Company: WKSP
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010837
Chunk: 71

Company: Worksport Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 71
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. 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.

18

Business
Developments

The
following highlights recent material developments in our business in the three months ended March 31, 2025:

●On
                                            February 4, 2025, the Company announced it had begun production of its new flagship product
                                            line: the AL4 Hardcover.

●On
                                            February 11, 2025, the Company announced that its subsidiary, Terravis Energy, had achieved
                                            a major industry milestone by unveiling its AetherLux™ heat pump system, which eliminates
                                            the need for Defrost Cycles, and operates at temperatures as low as -57°F and as high
                                            as +131°F – both of which are large shortcomings of other heat pumps on the market.

 ●On
                                            February 25, 2026 the Company announced that its dealer network has expanded by 30% in the
                                            first two months of 2025, and, following an ongoing production ramp-up driven by strong early
                                            feedback, initial models of its AL4 Premium Tonneau Cover were now officially available for
                                            purchase at www.worksport.com

●On
                                            February 27, 2025, the Company entered into a