Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 324

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 324
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 Stock (the “Pre-funded Warrant Shares”). The offering price per Share was $7.40 and the offering
price per Pre-funded Warrant was $7.399. The Shares, Pre-funded Warrants and Pre-funded Warrants Shares were offered pursuant to our
Form S-3 Registration as supplemented by a prospectus supplement and accompanying base prospectus dated March 18, 2024, filed with the
SEC on March 19, 2024 pursuant to Rule 424(b)(5) promulgated under the Securities Act. The registered direct offering closed on March
20, 2024.

39

The
Company received net proceeds of approximately $2.59 million from the offering, after deducting the estimated offering expenses payable
by the Company, including the tail fees payable to Maxim Group LLC. The Company intends to use the net proceeds from the offering for
general corporate purposes, including working capital.

In
a concurrent private placement, we issued the Purchaser warrants to purchase an aggregate of 770,264
shares of common stock for $7.40 per share. Under the warrants, we are obligated to register the shares underlying the warrants
on a registration statement on Form S-3 (or other applicable form). If at the time of exercise of the Warrant there is no effective registration
statement available for the shares of common stock underlying the warrants, the warrants may be exercised via a “cashless exercise.”
We will not receive any proceeds from any warrants exercised by a “cashless exercise.”

Consolidated
Statement of Cash Flows

Cash
increased from $3,365,778 at December 31, 2023 to $4,883,099 at December 31, 2024 – an increase of $1,517,321 or 45%. The increase
was primarily due to financing activities conducted during the period to support growth of ongoing operations.

Operating
Activities

Net
cash used by operating activities for the year ended December 31, 2024 was $10,138,798, compared to $11,930,580 in the prior year, driven
by a shift to production and distribution of hard tonneau covers.

Accounts
receivable decreased at December 31, 2024 by $387,561 and increased by $400,521 in the prior year. The decrease in accounts receivable
was due to volume shifts from private label sales in 2023 to direct to consumer sales in 2024. The shift from private label sales