Company: WKSP
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022113
Chunk: 41

Company: Worksport Ltd
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 41
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 rates, regional economies and the global economy. While it is difficult to predict the impact of any of the foregoing, the Israel-Hamas
war may increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when
needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition and results of operations.

Foreign
Currencies

We
are subject to foreign exchange risk as we manufacture certain products and components in China, market extensively in both Canadian
and U.S. markets, employ people residing in both the U.S. and Canada and, to date, have raised funds in Canadian Dollars. Meanwhile,
we report results of operations in U.S. Dollars. Since our Canadian customers pay in Canadian Dollars, we are subject to gains and losses
due to fluctuations in the USD relative to the Canadian Dollar. Our manufacturers in China are paid in USD to better avoid the relatively
greater fluctuation of the Chinese Yuan. To the extent the U.S. dollar strengthens against any of these foreign currencies, the translation
of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for our operations.

Tariffs

Worksport’s
hard tonneau covers—led by the AL3 and AL4 models—are manufactured in the U.S. using predominantly American aluminum, providing
strong resilience against tariffs. Soft covers, currently sourced from China, account for a minor portion of revenue, with domestic sourcing
options actively under review. The upcoming SOLIS solar cover will be built in the U.S., with solar panels expected to be sourced from
India, a country maintaining relatively stable trade relations with the U.S. For the COR portable power system, Worksport is working
with its international battery supplier and U.S.-based partners to mitigate tariff exposure and evaluate onshore manufacturing opportunities.
We continue to monitor international trade developments closely, including potential changes in tariff rates and the possibility of new
exemptions or other regulatory actions, to analyze impacts to our operations. The extent and duration of tariffs remain uncertain and
will depend on a variety of factors outside of our control. We remain committed to optimizing our operations, including managing our
supply chain to minimize the impact of tariffs on our results of operations.

24

Business
Developments

The
following highlights recent material developments in our business in the three months ended September 30, 2025:

    ●
    On
    July 16, 2025, Worksport announced that the AetherLux