and started to generate revenue in the third quarter of 2023, registering its highest quarterly sales

total in the Company’s history in the third quarter of 2024.

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

During the year

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

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

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

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.

As of September 30, 2024, the Company has sold and issued 604,048 shares of common

stock in consideration for net proceeds of $ 780,356 under the ATM Agreement .

November 2, 2023, the Company consummated a registered direct offering pursuant to which the Company issued 1,925,000 shares of common

stock and 1,575,000 pre-funded warrants to an institutional investor for a total net proceeds of $ 4,261,542 .

Concurrently with the registered

direct offering, the Company issued the same institutional investor 7,000,000 warrants in a private sale.

The warrants are exercisable

for 7,000,000 shares of common stock for $ 1.34 per share six months after issuance and until five and a half years from the issuance

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

The Company registered the 7,000,000 shares of common

stock underlying the warrants on a Form S-1 (333-276241) which was declared effective by the SEC on December 29, 2023.

March 20, 2024, the Company consummated a registered direct offering pursuant to which the Company issued 2,372,240 shares of common

stock and 1,477,892 pre-funded warrants to the same institutional investor as in the Company’s registered direct offering on November

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.

As of March 31,

2025, the Company had cash and cash equivalents of $ 5,080,372

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

Despite the Company having completed its purchasing of large manufacturing machinery for phase one output levels, operational costs

are expected to remain elevated and, thus, further decrease cash and cash equivalents.

Concurrently, the Company intends to continue

its ramp-up of manufacturing and increasing sales volumes in 2025, which should mitigate the effects of operational costs on cash

and cash equivalents as it releases new product lines;

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

Company was completed for initial production output in 2023 and quickly began improving output and sales during 2024 and into 2025.

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

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

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

On September 30, 2022, the Company filed a shelf registration statement on Form S-3, which was declared effective by the 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.

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

Pursuant to the ATM Agreement, HCW

is entitled to a commission equal to 3.0 %

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

Through March 31, 2025, the Company has sold and issued 784,133 shares

of common stock in consideration for net proceeds of $ 6,432,971

under the ATM Agreement.

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

shares of common stock and 157,500

pre-funded warrants to an institutional investor for a total

net proceeds of $ 4,261,542 .

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

The warrants are exercisable for 700,000

shares of common stock for $ 13.40

per share six months after issuance and until five and a half

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

and 147,789 pre-funded warrants to the same institutional investor as in the Company’s registered direct offering on November 2,

2023, for a total net proceeds of $ 2,629,083 .

1 unchanged sentence

investor 770,026 warrants in a private sale.

The warrants are exercisable for 7,700,264 shares of common stock for $ 0.74 per share

six months after issuance until five and a half years from the issuance date, subject to beneficial ownership limitations as described

in the warrants.

The Company registered the 7,700,264 shares of common stock underlying the warrants on a Form S-1 (333-278461) which

was declared effective by the SEC on April 8, 2024.

The warrants are exercisable for 770,026 shares of common stock for $ 7.40 per share six

months after issuance until five and a half years from the issuance date, subject to beneficial ownership limitations as described in

the warrants.

The Company registered the 770,026 shares of common stock underlying the warrants on a Form S-1 (333-278461) which was

declared effective by the SEC on April 8, 2024.

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

price of $ 0.5198 per warrant.

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

shares with an exercise price of $ 0.5198 .

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

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

1 to the prospectus supplement dated as of November

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

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

to $ 4,962,092 of shares

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

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

2024 Warrants at price of $ 5.198 per

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

In return, the Company issued 1,424,500 new

2025 Inducement Warrants.

Each Inducement Warrant has an exercise price of $ 6.502 ,

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

Worksport raised approximately $ 6,731,000 in

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

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

16 unchanged sentences

could be material.

Significant Accounting Policies

accounting policies used in the preparation of these condensed consolidated interim financial statements are consistent with those of

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

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

net of reserves, consists of:

Schedule of Inventory

September 30, 2024

March 31, 2025

December 31, 2024

Finished goods

Promotional items

Raw materials

of September 30, 2024, the value of finished goods on-hand increased due to stockpiling of hard tonneau covers, which have higher values

than stockpiled soft tonneau covers, as well as their raw materials to capitalize on demand generated from the Company’s 2024 sales

Prepaid expenses and deposits

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

Schedule of Prepaid Expenses and Deposits

September 30, 2024

December 31, 2023

Consulting, services, and advertising

Prepaid expenses and deposits,

of September 30, 2024, prepaid expenses and deposits consists of $ 237,594 (December 31, 2023 - $ 5,215 ) in prepaid consulting, services,

and advertising for third party consultants through the issuance of shares and stock options.

Amounts in deposits relate to prepayments

for manufacturing components and finished goods.

Finished goods

Work in progress

Inventories, net

Property and Equipment

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

and equipment consist of:

Schedule of Property and Equipment

September 30, 2024

March 31, 2025

December 31, 2024

Manufacturing equipment

Product molds

Leasehold improvements

Property and equipment, gross

Product molds

Warehouse equipment

Electrical equipment

Property and equipment, at cost

Less accumulated depreciation

1 unchanged sentence

( 3,032,025 )

and Equipment, net

Shareholders’ Equity (Deficit)

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

the nine months ended September 30, 2024, the Company sold 504,921 shares of common stock for a total net proceeds of $ 566,118 .

Property and equipment, net

Depreciation expense for the three months ended March 31, 2025 and 2024

was $ 348,507 and $ 382,520 , respectively.

Intangible Assets

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

Worksport trademarks, licenses, and software costs.

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

2014 and 2025.

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 prior year ended December 31, 2024 and for the three months ended March 31, 2025.

components of intangible assets are as follows:

Schedule of Components of Intangible Assets

March 31, 2025

December 31, 2024

Intangible assets, gross carrying amount

Less accumulated amortization

Intangible assets, net

expense for the three months ended March 31, 2025 and 2024 was $ 96,459

and $ 627 , respectively.

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

Prepaid Expenses and Deposits

expenses and deposits consist of:

Schedule of Prepaid Expenses and Deposits

March 31, 2025

December 31, 2024

Consulting, services and advertising

Prepaid expenses and deposits

Shareholders’ Equity

three months ended March 31, 2025, the following transactions occurred:

the three months ended March 31, 2025, the Company sold 22,725 shares of common stock for total gross proceeds of $ 185,874 .

The sale of shares was in connection with the shelf registration statement on Form S-3 effective on October 13, 2022, allowing the Company

1 unchanged sentence

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

Company recognized consulting expense of $ 753,069 to share subscriptions payable from restricted shares and stock options to be issued.

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

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

In association with the sale of common stock, the Company issued 1,477,892 pre-funded warrants and 7,700,264 warrants totaling proceeds

of $ 1,093,492 .

Refer to note 14.

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

In connection

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

Refer to note 14.

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

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

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

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

The sale of shares was in connection with the shelf registration

statement on Form S-3 effective on October 13, 2022, allowing the Company to issue up to $ 30,000,000 of common stock and prospectus supplement

covering the offering, issuance and sale of up to $ 13,000,000 of common stock that may be issued and sold under an At The Market Offering

Agreement dated as of September 30, 2022.

Company recognized consulting expense of $ 22,017 to

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

As of March 31, 2025, the restricted shares have

not been issued.

During the three months ended March 31, 2025, the Company issued 1,000 restricted

shares with a value of $ 82,100 .

the three months ended March 31, 2025, in connection with the inducement of 1,295,000

warrants at $ 5.198

per share, the Company also sold 1,424,500

warrants exercisable at $ 6.502

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.

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

three months ended March 31, 2024, the following transactions occurred:

the three months ended March 31, 2024, the Company sold 50,492 shares of common stock for a total net proceeds of $ 566,118 .

of shares was in connection with the shelf registration statement on Form S-3 effective on October 13, 2022, allowing the Company to

issue up to $ 30,000,000 of common stock and prospectus supplement covering the offering, issuance and sale of up to $ 13,000,000 of common

stock that may be issued and sold under an At The Market Offering Agreement dated as of September 30, 2022.

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

As of September 30, 2023, the restricted shares have not been issued.

During the same period the Company issued 250,000 shares of common

stock for consulting services valued at $ 635,000 .

to note 15 for additional shareholders’ equity (deficit) details.

of September 30, 2024, the Company was authorized to issue 299,000,000 shares of its common stock with a par value of $ 0.0001 .

were ranked equally with regard to the Company’s residual assets.

During the nine months ended September 30, 2024, the Company

was authorized to issue 100 shares of its Series A and 100,000 Series B Preferred Stock with a par value of $ 0.0001 .

Series A preferred

Stock have voting rights equal to 299 shares of common stock, per share of preferred stock .

Series B preferred Stock have voting rights

equal to 10,000 shares of common stock, per share of Preferred Stock .

Related Party Transactions

As of September 30, 2024, the Company

has a receivable of $ 14,303

(December 31, 2023 – payable of $ 2,192 )

from the CEO.

As of March 31, 2024, the Company issued 21,454 restricted shares with a value of $ 304,188 .

the three months ended March 31, 2024, the Company closed a sale of 237,224 shares of common stock for net proceeds of $ 1,535,591 .

association with the sale of common stock, the Company issued 147,789 pre-funded warrants and 770,026 warrants totaling proceeds of $ 1,093,492 .

effective tax rate for the three months ended March 31, 2025 and 2024 was 22.9 % before 100 % allowance adjustments on net deferred income tax assets.

The effective tax rate for the three months ended March 31, 2025

and 2024 was higher than expected from applying the U.S.

federal statutory rate of 21 %

to loss before income taxes due to tax benefits on losses generated outside the U.S.

with higher statutory rates.

Financial Instruments and Fair Value

value is defined as the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between

market participants at the measurement date.

Depending on the nature of the asset or liability, various techniques and assumptions can

be used to estimate fair value.

The definition of the fair value hierarchy is as follows:

1 – Quoted prices in active markets for identical assets and liabilities.

2 – Observable inputs other than quoted prices in active markets for similar assets and liabilities.

3 – Inputs for which significant valuation assumptions are unobservable in a market and therefore value is based on the best available

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 March 31, 2025.

The Company’s

long-term debt is based on a fixed interest rate, and its carrying amount approximates fair value at March 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 and is estimated based on quoted

market prices.

Changes in Cash Flows from Operating Assets and Liabilities

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

changes to the Company’s operating assets and liabilities for the three months ended March 31, 2025 and 2024 are as follows:

Schedule of Changes in Operating Assets and Liabilities

Decrease (increase) in accounts receivable

$ ( 455,509 )

Decrease (increase) in other receivable

1 unchanged sentence

( 2,908,354 )

( 2,205,697 )

Decrease (increase) in prepaid expenses and deposits

Increase (decrease) in payroll taxes payable

Increase (decrease) in accounts payable and accrued liabilities

in operating assets and liabilities

Changes in operating assets

and liabilities

$ ( 436,873 )

$ ( 706,645 )

the year ended December 31, 2019, the Company entered into an agreement to purchase 10,000,000 shares of a privately owned US-based mobile

phone development company for $ 50,000 – representing a 10 % equity stake.

The shares have been issued to the Company.

As of September

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

the nine months ended September 30, 2024, $ 66,308 ($ 90,000 CAD) of the Company’s Guaranteed Investment Certificate (“GIC”)

matured and the Company received $ 3,054 ($ 4,129 CAD) in interest income.

the three months ended March 31, 2025, $ 66,308 ($ 90,000 CAD) of the Company’s

Guaranteed Investment Certificate (“GIC”) matured and the Company received $ 2,499

($ 3,603.69 CAD) in interest income.

During the same period, the Company reinvested the principal

amount of $ 66,308 ($ 90,000 CAD) in a GIC.

The GIC bears a variable interest rate and will mature on February 27, 2025.

The anticipated

earned interest on the GIC at maturity is $ 3,123 ($ 4,275 CAD).

Operating Lease Obligations

the year ended December 31, 2019, the Company signed a lease agreement for warehouse space to commence on August 1, 2019 and end on July

31, 2022 with monthly lease payments of $ 2,221 .

During the year ended December 31, 2021, the Company entered into a second lease agreement

for warehouse space to commence on June 1, 2021 and end on May 31, 2024 with monthly lease payments of $ 19,910 .

The GIC bears a variable interest rate and will

mature on February 27, 2026.

The anticipated earned interest on the GIC at maturity is $ 2,499

($ 3,603.69 CAD).

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

corporate office and R&D facility pursuant to a five-year lease, dated June 1, 2022 , for a variable rate averaging $ 22,101 per month

over the lifetime of the lease.

The Company also pays approximately $ 4,418 in additional fees per month, which varies year to year.

corporate office and research and development (“R&D”) facility pursuant to a five-year lease, dated June 1, 2022 , for

a variable rate averaging $ 20,242 per month over the lifetime of the lease not inclusive of additional fees, which also vary and average

$ 5,033 per month in 2025 not inclusive of taxes.

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

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

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

the nine months ended September 30, 2024, the Company signed a lease agreement for office space to be used as an R&D facility pursuant

to a one-year lease with an option to extend the lease for an additional year, dated June 1, 2024, for a monthly rent of $ 3,600 .

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

4 unchanged sentences

amount equal to the lease liability.

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

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

Schedule Right-of-use Asset

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

of Lease Cost

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

Operating lease cost

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

of lease liabilities:

following is a summary of cash paid during the three months ended March 31, 2025 and 2024 for amounts included in the measurement of

lease liabilities:

of Measurement of Lease Liabilities

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

Operating cashflow

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

following are future minimum lease payments as of March 31, 2025:

Schedule of Future Minimum Lease Payments

4 unchanged sentences

Long term portion

debt consists of:

Schedule of Long Term Debt

March 31, 2025

December 31, 2024

Revolving Credit Facility (a)

Long-term debt

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

borrower (the “Borrower”) entered into a secured loan agreement (the “Loan Agreement”) with an external banking

entity (the “Lender”) relating to the Company’s purchase of a 152,847 square-foot building situated on two parcels

of land aggregating 18 acres of land located in West Seneca, New York (collectively, the “Property”) for a total purchase

price of $ 8,150,000 on May 6, 2022.

Under the terms of the Loan Agreement, the Borrower procured a total principal sum of $ 5,300,000 ,

bearing an interest rate of the prime rate plus 2.25 % annually, for the Company’s purchase of the Property and covering associated

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

the close of June 30, 2024, this account’s balance had changed to $ 386,164 , which is recorded under cash and cash equivalents in

the accompanying financial statements.

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

This outstanding balance and accrued interest were due on August 10, 2024.

The Company disclosed the material terms of the Loan

Agreement in a Current Report on Form 8-K filed with the Securities and Exchange Commission on May 11, 2022.

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

February 4, 2024, the Company and Worksport New York entered into a Forbearance Agreement with the Lender in connection with the Loan

Pursuant to the Forbearance Agreement, the Lender agreed to forbear from commencing an action for judgement of foreclosure

and sale, seeking an appointment of a receiver or collecting default accrued interest under the Loan until the occurrence of a Termination

Event (as defined in the Forbearance Agreement) and the Company and Worksport waived all defenses in connection with the Worksport New

York failure to maintain 1.20 to 1.0 debt service coverage ratio of operating income to debt service under the Loan for each of the trailing

twelve (12) months ended December 31, 2023, and the indirect sale of equity securities of Worksport New York as a result of the Company’s

sale equity securities in November 2023 (the “Existing Defaults”).

Pursuant to the Forbearance Agreement, the definition

of “Permitted Transfers” in the Loan Agreement was amended to include the transfer of direct or indirect interest in the

Company solely through a stock sale for capital raising purposes, subject to certain conditions, including no occurrence of an Event

of Default (other than the Existing Defaults), change in ownership or control of the Company, no new 10% or greater owners, and no involvement

of Sanctioned Persons.

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

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

due on May 20th, 2024.

The Company entered into an agreement with the lender to extend the maturity date to August 10th, 2024.

has since refinanced this loan.

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

Corporation, entered into a $ 6,000,000

Revolving Financing and Assignment Agreement with an external lending entity with a maturity of 24

months from initial funding (July 2026).

Upon transaction close, the Company drew down approximately $ 5.06

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

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

The Company used $ 4.73

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

North America Dr.

Less deferred debt issuance cost

Less current installments

Long-term debt

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

as well as Worksport USA Operations Corporation, entered into a $ 6,000,000 Revolving Financing

and Assignment Agreement with an external lending entity with a maturity date of July 18,

2026, or 24 months.

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

of the Revolving Credit Facility, net of $ 790,000 of interest reserve required to be withheld

to ensure interest payments by the Company.

The Company used $ 4.73 million of the drawn down

amount to refinance the Company’s mortgage on the Company’s real property located

at 2500 North America Dr.

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

to fund operations.

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

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

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

from initial funding (September 2027).

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

(net of issuance costs).

The Company and its

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

the year ended December 31, 2020, the Company received $ 28,387 ($ 40,000 CAD) interest-free from the Government of Canada as part of the

COVID-19 small business relief program.

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

of 25 percent ( 25 %).

As of September 30, 2022, the Company made the repayment of $ 28,387 ($ 40,000 CAD) and, as of February 14, 2023,

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

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

loan has been fully settled.

At March 31, 2025, the outstanding balance of this loan was $ 1,570,197 (net

of issuance costs of $ 165,217 ).

For collateral, the lender holds a first position on the

Company’s major asset classes (accounts receivable, the factory in New York, and inventory) other than the Company’s

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 March 31, 2025, the Company had an available balance of $ 2,858,700

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 ).

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.

Loss per Share

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

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

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

are 299,000,000 shares authorized with 30,920,397 and 17,436,805 shares issued and outstanding, as at September 30, 2024 and 2023, respectively.

The computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with

ASC Topic No.

the three months ended March 31, 2025, loss per share is $ 1.05 (basic and diluted) compared to that of the three months ended March

31, 2024, of $ 1.75

(basic and diluted) using the weighted average number of shares of 4,262,474 (basic and diluted) and 2,118,807

(basic and diluted), respectively.

are 29,900,000 shares authorized with 4,795,521 and 2,410,020 shares issued and outstanding, at March 31, 2025 and 2024, respectively.

computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with ASC

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.

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

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

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

As of September 30, 2023, the

Company has 3,939,924 warrants convertible to 4,239,924 shares of common stock, 170,212 restricted stock to be issued, 300,000 performance

stock units and stock options exercisable for 3,576,256 shares of common stock, for a total underlying shares of common stock of 8,286,392 .

the nine months ended September 30, 2024, in connection with the sale of 2,372,240 shares of common stock, the Company also sold 1,477,892

pre-funded warrants and issued 7,700,264 warrants exercisable for a total of 7,700,264 shares of common stock for $ 0.0001 and $ 0.74 ,

respectively, per share.

As of March 31, 2025, the Company has 2,414,526

warrants convertible to 2,444,526 common shares, 115,713 restricted stock to be issued, and 201,824 stock options

exercisable for 201,824 common shares for a total underlying common shares of 2,762,063 .

As of March 31, 2024, the Company has

2,011,808 warrants convertible to 2,041,808 common shares, 35,702 restricted stock to be issued, and 513,266 stock options exercisable

for 513,266 common shares for a total underlying common shares of 2,590,775 .

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

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.

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

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 of the pre-funded warrants are exercised .

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

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

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

In connection with the sale of

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

The pre-funded warrants are

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

During the same period, 147,789 pre-funded warrants were

exercised for 147,789 shares of common stock for $ 150 .

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

In connection with the sale of common stock

the Company issued 190,000 warrants.

The warrants have an exercise price of $ 4.00 and an expiration date of September 21, 2029 .

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

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

the year ended December 31, 2023, in connection with the sale of 1,925,000 shares of common stock in a registered direct offering, the

Company also sold 1,575,000 pre-funded warrants and 7,000,000 warrants exercisable for 7,000,000 shares of common stock for $ 0.0001 and

$ 1.34 , respectively, per share.

the year ended December 31, 2024, 13,091 warrants issued on August 3, 2021, and 344,652 warrants issued on August 6, 2021, all of which

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 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, 887,000 pre-funded warrants were exercised for 887,000 shares of common stock for $ 89 .

During the nine months

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

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

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

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

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.

The proceeds of the

warrant inducement and issuance of 284,000 shares of common stock are recorded as capital in excess of par.

The obligation to issue the

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

During the twelve months ended December 31, 2024, the

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

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

2 unchanged sentences

warrants was extended to December 31, 2026, and the stock option holder was issued an additional 40,000 restricted stock units.

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

the year ended December 31, 2022, the Company and a warrant holder reached an agreement to extend the exercisable period of 30,000 warrants,

convertible to 2 shares of common stock each, for an additional 12 months.

the year ended December 31, 2021, the Company issued 13,091 representative warrants to the Company’s underwriters.

The representative

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.

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

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

Schedule of Warrants Exercise Price

Exercise price

Number outstanding

Remaining Contractual Life (Years)

March 20, 2025

December 31, 2026

September 20, 2029

August 27, 2030

September 21, 2029

November 26, 2029

average remaining contractual life of outstanding warrants that expire is 4.99 years.

of Warrants Activity

September 30, 2024

March 31, 2025

December 31, 2024

Number of warrants

Weighted average price

Number of warrants

Weighted average price

average price

Balance, beginning of year

( 1,295,000 )

( 9,165,892 )

Balance, end of period

Stock Options and Performance Share Units

Equity Compensation

the Company’s 2015, 2021 and 2022 Equity Incentive Plans, the number of shares of common stock reserved for issuance under the

10 unchanged sentences

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

May 1, 2023, the Company and Steven Rossi reached an agreement to modify 1,600,000 restricted stock units and 400,000 performance stock

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

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

pertaining to the PSU vesting schedule.

On December 29, 2021, the Company granted 400,000 and 300,000 performance stock units (“PSUs”)

to the Company’s Chief Executive Officer and a director, respectively.

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

stock units (“PSUs”) issued on November 11, 2022, and December 29, 2021, respectively, and replace them with 200,000 stock

options, as described below.

November 11, 2022, 40,000

PSUs granted on December 29, 2021, as described

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

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.

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

As of March 31, 2025, 7,500

PSUs of the remaining 30,000

PSUs had vested.

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

The PSUs were to vest in 5% increments according to a schedule that correlates with the Company’s stock price.

The first 5% of

the PSUs was to have vested upon the Company’s stock price closing at $30.00, 50% was to have vested at a closing price of $165.00,

and 100% was to have vested at a closing price of $315.00 .

The fair value of the PSUs was estimated to be $ 1,344,570 .

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

the three months ended March 31, 2025, the Company issued 10,000 stock options to a director with an exercise price of $ 5.95 and an expiration

date of Marh 7, 2035.

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

1 unchanged sentence

538,896 stock options’ exercise prices were repriced to $ 7.042 , and all other criteria were unchanged.

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

During the nine months ended September 30, 2024, the

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

ranging from February 1, 2029 to July 28, 2034 .

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

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

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

30, 2028 to October 31, 2033 .

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

Schedule of Stock Options Activity

September 30, 2024

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

the year ended December 31, 2024, the Company issued 84,860 stock options to employees and directors with exercise prices ranging from

$ 5.20 to $ 14.10 and expiration dates ranging from February 1, 2029 to November 19, 2034.

Of these stock options, 2,040 were subsequently

of Stock Options Activity

March 31, 2025

December 31, 2024

Number of stock options

Weighted average price

Number of stock options

Weighted average price

Balance, beginning of period

Balance, beginning of year

Balance, end of period

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

Range of Exercise prices

Weighted average life (years)

Weighted average exercise price

Exercisable on September 30, 2024

of Share Based Payment Arrangement, Option, Exercise Price Range

Exercisable on

exercise price

March 31, 2025

Stock options

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

$ 5.20 - 55.00

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

Schedule of Stock Options Activity

September 30, 2024

March 31, 2025

December 31, 2024

Number of stock options

Weighted average price

Number of stock options

Weighted average price

Balance, beginning of period

Balance, beginning of year

Balance, end of period

of Share Based Payment Arrangement, Option, Exercise Price Range

Range of Exercise prices

Weighted average life (years)

Weighted average exercise price

Exercisable on September 30, 2024

Exercisable on

Exercise prices

exercise price

March 31, 2025

Stock options

Warrant Inducement

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

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

Pursuant to the Inducement, the exercising holder of

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

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

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

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

The proceeds of the warrant inducement

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

The obligation to issue the remaining 4,160,000

shares was originally recorded as a share subscription payable.

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

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

Rental Income

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

Segment Reporting

Company manages its business on a product basis and operates in the following two reporting segments for financial reporting purposes:

(1) Hard Tonneau Covers and (2) Soft Tonneau Covers.

The accounting policies of both reporting segments are the same as those described

in Note 1, Description of Business and Summary of Significant Accounting Policies.

Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer, who regularly reviews financial information

presented on a consolidated basis for purposes of allocating resources and evaluating financial performance of the Company’s reporting

The CODM primarily focuses on net income to evaluate its reporting segments.

The CODM also uses net income for evaluating pricing

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

Significant segment expenses reviewed,

which represent the differences between segment revenue and segment net loss, consist of the following:

of Revenue and Segment Net Loss

Tonneau Covers

/ Eliminations

Tonneau Covers

/ Eliminations

For the three months ended March 31, 2025

For the three months ended March 31, 2024

Hard Tonneau Covers

Soft Tonneau Covers

Corporate / Eliminations

Hard Tonneau Covers

Soft Tonneau Covers

Corporate / Eliminations

Cost of sales

Selling, general and administrative

Depreciation and amortization

Loss from continuing operations

$ ( 2,058,637

$ ( 2,141,700

$ ( 4,256,306

$ ( 1,283,250

$ ( 2,141,943

$ ( 3,639,466

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

of Net Sales Disaggregated by Geographic Area

Tonneau Covers

Hard Tonneau Covers

Soft Tonneau Covers

Hard Tonneau Covers

Soft Tonneau Covers

United States

Total Revenues

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

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

accounted for 89 % and 88 % of total assets, respectively.

Commitments and Contingencies

are no legal proceedings except for routine litigation incidental to the business.

Subsequent Events

Company has evaluated subsequent events through November 13, 2024.

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

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

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

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

electric pickup truck.

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

impacting revenues.

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

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

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

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

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

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

Company has evaluated subsequent events through May 15, 2025.

The following events occurred after the three months ended March 31, 2025:

April 1, 2025, the Company signed a lease agreement for 12,500 square feet of office space

to be used as an R&D facility pursuant to a three-year lease effective May 1, 2025, for

an average monthly rent of $ 9,659 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements