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What changed in Worksport Ltd's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Worksport Ltd's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+299 added−310 removedSource: 10-K (2026-03-26) vs 10-K (2025-03-27)

Top changes in Worksport Ltd's 2025 10-K

299 paragraphs added · 310 removed · 147 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

32 edited+57 added−93 removed22 unchanged
Biggest changePortable Power Station Market Research Report Information by Operation Type, By Technology Type, By Capacity Type, By Application And By Region - Forecast Till 2032 Source: https://www.marketresearchfuture.com/reports/portable-power-station-market-10079Global Portable Power Station Market Research Report. 2023. 12 Distribution We distribute our tonneau covers in Canada and the U.S. through an expanding network of wholesalers, private labels , distributors, and online retail channels, including eBay, Amazon, Walmart , Meta, and our own e-commerce platform hosted on Shopify.
Biggest changeRetrieved from https://www.marketresearchfuture.com/reports/portable-power-station-market-10079 Distribution We distribute our tonneau covers in U.S. and Canada through an expanding network of wholesalers, private labels, 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. We also pursue relationships with original equipment manufacturers and fleet customers where appropriate.
North America Electric Truck Market Size & Share Analysis – Growth Trends & Forecasts up to 2029 . 2024. Retrieved from https://www.mordorintelligence.com/industry-reports/north-america-electric-truck-market 6. SEMA. SEMA Market Report . 2025. Retrieved from www.sema.org 7. Grand View Research. U.S. Truck Bed Accessories Market Size, Share & Trends Analysis Report By Product Type, By Sales Channels, And Segment Forecasts, 2025 – 2030. 2024.
North America Electric Truck Market Size & Share Analysis – Growth Trends & Forecasts up to 2029 . 2026. Retrieved from https://www.mordorintelligence.com/industry-reports/north-america-electric-truck-market 6. SEMA. SEMA Market Report . 2025. Retrieved from www.sema.org 7. Grand View Research. U.S. Truck Bed Accessories Market Size, Share & Trends Analysis Report By Product Type, By Sales Channels, And Segment Forecasts, 2025 – 2030. 2024.
Worksport is able to monetize and protect its products through a large and growing intellectual property (“IP”) portfolio with patents and trademarks relating to, among other things, tonneau covers, solar integrated tonneau covers, portable power stations, NP (non-parasitic) hydrogen-based green energy systems, residential heating and cooling systems (heat pumps), and electric vehicle-charging stations.
Worksport is able to monetize and protect its products through a large and growing intellectual property (“IP”) portfolio with patents, designs, and trademarks relating to, among other things, tonneau covers and components, solar integrated tonneau covers, portable power stations, NP (non-parasitic) hydrogen-based green energy systems, residential heating and cooling systems (heat pumps), and electric vehicle-charging stations.
Future Trends Report . 2024. Retrieved from www.sema.org 2. Statista. Best-selling pickup trucks in the United States in 2024 . 2025. Retrieved from https://www.statista.com/statistics/204473/best-selling-trucks-in-the-united-states-from-january-to-october-2011/ 3. SEMA. Pickup Accessorization Report . 2022. Retrieved from www.sema.org 4. TechNavio. Pickup Truck Market in the US 2025-2029 . 2025. Retrieved from https://www.researchandmarkets.com/report/united-states-pickup-truck-market?utm_source=GNE&utm_medium=PressRelease&utm_code=3xc3fr&utm_campaign=2003670+-+US+Pickup+Truck+Analysis+Report+2024%3a+Market+to+Grow+by+%2449.4+Billion+During+2023-2028%2c+Driven+by+Increasing+Product+Portfolio+and+Development+of+Electric+Pickup+Trucks&utm_exec=chdomspi 5. Mordor Intelligence.
Future Trends Report . 2024. Retrieved from www.sema.org 2. Statista. Best-selling pickup trucks in the United States in 2025 . 2026. Retrieved from https://www.statista.com/statistics/204473/best-selling-trucks-in-the-united-states-from-january-to-october-2011/ 3. SEMA. Pickup Accessorization Report . 2022. Retrieved from www.sema.org 4. TechNavio. Pickup Truck Market in the US 2026-2030 . 2026. Retrieved from https://www.researchandmarkets.com/report/united-states-pickup-truck-market?utm_source=GNE&utm_medium=PressRelease&utm_code=3xc3fr&utm_campaign=2003670+-+US+Pickup+Truck+Analysis+Report+2024%3a+Market+to+Grow+by+%2449.4+Billion+During+2023-2028%2c+Driven+by+Increasing+Product+Portfolio+and+Development+of+Electric+Pickup+Trucks&utm_exec=chdomspi 5. Mordor Intelligence.
Retrieved from https://www.grandviewresearch.com/industry-analysis/us-truck-bed-accessories-market-report 11 Worksport looks to maximize market share by manufacturing industry-leading products at competitive margins as well as by exploring horizontal and vertical integration opportunities. Portable Power Station Market Compared to the Tonneau Cover Market, the Portable Power Station Market is much younger and globalized.
Retrieved from https://www.grandviewresearch.com/industry-analysis/us-truck-bed-accessories-market-report 8 Worksport looks to maximize market share by manufacturing industry-leading products at competitive margins as well as by exploring horizontal and vertical integration opportunities. Portable Power Station Market Compared to the Tonneau Cover Market, the Portable Power Station Market is much younger and globalized.
(NASDAQ: KULR), focused on advancing battery technology and strengthening domestic manufacturing, including, without limitation, joint battery pack development, thermal runaway protection and AI-integrated battery management system software design. ● On February 11, 2025, Worksport announced two major breakthroughs cold climate heat pump technology developed by its subsidiary, Terravis Energy.
(NASDAQ: KULR), focused on advancing battery technology and strengthening domestic manufacturing, including, without limitation, joint battery pack development, thermal runaway protection and AI-integrated battery management system software design. ● On February 11, 2025, we announced two major breakthroughs in cold climate heat pump technology developed by its subsidiary, Terravis Energy.
The global Portable Power Station Market is large and growing with a compound annual growth rate of 5.39% between 2024 and 2032. 1 The segments within the North American market that have the largest market share are power stations utilizing lithium-ion batteries and those used for off-grid power applications, 1 which match the COR system’s battery type as well as intended usage.
The global Portable Power Station Market is large and growing with a compound annual growth rate of 5.3% between 2025 and 2035. 1 The segments within the North American market that have the largest market share are power stations utilizing lithium-ion batteries and those used for off-grid power applications, 1 which match the COR system’s battery type as well as intended usage.
As of Q3 2024, there were roughly 61 million pickup trucks in operation within the U.S. 1 We offer tonneau covers for each of the 5 most popular pickup truck makes/models sold in 2024, 2 as well as the top 10 most accessorized pickup truck makes/models projected in 2022-2029. 3 Within the United States, the pickup truck market is expected to grow at a compound annual growth rate of 4.6% between 2023 and 2028. 4 Electric pickup trucks are projected to gain a larger portion of the U.S. pickup truck market share each year through 2035; 1 in fact, the electric pickup truck market is expected to grow at a compound annual growth rate of 31.15% between 2024 and 2029 within North America. 5 However, a large headwind acting against this trend is that pickup trucks tend to be more popular in areas with less-developed charging infrastructure 3 – a headwind that the SOLIS cover directly addresses and positions us favorably for possible partnerships and deals with electric pickup truck manufacturers.
As of the third quarter of 2024, there were roughly 61 million pickup trucks in operation within the U.S. 1 We offer tonneau covers for each of the 5 most popular pickup truck makes/models sold in 2025, 2 as well as the top 10 most accessorized pickup truck makes/models projected in 2022-2029. 3 Within the U.S., the pickup truck market is expected to grow at a compound annual growth rate of 5.3% between 2025 and 2030. 4 Electric pickup trucks are projected to gain a larger portion of the U.S. pickup truck market share each year through 2035; 1 in fact, the electric pickup truck market is expected to grow at a compound annual growth rate of 29.86% between 2025 and 2029 within North America. 5 However, a large headwind acting against this trend is that pickup trucks tend to be more popular in areas with less-developed charging infrastructure 3 – a headwind that the SOLIS cover directly addresses and positions us favorably for possible partnerships and deals with electric pickup truck manufacturers.
This includes patents, trademarks, copyrights and trade secrets. Although we believe the ownership of such intellectual property rights is an important factor in our business and that our success does depend in part on such ownership, we rely primarily on the innovative skills, technical competence and marketing abilities of our personnel.
Although we believe the ownership of such intellectual property rights is an important factor in our business and that our success does depend in part on such ownership, we rely primarily on the innovative skills, technical competence and marketing abilities of our personnel.
Master warehouse distributors and big box stores stock and distribute products to their customers, which are usually local dealers and wholesalers. Dealers and wholesalers are local stores which sell products to some businesses and retail consumers in their area and online. Dealers purchase most of their products from their local distributor who delivers to them regularly.
Dealers and wholesalers are local stores which sell products to some businesses and retail consumers in their area and online. Dealers purchase most of their products from their local distributor who delivers to them regularly. Retail end consumers are the end users of the products.
Health and Safety We are committed to protecting our team members everywhere we operate and, as such, supporting employees with general safety training. We have also taken additional health and safety measures during and after the COVID-19 pandemic. Available Information Our internet address is www.worksport.com.
Health and Safety We are committed to protecting our team members everywhere we operate and, as such, supporting employees with general safety training. We have also taken additional health and safety measures during and after the COVID-19 pandemic. Available Information We file our annual, quarterly and current reports, proxy statements and other information with the SEC.
Additional information describing the comparative segment revenues, operating profits and related financial information for 2024 and 2023 are provided in Note 18 – Segment Reporting, of Part III Item 8, Financial Statements and Supplementary Data, of this report. Hard Tonneau Covers Our hard line of tonneau covers includes tri- and quad-fold, aluminum covers.
Additional information describing the comparative segment revenues, operating profits and related financial information for 2025 and 2024 are provided in Note 16 – Segment Reporting, of Part III Item 8, Financial Statements and Supplementary Data, of this Report.
Our portfolio further includes five (5) issued design patents in the U.S., eighteen (18) design patents and registrations outside the U.S., and forty-two (42) pending design applications in various jurisdictions worldwide. We are also in the process of preparing and filing several other utility and design patent applications across relevant countries and jurisdictions.
Our portfolio further includes approximately eleven (11) issued design patents in the U.S., approximately thirty-nine (39) design patents and registrations outside the U.S., and approximately twenty-six (26) pending design applications in various jurisdictions worldwide. We are also in the process of preparing and filing several other utility and design patent applications across various countries and jurisdictions.
We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and, if applicable, amendments to those reports, available on the investor relations portion of our website. The reports are free of charge and are available as soon as reasonably possible after they are filed with the SEC.
We also make available, free of charge, on the Investor Relations section of its website, our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after such reports are filed with, or furnished to, the SEC. Our website address is www.worksport.com .
These breakthroughs eliminate the need of defrost cycles, a common heat pump drawback, and allow the heat pump (the AetherLux heat pump system) to operate in temperatures as low as -57°F, which is lower than the operating capabilities of commercially available heat pumps. ● On January 28, 2025, we executed an agreement to appoint Coinbase as the official custodian for our cryptocurrency holdings. ● On January 22, 2025, our subsidiary Terravis Energy announced two major technological advancements in heat pump technology, with commercial product launches anticipated in 2025. ● On December 6, 2024, we announced a collaboration with Fox Business Network, which provided a live showcase of our upcoming product innovations.
These breakthroughs eliminate the need of defrost cycles, a common heat pump drawback, and allow the heat pump (the AetherLux heat pump system) to operate in temperatures as low as -57°F, which is lower than the operating capabilities of commercially available heat pumps. ● On January 28, 2025, we executed an agreement to appoint Coinbase as the official custodian for our cryptocurrency holdings. 5 Segments and Products We conduct our business in two reportable business segments, which are the same as our operating segments: Soft Tonneau Covers and Hard Tonneau Covers.
Patents As of December 31, 2024, our patent portfolio includes eleven (11) issued utility patents in the U.S., seven (7) issued utility patents outside of the U.S., and thirty-seven (37) pending utility patent applications in various jurisdictions worldwide.
Patents As of December 31, 2025, our patent portfolio includes approximately fourteen (14) issued utility patents in the U.S., approximately ten (10) issued utility patents outside of the U.S., and approximately fifty-six (56) pending utility patent applications in various jurisdictions worldwide.
The SEC maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding SEC registrants, including Worksport. 15
The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
Worksport’s subsidiary, Terravis Energy, is poised to revolutionize the local and global markets for efficient home and commercial heat pumps through its groundbreaking Aetherlux Heat Pump.
Worksport’s subsidiary, Terravis Energy, is poised to revolutionize the local and global markets for efficient home and commercial heat pumps through its groundbreaking Aetherlux Heat Pump. Corporate History The Company was incorporated in the State of Nevada on April 2, 2003 under the name Franchise Holdings International, Inc.
We believe that being independent, innovative, operationally lean, and competitively priced will enable us to acquire a larger portion of the existing market share. To execute on this, we have a small and effective sales team to forge strong business-to-business relationships as well as a small and effective customer support team to service both business-to-business and direct-to-consumer sales.
To execute on this, we have a small and effective sales team to forge strong business-to-business relationships as well as a small and effective customer support team to service both business-to-business and direct-to-consumer sales.
Programs and Incentives We have applied for and been granted tax, mortgage, wage, and energy cost relief in New York in addition to wage cost and R&D cost relief in Ontario. These programs are provided by several agencies including the Erie County Industrial Development Agency, Empire State Development, NY Power Authority, and The Canada Revenue Agency.
These programs are provided by several agencies including the Erie County Industrial Development Agency, Empire State Development, NY Power Authority, and the Canada Revenue Agency.
Governmental Programs, Incentives and Regulations Globally, both the operation of our business and the ownership of our products by our customers are impacted by various government programs, incentives, and other arrangements. Our business and products are also subject to numerous governmental regulations that vary among jurisdictions.
TerraVis’s activities are currently focused on research, development, and evaluation, and these technologies have not yet been commercialized. Governmental Programs, Incentives and Regulations Globally, both the operation of our business and the ownership of our products by our customers are impacted by various government programs, incentives, and other arrangements.
Costs of environmental regulatory compliance are not expected to be significant. Human Capital Resources We employ fourteen full-time employees and one part-time employees in Canada and further employ sixty-six full-time employees in the U.S. We intend to hire additional employees as operations grow – particularly within our West Seneca, NY manufacturing facility.
Costs of environmental regulatory compliance are not expected to be significant. Human Capital Resources As of December 31, 2025, we employed one hundred and three (103) full-time employees and five (5) part-time employees in the U.S. and further employed thirteen (13) full-time employees and one (1) part-time employee in Canada.
The information contained on or connected to our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this or any report filed with the SEC.
Information contained on, or accessible through, our website is not incorporated by reference into this Form 10-K. 11
The use, storage, and disposal of our battery packs are regulated under existing laws and are the subject of ongoing regulatory changes that may add additional requirements in the future. 14 Environmental Matters We are committed to high environmental standards and carry out our activities and operations in compliance with all relevant and applicable environmental regulations and best industry practices.
We also operate in jurisdictions subject to various governmental programs, incentives, and regulatory regimes applicable to manufacturing operations and clean-energy related activities. 10 Environmental Matters We are committed to high environmental standards and carry out our activities and operations in compliance with all relevant and applicable environmental regulations and best industry practices.
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. The specialty equipment aftermarket consists of three major types of customers, which include master warehouse distributors and big box stores, dealers and wholesalers, and retail end consumers.
The specialty equipment aftermarket consists of three major types of customers, which include master warehouse distributors and big box stores, dealers and wholesalers, and retail end consumers. Master warehouse distributors and big box stores stock and distribute products to their customers, which are usually local dealers and wholesalers.
If all of the New Warrants are exercised for cash, we will receive gross proceeds of approximately $6.7 million. We filed a registration statement on Form S-1 (File No. 333-280676) registering the shares of common stock issuable upon the exercise of the New Warrants. The SEC declared the registration statement effective on July 12, 2024.
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. 333-292823), filed with the SEC on January 20, 2026 and declared effective on January 28, 2026.
We additionally work with temporary laborers in our factory – often with the goal of converting them to full time employees – and we sparingly and selectively contract independent contractors and consultants when needed. Compensation and Benefits We believe that compensation should be competitive and equitable and should enable employees to share in our success.
We intend to hire additional employees as operations grow – particularly within our West Seneca, NY manufacturing facility. We utilize temporary labor and, from time to time, engage independent contractors and consultants to support our operations. Compensation and Benefits We believe that compensation should be competitive and equitable and should enable employees to share in our success.
As part of the agreement, we also issued warrants to purchase up to 190,000 shares of common stock at an exercise price of $4.00 per share, exercisable for a period of five years from the date of issuance.
In consideration for such exercise, the Company issued new warrants to purchase up to 1,424,500 shares of its common stock at an exercise price of $6.502 per share, subject to adjustment. The new warrants become exercisable six months from the date of issuance and expire on the fifth anniversary of the date of issuance.
Research and Development We invest in research and development activities on an ongoing basis; we are actively acquiring new engineering and design assets. Our design engineers are based in the United States, and they have developed and are further developing unique tonneau cover designs with enhanced user experience, cost-effective and sustainable materials, and automatable manufacturing potential.
We have a diverse supplier network in countries like the U.S., the People’s Republic of China (“China”), Vietnam, and Canada. We are actively reducing our reliance on countries with potential geopolitical risks. Research and Development We continually invest in research and development, acquiring new assets and developing unique tonneau cover designs and sustainable materials.
As part of the agreement, the investor exercised their Existing Warrants to buy 700,000 shares of our common stock at a reduced price of $5.198 per share.
Pursuant to the agreement, the holder exercised warrants to purchase 1,295,000 shares of the Company’s common stock at a reduced exercise price of $5.198 per share, resulting in gross proceeds of approximately $6.7 million, before placement agent fees and other offering expenses.
Each soft cover is fitted with a powder-coated, lightweight aluminum frame and rear cam latches as well as ultra-violet (UV) protected, vinyl tri-layer material that seals around the truck bed with a rubber gasket designed to protect cargo from moisture and debris.
Soft covers include powder-coated lightweight aluminum frames, rear cam latches, quick latch functionality, and UV-protected vinyl tri-layer materials intended to seal around the truck bed and protect cargo from moisture and debris. Tri-fold soft covers are generally positioned as lower-cost options, while quad-fold covers provide additional functionality by allowing fuller truck bed access by folding upward toward the rear window.
This second outsourced manufacturing facility has an output capacity two times greater than that of the manufacturing facility in Meizhou, China, and we believe we can scale production at this newer facility without sacrificing quality or craftsmanship. 10 Intellectual Property We currently hold a broad collection of intellectual property rights relating to certain aspects of our parts and accessories and services.
We currently hold a broad collection of intellectual property rights relating to certain aspects of our parts and accessories and services. This includes patents, designs, trademarks, copyrights and trade secrets.
Removed
Corporate History The Company’s corporate history and business overview are described in detail in our most recent registration statement on Form S-1, filed with the SEC on July 3, 2024, which is incorporated herein by reference. Since that filing, the Company has undertaken certain material developments, as described below.
Added
In December 2014, the Company acquired Worksport Ltd., an Ontario corporation formed in 2011, which became a wholly owned subsidiary. In May 2020, the Company changed its name to Worksport Ltd.
Removed
Recent Offerings February 2025 Inducement Letter; New Warrants On February 27, 2025, we entered into a common stock warrant exercise inducement offer letter (the “2025 Inducement Letter”) with a certain holder (the “Holder”) of existing warrants to purchase shares of our common stock at an exercise price of $5.198 per share, issued on May 29, 2024 (the “May 2024 Existing Warrants”), pursuant to which the Holder agreed to exercise for cash its May 2024 Existing Warrants to purchase an aggregate of 1,295,000 shares of our common stock at $5.198 per share, in consideration for our agreement to issue new warrants (the “2025 Inducement Warrants”), to purchase an aggregate of 1,424,500 shares of our common stock at an exercise price of $6.502 per share, s ubject to adjustment for stock splits, recapitalizations and reorganizations and beneficial ownership limitations as described therein .
Added
On March 18, 2025, the Company effected a 1-for-10 reverse stock split of its issued and outstanding common stock in order to regain compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2). In connection with the reverse stock split, the authorized number of shares of common stock was proportionally reduced from 299,000,000 shares to 29,900,000 shares.
Removed
Each 2025 Inducement Warrant is exercisable six months after issuance, or August 27, 2025, until five and a half-year anniversary from the date of issuance. We received proceeds of $6,731,410 before deducting placement agent fees and other offering expenses payable by the Company upon the exercise of the May 2024 Existing Warrants.
Added
On April 17, 2025, the Company filed an amendment to its amended and restated articles of incorporation, effective May 19, 2025, increasing the total number of authorized shares of capital stock from 30,900,000 to 55,000,000, consisting of 45,000,000 shares of common stock and 10,000,000 shares of preferred stock Recent Offerings At-the-Market (“ATM”) Offering Program During 2025, we raised capital through our at-the-market offering program and other registered offerings of our common stock, generating aggregate gross proceeds of approximately $521,835 and net proceeds of $504,372 after commissions and offering expenses.
Removed
If all of the 2025 Inducement Warrants are exercised for cash, we will receive gross proceeds of approximately $9.3 million. We will file a registration statement on Form S-1 registering the shares of common stock issuable upon the exercise of the May 2024 Existing Warrants .
Added
These financings were undertaken to support our operations, fund growth initiatives and strengthen our balance sheet. In November 2025, we entered into an amendment to our at-the-market offering agreement to permit the sale of up to $4.0 million of our common stock from time to time. See “Item 5.
Removed
The New Warrants can be exercised on a cashless basis if there is not an effective registration statement effective or prospectus available for the shares of common stock underlying the such warrants. 539,500 hares that are issuable from the exercise of the May 2024 Existing Warrants are held in abeyance as of March 27, 2025.
Added
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—At-The-Market Offering” for additional information regarding these transactions. December 2025 Warrant Inducement On December 11, 2025, the Company entered into a warrant exercise inducement agreement with the holder of certain existing warrants originally issued on March 20, 2024 and March 3, 2025.
Removed
ATM Offering On November 5, 2024, we increased our at-the-market offering program, filing a prospectus supplement to register the sale of an additional $4,134,000 in shares of our common stock under the sales agreement with H.C. Wainwright & Co.
Added
Pursuant to the agreement, the holder exercised warrants to purchase 2,194,526 shares of the Company’s common stock at a reduced exercise price of $2.90 per share, resulting in gross proceeds of approximately $6.4 million, before placement agent fees and other offering expenses.
Removed
Offering to Chief Executive Officer On November 19, 2024, our Chief Executive Officer and President, Steven Rossi, entered into a Stock Purchase Agreement, pursuant to which he acquired 3,334 shares of common stock at a purchase price of $7.50 per share, representing a 44% premium above the then-market price.
Added
In consideration for the exercise, the Company issued new warrants to purchase up to 3,840,421 shares of common stock.
Removed
The transaction was executed as a private placement, and the shares were issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D.
Added
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
The proceeds from the sale, totaling approximately $25,000, were designated for working capital and general corporate purposes. 2024 Private Offering On September 19, 2024, we entered into a Securities Purchase Agreement with an investor pursuant to which we issued and sold 95,000 shares of our common stock at a purchase price of $4.00 per share.
Added
Regulation A Offering Between June 2025 and October 2025, the Company conducted a Regulation A offering pursuant to which it sold units consisting of shares of Series C Preferred Stock and accompanying warrants, resulting in aggregate gross proceeds of approximately $10.0 million, before fees and expenses.
Removed
The warrants contain standard adjustment provisions for stock splits, recapitalizations and reorganizations and include beneficial ownership limitations to prevent the purchaser from exceeding certain ownership thresholds.
Added
February 2025 Warrant Inducement On February 27, 2025, the Company entered into a warrant exercise inducement agreement with the holder of certain existing warrants originally issued on May 29, 2024.
Removed
The offering was conducted pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D pursuant to the purchaser’s representation as an accredited investor. 2024 Note On September 4, 2024, we entered into a Credit and Security Agreement with a lender, pursuant to which we issued a $1,487,200 term promissory note (the “2024 Note”).
Added
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-1 (File No. 333-286255), filed with the SEC on March 28, 2025 and declared effective on April 3, 2025. The Company used the net proceeds from the transaction for working capital and general corporate purposes.
Removed
The 2024 Note bears interest at the lesser of (i) the prime rate plus 7.00% per annum and (ii) the maximum rate allowed by law and is secured by a mortgage on the Company’s industrial equipment collateral. The repayment of the 2024 Note is structured in 155 weekly installments.
Added
The Company engaged Maxim Group LLC as its exclusive financial advisor in connection with the transaction. 4 Business Developments The following highlights recent material developments in our business since the beginning of the fiscal year covered by this Form 10-K: ● On December 11, 2025, we held our 2025 Annual Meeting of Shareholders.
Removed
In the event of default, the lender has the right to demand immediate repayment of the outstanding balance, including accrued interest, fees and all other amounts due under the agreement.
Added
At the Annual Meeting, a total of 12,369,649 shares of common stock were represented in person or by proxy, constituting 73.8% of the total outstanding common shares and a quorum under our bylaws. ● On December 11, 2025, we entered into a common stock warrant exercise inducement offer letter with a certain holder of existing warrants to purchase shares of our common stock, par value 0.001 per share, at a weighted average exercise price of $6.82, issued on March 20, 2024 and March 3, 2025, respectively.
Removed
May 2024 Inducement Letter; New Warrants On May 29, 2024, we entered into an Inducement Letter with a certain investor who had purchased warrants on November 2, 2023 (the “Existing Warrants”), exercisable for 700,000 shares of our common stock for $13.40 per share.
Added
The holder agreed to exercise for cash its existing warrants to purchase an aggregate of 2,194,526 shares of common stock at a reduced exercise price of $2.90 per share, in consideration for our agreement to issue new warrants to purchase up to 3,840,421 shares of common stock.
Removed
In consideration for the investor exercising the Existing Warrants, we issued the investor warrants (the “New Warrants”) to purchase 1,295,000 shares of our common stock for $5.198 per share, s ubject to adjustment for stock splits, recapitalizations, and reorganizations and beneficial ownership limitations as described therein (or via a cashless exercise in the event there is not a registration statement effective at the time of exercise).
Added
We received aggregate gross proceeds of approximately $6.4 million before deducting placement agent fees and other offering expenses paid by us. ● On December 1, 2025, we announced the commercial launch of our SOLIS™ truck-mounted folding solar array and COR™ portable battery system, which together form a modular, vehicle-mounted clean-energy solution.
Removed
Each New Warrant is exercisable six months after issuance, or November 29, 2024, until five and a half-year anniversary from the date of issuance. We received net proceeds of $3,363,898, after deducting commissions and expenses, upon the exercise of the Existing Warrants.
Added
The products are available for purchase through our direct-to-consumer platform. ● On November 25, 2025, we announced that our HD3 heavy-duty hard-folding tonneau cover entered commercial sales through our business-to-business dealer network following the commencement of production in mid-October 2025. ● On November 18, 2025, we announced the opening of a newly leased facility in Missouri to support the assembly, testing, and distribution of our SOLIS™ solar-integrated tonneau cover and COR™ energy products. ● On November 10, 2025, we announced final pricing and initial vehicle compatibility for our SOLIS™ solar-integrated tonneau cover in advance of its commercial launch, with initial availability covering a range of popular pickup truck models and bed configurations. ● On September 30, 2025, we announced a 42% increase in national dealer partnerships over the preceding quarter ● On August 7, 2025, we announced that we had doubled our Bitcoin holdings and invested in additional manufacturing machinery to double its production output ● On August 5, 2025, we announced our strongest 4-week production run since beginning domestic production. ● On July 16, 2025, we announced we doubled our R&D footprint by beginning a new lease at a larger R&D facility in Ozark, Missouri for the development of upcoming product lines. ● On July 16, 2025, we announced that the AetherLux Pro heat pump with high-performance Zerofrost technology – a product of its subsidiary, Terravis Energy - had received the attention of multi-billion dollar corporations and U.S. government entities, with site visits and due diligence underway. ● On June 10, 2025, we announced the addition of a second national automotive distributor, expanding our partnered dealer network to over 550 locations across the U.S. —representing a nearly sixfold increase since the beginning of 2025. ● On June 5, 2025, we confirmed a Fall 2025 commercial launch for our much-anticipated modular nano-grid system, known as SOLIS & COR.
Removed
The New Warrants can be exercised on a cashless basis if there is not an effective registration statement effective or prospectus available for the shares of common stock underlying the such warrants. 4 March 2024 Direct Offering and Concurrent Private Offering On March 18, 2024, we entered into a securities purchase agreement (the “2024 Securities Purchase Agreement”) with a certain institutional investor (the “2024 Purchaser”) pursuant to which we sold, in a registered direct offering, an aggregate of (i) 237,224 shares (the “2024 Shares”) of common stock and (ii) 147,790 Pre-Funded Warrants (the “2024 Pre-Funded Warrants”) to purchase up to 147,790 shares of common stock (the “2024 Pre-Funded Warrant Shares”).
Added
This announcement follows the successful completion of key engineering milestones and validation benchmarks across both systems. ● On June 2, 2025, we announced that 80% of the AL4 product line—20 out of 25 planned models—had been successfully rolled out to market. ● On May 28, 2025, we announced that we secured ISO 9001 Certification at our U.S.
Removed
The offering price per 2024 Share was $7.40, and the offering price per 2024 Pre-Funded Warrant was $7.399.
Added
Factory, expected to pave new inroads towards substantial new OEM and global supply chain opportunities.
Removed
The 2024 Shares, the 2024 Pre-Funded Warrants and the 2024 Pre-Funded Warrants Shares were offered pursuant to our Form S-3 Registration Statement (File No. 333-267696) (the “Form S-3”) as supplemented by a prospectus supplement and accompanying base prospectus dated March 18, 2024, filed with the SEC on March 19, 2024 pursuant to Rule 424(b)(5) promulgated under the Securities Act.
Added
This certification cycle officially commenced in April 2025 and remains valid through April 2028, contingent upon continued compliance. ● On April 29, 2025, we announced our strategic partnership with Patriot Automotive Technologies to accelerate nationwide expansion through Patriot’s network of over 200 dealer locations. ● On March 18, 2025, we effectuated a 1-for-10 reverse stock split of its common stock.
Removed
The registered direct offering closed on March 20, 2024. We received net proceeds of approximately $2.59 million from the offering, after deducting the estimated offering expenses payable by us, including the tail fees payable to Maxim Group LLC. We intend to use the net proceeds from the offering for general corporate purposes, including working capital.
Added
Our common stock continues to trade on the Nasdaq under our existing trading symbol, “WKSP”, and a new CUSIP number, 98139Q308, was assigned as a result of the reverse stock split. ● On February 27, 2025, we entered into a warrant inducement agreement (the “Inducement”) with the holder of existing warrants to purchase an aggregate 1,295,000 shares at a revised price of $5.20 in consideration for us to issue new warrants to purchase up to 1,424,500 additional shares of common stock at an exercise price of $6.502 each – resulting in gross proceeds of approximately $6,734,000. ● On February 25, 2025, we announced that our dealer network has expanded by 30% in the first two months of 2025, and, following an ongoing production ramp-up driven by strong early feedback, initial models of its AL4 Premium Tonneau Cover were now officially available for purchase at www.worksport.com. ● On February 13, 2025, we announced our strategic partnership with KULR Technology Group, Inc.
Removed
In a concurrent private placement, we issued the 2024 Purchaser warrants to purchase an aggregate of 770,027 shares of common stock for $7.40 per share. Under the warrants, we are obligated to register the shares underlying the warrants on a registration statement on Form S-3 (or other applicable form).
Added
We have developed and are commercializing a series of soft and hard folding tonneau covers and energy products designed for mobile and off-grid use cases. Soft Tonneau Covers Our soft tonneau cover offerings consist primarily of vinyl-wrapped tri-fold and quad-fold tonneau covers manufactured by third-party suppliers overseas in accordance with our specifications.
Removed
If at the time, there is no effective registration statement available for the shares of common stock underlying the warrants, the warrants may be exercised via a “cashless exercise.” We will not receive any proceeds from any warrants exercised by a “cashless exercise.” March 2024 S-3 Shelf Bringdown On March 20, 2024, we received net proceeds of approximately $2.63 million through a registered direct offering pursuant to which the Company issued 237,224 shares of common stock and 147,790 Pre-Funded Warrants to the same institutional investor as in the Company’s registered direct offering on November 2, 2023.
Added
Certain quad-fold configurations are designed to provide full bed access while limiting obstruction of the rear window in typical configurations. Hard Tonneau Covers Our hard folding tonneau cover offerings include tri-fold and quad-fold aluminum covers manufactured and assembled in the United States. Our hard covers incorporate Quick Latch functionality intended to allow single-sided operation.
Removed
Concurrently with the registered direct offering, we issued the institutional investor 770,027 warrants in a private sale. The warrants are exercisable for 770,027 shares of common stock for $7.40 per share six months after issuance until five and a half years from the issuance date, subject to beneficial ownership limitations as described in the warrants.
Added
Hard cover panels are formed aluminum and are coated using proprietary finishing processes intended to enhance durability. These covers are designed to provide a low-profile appearance and are engineered to align within the truck bed for fit and ease of installation.
Removed
We. registered the 770,027 shares of common stock underlying the warrants on a Form S-1 (333-278461) which was declared effective by the SEC on April 8, 2024.
Added
Certain hard cover offerings may be purchased with optional rail system configurations intended to expand utility and improve weather resistance and sealing. We continue to expand our hard cover lineup to address consumer, commercial, and fleet requirements, and we expect to continue expanding applications and fitments across major truck makes, models, and bed configurations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese situations remain uncertain, and while it is difficult to predict the impact of any of the foregoing, these conflicts and actions taken in response to these conflicts could increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations. 24 Risks Associated with Outsourced Manufacturing and Foreign Sourcing Evolving U.S. trade regulations and policies with China may in the future have a material and adverse effect on our business, financial condition and results of operations.
Biggest changeIn the event of a failure of any financial institutions where we maintain our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which could have a material adverse effect upon our liquidity, financial condition and our results of operations. 19 Risks Associated with Outsourced Manufacturing and Foreign Sourcing Evolving U.S. trade regulations and policies with China have in the past and may in the future have a material and adverse effect on our business, financial condition and results of operations.
If we fail to accurately predict our manufacturing requirements, we will incur the risk of having to pay for production capacities that we reserved but will not be able to use or that we will not be able to secure sufficient additional production capacities at reasonable costs in the event product demand exceeds expectations.
If we fail to predict our manufacturing requirements accurately, we will incur the risk of having to pay for production capacities that we reserved but will not be able to use or that we will not be able to secure sufficient additional production capacities at reasonable costs in the event product demand exceeds expectations.
Substantial additional costs may be evident in the event that litigation or other proceedings were initiated against us because we would have to seek legal defense or counsel in the province (Canada) or state (U.S.) where the litigation or legal proceedings were filed.
Substantial additional costs may be evident in the event that litigation or other proceedings were initiated against us because we would have to seek legal defense or counsel in the state (U.S.) or province (Canada) where the litigation or legal proceedings were filed.
We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies, product candidates and any future products are covered by valid and enforceable patents or are effectively maintained as trade secrets. 20 Certain aspects of our technologies are protected by patents, patent applications, and trade secrets.
We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies, product candidates and any future products are covered by valid and enforceable patents or are effectively maintained as trade secrets. Certain aspects of our technologies are protected by patents, patent applications, and trade secrets.
Any failure on our part to hire, train and retain a sufficient number of qualified professionals could impair our business. 19 We depend on intellectual property rights that may be infringed upon, and we may infringe upon the intellectual property rights of others.
Any failure on our part to hire, train and retain a sufficient number of qualified professionals could impair our business. We depend on intellectual property rights that may be infringed upon, and we may infringe upon the intellectual property rights of others.
The following examples are illustrative: ● others may be able to develop technologies that are similar to our technology platforms but that are not covered by the claims of any patents, should they issue, that we own or license; ● we or our licensors might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or license; ● we or our licensors might not have been the first to file patent applications covering certain aspects of our inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own or license may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges; ● our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; and ● the patents of others may have an adverse effect on our business.
The following examples are illustrative: ● others may be able to develop technologies that are similar to our technology platforms but that are not covered by the claims of any patents, should they issue, that we own or license; ● we or our licensors might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or license; ● we or our licensors might not have been the first to file patent applications covering certain aspects of our inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own or license may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges; ● our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; and ● the patents of others may have an adverse effect on our business.
At the same time, it lowers the attractiveness of refinancing, despite the fact that our anticipated positive future cash flows would allow us to seek financing from a broader selection of lenders. 17 Continued uncertain economic conditions, including inflation and the risk of a global recession could impair our ability to forecast and may harm our business, operating results, including our revenue growth and profitability, financial condition and cash flows.
At the same time, it lowers the attractiveness of refinancing, despite the fact that our anticipated positive future cash flows would allow us to seek financing from a broader selection of lenders. 13 Continued uncertain economic conditions, including inflation and the risk of a global recession could impair our ability to forecast and may harm our business, operating results, including our revenue growth and profitability, financial condition and cash flows.
To mitigate risks associated with cybersecurity attacks, we have cybersecurity insurance coverage in the aggregate amount of $1,000,000 per annual policy period, which covers damages from a range of potential cybersecurity issues including but not limited to property damage, privacy liability, privacy regulatory defense, cyber extortion, and post breach remediation.
To mitigate risks associated with cybersecurity attacks, we have cybersecurity insurance coverage in the aggregate amount of $1,000,000 per annual policy period , which covers damages from a range of potential cybersecurity issues including but not limited to property damage, computer crime, privacy liability, privacy regulatory defense, cyber extortion, and post breach remediation.
In addition, any preventative or protective actions that governments implement or that we take in response to a health crisis, such as travel restrictions, quarantines, or site closures, may interfere with the ability of our employees, suppliers and customers to perform their responsibilities. Such results could have a materially adverse effect on our business.
In addition, any preventative or protective actions that governments implement or that we take in response to a health crisis, such as travel restrictions, quarantines, or site closures, may interfere with the ability of our employees, suppliers and customers to perform their responsibilities. Such events could have a materially adverse effect on our business.
Even if we are fully insured as it relates to a claim, a claim could nevertheless diminish our brand and divert management’s attention and resources, which could have a negative impact on our business, financial condition and results of operations. We may produce products of inferior quality which would cause us to lose customers.
Even if we are fully insured as it relates to a claim, a claim could nevertheless diminish our brand and divert management’s attention and resources, which could have a negative impact on our business, financial condition and results of operations. We may produce products of inferior quality or perceived inferior quality which would cause us to lose customers.
As a result, if we fail to maintain our competitive position, this could have a material adverse effect on our business, cash flow, results of operations, financial position and prospects. 23 We may not have sufficient product liability insurance to cover potential damages.
As a result, if we fail to maintain our competitive position, this could have a material adverse effect on our business, cash flow, results of operations, financial position and prospects. 18 We may not have sufficient product liability insurance to cover potential damages.
Any negative reviews or reviews which compare us unfavorably to competitors could adversely affect consumer perception about our products. The US Central Bank has provided forward-looking guidance of relatively high interest rates plateauing for the near future.
Any negative reviews or reviews which compare us unfavorably to competitors could adversely affect consumer perception about our products. The U.S. Central Bank has provided forward-looking guidance of relatively high interest rates plateauing for the near future.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and employees. 21 Intellectual property rights do not necessarily address all potential threats to our business.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and employees. 16 Intellectual property rights do not necessarily address all potential threats to our business.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property and proprietary rights worldwide may be inadequate to obtain a significant commercial advantage from the intellectual property we develop or license.
We may not be able to accurately estimate the demand for our tonneau covers, which could result in inefficiencies in our production and hinder our ability to generate profits.
We may not be able to accurately estimate the demand for our tonneau covers, which could result in inefficiencies in our production and hinder our ability to generate revenue.
To accommodate growth and compete effectively, we will need working capital to maintain adequate inventory levels, develop additional procedures and controls and increase, train, motivate and manage our workforce. There is no assurance that our personnel, systems, procedures and controls will be adequate to support our potential future operations.
To accommodate growth and compete effectively, we will need working capital to maintain adequate inventory levels, develop additional procedures and controls and increase, train, motivate and manage our work force. There is no assurance that our personnel, systems, procedures and controls will be adequate to support our potential future operations.
Any change in laws regulating or enforcement actions pertaining to digital assets may restrict the use of these assets, including bitcoin and XRP, expose us to penalties and increase compliance costs, among other things.
Any change in laws regulating or enforcement actions pertaining to digital assets may restrict the use of these assets, including bitcoin and XRP, expose us to penalties and increase compliance costs.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we may obtain patent protection but where patent enforcement is not as strong as that in the United States.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we may obtain patent protection but where patent enforcement is not as strong as that in the U.S..
The situations in which we may become parties to such litigation or proceedings may include: ● litigation or other proceedings we may initiate against third parties to enforce our patent rights or other intellectual property rights; ● litigation or other proceedings we or our licensee(s) may initiate against third parties seeking to invalidate the patents held by such third parties or to obtain a judgment that our products do not infringe such third parties’ patents; and ● litigation or other proceedings third parties may initiate against us to seek to enforce their patents and/or invalidate our patents.
The situations in which we may become parties to such litigation or proceedings may include: ● litigation or other proceedings we may initiate against third parties to enforce our patent rights or other intellectual property rights; ● litigation or other proceedings we or our licensee(s) may initiate against third parties seeking to invalidate the patents held by such third parties or to obtain a judgment that our products do not infringe such third parties’ patents; and ● litigation or other proceedings third parties may initiate against us to seek to enforce their patents and/or invalidate our patents. 17 If third parties initiate litigation claiming that our products infringe their patent or other intellectual property rights, we will need to defend against such proceedings.
In addition, others may independently discover trade secrets and proprietary information. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. There are risks associated with outsourced production that may result in a decrease in our profit.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. There are risks associated with outsourced production that may result in a decrease in our profit.
Although we make an effort to ensure the high quality of our products, they could from time to time contain defects, anomalies or malfunctions that are undetectable at the time of shipment.
Although we make an effort to ensure the high quality of our light truck tonneau cover products, they could from time to time contain defects, anomalies or malfunctions that are undetectable at the time of shipment.
A single contract with an OEM, private label or key distributor can significantly increase demand for our products, requiring investments in expanded operational capacity including personnel, equipment and potentially facilities. 18 Our future growth may be limited.
A single contract with an OEM or key distributor can significantly increase demand for our products, requiring investments in expanded operational capacity including personnel, equipment and potential facilities. 14 Our future growth may be limited.
There is no assurance that we will generate higher revenues from our prospective sales partners nor be able to capitalize on additional third-party manufacturers. We rely on two suppliers for the production of our outsourced finished goods which may hinder our ability to grow. We purchase all of our soft tonneau covers from two supplier sources in China.
There is no assurance that we will generate higher revenues from our prospective sales partners nor be able to capitalize on additional third-party manufacturers. We rely on one supplier for the production of our outsourced soft tonneau covers, which may hinder our ability to grow. We purchase all of our soft tonneau covers from a supplier located in Foshan, China.
We cannot provide assurance that patents will be granted with respect to our pending patent applications, that the scope of any patents we might obtain will be sufficiently broad to offer meaningful protection, or that we will develop additional proprietary products that are patentable.
We cannot provide assurance that patents will be granted with respect to our pending patent applications, that the scope of any patents we might obtain will be sufficiently broad to offer meaningful protection, or that we will develop additional proprietary products that are patentable. In fact, any patents which might issue from our patent applications pending with the U.S.
The integration of blockchain payment systems may expose us to risks of cyberattacks, fraud, or technical failures, potentially resulting in financial losses or reputational damage.
The integration of blockchain payment systems may expose us to risks of cyberattacks, fraud, or technical failures, potentially resulting in financial losses or reputational damage. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If we were to own all or a portion of our bitcoin in a different manner, the accounting treatment for our bitcoin, our ability to use our bitcoin as collateral for additional borrowings, and the regulatory requirements to which we are subject, may correspondingly change.
If we were to own all or a portion of our bitcoin in a different manner, the accounting treatment for our bitcoin, our ability to use our bitcoin as collateral for additional borrowings, and the regulatory requirements to which we are subject, could change, which may have a material impact on our financial statements, liquidity, or regulatory obligations.
Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market prices of our common stock without regard to our operating performance.
Our common stock or warrants may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our common stock. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market prices of our common stock without regard to our operating performance.
Our business, results of operations and financial condition could be adversely affected by the effects of widespread public health pandemics, such as COVID-19, that are beyond our control.
Our business, results of operations and financial condition could be adversely affected by the effects of widespread public health events or outbreaks that are beyond our control.
Further, we cannot predict the extent to which the U.S. will adopt changes to existing trade regulations and policies, which creates uncertainties in planning our sourcing strategies and forecasting our margins.
Further, we cannot predict the extent to which the U.S. or foreign governments will implement new or modified trade regulations and policies, which creates uncertainties in planning our sourcing strategies and forecasting our margins.
Failure to adequately protect our intellectual property rights could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage, and a decrease in our revenue which would adversely affect our business, prospects, financial condition and operating results. 22 Confidentiality agreements with employees and others may not adequately prevent the disclosure of trade secrets and other proprietary information.
Failure to adequately protect our intellectual property rights could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage, and a decrease in our revenue which would adversely affect our business, prospects, financial condition and operating results.
The concentration of ownership could delay or prevent a change in control of our Company or otherwise discourage a potential acquirer from attempting to obtain control of our Company, which in turn could reduce the price of our stock. In addition, Mr.
For example, Mr. Steven Rossi may support proposals and actions with which you may disagree. The concentration of ownership could delay or prevent a change in control of our Company or otherwise discourage a potential acquirer from attempting to obtain control of our Company, which in turn could reduce the price of our stock. In addition, Mr.
Risks Related to the Ownership of Our Securities We have a large number of authorized but unissued shares of our common stock which will dilute existing ownership positions when issued.
Risks Related to the Ownership of Our Securities We have a large number of authorized but unissued shares of our common stock which will dilute existing ownership positions when issued. At December 31, 2025, our authorized capital stock consisted of 45,000,000 shares of common stock and 10,000,000 shares of preferred stock.
In order to protect our proprietary technology and processes, we also rely in part on confidentiality agreements with our employees, consultants, outsourced manufacturers and other advisors. These agreements may not effectively prevent the disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
Confidentiality agreements with employees and others may not adequately prevent the disclosure of trade secrets and other proprietary information. In order to protect our proprietary technology and processes, we also rely in part on confidentiality agreements with our employees, consultants, outsourced manufacturers and other advisors.
Steven Rossi currently owns 100% of our outstanding Series A Preferred Stock which entitles him to 51% of the voting power of our outstanding voting equity. Subject to any fiduciary duties owed to our other stockholders under Nevada law, Mr.
Mr. Steven Rossi currently owns 100% of our outstanding Series A Preferred Stock which entitles him to 51% of the voting power of our outstanding voting equity.
Rossi could use his voting influence to maintain our existing management and directors in office, delay or prevent changes in control of our Company, or support or reject other management and Board proposals that are subject to stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions. 27 If research analysts do not publish research about our business, or if they issue unfavorable commentary or downgrade our common stock, our stock price and trading volume could decline.
Steven Rossi could use his voting influence to maintain our existing management and directors in office, delay or prevent changes in control of our Company, or support or reject other management and Board proposals that are subject to stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions.
If additional tariffs are imposed on our products , or other retaliatory trade measures are taken, our costs could increase, and we may be required to raise our prices, which could materially and adversely affect our results. Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, could adversely affect our results of operations.
If additional tariffs or other trade measures are implemented on our products, or other retaliatory trade measures are taken, our costs could increase, and we may be required to raise our prices, which could materially and adversely affect our results.
While we had insurance coverage of $2,000,000 for the year ended December 31, 2024, we have no assurance that this insurance will be adequate to protect us from all material judgments and expenses related to potential future claims or that these levels of insurance will be available at economical prices, if at all.
While we had $5,000,000 in umbrella coverage on top of our $1,000,000 aggregate product liability coverage as of the date of this prospectus, we have no assurance that this insurance will be adequate to protect us from all material judgments and expenses related to potential future claims or that these levels of insurance will be available at economical prices, if at all.
If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.
If we or any of our licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected. 15 Our patents might not protect our technology from competitors, in which case we may not have any exclusionary advantage over competitors in selling any products that we may develop.
We engage in cross-border sales transactions which present tax risks among other obstacles. Cross-border sales transactions carry a risk of changes in import tax and/or duties related to the import and export of our product, which can result in pricing changes, which will affect revenues and earnings.
Cross-border sales transactions carry a risk of changes in import tax and/or duties related to the import and export of our product, which can result in pricing changes, which will affect revenues and earnings. Cross-border sales transactions carry other risks including, but not limited to, changing regulations, wait times, customs inspection and lost or damaged product.
At times, competitors may also release a generic or re-branded version of a current and successful product at a substantially reduced price in efforts to increase revenues or market share.
Alternatively, in the case of generic competition, competitors’ products may be of equal or better quality and sold at substantially lower prices than our products. At times, competitors may also release a generic or re-branded version of a current and successful product at a substantially reduced price in efforts to increase revenues or market share.
While the Chinese government has been pursuing economic reform policies that encourage private economic activity and greater economic decentralization, there is no assurance that the Chinese government will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice. 25 For example, the Chinese government has enacted some laws and regulations dealing with matters such as corporate organization and governance, foreign investment, commerce, taxation and trade.
While the Chinese government has been pursuing economic reform policies that encourage private economic activity and greater economic decentralization, there is no assurance that the Chinese government will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice.
Rossi is able to exercise significant influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, and will have some control over our management and policies. Mr. Rossi may have interests that are different from yours. For example, Mr. Rossi may support proposals and actions with which you may disagree.
Subject to any fiduciary duties owed to our other stockholders under Nevada law, Mr Steven Rossi is able to exercise significant influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, and will have some control over our management and policies. Mr. Steven Rossi may have interests that are different from yours.
Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition or results of operations. The risks are listed below in no particular order. Risks Related to Our Business Various factors raise substantial doubt about the Company’s ability to continue as a going concern.
Additional risks and uncertainties not presently known to us or that we currently believe are immaterial may also adversely affect our business, financial condition, results of operations or prospects Risks Related to Our Business We have expressed substantial doubt about our ability to continue as a going concern.
We accept digital assets as a form of payment from our customers. Digital assets are subject to evolving legal and regulatory frameworks in the U.S. and internationally.
The acceptance of blockchain and digital assets as payment on our platform introduces significant risks, including, without limitation, regulatory uncertainty, market volatility, and operational challenges. We accept digital assets as a form of payment from our customers. Digital assets are subject to evolving legal and regulatory frameworks in the U.S. and internationally.
Many of our potential competitors will be able to sustain the cost of such litigation and proceedings more effectively than we can because of their substantially greater resources.
The costs of resolving any patent litigation or other intellectual property proceeding, even if resolved in our favor, could be substantial. Many of our potential competitors will be able to sustain the cost of such litigation and proceedings more effectively than we can because of their substantially greater resources.
We have competition for our market share which could harm our sales. We participate in the automotive aftermarket equipment industry which is highly competitive for a relatively limited customer base. Companies that compete in this market include Real Truck (formerly Truck Hero), Truck Accessories Group, and Agri-Cover, Inc., among others.
We participate in the automotive aftermarket equipment industry which is highly competitive for a relatively limited customer base. Companies that compete in this market include RealTruck, Truck Accessories Group, and Agri-Cover, Inc., among others. Many of our current competitors are significantly better funded and have longer operating histories than we do.
Filing, prosecuting and defending patents covering our current and future product candidates and technology platforms in all countries throughout the world would be prohibitively expensive.
We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business. Filing, prosecuting and defending patents covering our current and future product candidates and technology platforms in all countries worldwide would be prohibitively expensive.
Changes in Chinese laws and regulations, or their interpretation, or the imposition of confiscatory taxation or restrictions are matters over which we have no control.
We have historically purchased all our soft tonneau cover finished goods from one to two suppliers in China. Changes in Chinese laws and regulations, or their interpretation, or the imposition of confiscatory taxation or restrictions are matters over which we have no control.
Any failure to comply with these covenants would have a material adverse effect on our business, prospects, financial condition and results of operations because we could lose our existing sources of funding, and our ability to secure new sources of funding could be impaired.
Any failure to comply with these covenants would have a material adverse effect on our business, prospects, financial condition and results of operations because we could lose our existing sources of funding, and our ability to secure new sources of funding could be impaired. 21 Our stock ownership structure has the effect of concentrating voting control with our Chief Executive Officer and Chairman, Steven Rossi, which will limit the ability of other shareholders to influence the outcome of important decisions.
The actions reflect a shift in federal energy and transportation policy, and the future of the U.S. regulatory environment surrounding electric vehicles remains uncertain. Any reduction or elimination of governmental support for EV adoption or related infrastructure development could negatively impact market demand, hinder our growth initiatives and materially affect our financial condition and results of operations.
Any reduction or elimination of governmental support for EV adoption or related infrastructure development could negatively impact market demand, hinder our growth initiatives and materially affect our financial condition and results of operations.
The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.
As bitcoin, XRP and other digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, regulators in the U.S. and internationally may interpret or apply existing laws and regulations in a manner that adversely affects the ownership, transfer, valuation, or use of digital assets The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.
Any decision to declare or pay dividends in the future will be at the discretion of our board of directors. Accordingly, your only opportunity to achieve a return on your investment in our common stock may be if the market price of our common stock appreciates and you sell your shares at a profit.
As a result, your only opportunity to achieve a return on your investment in our common stock may be if the market price of our common stock appreciates and you sell your shares at a profit. The market price for our common stock may never exceed, and may fall below, the price that you pay for such common stock.
The trading market for our securities may depend in part on the research and reports that research analysts publish about us and our business.
If research analysts do not publish research about our business, or if they issue unfavorable commentary or downgrade our common stock, our stock price and trading volume could decline. The trading market for our securities may depend in part on the research and reports that research analysts publish about us and our business.
Our competitive success also depends on our ability to maintain a strong brand and the belief that customers will need our products and services to meet their growth requirements. Alternatively, in the case of generic competition, competitors’ products may be of equal or better quality and sold at substantially lower prices than our products.
In addition, some of our competitors sell their products at prices lower than ours, and we compete primarily on the basis of product quality, features, value, service, and customer relationships. Our competitive success also depends on our ability to maintain a strong brand and the belief that customers will need our products and services to meet their growth requirements.
However, their experience in implementing, interpreting and enforcing these laws and regulations is limited and, in turn, our ability to enforce commercial claims or to resolve commercial disputes is unpredictable.
For example, the Chinese government has enacted some laws and regulations dealing with matters such as corporate organization and governance, foreign investment, commerce, taxation and trade. However, their experience in implementing, interpreting and enforcing these laws and regulations is limited and, in turn, our ability to enforce commercial claims or to resolve commercial disputes is unpredictable.
High interest rates increase the amount that we must pay for our mortgage on our West Seneca, NY property.
High interest rates increase the amount that we must pay related to our indebtedness.
We have mitigated such risks by stockpiling soft tonneau covers for domestic sales, but we will still rely on outsource manufacturing for additional soft cover production, as we have not manufactured our own soft tonneau covers in the past and are not planning to do so in the short term.
We have not manufactured our own soft tonneau covers in the past and are not planning to do so in the short term.
However, President Donald Trump has signed an executive order titled Unleashing American Energy , indicating that his administration intends to reverse electric vehicle mandates implemented by the prior administration. In addition, President Trump has paused billions of dollars in federal funding allocated toward EV charging infrastructure.
Our business strategy may rely, in part, on regulatory support for electric vehicle adoption, including incentives, mandates, infrastructure investment and emissions regulations. However, President Donald Trump has signed an executive order titled Unleashing American Energy , indicating that his administration intends to reverse electric vehicle mandates implemented by the prior administration.
In fact, any patents which might issue from our patent applications pending with the United States Patent and Trademark Office could be successfully challenged, invalidated or circumvented. This could result in our pending patent rights failing to create an effective competitive barrier.
Patent and Trademark Office could be successfully challenged, invalidated or circumvented. This could result in our pending patent rights failing to create an effective competitive barrier. Losing a significant patent or failing to get a patent issued from a pending patent application we consider significant could have a material adverse effect on our business.
While we are now manufacturing hard covers in the United States, the loss of one or both of these suppliers or a delay in shipments could have a material adverse effect on our soft tonneau cover sales and business. We will need additional financing in order to grow our business.
While we are now manufacturing hard tonneau covers in the U.S., the loss of this supplier or a delay in shipments could have a material adverse effect on our soft tonneau cover sales and business. We rely on key personnel, especially Steven Rossi, our Chief Executive Officer, President and Chairman of the Board.
Our success depends to a significant degree upon our ability to develop, maintain and protect proprietary products and technologies. As of December 31, 2024, we own 18 utility patents, 23 design registrations, and 79 pending utility and design patent applications worldwide. However, patents provide only limited protection of our intellectual property.
Our success depends to a significant degree upon our ability to develop, maintain, and protect proprietary products and technologies. However, patents provide only limited protection of our intellectual property. The assertion of patent protection involves complex legal and factual determinations and is therefore uncertain and potentially expensive.
Potential attacks span a spectrum from attacks by criminal hackers, hacktivists, and nation state or state-sponsored actors, to employee malfeasance and human or technological error.
There are growing risks related to the security, confidentiality and integrity of personal and corporate information stored and transmitted electronically due to increasingly diverse and sophisticated threats to networks, systems and data security. Potential attacks span a spectrum from attacks by criminal hackers, hacktivists, and nation state or state-sponsored actors, to employee malfeasance and human or technological error.
At December 31, 2024, our authorized capital stock consists of 29,900,000 shares of common stock, of which approximately 25,883,795 remain available for issuance, including shares of common stock issuable upon the exercise of outstanding warrants.
A substantial number of shares of our common stock remain available for issuance, including shares issuable upon the exercise of outstanding warrants.
Changes in U.S. government policies or regulations, including potential rollbacks of electric vehicle initiatives, could adversely affect our business, strategy, and growth prospects. Our business strategy may rely, in part, on regulatory support for electric vehicle adoption, including incentives, mandates, infrastructure investment and emissions regulations.
Any large fluctuations in the exchange between the RMB and USD may cause product costs to increase, therefore affecting revenues and profits, potentially adversely. Changes in U.S. government policies or regulations, including potential rollbacks of electric vehicle initiatives, could adversely affect our business, strategy, and growth prospects.
The trading price of bitcoin was significantly lower during prior periods, and such decline may occur again in the future. 28 Changes in our ownership of bitcoin could have accounting, regulatory and other impacts.
Bitcoin is a highly volatile asset that has traded at widely fluctuating prices during recent periods. The trading price of bitcoin was significantly lower during prior periods, and such decline may occur again in the future.
Our soft tonneau covers and some raw materials are sourced from China. Any restrictions or tariffs imposed on products that we or our suppliers import for sale or production in the U.S. would adversely and directly impact our cost of sales.
Any tariffs, duties, quotas, export controls, sanctions or other trade restrictions imposed on products that we or our suppliers import for sale or production in the U.S. would adversely and directly impact our cost of goods sold and could force us to seek alternative suppliers, which may not be as cost effective or readily available.
Our management will continue to have broad discretion to issue shares of our common stock in a range of transactions, including capital-raising transactions, mergers, acquisitions and other transactions, without obtaining stockholder approval, unless stockholder approval is required under law or the rules of Nasdaq or any other trading market on which our common stock may be listed.
Our Board of Directors has the authority to issue additional shares of common stock and, with respect to preferred stock, to establish the rights, preferences and privileges of one or more series of preferred stock without further stockholder approval, except where stockholder approval may be required by applicable law or the rules of Nasdaq or any other trading market on which our common stock may be listed.
We manufacture soft tonneau covers in China , source raw materials for hard tonneau covers from the U.S., Canada and China, work with U.S. and Canada-based service providers, and employ individuals in the U.S. and Canada. Meanwhile, we report results of operations in U.S. Dollars (USD). Large fluctuations in the exchange between foreign currencies and USD may adversely affect profitability.
We are subject to foreign currency risk which may adversely affect profitability. We are subject to foreign exchange risk as we manufacture our products in China, market extensively in both Canadian and U.S. markets, and employ people residing in both the U.S. and Canada. Meanwhile, we report results of operations in U.S. Dollars (USD).
Our business and operations would suffer in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity or a natural disaster. There are growing risks related to the security, confidentiality and integrity of personal and corporate information stored and transmitted electronically due to increasingly diverse and sophisticated threats to networks, systems and data security.
Our business and operations would suffer in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity, or an inability to effectively adopt and govern emerging technologies, including artificial intelligence, or a natural disaster.
In addition, further tariffs have been proposed by the United States and its trading partners and additional trade restrictions could be implemented. There are risks associated with outsourced production in China, and their laws which may have a material adverse effect on our financial stability. We purchase all our soft tonneau cover finished goods from two suppliers in China.
In addition, extended trade tensions and regulatory uncertainties may disrupt our supply chain, delay production or negatively impact our ability to compete in the market. There are risks associated with outsourced production in China, and their laws may have a material adverse effect on our financial stability.
Removed
ITEM 1A. RISK FACTORS In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition or future results. The risks described below are not the only risks we face.
Added
ITEM 1A. RISK FACTORS Investing in our securities involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this Form 10-K, including our consolidated financial statements and the related notes, before making an investment decision.
Removed
The Company has incurred significant losses since its inception, including a net loss of $16,163,789 for the year ended December 31, 2024, and has an accumulated deficit of $64,476,966 as of December 31, 2024. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.
Added
If any of the following risks actually occur, our business, financial condition, results of operations or prospects could be materially adversely affected. In that event, the trading price of our securities could decline, and investors could lose all or part of their investment. The risks described below are not the only risks facing our Company.
Removed
The Company’s continuation as a going concern is dependent upon its ability to generate positive cash flows from operations and to secure additional sources of equity and/or debt financing.
Added
Our independent registered public accounting firm’s report on our audited financial statements includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. We have a history of operating losses, have never generated a profit, and have relied primarily on equity and debt financings to fund our operations.
Removed
Despite the Company’s intent to fund operations through equity and debt financing arrangements, there is no assurance that such financing will be available on terms acceptable to the Company, if at all. Our independent auditors have included an explanatory paragraph in their audit report regarding the Company’s ability to continue as a going concern.
Added
For the year ended December 31, 2025, we incurred a net loss of approximately $19.4 million, and accumulated deficit of approximately $83.9 million and cash and cash equivalents of approximately $5.9 million. We also had availability on our revolving line of credit of approximately $3.4 million.
Removed
This going concern risk may materially limit our ability to raise additional funds through the issuance of new debt or equity or may adversely affect the terms upon which such capital may be available. The inability to obtain sufficient financing on acceptable terms could have a material adverse effect on the Company’s financial condition, results of operations, and business prospects.
Added
Our ability to continue as a going concern depends on our ability to generate positive cash flows from operations and to obtain additional financing on acceptable terms, if at all. We expect to continue to incur operating losses as we scale our operations and invest in product development, manufacturing, and commercialization.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed9 unchanged
Biggest changeWe do, however, have cybersecurity insurance coverage in the aggregate amount of $1,000,000 per annual policy period, which covers damages from a range of potential cyber security issues including but not limited to property damage, privacy liability, privacy regulatory defense, cyber extortion, and post breach remediation.
Biggest changeWe do, however, have cybersecurity insurance coverage in the aggregate amount of $1,000,000 per annual policy period, which covers damages from a range of potential cyber security issues including but not limited to property damage, computer crime, privacy liability, privacy regulatory defense, cyber extortion, and post breach remediation.
Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity and the nature of our operations, thereby reducing our exposure to cybersecurity risks. 29 In addition, the Board will oversee any cybersecurity risk management framework, and the Board’s governance committee and the firm’s CEO, Steven Rossi, will review and approve any cybersecurity policies, strategies and risk management practices .
Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity and the nature of our operations, thereby reducing our exposure to cybersecurity risks. 23 In addition, the Board will oversee any cybersecurity risk management framework, and the Board’s governance committee and the firm’s CEO, Steven Rossi, will review and approve any cybersecurity policies, strategies and risk management practices .

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−2 removed0 unchanged
Biggest change(3) Twelve-month lease dated June 1, 2023 - renewed effective June 1, 2024 at $3,600 USD per month with a termination date of May 31, 2025. (4) Three-year lease dated April 16, 2021 and terminated on May 31,f 2024 for $23,971 CAD per month.
Biggest change(3) Three-year lease, dated May 1, 2025 - at a variable rate beginning at $9,659 USD per month with a termination date of April 30, 2028. We believe our facilities are suitable and adequate for our current operations.
ITEM 2. PROPERTIES As of December 31, 2024, we had three facilities located throughout the U.S. and Canada. One of these facilities are owned and the remainder are leased. Our principal facilities are as follows: Address Type Ownership Size (sq ft) 2500 N America Dr., West Seneca, NY 14224, U.S.
ITEM 2. PROPERTIES As of December 31, 2025, we had three facilities located throughout the U.S. and Canada. One of these facilities is owned and the remainder are leased. Our principal facilities are as follows: Address Type Ownership Size (sq ft) 2500 N America Dr., West Seneca, NY 14224, U.S.
(3) Office, R&D Facility Rented 3,600 (1) For further information on the property mortgage, see Note 13 - Indebtedness of Part II Item 8, Financial Statements and Supplementary Data, of this report.
(3) Office, R&D Facility Rented 12,500 (1) For further information on this property, see Note 12 - Indebtedness of Part II Item 8, Financial Statements and Supplementary Data, of this Report. (2) Two-year lease, dated July 18, 2025, at a rate of $2,299 CAD per month with a termination date of July 17, 2027.
Removed
(1) Corporate Headquarters, Warehouse, and Manufacturing Owned and mortgaged 152,847 55G East Beaver Creek Rd., Richmond Hill, Ontario L4B 1E5, Canada (2) Office, R&D Facility Rented 20,296 5146 N. 23rd St. Ozark, MO 65721, U.S.
Added
(1) Corporate Headquarters, Warehouse, and Manufacturing Owned; Collateral for line of credit 152,847 391 Steelcase Road, West, Unit 17, Markham L3R3V9, Canada (2) Office, R&D Facility Rented 1,992 967 W. Hwy NN, Suites C, D, E &F, Ozark, MO, U.S.
Removed
(2) Five-year lease, dated June 1, 2022, for a variable rate averaging $27,934 CAD per month over the lifetime of the lease not inclusive of additional fees, which also vary and averaged $6,832 CAD per month in 2024 not inclusive of taxes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we are involved in lawsuits, claims, investigations, and proceedings, including pending opposition proceedings involving patents that arise in the ordinary course of business. We are not presently a party to any material pending or threatened legal proceedings, nor do we have any knowledge of any such pending claim.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we are involved in lawsuits, claims, investigations, and proceedings. We are not presently a party to any material pending or threatened legal proceedings, nor do we have any knowledge of any such pending claim.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+17 added−6 removed1 unchanged
Biggest changeThe warrants will be exercisable for a period of five year from the date of issuance. The issuance of the securities listed above was deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering.
Biggest changeThe Inducement Warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder. The holder represented that it was an accredited investor and that the Inducement Warrants were acquired for investment purposes and not with a view to distribution in violation of the Securities Act.
Securities Authorized for Issuance Under Equity Compensation Plans See “Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Incentive Plans” of this report which is incorporated herein by reference. Equity Incentive Plans See “Part III Item 11, Executive Compensation” of this report which is incorporated herein by reference. 32 ITEM 6. [RESERVED].
The Company engaged Maxim Group LLC as its exclusive financial advisor in connection with the transaction. Securities Authorized for Issuance Under Equity Compensation Plans See “ Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Incentive Plans” of this report which is incorporated herein by reference.
Prior to trading on Nasdaq, our common stock was quoted on the OTCQB Market under the symbol “WKSP.” Holders of Common Stock On March 27, 2025, there were 344 holders of record of our common stock. Stock Transfer Agent Our transfer agent is Vstock Transfer, LLC., located at 18 Lafayette Place, Woodmere, NY 11598. Their telephone number is (212) 828-8436.
Prior to trading on Nasdaq, our common stock was quoted on the OTCQB Market under the symbol “WKSP.” Holders of Common Stock On March 26, 2026, there were 11,885,519 holders of record of our common stock. Stock Transfer Agent Our transfer agent is Odyssey Transfer and Trust Company., located at 2155 Woodlane Drive, Suite 100, Woodbury, MN 55125.
Removed
Dividend Policy We do not expect to pay cash dividends in the foreseeable future.
Added
Their telephone number is (612) 453-4531. Dividend Policy We have never declared or paid any cash dividends on our common stock. We intend to retain future earnings, if any, to finance the operation of our business and do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Removed
Any future decision to pay dividends will be at the discretion of our board and will depend, among other things, on earnings, financial condition, level of indebtedness, provisions of our existing credit agreements and other factors that our board deems relevant. 31 Unregistered Sales of Equity Securities ● Warrants to purchase 770,026 shares of common stock of the Company at an exercise price of $7.40 per share, subject to adjustment for reverse stock splits, recapitalizations and reorganizations, which are exercisable six months after the date of issuance, or September 20, 2024, until the five and a half-year anniversary date of the date of issuance, or September 20, 2029. ● On May 31, 2024, the Company issued warrants to purchase up to 1,295,000 shares of the Company’s common stock in connection with entering into the Inducement Offer Letter with a certain holder of existing warrants, pursuant to which the Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 700,000 shares of the Company’s common stock, at a reduced exercised price of $0.5198 per share.
Added
Any future determination related to our dividend policy will be made at the discretion of our Board after considering our financial condition, results of operations, capital requirements, business prospects and other factors our Board deems relevant, and subject to the restrictions contained in any future financing instruments, and the rights and preferences of any outstanding preferred stock, including our Series C Preferred Stock.
Removed
Each Inducement Warrant has an exercise price equal to $5.198 per share and will be exercisable at any time on or after the date that is six (6) months from the issuance date provided that stockholder approval is obtained and will have a term of exercise of five and one half (5½) years following the date of issuance.
Added
At-The-Market Offering On September 30, 2022, we filed a shelf registration statement on Form S-3 (File No. 333-267696), which was declared effective by the SEC on October 13, 2022.
Removed
The Company engaged Maxim Group LLC (“Maxim”) to act as its exclusive warrant solicitation agent and financial advisor in connection with the warrant inducement transaction and paid Maxim a cash fee equal to 7.0% of the gross proceeds received from the exercise of the Existing Warrants.
Added
The registration statement included (i) a base prospectus covering the offering, issuance and sale of up to $30,000,000 of our common stock, preferred stock, warrants, rights and units, and (ii) a prospectus supplement relating to the offer and sale of up to $13,000,000 of our common stock pursuant to an At The Market Offering Agreement, dated September 30, 2022 (the “Sales Agreement”), with H.C.
Removed
The Company used and is expecting to use the net proceeds of these transactions for general corporate purposes, including working capital. ● On September 19, 2024, the Company issued 95,000 shares of common stock to an investor at a $0.40 per share purchase price and warrants to purchase up to 190,000 shares of common stock at an exercise price of $0.40 per share.
Added
Wainwright & Co., LLC (“Wainwright”), as sales agent. Under the Sales Agreement, Wainwright is entitled to a commission equal to 3.0% of the gross sales price of shares sold.
Removed
The recipient of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.
Added
From January 1, 2025 through October 13, 2025 (the expiration of the registration statement), we sold an aggregate of 110,619 shares of our common stock pursuant to the Sales Agreement (the “ATM Shares”), for aggregate gross proceeds of $521,835 and net proceeds of $504,372, after deducting commissions and other related transaction costs of $17,463.
Added
On November 14, 2025, we entered into an amendment to the Sales Agreement with Wainwright (the “Amendment”), pursuant to which we may offer and sell shares of our common stock having aggregate sales proceeds of up to $4,000,000 from time to time through Wainwright, acting as sales agent.
Added
The sales are made pursuant to a prospectus supplement and the accompanying base prospectus included in a registration statement on Form S-3 (File No. 333-291582), filed with the SEC on November 14, 2025, and declared effective on December 12, 2025.
Added
Unregistered Sales of Equity Securities December 2025 Warrant Inducement On December 11, 2025, the Company entered into a warrant exercise inducement agreement with the holder of certain outstanding warrants originally issued on March 20, 2024 and March 3, 2025.
Added
Pursuant to the agreement, the holder exercised warrants to purchase an aggregate of 2,194,526 shares of the Company’s common stock at a reduced exercise price of $2.90 per share, resulting in gross proceeds of approximately $6.4 million to the Company before placement agent fees and other offering expenses.
Added
In consideration for the exercise of the existing warrants, the Company issued new warrants to purchase up to 3,840,421 shares of common stock (the “Inducement Warrants”). The Inducement Warrants were issued in a private placement to the holder of the existing warrants and were not registered under the Securities Act of 1933, as amended (the “Securities Act”).
Added
The shares of common stock issuable upon exercise of the Inducement Warrants were subsequently registered for resale pursuant to the Company’s registration statement on Form S-3 (File No. 333-292823), filed January 20, 2025 and declared effective January 28, 2026.
Added
February 2025 Warrant Inducement On February 27, 2025, the Company entered into a warrant exercise inducement agreement with the holder of certain existing warrants originally issued on May 29, 2024.
Added
Pursuant to the agreement, the holder exercised warrants to purchase 1,295,000 shares of the Company’s common stock at a reduced exercise price of $5.198 per share, resulting in gross proceeds of approximately $6.7 million, before placement agent fees and other offering expenses.
Added
In consideration for such exercise, the Company issued new warrants to purchase up to 1,424,500 shares of its common stock at an exercise price of $6.502 per share, subject to adjustment. The new warrants become exercisable six months from the date of issuance and expire on the fifth anniversary of the date of issuance.
Added
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-1 (File No. 333-286255), filed with the SEC on March 28, 2025 and declared effective on April 3, 2025. The Company used the net proceeds from the transaction for working capital and general corporate purposes.
Added
Equity Incentive Plans See “Part III Item 11, Executive Compensation” of this report which is incorporated herein by reference. 25 ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

36 edited+34 added−21 removed37 unchanged
Biggest changeVolume discounts are offered to certain high-volume customers, and we also offer a “dock price” or “pickup program” in which clients are able to pick up inventory directly from our stocking warehouse. 37 Operating Expenses Operating expenses increased for the year ended December 31, 2024 by $1,394,309, from $14,977,175 for the fiscal year ended December 31, 2023 to $16,371,484 for the fiscal year ended December 31, 2024, due to the following factors. ● Research and development expense increased by $620,622 from $1,669,318 in 2023 to $2,289,940 in 2024.
Biggest changeVolume discounts are offered to certain high-volume customers, and we also offer a “dock price” or “pickup program” in which clients are able to pick up inventory directly from our stocking warehouse.
We are also identifying North American suppliers of our products’ components and will prioritize transport by rail when possible to avoid high trucking costs. 34 Foreign Currencies We are subject to foreign exchange risk as we manufacture certain products and components in China, market extensively in both Canadian and U.S. markets, employ people residing in both the U.S. and Canada and, to date, have raised funds in Canadian Dollars.
We are also identifying North American suppliers of our products’ components and will prioritize transport by rail when possible to avoid high trucking costs. 27 Foreign Currencies We are subject to foreign exchange risk as we manufacture certain products and components in China, market extensively in both U.S. and Canadian markets, employ people residing in both the U.S. and Canada and, to date, have raised funds in both U.S.
Meanwhile, we report results of operations in USD. Since our Canadian customers pay in Canadian Dollars, we are subject to gains and losses due to fluctuations in the USD relative to the Canadian Dollar. Our manufacturers in China are paid in USD to better avoid the relatively greater fluctuation of the Chinese Yuan.
Dollars (USD) and Canadian Dollars (CAD). Meanwhile, we report results of operations in USD. Since our Canadian customers pay in CAD, we are subject to gains and losses due to fluctuations in the USD relative to CAD. Our manufacturers in China are paid in USD to better avoid the relatively greater fluctuation of the Chinese Yuan.
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.
In cautious preparation for those that are foreseeable, we strategically began 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.
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 U.S. or from the U.S. to Canada.
This includes import duty charges, including tariffs, 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 U.S. or from the U.S. to Canada.
Critical Accounting Policies Our discussion and analysis of consolidated results of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates assumptions and judgments that affect the amounts reported.
Critical Accounting Policies Our discussion and analysis of consolidated results of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. of America. The preparation of these consolidated financial statements requires us to make estimates assumptions and judgments that affect the amounts reported.
Our discounting strategy is part of a broader initiative to enhance market presence and build brand awareness. We anticipate this will well position us for sustained customer engagement in future periods, during which discounting may not be necessary to the same extent.
We continue to employ a discounting strategy as part of a broader initiative to enhance market presence and build brand awareness. We anticipate this will well position us for sustained customer engagement in future periods, during which discounting may not be necessary to the same extent.
Gasoline Prices and Supply Chain Issues We faced significantly higher ocean freight, trucking, and container handling costs as well as last mile delivery costs in 2021 and 2022 than we did in previous years – all of which have increased our products’ landed costs.
Gasoline Prices and Supply Chain Issues We faced significantly higher ocean freight, trucking, and container handling costs as well as last mile delivery costs in recent years – all of which have increased our products’ landed costs.
For further information, refer to Note 8, Income Taxes of Part III Item 8, Financial Statements and Supplementary Data, of this report. Split On March 18, 2025, we effected a 1:10 stock split of our authorized shares of common stock and simultaneously reduced the number of authorized shares of common stock from 299,000,000 to 29,900,000.
For further information, refer to Note 8, Income Taxes of Part III Item 8, Financial Statements and Supplementary Data, of this report. Reverse Common Stock Split On March 18, 2025, we effected the Reverse Stock Split at the ratio of 1:10, which immediately proportionally reduced the authorized number of shares of common stock from 299,000,000 to 29,900,000.
There can be no assurance that the steps our management is taking will be successful. 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 year ended December 31, 2024, the Company received net proceeds of $12,482,549 from offerings.
There can be no assurance that the steps our management is taking will be successful. 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 fiscal year ended December 31, 2025, the Company received net proceeds of approximately $21.8 million from offerings.
The increase was primarily due to financing activities conducted during the period to support growth of ongoing operations. Operating Activities Net cash used by operating activities for the year ended December 31, 2024 was $10,138,798, compared to $11,930,580 in the prior year, driven by a shift to production and distribution of hard tonneau covers.
The increase was primarily due to financing activities conducted during the fiscal year to support growth of ongoing operations. Operating Activities Net cash used in operating activities for the fiscal year ended December 31, 2025 was $17,314,390, compared to $10,138,798 in the prior year, driven by a shift to production and distribution of hard tonneau covers.
Revenue related to shipping and handling costs billed to customers is included in net sales, and the related shipping and handling costs are included in cost of sales. Inventory Valuation – At December 31, 2024, we had inventories of $5,190,054, or 50% of our current assets.
Revenue related to shipping and handling costs billed to customers is included in net sales, and the related shipping and handling costs are included in cost of sales. Inventory Valuation – At December 31, 2025, we had inventories of $9,530,671, or 57% of our current assets.
Prepaid expenses and deposits decreased by $1,305,057 at December 31, 2024 and increased by $776,709 at December 31, 2023 due to deposits by us for the purchase of production equipment and inventory. Accounts payable and accrued liabilities increased at December 31, 2024 by $1,167,834 and decreased at December 31, 2023 by $492,114, respectively.
Prepaid expenses and deposits increased by $338,669 at December 31, 2025 and decreased by $1,305,057 at December 31, 2024 due to deposits by us for the purchase of production equipment and inventory. Accounts payable and accrued liabilities increased at December 31, 2025 by $2,179,473 and increased at December 31, 2024 by $1,167,834, respectively.
During the year ended December 31, 2024 the Company received net proceeds of $12,482,549 from the sale of shares and pre-funded warrants. During the year ended December 31, 2023, the Company received net proceeds of $4,475,869 from the sale of shares and pre-funded warrants.
During the fiscal year ended December 31, 2025 the Company received net proceeds of $21,823,476 from the sale of shares and pre-funded warrants. During the fiscal year ended December 31, 2024, the Company received net proceeds of $12,482,549 from the sale of shares and pre-funded warrants.
As of December 31, 2024, the Company had working capital of $7,304,110 (2023 – $1,956,894) and had an accumulated deficit of $64,476,966 (202 3 - $ 48,313,177 ). 38 In their audit report, our independent auditors expressed that there is substantial doubt as to our ability to continue as a going concern.
As of December 31, 2025, the Company had working capital of $10,061,578 (2024 – $7,304,110) and had an accumulated deficit of $83,873,790 (2024 - $64,476,966). 30 In their audit report, our independent auditors expressed that there is substantial doubt as to our ability to continue as a going concern.
The decrease in investing activities was primarily due to higher capital expenditures on various production equipment in 2023 to support the Company’s transition to production in 2024. Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $12,184,354 compared to $4,431,965 in the prior year.
The increase in investing activities was primarily due to higher capital expenditures on various production equipment in 2025. Financing Activities Net cash provided by financing activities for the fiscal year ended December 31, 2025 was $19,456,688 compared to $12,184,354 in the prior year.
Accounts receivable decreased at December 31, 2024 by $387,561 and increased by $400,521 in the prior year. The decrease in accounts receivable was due to volume shifts from private label sales in 2023 to direct to consumer sales in 2024. The shift from private label sales to direct to consumer decreases the cash conversion timeline.
Accounts receivable increased at December 31, 2025 by $461,382 and decreased by $387,561 in the prior year. The increase in accounts receivable when compared with 2024 was due to volume shifts from private label sales in 2023 to direct to consumer sales in 2024.
Changes in these and other factors, such as low demand or technological obsolescence, could cause us to establish or increase our inventory reserves, which would negatively impact our gross margin. 35 Reviews of Impairment of Long-Lived Assets – Long-lived assets held for use, which primarily includes finite-lived intangible assets, property, plant and equipment, and right-of-use assets, are evaluated for impairment whenever events or circumstances indicate that the undiscounted cash flows to be generated by their use over their expected useful lives and eventual disposition are less than carrying value.
Reviews of Impairment of Long-Lived Assets – Long-lived assets held for use, which primarily includes finite-lived intangible assets, property, plant and equipment, and right-of-use assets, are evaluated for impairment whenever events or circumstances indicate that the undiscounted cash flows to be generated by their use over their expected useful lives and eventual disposition are less than carrying value.
Contractual Obligations and Commercial Commitments The following table summarizes our contractual obligations as of December 31, 2024 and 2023: Contractual Obligations December 31, 2024 December 31, 2023 Operating lease obligations $ 615,007 $ 1,082,319 Equipment purchases $ - $ 59,815 Total Contractual Obligations $ 615,007 $ 1,142,134 We intend to fund our contractual obligations with working capital.
Contractual Obligations and Commercial Commitments The following table summarizes our contractual obligations as of December 31, 2025 and 2024: Contractual Obligations December 31, 2025 December 31, 2024 Operating lease obligations $ 318,520 $ 615,007 Equipment purchases $ 2,700,000 $ - Total Contractual Obligations $ 3,018,520 $ 615,007 We intend to fund our contractual obligations with working capital.
These fluctuations were driven primarily by the transition to production activities in 2024. 40 Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $528,235 compared to $3,756,364 in the prior year.
These fluctuations were driven primarily by the transition to production activities in 2024 and increased raw materials inventory purchases to support production in 2025. Investing Activities Net cash used in investing activities for the fiscal year ended December 31, 2025 was $1,119,503 compared to $528,235 in the prior year.
For business-to-consumer channels, we are focused on lowering our customer acquisition cost throughout 2025. For business-to-business channels, we have assembled a strong team of both internal and external sales representatives, and we are actively presenting our product offerings to various dealers, wholesalers, and retailers across the U.S. and Canada.
For the business-to-business channel, we have assembled a strong team of both internal and external sales representatives, and we are actively presenting our product offerings to various dealers, wholesalers, and retailers across the U.S. and Canada. We intend to continue gradually increasing output capacity through refined production processes and increased personnel.
The Company continues to focus on establishing new and strengthening existing business-to-consumer and business-to-business channels while also strengthening customer support to increase customer satisfaction and enable high product turnover. Worksport has successfully bolstered its business-to-consumer sales channels in 2024, and it is now focusing on increasing cost efficiencies in these sales channels as well as establishing new business-to-business sales channels.
The Company continues to focus on establishing new and strengthening existing business-to-consumer and business-to-business channels while also strengthening customer support to increase customer satisfaction and enable high product turnover.
For the year ended December 31, 2024, net sales generated in the U.S. was $8,397,570, compared to $1,522,821 for the same period in 2023, an increase of 451%. For the year ended December 31, 2024, net sales generated in Canada was $67,519, compared to $6,811 for the same period in 2023, an increase of 891%.
For the year ended December 31, 2025, net sales generated in Canada was $90,955, compared to $67,519 for the same period in 2024, an increase of 35%. For the year ended December 31, 2025, net sales generated outside the U.S. and Canada was $700, compared to $19,290 for the same period in 2024.
We have pursued and will continue to pursue relationships with Original Equipment Manufacturers with the intention of distributing through them as well. 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 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. We currently work closely with a large U.S. and a large Canadian distributor as well as online retailers to grow our customer base.
For the year ended December 31, 2024, net sales generated outside the U.S. and Canada was $19,290. Net sales increased the year ended December 31, 2024 compared to the same period the prior year due to increased sales of tonneau covers to a private label partner, various dealers and distributors, and end users via the Company’s online marketplace.
Net sales increased the year ended December 31, 2025, compared to the same period the prior year due to increased sales of tonneau covers to end users via the Company’s online marketplace and various dealers and distributors. The Company increased its product offerings in 2025 to also include the AL4 and HD3 covers to end customers.
Federal Reserve has begun to decrease interest rates in 2024, but they may persist at an elevated level for the foreseeable future.
Federal Reserve has begun to decrease interest rates in 2024, but they may persist at an elevated level for the foreseeable future. Our indebtedness arrangements both have floating interest rates, meaning we are susceptible to variable monthly mortgage and debt interest costs as a result of changes in interest rates.
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 year ended December 31, 2024, we had net losses of $16,163,789 (2023 - $14,928,958).
Since the Company’s acquisition of Worksport in 2014, it has never generated a profit. During the fiscal year ended December 31, 2025, we had net losses of $19,352,297 (2024 - $16,163,789).
The increase in the cost of sales as a percentage of sales was primarily due to two factors: (1) strategic discounting aimed at boosting traffic to our direct-to-consumer online marketplace, and (2) overhead allocation associated with sold inventory produced in periods with limited production volume.
Cost of Sales The decrease in the cost of sales as a percentage of sales was primarily due to two factors: (1) increase production volume to support sales growth, including introduction of new product lines during 2025, and (2) overhead allocation efficiencies associated with higher production volume.
This scaling will be facilitated by reallocating more of our existing human capital and machinery resources from design engineering and testing functions toward production. This shift is intended to support ongoing production increases and drive long-term efficiencies in our cost structure. We provide our distributors and online retailers an “all-in” wholesale price.
As production volume grows and our manufacturing process becomes more efficient, we expect to allocate fixed costs included in overhead absorption against a larger production volume base. This scaling will be facilitated by reallocating more of our existing human capital and machinery resources toward production. We provide our distributors and online retailers an “all-in” wholesale price.
While the Freight Rate Index has significantly increased from late 2023 through mid-2024 as a result of Houthi attacks against cargo ships in the Red Sea and the concurrent decline in activity across the Panama Canal, the shipping routes used by Worksport have not faced dramatic price hikes. Regardless, Worksport is closely monitoring international shipping costs.
While the Freight Rate Index has significantly increased during certain periods due to geopolitical tensions and disruptions affecting global shipping routes, the shipping routes used by Worksport have not faced dramatic price hikes. Regardless, Worksport is closely monitoring international shipping costs.
Private label sales accounted for 37% or $3,129,930 of net sales for the year ended December 31, 2024. We expect to continue to grow our fields of business as we develop unique products with enhanced utility to offer to other prospective clients in the U.S. and Canadian markets.
We expect to continue to grow our fields of business as we develop unique products with enhanced utility to offer to other prospective clients in the U.S. and Canadian markets. 29 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.
Inventory increased at December 31, 2024 by $1,558,562 and increased at December 31, 2023 by $2,285,120 due to a shift in production requirements from soft tonneau covers to hard tonneau covers.
The shift from private label sales to other business to business channel customers resulted in an increase in accounts receivable in 2025 based on longer payment terms when compared with direct sales to consumers. 31 Inventory increased at December 31, 2025 by $4,340,617 and increased at December 31, 2024 by $1,558,562 due to a shift in production requirements from soft tonneau covers to hard tonneau covers.
We have raised significant funds during the 2024 fiscal year by utilizing the following public and private offerings: September 2024 Private Offering On September 19, 2024, we entered into a Securities Purchase Agreement with an investor pursuant to which we issued and sold 95,000 shares of our common stock at a purchase price of $4.00 per share.
We have raised significant funds during the 2025 fiscal year by utilizing the following public and private offerings: At-the-Market Offering Program During the fiscal year ended December 31, 2025, the Company sold 110,619 shares of its common stock under its at-the-market offering program pursuant to the At-the-Market Offering Agreement, dated September 30, 2022 (the “Sales Agreement”), as amended on November 14, 2025, with H.C.
Online retailers accounted for 58% of total net sales for the year ended December 31, 2024 compared to 7% for the year ended December 31, 2023. Distributor sales increased 6,120% for the year ended December 31, 2024 compared with the year ended December 31, 2023 with net sales of $423,627 and $6,811, respectively.
Distributor sales increased 884% for the fiscal year ended December 31, 2025 compared with the fiscal year ended December 31, 2024 with net sales of $4,168,469 and $423,627, respectively. There were no private label sales in 2025. Private label sales accounted for 37% or $3,129,930 of net sales for the fiscal year ended December 31, 2024.
Set forth below is a brief discussion of the key factors impacting our results of operations. 33 Climate Change Climate change threatens to cause many foreseeable as well as unforeseeable ramifications.
Climate Change Climate change threatens to cause many foreseeable as well as unforeseeable ramifications.
As part of the agreement, we also issued warrants to purchase up to 190,000 shares of common stock at an exercise price of $4.00 per share, exercisable for a period of five years from the date of issuance.
In consideration for such exercise, the Company issued new warrants to purchase up to 1,424,500 shares of its common stock at an exercise price of $6.502 per share, subject to adjustment. The new warrants become exercisable six months from the date of issuance and expire on the fifth anniversary of the date of issuance.
Removed
Our $6,000,000 mortgage on our West Seneca property and our $1,487,000 in equipment financing both have floating interest rates, meaning we are susceptible to variable monthly mortgage and debt interest costs as a result of changes in interest rates.
Added
Set forth below is a brief discussion of the key factors impacting our results of operations. 26 Tariffs and Supply Chain Impact Our hybrid manufacturing model, which includes sourcing certain products and components from overseas—particularly from China—exposes us to risks associated with tariffs and evolving global trade policies.
Removed
We consider overall inventory levels in relation to forecasted demand.
Added
Tariffs on imported raw materials, components, and finished goods have increased our input costs and may continue to do so in the future.
Removed
Consolidated Results of Operations The following is a discussion of our results of operations in 2024 compared to 2023. Net sales For the year ended December 31, 2024, net sales were $8,484,379, as compared to $1,529,632 for the year ended December 31, 2023. Year-over-year sales increased by approximately 455%.
Added
During fiscal 2025, increases in certain material and component costs attributable, in part, to tariffs contributed to higher cost of goods sold; however, these increases were offset by higher production volumes, improved overhead absorption, and operational efficiencies, resulting in an overall improvement in gross margins compared to the prior fiscal year.
Removed
We intend to continue gradually increasing output capacity through refined production processes and increased personnel. 36 Net sales from online retailers of our products increased from $104,352 in 2023 to $4,930,822 in 2024, an increase of 4,625%.
Added
These impacts are both direct, through duties applied to imported products and components, and indirect, as suppliers and logistics providers may pass through increased costs associated with tariff regimes and related trade restrictions. While we have taken steps to mitigate these risks through supplier diversification, a portion of our supply chain remains dependent on foreign sources.
Removed
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.
Added
As a result, tariffs and other trade measures may continue to increase our cost of goods sold and may impact product pricing and margins to the extent not offset by operational efficiencies or pricing actions.
Removed
Cost of Sales Cost of sales increased by 488%, from $1,289,118 for the year ended December 31, 2023 to $7,578,729 for the year ended December 31, 2024. Our cost of sales, as a percentage of net sales, was approximately 89% and 84% for the years ended December 31, 2024 and 2023, respectively.
Added
In addition, changes in U.S. trade policy or further escalation of tariffs could disrupt supply availability or increase lead times, which may adversely affect our operations and results of operations. Geopolitical and Macroeconomic Conditions Recent geopolitical developments, including conflicts in the Middle East involving Iran, have contributed to volatility in global financial markets, higher energy prices and inflationary pressures.
Removed
Additionally, overhead absorption was initially higher due to the allocation of fixed costs over a smaller production volume earlier in 2024. As production volume grows and our manufacturing process becomes more efficient, we expect to allocate those same fixed costs against a larger production volume base.
Added
While we do not have direct exposure to the affected regions through our suppliers, customers or operations, these conditions may adversely affect our business. In particular, increases in global energy and transportation costs may increase our cost of goods sold, and inflationary pressures may increase the cost of materials sourced from our suppliers, including suppliers in Asia.
Removed
The increase relates to development initiatives for hard tonneau covers (HD3, AL4), soft tonneau covers (SCX) and energy products. ● General and administrative expense increased by $704,632 from $7,974,362 in 2023 to $8,678,994 in 2024.
Added
In addition, such conditions may adversely affect consumer discretionary spending, which could reduce demand for our products. Volatility in the capital markets may also affect our ability to raise capital on favorable terms. The extent and duration of these conditions remain uncertain and could adversely affect our business, financial condition and results of operations.
Removed
The increase was related to increased employment of production personnel including engineers, machine operators, and assembly people, and increases in wages and salaries as we seek to expand our operations and further develop our products. ● Sales and marketing expenses increased by $903,450, from $1,483,054 for 2023 to $2,386,504 for 2024.
Added
We consider overall inventory levels in relation to forecasted demand. Changes in these and other factors, such as low demand or technological obsolescence, could cause us to establish or increase our inventory reserves, which would negatively impact our gross margin.
Removed
The increase in sales and marketing is primarily attributable to the Company’s marking campaigns to create brand and product awareness. ● Professional fees, which include accounting, legal, and consulting fees, decreased by $822,203 from $3,853,134 in 2023 to $3,030,931 in 2024.
Added
Pursuant to the laws of the State of Nevada, shareholder approval was not required in order to effect the split as the Board has the authority to effect a reverse stock split without shareholder approval if the number of authorized shares of common stock is proportionally reduced as a result.
Removed
The decrease in professional fees was due to insourcing certain business processes and fewer share-based payments to third parties for services rendered. \Other Income and Expenses We reported net other expenses for the year ended December 31, 2024 of $697,955 compared to net other expenses of $192,297 the prior year.
Added
No fractional shares were issued as a result of the Reverse Stock Split. Each fractional share was automatically rounded up to the next whole share. The Reverse Stock Split was undertaken in order for us to regain compliance with the minimum bid requirement under Nasdaq Listing Rule 5550(a)(2).
Removed
The increase in other expenses can be attributed to decreased interest and rental income. Liquidity and Capital Resources As of December 31, 2024, we had $4,883,099 in cash and cash equivalents and $892,000 of remaining available capacity on our revolving line of credit.
Added
Amendment to Articles of Incorporation On April 17, 2025, our Board of Directors and majority stockholder approved an amendment to our articles of incorporation to increase the total number of authorized shares of capital stock from 30,900,000 to 55,000,000, consisting of an increase in the authorized number of shares of common stock from 29,900,000 to 45,000,000 and an increase in the authorized number of shares of preferred stock from 1,000,000 to 10,000,000.
Removed
The warrants contain standard adjustment provisions for stock splits, recapitalizations and reorganizations and include beneficial ownership limitations to prevent the purchaser from exceeding certain ownership thresholds. We obtained $380,000 in net proceeds from this offering.
Added
The amendment was filed with the State of Nevada and became effective on May 19, 2025.
Removed
Public Offering On September 30, 2022, we filed a shelf registration statement on Form S-3 (File No. 333-267696), which was declared effective by the SEC on October 13, 2022, containing a base prospectus covering the offering, issuance and sale by us of up to $30,000,000 of our common stock and prospectus supplement covering the offering, issuance and sale by us of up to $13,000,000 of our common stock that may be issued and sold under an At The Market Offering Agreement dated as of September 30, 2022.
Added
The increase in authorized capital provides the Company with additional flexibility to issue equity securities in connection with capital-raising transactions, strategic initiatives, or other corporate purposes. 28 Consolidated Results of Operations The following is a discussion of our results of operations for the fiscal year ended December 31, 2025 compared to the fiscal year ended December 31, 2024.
Removed
Pursuant to the ATM Agreement, H.C. Wainwright & Co., LLC is entitled to a commission equal to 3.0% of the gross sales price of the shares of common stock sold. We sold $6,032,789 of shares of common stock pursuant to the ATM Agreement during the fiscal year ended December 31, 2024.
Added
Years ended December 31, Favorable (Unfavorable) 2025 vs. 2024 2025 2024 Amount % Net sales $ 16,101,738 $ 8,484,379 $ 7,617,359 89.8 % Cost of sales 11,626,831 7,578,729 (4,048,102 ) (53.4 )% Gross profit 4,474,907 905,650 3,569,257 394.1 % Research and development 1,538,923 2,289,940 751,017 32.8 % General and administrative 14,806,326 11,709,925 (3,096,401 ) (26.4 )% Sales and marketing 6,947,671 2,386,504 (4,561,167 ) (191.1 )% Other operating income, net (4,587 ) (14,885 ) (10,298 ) (69.2 )% Loss from operations (18,813,426 ) (15,465,834 ) (3,347,592 ) (21.6 )% Interest expense (592,755 ) (726,095 ) 133,340 18.4 % Other (expense) income 53,884 28,140 25,744 91.5 % Net loss $ (19,352,297 ) $ (16,163,789 ) $ (3,188,508 ) (19.7 )% Per share data Basic and diluted earnings per share $ (3.16 ) $ (5.84 ) $ 2.68 46.0 % Years ended December 31, Favorable (Unfavorable) Percent of net sales 2025 2024 Percentage points Cost of sales 72 % 89 % 17 % Gross profit 28 % 11 % 17 % Research and development expense 10 % 27 % 17 % General and administrative expense 92 % 138 % 46 % Sales and marketing expense 43 % 28 % (15 )% Net sales For the year ended December 31, 2025, net sales generated in the U.S. was $16,010,083, compared to $8,397,570 for the same period in 2024, an increase of 91%.
Removed
March 2024 Direct Offering and Concurrent Private Offering On March 18, 2024, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a certain institutional investor (the “Purchaser”) pursuant to which we sold, in a registered direct offering, an aggregate of (i) 237,224 shares (the “Shares”) of common stock and (ii) 147,789 pre-funded warrants (the “Pre-funded Warrants”) to purchase up to 147,789 shares of Common Stock (the “Pre-funded Warrant Shares”).
Added
Worksport has successfully bolstered its business-to-consumer sales channels in 2025, and it is now focusing on increasing cost efficiencies in these sales channel as well as expanding its presence in additional business-to-business sales channel territories.
Removed
The offering price per Share was $7.40 and the offering price per Pre-funded Warrant was $7.399.
Added
For the business-to-consumer channel, we are focused on lowering our customer acquisition cost with additional focus on brand awareness and shift away from reliance on conversion marketing to increase brand awareness.
Removed
The Shares, Pre-funded Warrants and Pre-funded Warrants Shares were offered pursuant to our Form S-3 Registration as supplemented by a prospectus supplement and accompanying base prospectus dated March 18, 2024, filed with the SEC on March 19, 2024 pursuant to Rule 424(b)(5) promulgated under the Securities Act.
Added
Net sales from online retailers of our products increased from $4,930,822 in 2024 to $11,933,269 in 2025, an increase of 142%. Online retailers accounted for 74% of total net sales for the fiscal year ended December 31, 2025 compared to 58% for the fiscal year ended December 31, 2024.
Removed
The registered direct offering closed on March 20, 2024. 39 The Company received net proceeds of approximately $2.59 million from the offering, after deducting the estimated offering expenses payable by the Company, including the tail fees payable to Maxim Group LLC. The Company intends to use the net proceeds from the offering for general corporate purposes, including working capital.
Added
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 fiscal year, the overall effect of increased scale and production efficiencies resulted in an improvement in our gross margin.
Removed
In a concurrent private placement, we issued the Purchaser warrants to purchase an aggregate of 770,264 shares of common stock for $7.40 per share. Under the warrants, we are obligated to register the shares underlying the warrants on a registration statement on Form S-3 (or other applicable form).
Added
Operating Expenses Operating expenses increased for the fiscal year ended December 31, 2025 by $6,916,849, from $16,371,484 for the fiscal year ended December 31, 2024 to $23,288,333 for the fiscal year ended December 31, 2025, due to the following factors. ● Research and development expense: The $751,017 (33%) decrease relates to our transition from development of certain hard covers in 2024 (e.g., HD3, AL4, certain energy products) to production in 2025.
Removed
If at the time of exercise of the Warrant there is no effective registration statement available for the shares of common stock underlying the warrants, the warrants may be exercised via a “cashless exercise.” We will not receive any proceeds from any warrants exercised by a “cashless exercise.” Consolidated Statement of Cash Flows Cash increased from $3,365,778 at December 31, 2023 to $4,883,099 at December 31, 2024 – an increase of $1,517,321 or 45%.
Added
We continued our development initiatives with our energy products and other tonneau covers in 2025 with the anticipation of production of 2026. ● General and administrative expense: The $3,096,401 (26%) increase was related to increased employment as we expand our operations and further develop our products.
Added
We also incurred expenses related to ongoing investment relations initiatives to further our brand recognition to investors during the period. ● Sales and marketing expense: The $4,561,167 (191%) increase in sales and marketing is primarily attributable to the Company’s online optimization efforts, online marking campaigns and other traditional branding initiatives to create brand and product awareness.
Added
Other Income ((Expense) The $159,084 (23%) decrease in other expenses can be attributed to decreased interest expense based on our components of indebtedness in 2025. In 2024, we converted from a traditional mortgage to a line of credit which is secured by our production facility.

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