Company: WKSP
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022113
Chunk: 90

Company: Worksport Ltd
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 90
---
 financial statements, including revenue
recognition, inventory valuation, reviews for impairment of long-lived assets, and income taxes.

RECENT
ACCOUNTING PRONOUNCEMENTS

See
Note 1, Description of Business and Significant Accounting Policies included in Item 1, Financial Statements of this report for further
information regarding Financial Accounting Standards Board issued Accounting Standards Updates.

CONSOLIDATED
RESULTS OF OPERATIONS

Three
Months Ended September 30, 2025 compared to the Three Months Ended September 30, 2024

Net
Sales

For
the three months ended September 30, 2025, net sales were $5,013,872, as compared to $3,122,359 for the three months ended September
30, 2024. Year-over-year net sales increased by 61%. For the three months ended September 30, 2025, net sales generated in the U.S.
was $4,985,887, as compared to $3,093,608 for the same period in 2024, an increase of 61%. For the three months ended September 30,
2025, net sales generated from other countries was $27,985, compared to $28,751 for the same period in 2024.

Net
sales increased during the three months ended September 30, 2025 compared to the same period the prior year due to the successful
launch of the AL4 product line alongside further branding and marketing efforts for all product lines, resulting in higher direct to
consumer sales. Implementation of our distributor, wholesaler, and jobber sales strategy via the addition of multiple distributor
partners with a network of over 550 locations across the U.S. has driven higher net sales from our business-to-business
sales channels.

25

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, and our own e-commerce platform hosted on Shopify.
Distribution via each aforementioned channel is expected to increase during 2026. 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 six large U.S. distributors, one retail auto chain, and online retailers to
grow our customer base. We added two of these U.S. distributors within the period, which will allow us to promote to dealers and sell
to jobbers in