Worksport Ltd
For the period ended Jun 30, 2025. Filed Aug 13, 2025.
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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.
Jun 30, 2025 · Filed Aug 13, 2025
WKSP$0.27+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001641172-25-010837
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0001641172-25-023334
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 76 previous paragraphs and 93 current paragraphs.
57 unchanged; 18 reworded; 12 added; 1 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 6 previous and 3 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 (12)
Current report
Net sales increased during the three months ended June 30, 2025 compared to the same period the prior year due to the successful launch of the AL4 product line alongside further branding and marketing efforts for all product lines, resulting in higher direct to consumer sales. Implementation of our distributor, wholesaler, and jobber sales strategy via the addition of multiple distributor partners with a network of over 550 locations across the United States has driven higher net sales from our business to business sales channels.
Current report
Net loss for the three months ended June 30, 2025 was $3,734,484, compared to a net loss of $4,013,399 for the three months ended June 30, 2024 – a decrease of 6.9%. The decrease in the net loss can be attributed to higher net sales and gross profit and certain reduced operating expenses.
Current report
Six Months Ended June 30, 2025 compared to the Six Months Ended June 30, 2024
Current report
Net sales
Current report
Cost of Sales
Current report
Operating Expenses
Current report
Operating expenses increased for the six months ended June 30, 2025 by $1,467,970, from $7,884,299 for the six months ended June 30, 2024 to $9,352,269, mainly due to the following factors:
Current report
Other Income and Expenses
Current report
Net Loss
Current report
Regulation A Offering
Current report
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, and the warrants have the potential to provide an additional $13,950,000 of additional proceeds if all are converted. Through June 30, 2025, the Company completed one tranche and received gross proceeds of $160,339. Subsequent to June 30, the Company completed 12 additional tranches and received gross proceeds of $4,404,146.
Current report
Cash decreased from $4,883,099 at December 31, 2024, to $1,393,140 at June 30, 2025 – a decrease of $3,489,959 or 72%. The decrease was primarily due to repayments on debt obligations.
Removed paragraphs (1)
Previous report
Cash increased from $4,883,099 at December 31, 2024, to $5,080,372 at March 31, 2025 – an increase of $197,273 or 4%. The increase was primarily due to capital raising through financing activities.
Reworded paragraphs (18)
Previous wording
Worksport’s hard tonneau covers—led by the AL3 and AL4 models—are manufactured in the U.S. using predominantly American aluminum, providing strong resilience against tariffs. Soft covers, currently sourced from China, account for a minor portion of revenue, with domestic sourcing options actively under review. The upcoming SOLIS solar cover will be built in the U.S., with solar panels expected to be sourced from India, a country maintaining relatively stable trade relations with the U.S. For the COR portable power system, Worksport is working with its international battery supplier and U.S.-based partners to mitigate tariff exposure and evaluate onshore manufacturing opportunities.
Current wording
Worksport’s hard tonneau covers—led by the AL3 and AL4 models—are manufactured in the U.S. using predominantly American aluminum, providing strong resilience against tariffs. Soft covers, currently sourced from China, account for a minor portion of revenue, with domestic sourcing options actively under review. The upcoming SOLIS solar cover will be built in the U.S., with solar panels expected to be sourced from India, a country maintaining relatively stable trade relations with the U.S. For the COR portable power system, Worksport is working with its international battery supplier and U.S.-based partners to mitigate tariff exposure and evaluate onshore manufacturing opportunities. We continue to monitor international trade developments closely, including potential changes in tariff rates and the possibility of new exemptions or other regulatory actions, to analyze impacts to our operations. The extent and duration of tariffs remain uncertain and will depend on a variety of factors outside of our control. We remain committed to optimizing our operations, including managing our supply chain to minimize the impact of tariffs on our results of operations.
Previous wording
For the three months ended March 31, 2025, net sales were $2,240,005, as compared to $512,637 for the three months ended March 31, 2024. Year-over-year net sales increased by approximately 337%. For the three months ended March 31, 2025, net sales generated in U.S. was $2,227,549, as compared to $474,654 for the same period in 2024, an increase of 369%. For the three months ended March 31, 2025, revenue generated in Canada was $12,456, compared to $20,007 for the same period in 2024, a decrease of 38%.
Current wording
For the three months ended June 30, 2025, net sales were $4,104,958, as compared to $1,921,539 for the three months ended June 30, 2024. Year-over-year net sales increased by approximately 114%. For the three months ended June 30, 2025, net sales generated in U.S. was $4,070,406, as compared to $1,910,838 for the same period in 2024, an increase of 113%. For the three months ended June 30, 2025, revenue generated in Canada was $34,552, compared to $28,677 for the same period in 2024, an increase of 20%.
Previous wording
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.
Current wording
We currently work closely with a large Canadian and four large U.S. distributors as well as online retailers to grow our customer base. We are progressing well in conversations with two other major distributors with strong market presences, which will allow us to promote to dealers and sell to jobbers in strategic regions. Lastly, we partnered with a network of nationwide U.S. dealers capable of bringing our product to all U.S. continental states.
Previous wording
Cost of sales increased by 288%, from $475,181 for the three months ended March 31, 2024, to $1,843,784 for the three months ended March 31, 2025. Our cost of sales, as a percentage of sales, was approximately 82% and 93% for the three months ended March 31, 2025 and 2024, respectively. The decrease in the cost of sales as a percentage of sales was primarily driven by improved production efficiencies resulting from the continued maturation of our manufacturing processes. As production volumes increased, we achieved greater economies of scale and more efficient overhead absorption, resulting in lower per-unit manufacturing costs. This improvement in operational throughput allowed fixed and semi-variable overhead costs to be allocated across a higher number of units, thereby reducing the cost of sales on a per-unit basis.
Current wording
Cost of sales increased by 86%, from $1,624,910 for the three months ended June 30, 2024, to $3,022,846 for the three months ended June 30, 2025. Our cost of sales, as a percentage of sales, was approximately 73.6% and 84.6% for the three months ended June 30, 2025 and 2024, respectively. The decrease in the cost of sales as a percentage of sales was primarily driven by improved production efficiencies resulting from the continued maturation of our manufacturing processes. As production volumes increased, we achieved greater economies of scale and more efficient overhead absorption, resulting in lower per-unit manufacturing costs. This improvement in operational throughput allowed fixed and semi-variable overhead costs to be allocated across a higher number of units, thereby reducing the cost of sales on a per-unit basis.
Previous wording
Operating expenses increased for the three months ended March 31, 2025 by $975,605, from $3,676,922 for the three months ended March 31, 2024 to $4,652,527, mainly due to the following factors:
Current wording
Operating expenses increased for the three months ended June 30, 2025 by $492,366, from $4,207,377 for the three months ended June 30, 2024 to $4,699,743, mainly due to the following factors:
Previous wording
Net sales increased during the three months ended March 31, 2025 compared to the same period the prior year due to further branding and marketing efforts resulting in higher direct to consumer sales as well as implementation of our distributor, wholesaler, and jobber sales strategy leading to increases in our business to business sales channels.
Current wording
Net sales increased during the six months ended June 30, 2025 compared to the same period the prior year due to further branding and marketing efforts resulting in higher direct to consumer sales as well as implementation of our distributor, wholesaler, and jobber sales strategy leading to increases in our business to business sales channels. Also driving greater net sales was the release of the flagship AL4 product line.
Previous wording
We reported net other expenses for the three months ended March 31, 2025 of $204,158, compared to $75,191 for three months ended March 31, 2024. The increase in net other expenses was attributed to increased interest expense on our line of credit and a reduction in rental income as a result of the completion of the term of our sublease agreement.
Current wording
We reported net other expenses for the six months ended June 30, 2025 of $321,012, compared to $177,842 for the six months ended June 30, 2024. The increase in net other expenses was attributed to increased interest expense on our line of credit and a reduction in rental income as a result of the completion of the term of our sublease agreement.
Previous wording
Net loss for the three months ended March 31, 2025 was $4,460,464, compared to a net loss of $3,714,657 for the three months ended March 31, 2024 – an increase of 20%. The increase in the net loss can be attributed to the increase in various operating expenses as we focus on expanding our operations, research and development, manufacturing, and supply chain.
Current wording
Net loss for the six months ended June 30, 2025 was $8,194,948, compared to a net loss of $7,728,056 for the six months ended June 30, 2024 – an increase of 6.0%. The increase in the net loss can be attributed to the increase in various operating expenses as we focus on expanding our operations, manufacturing, and supply chain.
Previous wording
As of March 31, 2025 and December 31, 2024, we had $5,080,372 and $4,883,099, respectively in cash and cash equivalents. As of March 31, 2025, we had $2,858,700 of remaining available capacity on our revolving line of credit compared with $811,400 of remaining available capacity as of December 31, 2024. The increase in cash and cash equivalents and increase in the remaining available capacity on our revolving line of credit was primarily a result of our warrant inducement transaction on February 27, 2025. We have historically generated only 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 months ended March 31, 2025, we had net losses of $4,460,464 (three months ended March 31, 2024 - $3,714,657). As of March 31, 2025, the Company had working capital of $7,936,250 (As of December 31, 2024 - $7,304,110) and had an accumulated deficit of $68,937,430 (As of December 31, 2024 - $64,476,966).
Current wording
As of June 30, 2025 and December 31, 2024, we had $1,393,140 and $4,883,099, respectively in cash and cash equivalents. As of June 30, 2025, we had $4,763,700 of remaining available capacity on our revolving line of credit compared with $811,400 of remaining available capacity as of December 31, 2024. The decrease in cash and cash equivalents and increase in the remaining available capacity on our revolving line of credit was primarily a result of the use of cash flows from operations to reduce our indebtedness. We have historically generated only 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, 2025, we had net losses of $3,734,484 and $8,194,948, respectively (three months ended June 30, 2024 - $4,013,399; six months ended June 30, 2024 - $7,728,056). As of June 30, 2025, the Company had working capital of $4,758,042 (As of December 31, 2024 - $7,304,110) and had an accumulated deficit of $72,671,914 (as of December 31, 2024 - $64,476,966).
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 three months ended March 31, 2025, the Company received net proceeds of $6,570,415 from offerings. 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 six months ended June 30, 2025, the Company received net proceeds of $6,384,840 from offerings. 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.
Previous wording
We have raised significant funds during the three months ended March 31, 2025 per the following public and private offerings:
Current wording
We have raised significant funds during the six months ended June 30, 2025 per the following public and private offerings:
Previous wording
Pursuant to the At The Market Offering Agreement dated as of September 30, 2022 (“ATM Agreement”), with H.C. Wainwright & Co., LLC, as the sales agent, during the three month period ended March 31, 2025, we sold and issued a total of 22,725 shares of common stock in consideration for net proceeds of $185,874 under the ATM Agreement.
Current wording
Pursuant to the At The Market Offering Agreement dated as of September 30, 2022 (“ATM Agreement”), with H.C. Wainwright & Co., LLC, as the sales agent, during the six month period ended June 30, 2025, we sold and issued a total of 22,725 shares of common stock in consideration for net proceeds of $185,874 under the ATM Agreement.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2025 was $3,839,918, compared to $2,794,604 in 2024, primarily driven by the shift to production and distribution of hard tonneau covers.
Current wording
Net cash used in operating activities for the six months ended June 30, 2025 was $6,935,033, compared to $6,421,292 in 2024, primarily driven by the shift to production and distribution of hard tonneau covers.
Previous wording
Accounts receivable increased at March 31, 2025 by $25,362 and decreased by $306,778 in the prior period. The increase in accounts receivable was due to further development of our Distributor and Jobber customer network and relationships.
Current wording
Accounts receivable increased at June 30, 2025 by $253,372 and increased by $160,264 in the prior period. The increase in accounts receivable was due to further development of our Distributor and Jobber customer network and relationships.
Previous wording
Inventory increased at March 31, 2025 by $583,116, and increased at March 31, 2024 by $2,908,354, as a result of stockpiling of finished goods and raw materials in preparation for the launch of our AL4 product line. Prepaid expenses and deposits increased by $192,071 at March 31, 2025, and decreased by $1,155,090 at March 31, 2024 due to timing of deposits from B2C customers prior to fulfillment of their orders at the end of the accounting period.
Current wording
Inventory increased at June 30, 2025 by $691,459, and decreased at June 30, 2024 by $2,755,252, as a result of the maturation of the production process and shift in 2024 to hard tonneau cover production. Prepaid expenses and deposits increased by $470,641 at June 30, 2025, and decreased by $1,345,434 at June 30, 2024 due to timing of deposits from B2C customers prior to fulfillment of their orders at the end of the accounting period.
Previous wording
Accounts payable and accrued liabilities increased at March 31, 2025 by $390,691 compared to an increase of $729,303 at March 31, 2024.
Current wording
Accounts payable and accrued liabilities increased at June 30, 2025 by $469,362 compared to an increase of $115,586 at June 30, 2024. The increase is primarily due to an increase in accrued labor costs in 2025 compared with the prior period.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2025 was $458,342 compared to $212,969 for the three months ended March 31, 2024. The increase in investing activities was primarily attributable to our purchase of cryptocurrency and website enhancements, both of which are classified as intangible assets. We also acquired additional tooling components for our COR production process.
Current wording
Net cash used in investing activities for the six months ended June 30, 2025 was $582,797 compared to $335,787 for the six months ended June 30, 2024. The increase in investing activities was primarily attributable to our purchase of cryptocurrency and website enhancements, both of which are classified as intangible assets. We also acquired additional tooling components for our COR production process.
Previous wording
Net cash provided by financing activities for the three months ended March 31, 2025 was $4,495,533 compared to net cash used in financing activities of $3,178,775 for the three months ended March 31, 2024.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2025 was $4,027,871 compared to net cash provided by financing activities of $6,817,390 for the six months ended June 30, 2024.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
We reported net other expenses for the three months ended June 30, 2025 of $116,853, compared to $102,651 for three months ended June 30, 2024. The increase in net other expenses was attributed to a reduction in rental income as a result of the completion of the term of our sublease agreement.
Current report — wording carried from elsewhere
For the six months ended June 30, 2025, net sales were $6,344,963, as compared to $2,434,176 for the six months ended June 30, 2024. Year-over-year net sales increased by approximately 161%. For the six months ended June 30, 2025, net sales generated in U.S. was $6,297,955, as compared to $2,385,492 for the same period in 2024, an increase of 164%. For the six months ended June 30, 2025, revenue generated in Canada was $47,008, compared to $48,684 for the same period in 2024, a decrease of 3%.
Current report — wording carried from elsewhere
We distribute our hard tonneau covers and soft tonneau covers in the U.S. and Canada through an expanding network of wholesalers, private labels, distributors, and other online retailers, including eBay, Amazon, Walmart, and our own e-Commerce platform hosted on Shopify. Distribution via each aforementioned channel is expected to increase during 2025. We have pursued and will continue to pursue relationships with Original Equipment Manufacturers with the intention of distributing through them as well.
Current report — wording carried from elsewhere
We currently work closely with a large Canadian and four large U.S. distributors as well as online retailers to grow our customer base. We are progressing well in conversations with two other major distributors with strong market presences, which will allow us to promote to dealers and sell to jobbers in strategic regions. Lastly, we partnered with a network of nationwide U.S. dealers capable of bringing our product to all U.S. continental states.
Current report — wording carried from elsewhere
Cost of sales increased by approximately 132%, from $2,100,091 for the six months ended June 30, 2024, to $4,866,630 for the six months ended June 30, 2025. Our cost of sales, as a percentage of sales, was approximately 77% and 86% for the six months ended June 30, 2025 and 2024, respectively. The decrease in the cost of sales as a percentage of sales was primarily driven by improved production efficiencies resulting from the continued maturation of our manufacturing processes. As production volumes increased, we achieved greater economies of scale and more efficient overhead absorption, resulting in lower per-unit manufacturing costs. This improvement in operational throughput allowed fixed and semi-variable overhead costs to be allocated across a higher number of units, thereby reducing the cost of sales on a per-unit basis.
Current report — wording carried from elsewhere
We provide our distributors and online retailers 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 United States 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.