Company: WKSP
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010837
Chunk: 36

Company: Worksport Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 36
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, from $66,777 in 2024 to $869,749 in 2025. The
                                            increase in sales and marketing was primarily attributable to marketing campaigns to drive
                                            traffic and engagement to our online marketplace for direct to consumer sales.

●Professional
                                            fees expense, which includes accounting, legal, and consulting fees, decreased from $943,778
                                            in 2024 to $426,041 in 2025. The decrease in professional fees was primarily driven by reduced reliance
on external consultants as the Company progressed from the planning and setup phase of its manufacturing operations to active production
and scaling efforts, inclusive of marketing, as well as a reduction in non-cash expenditures relating to stock-based compensation for
consultants.

20

Other
Income and Expenses

We
reported net other expenses for the three months ended March 31, 2025 of $204,158, compared to $75,191 for three months ended March
31, 2024. The increase in net other expenses was attributed to increased interest expense on our line of credit and a reduction in
rental income as a result of the completion of the term of our sublease agreement.

Net
Loss

Net
loss for the three months ended March 31, 2025 was $4,460,464, compared to a net loss of $3,714,657 for the three months ended March
31, 2024 – an increase of 20%. The increase in the net loss can be attributed to the increase in various operating expenses as
we focus on expanding our operations, research and development, manufacturing, and supply chain.

Liquidity
and Capital Resources

As
of March 31, 2025 and December 31, 2024, we had $5,080,372 and $4,883,099, respectively in cash and cash equivalents. As of March
31, 2025, we had $2,858,700 of remaining available capacity on our revolving line of credit compared with $811,400 of remaining
available capacity as of December 31, 2024. The increase in cash and cash equivalents and increase in the remaining available
capacity on our revolving line of credit was primarily a result of our warrant inducement transaction on February 27, 2025. We
have historically generated only limited gross profit and have relied primarily upon capital generated from public and private
offerings of our securities to fund continuing operations. Since the Company’s acquisition of Works