UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended: June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-40681

Worksport Ltd.

(Exact Name of Small Business Issuer as specified in its charter)

Nevada		35-2696895
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

2500 N America Dr, West Seneca, NY		14224
(Address of principal executive offices)		(Zip Code)

Registrant’s Telephone Number, including area code: (888) 554-8789

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Common Stock	WKSP	The Nasdaq Stock Market LLC
Warrants	WKSPW	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit post such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 13, 2024, the Registrant had 29,650,916 shares of common stock, par value $0.0001 per share, issued and outstanding.

WORKSPORT LTD.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets as at June 30, 2024 (Unaudited) and December 31, 2023	3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 and 2023 (Unaudited)	4
Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2024 and 2023 (Unaudited)	5
Condensed Consolidated Statements of Cash Flow for the six months ended June 30, 2024 and 2023 (Unaudited)	7
Notes to the Condensed Consolidated Financial Statements (Unaudited)	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3. Quantitative and Qualitative Disclosures About Market Risk	27

Item 4. Controls and Procedures	27

PART II OTHER INFORMATION

Item 1. Legal Proceedings	28

Item 1A. Risk Factors	28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 3. Defaults Upon Senior Securities	28

Item 4. Mine Safety Disclosures	29

Item 5. Other Information	29

Item 6. Exhibits	30

SIGNATURES	31

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Worksport Ltd.

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30, 2024 (Unaudited)			December 31, 2023
Assets
Current Assets
Cash and cash equivalents	$	3,426,089		$	3,365,778
Accounts receivable, net		623,386			463,122
Other receivable		140,863			165,865
Inventory (note 4)		6,386,744			3,631,492
Related party loan (note 8)		14,303			-
Prepaid expenses and deposits (note 5)		151,815			1,497,249
Total Current Assets		10,743,200			9,123,506
Investments (note 10)		90,731			90,731
Property and Equipment, net (note 6)		14,308,776			14,483,436
Right-Of-Use Asset, net (note 11)		705,155			917,354
Intangible Assets, net		1,337,636			1,338,889
Total Assets	$	27,185,498		$	25,953,916
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities	$	1,750,166		$	1,451,181
Payroll taxes payable		260,585			85,010
Related party loan (note 8)		-			2,192
Current portion – Long term debt (note 12)		-			5,300,000
Current lease liability (note 11)		243,203			328,229
Total Current Liabilities		2,253,954			7,166,612
Long Term – Lease Liability (note 11)		485,451			608,761
Long Term Debt (note 12)		5,300,000			-
Total Liabilities		8,039,405			7,775,373

Shareholders’ Equity
Series A & B Preferred Stock, $0.0001 par value, 100,100 shares authorized, 100 Series A and 0 Series B issued and outstanding, respectively (note 7)		-			-
Common stock, $0.0001 par value, 299,000,000 shares authorized, 28,520,704 and 20,320,503 shares issued and outstanding, respectively (note 7)		2,852			2,032
Additional paid-in capital		69,230,341			64,685,693
Share subscriptions receivable		(1,577	)		(1,577	)
Share subscriptions payable		5,964,290			1,814,152
Accumulated deficit		(56,041,233	)		(48,313,177	)
Cumulative translation adjustment		(8,580	)		(8,580	)
Total Shareholders’ Equity		19,146,093			18,178,543
Total Liabilities and Shareholders’ Equity	$	27,185,498		$	25,953,916

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

Worksport Ltd.

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three and Six Months Ended June 30, 2024 and 2023

(Unaudited)

	2024			2023			2024			2023
	Three Months ended June 30,						Six Months ended June 30,
	2024			2023			2024			2023

Net Sales	$	1,921,539		$	199,851		$	2,434,176		$	231,776
Cost of Goods Sold		1,624,910			153,288			2,100,091			173,045
Gross Profit		296,629			46,563			334,085			58,731

Operating Expenses
General and administrative		2,946,386			1,744,801			5,620,704			3,874,413
Sales and marketing		478,792			548,712			545,569			1,093,063
Professional fees		766,563			1,491,453			1,710,341			2,360,064
(Gain) loss on foreign exchange		15,636			316			7,685			(142	)
Total operating expenses		4,207,377			3,785,282			7,884,299			7,327,398
Loss from operations		(3,910,748	)		(3,738,719	)		(7,550,214	)		(7,268,667	)

Other Income (Expense)
Interest expense		(134,164	)		(187,893	)		(257,762	)		(352,992	)
Interest income		-			78,778			3,054			198,606
Rental income (note 17)		31,513			50,379			76,866			94,835
Gain on settlement of debt		-			-			-			7,493
Total other income (expense)		(102,651	)		(58,736	)		(177,842	)		(52,058	)

Net Loss	$	(4,013,399	)	$	(3,797,455	)	$	(7,728,056	)	$	(7,320,725	)

Loss per Share (basic and diluted)	$	(0.15	)	$	(0.22	)	$	(0.33	)	$	(0.43	)
Weighted Average Number of Shares (basic and diluted)		25,958,628			17,165,533			23,573,349			17,162,471

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

Worksport Ltd.

Condensed Consolidated Statements of Shareholders’ Equity

For the Three Months Ended June 30, 2024 and 2023

(Unaudited)

	Shares		Amount		Shares		Amount		Capital			Receivable			Payable		Deficit			Adjustment			(Deficit)
	Preferred Stock				Common Stock				Additional Paid-in			Share Subscriptions			Share Subscription		Accumulated			Cumulative Translation			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital			Receivable			Payable		Deficit			Adjustment			(Deficit)
Balance at April 1, 2023		100	$	0		17,159,376	$	1,716	$	57,275,920		$	(1,577	)	$	1,223,111	$	(36,907,489	)	$	(8,580	)	$	21,583,101
Issuance for services and subscriptions payable		-		-		250,000		25		1,332,798			-			271,774		-			-			1,604,597
Share issuance		-		-		4,434		1		7,131			-			-		-			-			7,132
Net loss		-		-		-		-		-			-			-		(3,797,455	)		-			(3,797,455	)
Balance at June 30, 2023		100	$	0		17,413,810	$	1,742	$	58,615,849		$	(1,577	)	$	1,494,885	$	(40,704,944	)	$	(8,580	)	$	19,397,375

Balance at April 1, 2024		100	$	0		24,100,201	$	2,410	$	69,018,715		$	(1,577	)	$	1,917,585	$	(52,027,834	)	$	(8,580	)	$	18,900,719
Issuance for services and subscriptions payable		-		-		102,611		10		686,609			-			188,241		-			-			874,860
Warrant inducement (note 16)		-		-		2,840,000		284		(474,850	)		-			3,858,464		-			-			3,383,898
Warrant exercise (note 14)		-		-		1,477,892		148		(133	)		-			-		-			-			15
Net loss		-		-		-		-		-			-			-		(4,013,399	)		-			(4,013,399	)
Balance at June 30, 2024		100	$	0

SEC Form 10-Q filed by Worksport Ltd.