Worksport .(US:WKSP)2025-08-13 12:01Financial Performance - For the three months ended June 30, 2025, net sales were $4,104,958, representing a year-over-year increase of approximately 114% compared to $1,921,539 in the same period of 2024[109] - Net sales for the six months ended June 30, 2025, were $6,344,963, a 161% increase from $2,434,176 in the same period of 2024[119] - Net sales generated in the U.S. for the three months ended June 30, 2025, were $4,070,406, an increase of 113% from $1,910,838 in the same period of 2024[109] Expenses and Losses - Cost of sales increased by approximately 132%, from $2,100,091 for the six months ended June 30, 2024, to $4,866,630 for the six months ended June 30, 2025[123] - Operating expenses rose by $1,467,970, from $7,884,299 in 2024 to $9,352,269 in 2025, primarily due to increased general and administrative expenses and sales and marketing expenses[125] - Net loss for the six months ended June 30, 2025, was $8,194,948, compared to a net loss of $7,728,056 for the same period in 2024, representing a 6.0% increase[128] - Research and development expenses decreased by $741,031, from $1,415,465 in 2024 to $674,434 in 2025, due to reduced development efforts for the AL3 and AL4 product lines[125] Cash and Working Capital - The company had $1,393,140 in cash and cash equivalents as of June 30, 2025, down from $4,883,099 at December 31, 2024, a decrease of 72%[135] - The company had working capital of $4,758,042 as of June 30, 2025, down from $7,304,110 as of December 31, 2024[129] - Net cash used in operating activities for the six months ended June 30, 2025 was $6,935,033, an increase from $6,421,292 in 2024, primarily due to the shift to production and distribution of hard tonneau covers[136] Inventory and Receivables - Accounts receivable increased by $253,372 at June 30, 2025, compared to an increase of $160,264 in the prior period, driven by the development of the Distributor and Jobber customer network[136] - Inventory increased by $691,459 at June 30, 2025, contrasting with a decrease of $2,755,252 at June 30, 2024, due to the maturation of the production process[137] - Prepaid expenses and deposits increased by $470,641 at June 30, 2025, compared to a decrease of $1,345,434 in the prior period, influenced by timing of deposits from B2C customers[137] Financing and Capital Raising - The company completed the initial closing of its Regulation A offering, raising gross proceeds of $160,339 from the issuance of 49,335 units[111] - The company generated gross proceeds of approximately $6,731,400 from the exercise of existing warrants and the sale of inducement warrants during the six months ended June 30, 2025[132] - The company expects to generate gross proceeds of $10,000,000 from its Regulation A offering, with potential additional proceeds of $13,950,000 from warrants if fully converted[134] - Net cash provided by financing activities for the six months ended June 30, 2025 was $4,027,871, down from $6,817,390 in the prior period[140] Strategic Initiatives - The successful launch of the AL4 product line and enhanced branding efforts contributed to higher direct-to-consumer sales, driving increased net sales[110] - The company announced a strategic partnership with Patriot Automotive Technologies to expand its network to over 200 dealer locations nationwide[111] - The addition of a second national automotive distributor expanded the partnered dealer network to over 550 locations across the U.S., representing a nearly six-fold increase since the beginning of 2025[111] - The company confirmed a Fall 2025 commercial launch for its modular nano-grid system, known as SOLIS & COR, following successful engineering milestones[111] Other Financial Information - The company reported net other expenses of $321,012 for the six months ended June 30, 2025, compared to $177,842 for the same period in 2024, attributed to increased interest expense[127] - There were no material off-balance sheet arrangements that are likely to have a significant future effect on the company's financial condition[141] - As a smaller reporting company, the company is not required to provide certain market risk disclosures[142]