Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 134

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 134
---
-based payments to third
    parties for services rendered.

\Other
Income and Expenses

We
reported net other expenses for the year ended December 31, 2024 of $697,955 compared to net other expenses of $192,297 the prior year.
The increase in other expenses can be attributed to decreased interest and rental income.

Liquidity
and Capital Resources

As
of December 31, 2024, we had $4,883,099 in cash and cash equivalents and $892,000 of remaining available capacity on our revolving line of credit. 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 Worksport in 2014, it has never generated a profit. During the year ended December 31,
2024, we had net losses of $16,163,789 (2023 - $14,928,958). As of December 31, 2024, the Company had working capital of $7,304,110
(2023 – $1,956,894) and had an accumulated deficit of $64,476,966 (2023 -
$48,313,177).

38

In
their audit report, our independent auditors expressed that there is substantial doubt as to our ability to continue as a going concern.
Our ability to continue as a going concern is dependent upon our ability to generate cash flows from operations and obtain equity and/or
debt financing. We intend to continue funding operations through equity and debt financing arrangements, which may be insufficient to
fund our capital expenditures, working capital and other cash requirements in the long term. There can be no assurance that the steps
our management is taking will be successful.

To
date, our principal sources of liquidity consist of net proceeds from public and private securities offerings and cash exercises of outstanding
warrants. During the year ended December 31, 2024, the Company received net proceeds of $12,482,549 from offerings. Management is focused
on transitioning towards gross profit as our principal source of liquidity by growing our existing product offerings and customer base
and realizing manufacturing efficiency improvements. We cannot give assurance that we can increase our cash balances or limit our cash
consumption and thus maintain sufficient cash balances for our planned operations or future business developments. Future business development
and demands may lead to cash utilization at levels greater than recently experienced. We may need to raise additional capital in the