Company: WKSP
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010837
Chunk: 91

Company: Worksport Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 91
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,527, mainly due to the following factors:

●Research
                                            and development expense decreased by $11,399, from $381,000 in 2024 to $369,601 in 2025. The
                                            decrease was related to developmental progress of our AL3 product line which required less
                                            R&D efforts as resources were shifted to normal-course production.

●General
and administrative expense increased by $695,463, from $2,293,318 in 2024 to $2,988,781 in 2025. The increase was related to a shift
in overhead absorption driven by production volume requirements as well as an increase in labor costs to support production efforts.

●Sales
                                            and marketing expense increased by $802,972, from $66,777 in 2024 to $869,749 in 2025. The
                                            increase in sales and marketing was primarily attributable to marketing campaigns to drive
                                            traffic and engagement to our online marketplace for direct to consumer sales.

●Professional
                                            fees expense, which includes accounting, legal, and consulting fees, decreased from $943,778
                                            in 2024 to $426,041 in 2025. The decrease in professional fees was primarily driven by reduced reliance
on external consultants as the Company progressed from the planning and setup phase of its manufacturing operations to active production
and scaling efforts, inclusive of marketing, as well as a reduction in non-cash expenditures relating to stock-based compensation for
consultants.

20

Other
Income and Expenses

We
reported net other expenses for the three months ended March 31, 2025 of $204,158, compared to $75,191 for three months ended March
31, 2024. The increase in net other expenses was attributed to increased interest expense on our line of credit and a reduction in
rental income as a result of the completion of the term of our sublease agreement.

Net
Loss

Net
loss for the three months ended March 31, 2025 was $4,460,464, compared to a net loss of $3,714,657 for the three months ended March
31, 2024 – an increase of 20%. The increase in the net loss can be attributed to the increase in various operating expenses as
we focus on expanding our operations, research and development, manufacturing, and supply chain.

Liquidity
and Capital Resources

As
of March 31, 2025 and December 31, 202