Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 325

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 325
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 to
direct to consumer decreases the cash conversion timeline.

Inventory
increased at December 31, 2024 by $1,558,562 and increased at December 31, 2023 by $2,285,120 due to a shift in production
requirements from soft tonneau covers to hard tonneau covers. Prepaid expenses and deposits decreased by $1,305,057 at December 31,
2024 and increased by $776,709 at December 31, 2023 due to deposits by us for the purchase of production equipment and
inventory.

Accounts
payable and accrued liabilities increased at December 31, 2024 by $1,167,834 and decreased at December 31, 2023 by $492,114,
respectively. These fluctuations were driven primarily by the transition to production activities in 2024.

40

Investing
Activities

Net
cash used in investing activities for the year ended December 31, 2024 was $528,235 compared to $3,756,364 in the prior year. The decrease
in investing activities was primarily due to higher capital expenditures on various production equipment in 2023 to support the Company’s
transition to production in 2024.

Financing
Activities

Net
cash provided by financing activities for the year ended December 31, 2024 was $12,184,354 compared to $4,431,965 in the prior year.
During the year ended December 31, 2024 the Company received net proceeds of $12,482,549 from the sale of shares and pre-funded warrants.
During the year ended December 31, 2023, the Company received net proceeds of $4,475,869 from the sale of shares and pre-funded warrants.

Contractual
Obligations and Commercial Commitments

The
following table summarizes our contractual obligations as of December 31, 2024 and 2023:

    Contractual
    Obligations 
    December
    31, 2024  
    December
    31, 2023 
  
    Operating lease obligations 
    $615,007  
    $1,082,319 
  
    Equipment purchases 
    $-  
    $59,815 
  
    Total Contractual Obligations 
    $615,007  
    $1,142,134 

We
intend to fund our contractual obligations with working capital.

Off-Balance
Sheet Arrangements