What changed in this filing

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Item 1. Financial Statements

2025-08-13 compared with 2025-05-15 · 395 added, 340 removed, 377 unchanged (66% of the section changed)

1 unchanged sentence

Consolidated Balance Sheets

March 31, 2025

June 30, 2025

December 31, 2024

22 unchanged sentences

Shareholders’ Equity

Series A & B Preferred Stock, $ 0.001 par value, 10,010 shares authorized, 100 Series A and 0 Series

B issued and outstanding, respectively (Note 7)

Common stock, $ 0.001 par value, 29,900,000 shares authorized, 4,795,521 and 4,016,205 shares issued and

outstanding, respectively (Note 7)

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

Preferred stock, value

Common stock, $ 0.001 par value, 45,000,000 shares authorized, 5,519,130 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 to Condensed Consolidated Financial Statements which form an integral part of the Condensed Consolidated

Financial Statements.

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

Consolidated Statements of Operations and Comprehensive Loss

the Three Months Ended March 31, 2025 and 2024

Three Months ended March 31,

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

Three Months ended June 30,

Six Months ended June 30,

Cost of sales

4 unchanged sentences

Professional fees

Gain on foreign exchange

(Gain) loss on foreign exchange

Total operating expenses

2 unchanged sentences

( 3,910,748 )

( 7,873,936 )

( 7,550,214 )

Other income (expense)

5 unchanged sentences

$ ( 4,013,399 )

$ ( 8,194,948 )

$ ( 7,728,056 )

Loss per share (basic and diluted)

Weighted average number of shares (basic and diluted)

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

Financial Statements.

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

Consolidated Statements of Shareholders’ Equity

the Three Months Ended March 31, 2025 and 2024

the Three Months Ended June 30, 2025 and 2024

Subscriptions

Stockholders’

at January 1, 2024

at April 1, 2024

$ ( 52,027,834 )

for services and subscriptions payable

issued (Note 7)

( 3,714,657 )

inducement (Note 15)

exercise (Note 15)

( 4,013,399 )

at March 31, 2024

( 4,013,399 )

at January 1, 2025

at June 30, 2024

$ ( 56,041,233 )

at April 1, 2025

$ ( 68,937,430 )

for services and subscriptions payable

issued (Note 7)

Exercise (Note 15)

Warrant exercise (Note 15)

( 2,804,321 )

Issuance of preferred shares pursuant to Reg-A

Issuance of warrants pursuant to Reg-A

( 3,734,484 )

at March 31, 2025

( 3,734,484 )

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

Financial Statements.

at June 30, 2025

$ ( 72,671,914 )

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

Consolidated Statements of Shareholders’ Equity

the Six Months Ended June 30, 2025 and 2024

Subscriptions

Stockholders’

at January 1, 2024

for services and subscriptions payable

issuance (Note 7)

inducement (Note 15)

exercise (Note 15)

at June 30, 2024

at January 1, 2025

for services and subscriptions payable

issued (Note 7)

exercise (Note 15)

Issuance of preferred shares pursuant to Reg-A

Issuance of warrants pursuant to Reg-A

at June 30, 2025

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

Consolidated Statements of Cash Flows

the Three Months Ended March 31, 2025 and 2024

the Six Months Ended June 30, 2025 and 2024

Operating Activities

10 unchanged sentences

Changes in operating assets and liabilities (Note 10)

( 1,004,468 )

( 1,429,494 )

Net cash used in operating activities

2 unchanged sentences

Cash Flows from Investing Activities

Purchase of property and equipment

Purchase of intangible assets

Purchase of property and equipment

Purchase of investments

Net cash used in investing activities

2 unchanged sentences

Proceeds from warrant exercise

Proceeds from issuance of preferred stock, net of issuance cost

Proceeds from issuance of warrants, net of issuance cost

Proceeds from line of credit

3 unchanged sentences

Proceeds from issuance of common share, net of issuance cost

Net cash received from financing activities

Net cash received from (used in) financing activities

Change in cash

( 3,489,959 )

Cash, restricted cash and cash equivalents - beginning of period

Cash, restricted cash and cash equivalents end of period

Supplemental Disclosure of non-cash operating and investing activities

Fixed asset additions included in accounts payable

Supplemental Disclosure of non-cash operating and financing activities

Warrant inducement issuance costs included in accounts payable

Supplemental Disclosure of cash flow information

1 unchanged sentence

Interest paid

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

Financial Statements.

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

to the Condensed Consolidated Financial Statements

6 unchanged sentences

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.

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

indicative of the results expected for the full year.

The accompanying unaudited consolidated condensed financial statements should be

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

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

Reclassifications

1 unchanged sentence

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.

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

and administrative expense, to research and development expense.

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

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

and development expense.

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

ongoing investment in innovation.

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

accounting pronouncements

16 unchanged sentences

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

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

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

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

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

after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the potential effect that the updated

standard will have on the financial statements and related disclosures.

company considers the applicability and impact of all ASUs.

2 unchanged sentences

Going Concern

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.

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

The Company also has availability on its revolving line of credit

of $ 4,763,700 .

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

of its securities.

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

As of June 30, 2025,

the Company had an accumulated deficit of $ 72,671,914 .

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 June 30,

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

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

(2024 - $ 7,728,056 ).

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

(December 31, 2024 – $ 2,901,401 )

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

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

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

continued operations.

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

flows from operations and obtain equity and/or debt financing.

The Company intends to continue funding operations through equity and

debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements

in the long term.

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

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

The Company has not generated profit from operations since inception and to date has

relied on debt and equity financing for continued operations.

The Company’s ability to continue as a going concern is dependent

upon the ability to generate cash flows from operations and obtain equity and/or debt financing.

The Company intends to continue funding

operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital

and other cash requirements in the long term.

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

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.

As of June 30, 2025,

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

Despite the Company having completed its purchasing

of large manufacturing machinery for phase one output levels, operational costs are expected to remain elevated and, thus, further decrease

cash and cash equivalents.

Concurrently, the Company intends to continue its ramp-up of manufacturing and increasing sales volumes in

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

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

began improving output and sales during 2024 and into 2025.

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.

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

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

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

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

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

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

Co., LLC, as the sales agent (“HCW”).

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

gross sales price of the shares of common stock sold.

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

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

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

stock and 157,500 pre-funded warrants to an institutional investor for a total net proceeds of $ 4,261,542 .

Concurrently with the

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

The warrants are

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

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

The Company registered the 700,000

shares of common stock underlying the warrants on a Form S-1

(333-276241) which was declared effective by the SEC on December 29, 2023.

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

March 20, 2024, the Company consummated a registered direct offering pursuant to which the Company issued 237,224 shares of common stock

20 unchanged sentences

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

2024 Warrants at price of $ 5.198 per share.

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.

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

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

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

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

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

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

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

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

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

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.

net of reserves, consists of:

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

Schedule of Inventory

March 31, 2025

December 31, 2024

Raw materials

5 unchanged sentences

Schedule of Property and Equipment

March 31, 2025

December 31, 2024

Manufacturing equipment

4 unchanged sentences

Property and equipment, at cost

Less accumulated depreciation

Accumulated depreciation

( 3,727,975 )

( 3,032,025 )

Property and equipment, net

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

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

Property and equipment,

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

and $ 232,199 ,

respectively.

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

and $ 614,719 ,

respectively.

Intangible Assets

7 unchanged sentences

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.

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

Accumulated amortization

Intangible assets,

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

Amortization expense for the six months ended

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

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

of Estimated Amortization of the patent and Software

Prepaid expenses and deposits

expenses and deposits consist of:

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

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

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.

services, and advertising

expenses and deposits

Shareholders’ Equity (Deficit)

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

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

The sale of shares

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

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

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

Company recognized consulting expense of $ 26,000

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

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

restricted shares have not been issued.

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

restricted shares with a value of $ 452,100 .

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

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

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

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

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.

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

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

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

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

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

Company recognized consulting expense of $ 595,863 to share subscriptions payable from restricted shares and stock options to be issued.

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.

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

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

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

of $ 1,093,492 .

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

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

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

with higher statutory rates.

14 unchanged sentences

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

rate and is reflected in the financial statements at carrying value which approximates fair value at March 31, 2025.

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

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

The fair value of

2 unchanged sentences

Changes in Cash Flows from Operating Assets and Liabilities

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

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

Schedule of Changes in Operating Assets and Liabilities

Decrease (increase) in accounts receivable

Decrease (increase) in accounts

$ ( 253,372 )

$ ( 160,264 )

Decrease (increase) in other receivable

1 unchanged sentence

( 2,755,252 )

Decrease (increase) in prepaid expenses and deposits

Increase (decrease) in accounts payable and accrued liabilities

Changes in operating assets

and liabilities

Decrease (increase) in prepaid expenses

Increase (decrease)

in accounts payable and accrued liabilities

in operating assets and liabilities

$ ( 1,004,468 )

$ ( 1,429,494 )

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, 2026.

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

($ 3,603.69 CAD).

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

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

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

($ 90,000 CAD) in a GIC.

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

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

During the six

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

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

The anticipated earned interest on the GIC

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

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

corporate office and 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 .

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

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

date of initial application beginning January 1, 2019.

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

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

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

to a one-year

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

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

per month with a termination

date of May 31, 2025 .

The lease was not renewed.

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

lease liability and a right-of-use asset.

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

discounted using the Company’s incremental borrowing rate of 10 %.

The Company has measured the right-of-use asset at an initial

amount equal to the lease liability.

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

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

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

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

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

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

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

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

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

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

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

to the lease liability.

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

Schedule Right-of-use Asset

March 31, 2025

December 31, 2024

Right-of-use asset

Current lease liability

Long-term lease liability

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

lease liability

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

of Lease Cost

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Operating lease cost

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:

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

of Measurement of Lease Liabilities

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

Operating cashflow

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

Schedule of Future Minimum Lease Payments

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

of Future Minimum Annual Lease Payments

Total future minimum lease payments

amount representing interest

amount representing

Present value of future payments

3 unchanged sentences

Schedule of Long Term Debt

March 31, 2025

December 31, 2024

June 30, 2025

Revolving Credit Facility (a)

3 unchanged sentences

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

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

entered into a $ 6,000,000

Revolving Financing and Assignment

Agreement with an external lending entity with a maturity date of July 18, 2026, or 24

Upon transaction close, the

Company drew down approximately $ 5.06

million of the Revolving Credit Facility,

net of $ 790,000

of interest reserve required to be

withheld to ensure interest payments by the Company.

The Company used $ 4.73

million of the drawn down amount

to refinance the Company’s mortgage on the Company’s real property located at 2500 North America Dr.

in West Seneca, New

York, and additionally drew approximately $ 330,000

to fund operations.

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 ).

Interest on the

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

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

(net of issuance costs of $ 113,656 ).

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

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

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

On September 4, 2024, the Company, through its wholly owned

subsidiary, Worksport USA Operations Corporation, entered into a $ 1,487,200 credit and security agreement with an external lending entity

with a maturity date of September 1, 2027 , which is 36 months from initial funding.

Upon transaction close, the Company received net

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

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

Corporation, serve as guarantors on the loan.

For collateral, the lender holds a first position

on the Company’s equipment, which is primarily manufacturing and warehousing equipment.

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

is primarily manufacturing and warehousing equipment.

Interest on the loan is based on the prime rate plus

700 basis points per annum.

is in compliance with all covenants.

Loss per Share

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 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 .

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

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

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

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

The computation

of loss per share is based on the weighted average number of shares outstanding during the period in accordance with ASC Topic No.

“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.

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.

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

Pursuant to the Inducement, the exercising holder of the existing warrants received

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

As a result of the inducement

and subsequent exercise, the Company determined the incremental fair value provided to the holder from the inducement warrants issued

using the Black Scholes model.

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

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

11 unchanged sentences

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, 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

12 unchanged sentences

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

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

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

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

During the same period, 88,700 pre-funded

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

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

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

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

12 unchanged sentences

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

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

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

Schedule of Warrants Exercise Price

Exercise price

December 31, 2026

September 20, 2029

August 27, 2030

September 21, 2029

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

average remaining contractual life of outstanding warrants that expire is

of Warrants Activity

March 31, 2025

December 31, 2024

average price

Balance, beginning of year

beginning of year

( 1,295,000 )

Balance, end of period

end of period

Equity Compensation

11 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 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.

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

to the PSU vesting schedule.

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

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

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

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

The fair value of the

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

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

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

5 unchanged sentences

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

the 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.

the six months ended June 30, 2025, the Company issued 10,000 stock options to a director with an exercise price of $ 5.95 and an expiration

date of March 7, 2035 .

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

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

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

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

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

6 unchanged sentences

of Stock Options Activity

March 31, 2025

December 31, 2024

Balance, beginning of year

average price

stock options

average price

Balance, beginning of period

Balance, end of period

of Share Based Payment Arrangement, Option, Exercise Price Range

Exercise prices

Weighted average

Exercisable on

exercise price

March 31, 2025

Stock 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:

of June 30, 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

March 31, 2025

December 31, 2024

Balance, beginning of year

stock options

average price

stock options

average price

Balance, beginning of period

Balance, end of period

of Share Based Payment Arrangement, Option, Exercise Price Range

Exercisable on

Exercise prices

exercise price

March 31, 2025

Stock options

June 30, 2024

Segment Reporting

11 unchanged sentences

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

For the three months ended June 30, 2025

For the three months ended June 30, 2024

Corporate / Other / Eliminations

Cost of sales

( 2,937,204 )

( 3,022,846 )

( 1,624,910 )

Selling, general and administrative

( 2,502,025 )

( 1,701,753 )

( 4,255,841 )

( 1,277,484 )

( 1,930,197 )

( 3,974,551 )

Depreciation and amortization

6 unchanged sentences

$ ( 1,952,102 )

$ ( 3,910,748 )

For the six months ended June 30, 2025

For the six months ended June 30, 2024

Corporate / Other / Eliminations

Cost of sales

( 4,673,695 )

( 4,866,630 )

( 1,256,284 )

( 2,100,091 )

Selling, general and administrative

( 4,525,421 )

( 3,819,688 )

( 8,463,401 )

( 2,254,510 )

( 4,014,486 )

( 7,268,327 )

Depreciation and amortization

Loss from continuing operations

$ ( 3,946,401 )

$ ( 3,842,413 )

$ ( 7,873,936 )

$ ( 2,600,617 )

$ ( 855,551 )

$ ( 4,094,046 )

$ ( 7,550,214 )

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.

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

accounted for 88 % of total assets, respectively.

Commitments and Contingencies

1 unchanged sentence

Subsequent Events

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 .

Company has evaluated subsequent events through August 13, 2025.

The following events occurred after the period ended

June 30, 2025:

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

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

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

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

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

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

and expiring 10 years from grant date.

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

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

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

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

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

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

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

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

This additional equipment

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

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

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