Company: WKSP
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023334
Chunk: 38

Company: Worksport Ltd
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 our stocking warehouse.

Operating
Expenses

Operating
expenses increased for the three months ended June 30, 2025 by $492,366, from $4,207,377 for the three months ended June 30, 2024 to
$4,699,743, mainly due to the following factors:

    ●
    Research and development expense decreased by $741,031, from $1,045,864
in 2024 to $304,833 in 2025. The decrease was related to developmental progress of our AL3 product line and release of our AL4 product
line, both of which required less development efforts as resources were shifted to normal-course production.

    ●
    General and administrative expense increased by $553,533, from $1,900,522 in 2024 to $2,454,055 in 2025. The increase was primarily attributable to new software subscriptions used to support administrative and production efforts and higher labor costs, alongside an increase in e-Commerce fees due to higher current period sales volume.

    ●
    Sales and marketing expense increased by $826,563, from $478,792 in 2024
to $1,305,355 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, including awareness campaigns for the newly released AL4 product line.

    ●
    Professional fees expense, which includes accounting, legal, and consulting
fees, decreased from $766,563 in 2024 to $637,493 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.

Other
                                            Income and Expenses

We
reported net other expenses for the three months ended June 30, 2025 of $116,853, compared to $102,651 for three months ended June 30, 2024.
The increase in net other expenses was attributed to a reduction in
rental income as a result of the completion of the term of our sublease agreement.

26

Net
Loss

Net
loss for the three months ended June 30, 2025 was $3,734,484, compared to a net loss of $4,013,399 for the three months ended June
30, 2024 – a decrease of