Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 113

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 113
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possibility of delivery delays, product defects and other production-side risks stemming from our use of outsourced manufacturers and
suppliers cannot be eliminated. In particular, inadequate production capacity among outsourced manufacturers could result in us being
unable to supply enough product amid periods of high product demand, the opportunity costs of which could be substantial.  This
risk is partially offset by the fact that we domestically manufacture our line of hard tonneau covers, which is responsible for a larger
portion of our sales than our outsource manufactured soft tonneau covers.

There
are risks associated with domestic production that may result in slower or more expensive production.

Prior
to August of 2023, we had no experience in the domestic manufacturing of tonneau covers. Domestic production entails far more detailed
sourcing of raw materials as well as hiring and training of personnel. Domestic production increases our susceptibility to domestic low-wage
labor shortages and subjects us to higher thresholds of compliance with local labor and business laws.

We
may not be successful in our potential business combinations.

We
may, in the future, pursue acquisitions of other complementary businesses and technology licensing arrangements. We have been approached
by competitors to license one or more of our tonneau cover products. We may also pursue strategic alliances and joint ventures that leverage
another company’s core products and industry experience to expand our product offerings and geographic presence. We have limited
experience with respect to acquiring other companies and limited experience with respect to forming collaborations, strategic alliances
and joint ventures. If we were to make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing
business and could assume unknown or contingent liabilities. Integrating an acquired company also may require management resources that
otherwise would be available for the ongoing development of our existing business.

We
have competition for our market share which could harm our sales.

We
participate in the automotive aftermarket equipment industry which is highly competitive for a relatively limited customer base. Companies
that compete in this market include Real Truck (formerly Truck Hero), Truck Accessories Group, and Agri-Cover, Inc., among others. Many
of our current competitors are significantly better funded and have longer operating histories than we do.

In
addition, some of our competitors sell their products at prices lower than ours, and we compete primarily on the basis of product quality,
features, value, service, and customer relationships. Our competitive success also depends on our ability to maintain a strong brand
and the belief that customers will need our products and services to meet their