Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 106

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 106
---

hinder our ability to generate profits.

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. 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.

Our
ability to achieve our expansion objectives and to manage our growth effectively depends upon a variety of factors, including our ability
to internally develop products, to attract and retain skilled employees, to successfully position and market our products, to protect
our existing intellectual property, to capitalize on the potential opportunities we are pursuing with third parties, and to acquire sufficient
funding whether internally or externally. 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. 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. We carry significant strategic inventories of these finished
goods to reduce the risk associated with this concentration of suppliers. Strategic inventories are managed based on demand. 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.

From
time to time, in order to expand operations to meet customer demand, we will need to incur additional capital expenditures. These capital
expenditures are intended to be funded from third party sources, including the incurring of debt and/or the sale of additional equity
securities. In addition to requiring additional financing to fund capital expenditures, we may require additional financing to fund working
capital, research and development, sales and marketing, general and administrative expenditures and operating losses. The incurrence
of debt creates