Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 226

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 4
Chunk 226
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Net
sales increased the year ended December 31, 2024 compared to the same period the prior year due to increased sales of tonneau covers
to a private label partner, various dealers and distributors, and end users via the Company’s online marketplace. The Company continues
to focus on establishing new and strengthening existing business-to-consumer and business-to-business channels while also strengthening
customer support to increase customer satisfaction and enable high product turnover. Worksport has successfully bolstered its business-to-consumer
sales channels in 2024, and it is now focusing on increasing cost efficiencies in these sales channels as well as establishing new business-to-business
sales channels. For business-to-consumer channels, we are focused on lowering our customer acquisition cost throughout 2025. For business-to-business
channels, we have assembled a strong team of both internal and external sales representatives, and we are actively presenting our product
offerings to various dealers, wholesalers, and retailers across the U.S. and Canada. We intend to continue gradually increasing output
capacity through refined production processes and increased personnel.

36

Net
sales from online retailers of our products increased from $104,352 in 2023 to $4,930,822 in 2024, an increase of 4,625%. Online retailers
accounted for 58% of total net sales for the year ended December 31, 2024 compared to 7% for the year ended December 31, 2023. Distributor
sales increased 6,120% for the year ended December 31, 2024 compared with the year ended December 31, 2023 with net sales of $423,627
and $6,811, respectively. Private label sales accounted for 37% or $3,129,930 of net sales for the year ended December 31, 2024. We expect
to continue to grow our fields of business as we develop unique products with enhanced utility to offer to other prospective clients
in the U.S. and Canadian markets.

We
distribute our hard tonneau covers and soft tonneau covers in the U.S. and Canada through an expanding network of wholesalers, private
labels, distributors, and other online retailers, including eBay, Amazon, Walmart, and our own e-Commerce platform hosted on Shopify.
Distribution via each aforementioned channel is expected to increase during 2025. We have pursued and will continue to pursue relationships
with Original Equipment Manufacturers with the intention of distributing through them as well.

We