Worksport Ltd
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 10, 2026
WKSP$0.29-1.5%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001437749-26-026997
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0001437749-26-036143
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 102 current paragraphs.
56 unchanged; 39 reworded; 7 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Recent Developments
Current report
The following material developments occurred after September 30, 2026:
Current report
CRITICAL ACCOUNTING ESTIMATES
Current report
There have been no material changes to our critical accounting estimates from those disclosed under “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Current report
Net sales from online retailers of our products increased by $273,293, from $8,581,631 for the nine months ended September 30, 2025 to $8,854,924 for the nine months ended September 30, 2026. The 3.2%increase is a result of the Company’s focus on lowering customer acquisition costs for direct-to-consumer sales and a presence in the business-to-business sales channel. This, in turn, allows the Company to reduce expenses normally attributed to conversion marketing. An intentional reduction in conversion marketing efforts decreases order volume, but results in more efficient marketing spend and a higher average order value.
Current report
August 2026 Warrant Inducement
Current report
On August 27, 2026, the Company entered into a warrant exercise inducement agreement with the holder of certain existing warrants originally issued on December 12, 2025. Pursuant to the agreement, the holder exercised warrants to purchase 3,840,421 shares of the Company’s common stock at a reduced exercise price of $0.60 per share, for gross proceeds of $2,304,253, before deducting approximately $215,000 of placement agent fees and other offering expenses payable, resulting in estimated net proceeds of approximately $2,089,253. In consideration for the exercise, the Company issued new warrants to purchase up to 4,800,526 shares of common stock. The shares of common stock issuable upon exercise of the new warrants were registered for resale pursuant to the Company’s registration statement on Form S-3 (File No. 333-299283), filed October 5, 2026, and declared effective October 13, 2026. The Company intends to use the net proceeds from the transaction for general corporate and working capital purposes. The Company engaged Maxim Group LLC as its exclusive financial advisor in connection with the transaction.
Removed paragraphs (5)
Previous report
CRITICAL ACCOUNTING POLICIES
Previous report
On a regular basis, we evaluate the critical accounting policies used to prepare our consolidated financial statements, including revenue recognition, inventory valuation, reviews for impairment of long-lived assets, and income taxes.
Previous report
We currently work closely with a large Canadian and two large U.S. distributors as well as online retailers to grow our customer base. We are progressing well in conversations with three other major distributors with strong market presences, which will allow us to promote to dealers and sell to jobbers in strategic regions. Lastly, we are in closing discussions with a network of nationwide U.S. dealers capable of bringing our product to all U.S. continental states.
Previous report
Net sales from online retailers of our products decreased by $241,704, from $3,121,458 for the three months ended June 30, 2025 to $2,879,754 for same period ended June 30, 2026. The $241,704 decrease is a result ofthe Company’s focus to lower our customer acquisition cost with additional focus on brand awareness and less focus on conversion marketing. The reduction in conversion marketing efforts decreased order volume, but this was offset by an increase in the average order value of our product offerings.
Previous report
We currently work closely with a large Canadian and a large U.S. distributor as well as online retailers to grow our customer base. We are progressing well in conversations with three other major distributors with strong market presences, which will allow us to promote to dealers and sell to jobbers in strategic regions. Lastly, we are in closing discussions with a network of nationwide U.S. dealers capable of bringing our product to all U.S. continental states.
Reworded paragraphs (39)
Previous wording
Electric Vehicles (EVs) have been increasing in consumer interest, whether that interest takes the form of vehicle pre-orders, sales, or investments. As we begin marketing our Worksport SOLIS and COR, we plan to market the SOLIS as a must-have accessory for electric light duty vehicle owners while simultaneously riding the coattails of EV popularity to promote our other products (COR and conventional tonneau covers) to the very large population of Americans that have an interest in EVs without the funds to purchase them. Further, participating in the EV space allows us to target consumers with an interest in cutting-edge technologies – a great market in which to promote our COR portable power system.
Current wording
Electric Vehicles (EVs) have been increasing in consumer interest, whether that interest takes the form of vehicle pre-orders, sales, or investments. As we begin marketing our Worksport SOLIS and COR, we plan to market the SOLIS to electric light duty vehicle owners and to leverage consumer interest in EVs to promote our other products (COR and conventional tonneau covers) to the very large population of Americans who have an interest in EVs without the funds to purchase them. Further, participating in the EV space allows us to target consumers with an interest in cutting-edge technologies – a market in which to promote our COR portable power system.
Previous wording
The Build Back Better Bill was a strong indication of upcoming and favorable U.S. regulations. Many regulations that improve North America’s EV charging infrastructure or provide grants to businesses operating in the EV space would benefit us. While we are primarily focused on the light duty vehicle market, our energy products are particularly useful for electric light duty pickup trucks and, therefore, are positioned to benefit greatly from any bill that increases the prevalence of such vehicles. However, President Donald Trump has signed an executive order titled Unleashing American Energy in which he has indicated his administration will be reversing the electric vehicle mandates of Joe Biden’s former administration, and he has further paused billions of dollars in funding allocated towards electric vehicle charging stations. The future of the U.S.’s regulatory environment surrounding electric vehicles is uncertain.
Current wording
Many regulations that improve North America’s EV charging infrastructure or provide grants to businesses operating in the EV space would benefit us. While we are primarily focused on the light duty vehicle market, our energy products are particularly useful for electric light duty pickup trucks and, therefore, could benefit from any bill that increases the prevalence of such vehicles. However, President Donald Trump has signed an executive order titled Unleashing American Energy in which he has indicated his administration will be reversing the electric vehicle mandates of Joe Biden’s former administration, and he has further paused billions of dollars in funding allocated towards electric vehicle charging stations. The future of the U.S.’s regulatory environment surrounding electric vehicles is uncertain.
Previous wording
Our conventional tonneau covers are engineered for enhanced user experience and resistance to wear-and-tear, making them strong and competitive products in an otherwise consolidated and saturated market. The Worksport COR portable power station, however, operates in a much wider yet unsaturated market. The global Portable Power Station market is quickly growing, and the competitive landscape is far from consolidated. The solar tonneau cover market is in its infancy, and it’s a market in which we have first-mover advantage. To ensure we do not fall behind future competitors, we are highly focused on protecting our intellectual property both domestically and abroad.
Current wording
Our conventional tonneau covers are engineered for enhanced user experience and resistance to wear-and-tear, in a consolidated and competitive market. The Worksport COR portable power station, however, operates in a much wider yet unsaturated market. The global Portable Power Station market is quickly growing, and the competitive landscape is far from consolidated. The solar tonneau cover market is in its infancy, and we believe we are among the early entrants in this market. To ensure we do not fall behind future competitors, we are highly focused on protecting our intellectual property both domestically and abroad.
Previous wording
Climate change threatens to cause many foreseeable as well as unforeseeable ramifications. In cautious preparation for those that are foreseeable, we have strategically begun domestic manufacturing operations in Western New York – an economically growing region not immediately threatened by climate change to the same extent as other regions and possibly one that may benefit from future population migrations within the U.S. Further, we intend to lower our own carbon footprint by investing in energy-saving measures in our factory in West Seneca, NY. Considering climate change may also exacerbate geopolitical tensions, we are working to diversify our supply chain and lower our reliance on any particular region or country for raw materials in order to lower our exposure to climate change-induced economic or political instability.
Current wording
Climate change threatens to cause many foreseeable as well as unforeseeable ramifications. In cautious preparation for those that are foreseeable, we have strategically begun domestic manufacturing operations in Western New York. Further, we intend to lower our own carbon footprint by investing in energy-saving measures in our factory in West Seneca, NY. Considering climate change may also exacerbate geopolitical tensions, we are working to diversify our supply chain and lower our reliance on any particular region or country for raw materials in order to lower our exposure to climate change-induced economic or political instability.
Previous wording
We believe our Worksport SOLIS and Worksport COR products will be received positively by the public for their resilience to, and even increased utility as a result of, Climate Change. However, we acknowledge the potentially negative environmental impacts of poor battery recycling and increasing demand for precious metals. We are actively researching ways to lower such environmental impacts.
Current wording
We acknowledge the potentially negative environmental impacts of poor battery recycling and increasing demand for precious metals. We are actively researching ways to lower such environmental impacts.
Previous wording
Additionally, as central banks and the U.S. Federal Reserve adjust interest rates in response to evolving inflationary conditions, the cost of debt financing may fluctuate. While the Federal Reserve began reducing the federal funds rate in the latter half of 2024 and has continued measured reductions into 2025 and early 2026, interest rates remain elevated relative to pre-2022 levels, and the pace and extent of future reductions remain uncertain. Our $6,000,000 revolving line of credit and our $1,487,000 in equipment financing both carry floating interest rates, meaning we remain susceptible to variable debt interest costs as a result of changes in interest rates.
Current wording
Additionally, as central banks and the U.S. Federal Reserve adjust interest rates in response to evolving inflationary conditions, the cost of debt financing may fluctuate. While the Federal Reserve began reducing the federal funds rate in the latter half of 2024 and has continued reductions since, interest rates remain elevated relative to pre-2022 levels, and the pace and extent of future reductions remain uncertain. Our $6,000,000 revolving line of credit and our $1,487,000 in equipment financing both carry floating interest rates, meaning we remain susceptible to variable debt interest costs as a result of changes in interest rates.
Previous wording
The following is a discussion of our results of operations from the three months ended June 30, 2026 compared to the three months ended June 30, 2025
Current wording
The following is a discussion of our results of operations for the three months ended September 30, 2026 compared to the three months ended September 30, 2025
Previous wording
For the three months ended June 30, 2026, net sales generated in the U.S. was $5,197,760, compared to $4,070,406 for the same period in 2025, anincrease of approximately $1,127,354.
Current wording
For the three months ended September 30, 2026, net sales generated in the U.S. were $7,209,675, compared to $4,986,583 for the same period in 2025, anincrease of approximately $2,223,092.
Previous wording
Net sales increased during the three months ended June 30, 2026 compared to the same period the prior year due to increased sales of tonneau covers to end users via various dealers and distributors. The Company increased its product offerings in 2026 to also include NEXUS covers to end customers. The Company continues to focus on establishing as well as strengthening its presence in both the direct-to-consumer and business-to-business sales channels while also strengthening customer support to increase customer satisfaction and increase product turnover.
Current wording
Theincrease was primarily due to increased sales of tonneau covers to end users via various dealers and distributors. The Company increased its product offerings in 2026 to also include NEXUS covers to end customers. The Company continues to focus on establishing, as well as strengthening, its presence in both the direct-to-consumer and business-to-business sales channels while also strengthening customer support to increase customer satisfaction.
Previous wording
We distribute our products in the U.S. and Canada through an expanding network of wholesalers, distributors, and dealers, and through online channels, including major online marketplaces and our direct-to-consumer e-commerce platform. We intend to continue expanding both business-to-business and direct-to-consumer channels with product offerings unique to each of these channels. We also continue to pursue relationships with original equipment manufacturers and fleet customers where appropriate.
Current wording
We distribute our products in the U.S. and Canada through an expanding network of wholesalers, distributors, and dealers, and through online channels, including major online marketplaces and our direct-to-consumer e-commerce platform. We intend to continue expanding both business-to-business and direct-to-consumer channels with product offerings to each of these channels. We also continue to pursue relationships with original equipment manufacturers and fleet customers where appropriate.
Previous wording
Net sales from online retailers of our products decreased by $301,739, from $4,992,533 for the six months ended June 30, 2025 to $4,690,794 for the same period ended June 30, 2026. The 6.0%decrease is a result of the Company’s focus to lower our customer acquisition cost with additional focus on brand awareness and less focus on conversion marketing. The reduction in conversion marketing efforts decreased order volume, but this was offset by an increase in the average order value of our product offerings.
Current wording
Net sales from online retailers of our products increased by $575,032, from $3,589,098 for the three months ended September 30, 2025 to $4,164,130 for the three months ended September 30, 2026. The $575,032 increase is a result of the Company’s focus on lowering customer acquisition costs with direct-to-consumer sales by expanding its sales channel concentration in the business-to-business sale channel. This, in turn, allows the Company to reduce expenses normally attributed to conversion marketing. An intentional reduction in conversion marketing efforts decreases order volume, but yields efficient marketing spend and therefore an increase in average order value.
Previous wording
The decrease in the cost of sales as a percentage of sales was primarily driven by two factors: (1) increased production volume to support sales growth, including introduction of new product lines during 2025, and (2) overhead allocation efficiencies associated with higher production volume. These improvements offset increases in certain material, components, and landed costs, including the impact of tariffs on imported products and components sourced from overseas. While tariffs contributed to higher input costs during the six months ended June 30, 2026, the overall effect of increased scale and production efficiencies resulted in an improvement in our gross margin.
Current wording
The increase in the cost of sales as a percentage of net sales was primarily offset by two efficiency factors: (1) increased production volume to support sales growth, including introduction of new product lines during 2026, and (2) overhead allocation efficiencies associated with higher production volume. These improvements partially offset increases in certain material, components, and landed costs, including the impact of tariffs on imported products and components sourced from overseas. While tariffs contributed to higher input costs during the three months ended September 30, 2026, the efficiency improvements partially offset the increase in input costs, and gross margin decreased by approximately one percentage point.
Previous wording
We provide our distributors and online retailers with an “all-in” wholesale price. This includes any import duty charges, taxes, and shipping charges. Discounts are applied if the distributor or retailer chooses to use their own shipping process. Certain exceptions apply on rare occasions where product is shipped outside the contiguous United Sates or from the U.S. to Canada. Volume discounts are offered to certain high-volume customers, and we also offer a “dock price” or “pickup program” whereby clients are able to pick up product directly from our stocking warehouse.
Current wording
We provide our distributors and online retailers with an “all-in” wholesale price. This includes any import duty charges, taxes, and shipping charges. Discounts are applied if the distributor or retailer chooses to use their own shipping process. Certain exceptions apply on rare occasions where product is shipped outside the contiguous United States or from the U.S. to Canada. Volume discounts are offered to certain high-volume customers, and we also offer a “dock price” or “pickup program” whereby clients are able to pick up product directly from our stocking warehouse.
Previous wording
Operating expenses increased for the six months ended June 30, 2026 by $2,714,343, from $9,352,269 for the six months ended June 30, 2025 to $12,066,612, mainly due to the following factors:
Current wording
Operating expense for the three months ended September 30, 2026 decreasedby $743,533, from $6,361,555 for the three months ended September 30, 2025 to $5,618,022, for the three months ended September 30, 2026 mainly due to the following factors:
Previous wording
We reported net other expenses for the three months ended June 30, 2026 of $146,750, compared to $116,853 for three months ended June 30, 2025. Theincrease in net other expenses was attributed to an greater use of our line of credit to fund working capital requirements.
Current wording
We reported net other expenses for the three months ended September 30, 2026 of $170,077, compared to $135,908 for the three months ended September 30, 2025. Theincrease in net other expenses was attributed to a greater use of our line of credit to fund working capital requirements, which contributed to an increase in interest expense.
Previous wording
Net loss for the three months ended June 30, 2026 was $3,965,303, compared to a net loss of $3,734,484 for the three months ended June 30, 2025 – anincrease of approximately 6.2%. Theincrease in net loss can be attributed to the increase in various operating expenses as we focus on expanding our operations and promoting our brand awareness.
Current wording
Net loss for the three months ended September 30, 2026 was $3,599,392, compared to a net loss of $4,928,679 for the three months ended September 30, 2025 – adecrease of approximately 27.0%. Thedecrease in net loss can be attributed to the reduction in various operating expenses as we focus on maximizing cost efficiencies as we continue to scale.
Previous wording
The following is a discussion of our results of operations from the six months ended June 30, 2026 compared to the six months ended June 30, 2025
Current wording
The following is a discussion of our results of operations for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
Previous wording
For the six months ended June 30, 2026, net sales generated in the U.S. was $8,504,405, compared to $6,297,955 for the same period in 2025, anincrease of approximately 35.0%.
Current wording
For the nine months ended September 30, 2026, net sales generated in the U.S. was $15,714,080, compared to $11,284,538 for the same period in 2025, anincrease of approximately 39.3%.
Previous wording
Net sales increased during the six months ended June 30, 2026 compared to the same period the prior year due to increased sales of tonneau covers to end users via various dealers and distributors. The Company increased its product offerings in 2025 to also include AL4 and HD3 covers to end customers. In 2026, the Company added the NEXUS product offering to its customers. The Company continues to focus on establishing as well as strengthening its presence in both the direct-to-consumer and business-to-business sales channels while also strengthening customer support to increase customer satisfaction and increase product turnover.
Current wording
Net sales increased during the nine months ended September 30, 2026 compared to the same period in the prior year due to increased sales of hard tonneau covers to end users via various dealers and distributors. The Company increased its product offerings in 2025 to also include AL4 and HD3 covers to end customers. In 2026, the Company added the NEXUS product offering to its customers. The Company continues to focus on establishing, as well as strengthening, its presence in both the direct-to-consumer and business-to-business sales channels while also strengthening customer support to increase customer satisfaction and increase product turnover.
Previous wording
The decrease in the cost of sales as a percentage of sales was primarily driven by two factors: (1) increased production volume to support sales growth, including introduction of new product lines during 2025, and (2) overhead allocation efficiencies associated with higher production volume. These improvements offset increases in certain material, components, and landed costs, including the impact of tariffs on imported products and components sourced from overseas. While tariffs contributed to higher input costs during the three months ended June 30, 2026, the overall effect of increased scale and production efficiencies resulted in an improvement in our gross margin.
Current wording
The decrease in the cost of sales as a percentage of net sales was primarily driven by two factors: (1) increased production volume to support sales growth, including introduction of new product lines during 2025 and 2026, including NEXUS, and (2) overhead allocation efficiencies associated with higher production volume. These improvements offset increases in certain material, components, and landed costs, including the impact of tariffs on imported products and components sourced from overseas. While tariffs contributed to higher input costs during the nine months ended September 30, 2026, the overall effect of increased scale and production efficiencies resulted in an improvement in our gross margin.
Previous wording
Operating expenses increased for the three months ended June 30, 2026 by $768,746, from $4,699,743 for the three months ended June 30, 2025 to $5,468,489, mainly due to the following factors:
Current wording
Operating expenses increased for the nine months ended September 30, 2026 by $1,953,956, from $15,730,678 for the nine months ended September 30, 2025 to $17,684,634 for the nine months ended September 30, 2026, mainly due to the following factors:
Previous wording
We reported net other expenses for the six months ended June 30, 2026 of $231,095, compared to $321,012 for six months ended June 30, 2025. Thedecrease in net other expenses was attributed to decreased interest expense on our line of credit as a result of reduced usage following cash inflows as a result of the December 2025 warrant inducement transaction.
Current wording
We reported net other expenses for the nine months ended September 30, 2026 of $401,172, compared to $440,066 for the nine months ended September 30, 2025. Thedecrease in net other expenses was attributed to decreased interest expense on our line of credit as a result of reduced usage following cash inflows as a result of the December 2025 warrant inducement transaction.
Previous wording
Net loss for the six months ended June 30, 2026 was $9,793,824, compared to a net loss of $8,194,948 for the six months ended June 30, 2025 – anincrease of approximately 19.5%. The increase in net loss can be attributed to the increase in various operating expenses as we focus on expanding our operations and promoting our brand awareness.
Current wording
Net loss for the nine months ended September 30, 2026 was $13,393,217, compared to a net loss of $13,123,627 for the nine months ended September 30, 2025 – anincrease of approximately 2.1%. The increase in net loss can be attributed to the increase in various operating expenses as we focus on expanding our operations and promoting our brand awareness.
Previous wording
As of June 30, 2026 and December 31, 2025, we had $1,160,158 and $5,945,894, respectively in cash and cash equivalents. As of June 30, 2026, we had $818,339 of remaining available capacity on our revolving line of credit compared with $3,448,016 of remaining available capacity as of December 31, 2025. The decrease in cash and cash equivalents and decrease in the remaining available capacity on our revolving line of credit was primarily a result of our use of proceeds from our warrant inducement transaction in December 2025 to fund working capital requirements to support the production of our new product offerings. We have historically generated limited gross profit and have relied primarily upon capital generated from public and private offerings of our securities to fund continuing operations. Since the Company’s acquisition of Worksport in 2014, it has never generated a profit. During the three and six months ended June 30, 2026, we had net losses of $3,965,303 and $9,793,824, respectively (three months ended June 30, 2025 - $3,734,484; six months ended June 30, 2025 - $8,194,948). As of June 30, 2026, the Company had working capital of $10,961,087 (As of December 31, 2025 - $10,061,578) and had an accumulated deficit of $93,721,747 (As of December 31, 2025 - $83,873,790).
Current wording
As of September 30, 2026 and December 31, 2025, we had $2,528,222 and $5,945,894, respectively in cash and cash equivalents. As of September 30, 2026, we had $1,818,887 of remaining available capacity on our revolving line of credit compared with $3,448,016 of remaining available capacity as of December 31, 2025. The decrease in cash and cash equivalents was primarily a result of our cash used in operating activities to fund working capital requirements and support the production of our new product offerings. We have historically generated limited gross profit and have relied primarily upon capital generated from public and private offerings of our securities to fund continuing operations. Since the Company’s acquisition of Worksport in 2014, it has never generated a profit. During the three and nine months ended September 30, 2026, we had net losses of $3,599,392 and $13,393,217, respectively (three months ended September 30, 2025 - $4,928,679; nine months ended September 30, 2025 - $13,123,627). As of September 30, 2026, the Company had working capital of $9,408,182 (As of December 31, 2025 - $10,061,578) and had an accumulated deficit of $97,348,858 (As of December 31, 2025 - $83,873,790).
Previous wording
In their fiscal 2025 audit report, our independent auditors expressed that there is substantial doubt as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate cash flows from operations and obtain equity and/or debt financing. We intend to continue funding operations through equity and debt financing arrangements, which may be insufficient to fund our capital expenditures, working capital and other cash requirements in the long term. There can be no assurance that the steps our management is taking will be successful.
Current wording
In their fiscal 2025 audit report, our independent registered public accounting firm included an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate cash flows from operations and obtain equity and/or debt financing. We intend to continue funding operations through equity and debt financing arrangements, which may be insufficient to fund our capital expenditures, working capital and other cash requirements in the long term. There can be no assurance that the steps our management is taking will be successful.
Previous wording
To date, our principal sources of liquidity consist of net proceeds from public and private securities offerings and cash exercises of outstanding warrants. During the six months ended June 30, 2026, the Company received net proceeds of $4,523,215 from the offerings described below. Management is focused on transitioning towards gross profit as our principal source of liquidity by growing our existing product offerings and customer base and realizing manufacturing efficiency improvements. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future business developments. Future business development and demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot ensure that we will be able to raise additional capital on acceptable terms, or at all. Subject to the foregoing, we believe our current cash balances coupled with anticipated cash flow from operating activities will be sufficient to meet our working capital requirements for at least one year from the date of issuance of the accompanying consolidated financial statements.
Current wording
To date, our principal sources of liquidity consist of net proceeds from public and private securities offerings and cash exercises of outstanding warrants. During the nine months ended September 30, 2026, the Company received net proceeds of $7,100,326 from the offerings described below. Management is focused on transitioning towards gross profit as our principal source of liquidity by growing our existing product offerings and customer base and realizing manufacturing efficiency improvements. We cannot give assurance that we can increase our cash balances or limit our cash consumption and thus maintain sufficient cash balances for our planned operations or future business developments. Future business development and demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the future. However, we cannot ensure that we will be able to raise additional capital on acceptable terms, or at all.
Previous wording
We have raised funds during the six months ended June 30, 2026 from the following public and private securities offerings:
Current wording
We have raised funds during the nine months ended September 30, 2026 from the following public and private securities offerings:
Previous wording
On November 14, 2025, the Company entered into an amendment to its At The Market Offering Agreement, dated September 30, 2022, with H.C. Wainwright & Co., LLC (“Wainwright”) in connection with a new shelf registration statement on Form S-3 (File No. 333-291582), which was declared effective by the SEC on December 12, 2025. Pursuant to the amended ATM Agreement and the related prospectus supplement dated December 12, 2025, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $4.0 million through Wainwright as sales agent. During the six months ended June 30, 2026, the Company sold 3,157,774 shares of common stock under the ATM Agreement for aggregate gross proceeds of approximately $4,003,273, resulting in net proceeds of approximately $3,869,882 after deducting commissions and offering expenses.
Current wording
On November 14, 2025, the Company entered into an amendment to its At The Market Offering Agreement, dated September 30, 2022, with H.C. Wainwright & Co., LLC (“Wainwright”) in connection with a new shelf registration statement on Form S-3 (File No. 333-291582), which was declared effective by the SEC on December 12, 2025. Pursuant to the amended ATM Agreement and the related prospectus supplement dated December 12, 2025, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $4.0 million through Wainwright as sales agent. During the nine months ended September 30, 2026, the Company sold 4,006,728 shares of common stock under the ATM Agreement for aggregate gross proceeds of approximately $4,496,875, resulting in net proceeds of approximately $4,357,740 after deducting commissions and offering expenses.
Previous wording
During the six months ended June 30, 2026, we received $54,107 of proceeds net of issuance cost that were previously held in escrow. The funds in escrow pertain to the Regulation A offering from 2025.
Current wording
During the nine months ended September 30, 2026, we received $54,107 of proceeds net of issuance costs that had previously been held in escrow. The funds in escrow pertained to the 2025 Regulation A offering.
Previous wording
During the six months ended June 30, 2026, we completed two registered direct offerings with one institutional accredited investor and received gross proceeds of $722,870, resulting in net proceeds of approximately $599,226 after deducting issuance costs.
Current wording
During the nine months ended September 30, 2026, we completed two registered direct offerings with one institutional accredited investor and received gross proceeds of $722,870, resulting in net proceeds of approximately $599,226 after deducting issuance costs.
Previous wording
Cash and cash equivalents decreased from $5,945,894 at December 31, 2025, to $1,160,158 at June 30, 2026 – a decrease of $4,785,736 or 80.5%. The decrease was primarily due to the use of cash to acquire working capital based on supporting the production of existing product offerings as well as the expected growth of additional product offerings launched in 2026. The Company procured approximately $8.1 million of raw materials to support production of our expanded product lineup, including the SOLIS, COR and NEXUS product lines. Some of our new product offerings utilize raw materials common to existing product offerings. Approximately $1.0 million of these raw materials purchases remained in accounts payable as of June 30, 2026.
Current wording
Cash and cash equivalents decreased from $5,945,894 at December 31, 2025, to $2,528,222 at September 30, 2026 – a decrease of $3,417,672 or 57.5%. The decrease was primarily due to the use of cash to fund working capital to support the production of existing product offerings and the expected growth of additional product offerings launched in 2026. The Company procured approximately $9.5 million of raw materials to support production of our expanded product lineup, including the SOLIS, COR and NEXUS product lines. Some of our new product offerings utilize raw materials common to existing product offerings. Approximately $0.6 million of these raw materials purchases remained in accounts payable as of September 30, 2026.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2026 was $11,677,145, compared to $6,935,033 in 2025, primarily driven by the launch of additional product offerings during the six months ended June 30, 2026. Net cash used in operating activities exceeded the Company’s net loss by approximately $1.8 million. The principal component of the change is attributable to the $2.5 million increase in inventory, reflecting the procurement of raw materials and production of finished goods to support the launch of new product offerings during the six months ended June 30, 2026 including SOLIS, COR, and NEXUS.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2026 was $12,043,036, compared to $11,190,182 in 2025, primarily driven by the launch of additional product offerings during the nine months ended September 30, 2026. Net cash used in operating activities did not exceed the Company’s net loss by approximately $1.3 million. The principal component of the change is attributable non-cash expenses, mainly equity compensation of $2,241,010 and depreciation and amortization expense of $1,266,787, which reduce reported earnings but did not require the use of cash during the period.
Previous wording
Accounts receivable increased at June 30, 2026 by $503,358 and increased by $253,372 in the prior period. The increase in accounts receivable is based on the volume of shipment with various business-to-business customers as well as the concentration of customers in certain sales channels.
Current wording
Accounts receivable increased at September 30, 2026 by $648,993 and increased by $472,485 in the prior year period. The increase in accounts receivable is based on the volume of shipment with various business-to-business customers as well as the concentration of customers in certain sales channels.
Previous wording
Inventory increased at June 30, 2026 by $2,535,745, and increased at June 30, 2025 by $691,459, as a result of the procurement of raw materials and production of finished goods to support the commercial launches of our COR, SOLIS and NEXUS product lines.
Current wording
Inventory increased at September 30, 2026 by $52,868, and increased at September 30, 2025 by $1,645,437, as a result of the procurement of raw materials and production of finished goods to support the commercial launches of our COR, SOLIS and NEXUS product lines.
Previous wording
Prepaid expenses and other decreased by $186,836 at June 30, 2026, and increased by $470,641 at June 30, 2025 due to timing of advanced payments for professional services to support operations.
Current wording
Prepaid expenses and other decreased by $68,344 at September 30, 2026, and increased by $865,634 at September 30, 2025 due to timing of advanced payments for professional services to support operations.
Previous wording
Accounts payable and accrued liabilities decreased at June 30, 2026 by $1,248,251 and increased by $469,362 at June 30, 2025 due to the payment for raw materials and finished goods procured and produced in preparation for and support of the commercial launches of our COR, SOLIS and NEXUS product lines.
Current wording
Accounts payable and accrued liabilities decreased at September 30, 2026 by $1,467,392 and increased by $1,477,537 at September 30, 2025 due to the timing of payment for raw materials and finished goods procured and produced in preparation for and support of the commercial launches of our COR, SOLIS and NEXUS product lines.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2026 was $197,654 compared to $582,797 for the six months ended June 30, 2025. The decrease in investing activities was primarily attributable to our purchase of cryptocurrency and website enhancements in 2025, both of which are classified as intangible assets.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2026 was $274,877 compared to $1,067,257 for the nine months ended September 30, 2025. The decrease in investing activities was primarily attributable to the timing of machinery and equipment to support our production growth.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2026 was $7,089,063 compared to net cash provided by financing activities of $4,027,871 for the six months ended June 30, 2025. Net cash provided by financing activities were principally due to our use of the ATM, whereby we received net proceeds of $3,869,882. We also received proceeds from our line of credit through net borrowings of $2,729,739 for the six months ended June 30, 2026. In June 2026, we completed two registered direct offerings with one institutional accredited investor for gross proceeds of $722,870, resulting in net proceeds of approximately $599,226 after deducting issuance costs.
Current wording
Net cash provided by financing activities for the nine months ended September 30, 2026 was $8,900,241 compared to net cash provided by financing activities of $11,136,030 for the nine months ended September 30, 2025. Net cash provided by financing activities was principally attributable to our use of the ATM, whereby we received net proceeds of $4,357,740. We also received proceeds from our line of credit through net borrowings of $1,852,369 for the nine months ended September 30, 2026. In June 2026, we completed two registered direct offerings with one institutional accredited investor for gross proceeds of $722,870, resulting in net proceeds of approximately $599,226 after deducting issuance costs. In August 2026, we completed a warrant inducement and received gross proceeds of $2,304,253.
Previous wording
As of June 30, 2026, the Company amended an agreement that included an outstanding contractual obligation of approximately $2.1 million related to the acquisition of manufacturing equipment from Prima Power, representing approximately 70% of the total equipment cost of approximately $3.0 million. The amendment provides for Prima Power to retain the initial 10% equipment deposit of $300,000 to be applied to a future equipment purchase. The equipment deposit of $300,000 is included in other noncurrent assets as of June 30, 2026. Other than the indebtedness, lesses, purchases, employment and other obligations disclosed in this Form 10-Q or incurred in the ordinary course of business, the Company had no material contractual obligations as of June 30, 2026.
Current wording
On June 30, 2026, the Company amended an agreement pursuant to which it was released from an outstanding contractual obligation of approximately $2.7 million related to the acquisition of manufacturing equipment from Prima Power, representing approximately 90% of the total equipment cost of approximately $3.0 million. The amendment provides for Prima Power to retain the initial 10% equipment deposit of $300,000 to be applied to a future equipment purchase. The equipment deposit of $300,000 is included in other noncurrent assets as of September 30, 2026. Other than the indebtedness, leases, purchases, employment and other obligations disclosed in this Form 10-Q or incurred in the ordinary course of business, the Company had no material contractual obligations as of September 30, 2026.