Company: WKSP
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010837
Chunk: 34

Company: Worksport Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 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 (“ASU”).

CONSOLIDATED
RESULTS OF OPERATIONS

Three
Months Ended March 31, 2025 compared to the Three Months Ended March 31, 2024

Net
sales

For
the three months ended March 31, 2025, net sales were $2,240,005, as compared to $512,637 for the three months ended March 31, 2024.
Year-over-year net sales increased by approximately 337%. For the three months ended March 31, 2025, net sales generated in U.S. was
$2,227,549, as compared to $474,654 for the same period in 2024, an increase of 369%. For the three months ended March 31, 2025,
revenue generated in Canada was $12,456, compared to $20,007 for the same period in 2024, a decrease of 38%.

19

Net
sales increased during the three months ended March 31, 2025 compared to the same period the prior year due to further branding and marketing
efforts resulting in higher direct to consumer sales as well as implementation of our distributor, wholesaler, and jobber sales strategy
leading to increases in our business to business sales channels.

We
distribute our hard tonneau covers and soft tonneau covers in the U.S. and Canada through an expanding network of wholesalers, private
labels, distributors, and other online retailers, including eBay, Amazon, Walmart, and our own e-Commerce platform hosted on Shopify.
Distribution via each aforementioned channel is expected to increase during 2025. We have pursued and will continue to pursue relationships
with Original Equipment Manufacturers with the intention of distributing through them as well.

We
currently work closely with a large Canadian and a large U.S. distributor as well as online retailers to grow our customer base. We are
progressing well in conversations with three other major distributors with strong market presences, which will allow us to promote to
dealers and sell to jobbers in strategic regions. Lastly, we are in closing discussions with a network of nationwide U.S. dealers capable