Worksport .(US:WKSP)2025-11-13 12:31Financial Performance - For the three months ended September 30, 2025, net sales increased by 61% to $5.0 million compared to $3.1 million in the same period in 2024[99]. - Net sales for the nine months ended September 30, 2025, were $11,358,835, a 104% increase compared to $5,556,535 for the same period in 2024[127]. - Net loss for the nine months ended September 30, 2025, was $13,123,627, an 11% increase from a net loss of $11,862,973 for the same period in 2024[135]. Cost and Expenses - Cost of sales increased by 67%, from $4,975,277 for the nine months ended September 30, 2024, to $8,311,718 for the same period in 2025, with a decrease in cost of sales as a percentage of sales from 90% to 73%[131]. - Operating expenses rose by $3,693,990, from $12,036,688 in 2024 to $15,730,678 in 2025, driven by increased sales and marketing expenses[133]. - Research and development expenses decreased by $836,382, from $1,811,911 in 2024 to $975,529 in 2025, due to the release of the AL4 product line[133]. - Sales and marketing expenses increased by $3,330,492, from $1,206,807 in 2024 to $4,537,299 in 2025, primarily for marketing campaigns supporting investor relations and the AL4 product line[133]. Cash Flow and Financial Position - As of September 30, 2025, the company had cash and cash equivalents of $3,761,690, down from $4,883,099 as of December 31, 2024[136]. - Cash decreased from $4,883,099 at December 31, 2024, to $3,761,690 at September 30, 2025, a decrease of $1,121,409 or 23% due to debt repayments[142]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $11,190,182, compared to $7,959,212 in 2024, driven by the shift to hard tonneau cover production[143]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $1,067,257, primarily for a deposit on new manufacturing equipment[147]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $11,136,030, an increase from $6,951,879 in 2024, mainly from net proceeds from offerings[148]. - The company has raised net proceeds of $13,358,414 from public and private offerings during the nine months ended September 30, 2025[138]. - The company has an accumulated deficit of $77,617,726 as of September 30, 2025, compared to $64,476,966 as of December 31, 2024[136]. Production and Operations - The company expanded its distribution network to six national distributors, including two new partnerships in the last quarter[99]. - The U.S. production facilities achieved the highest monthly production volume in the company's history[99]. - The company doubled its R&D footprint with a new lease for a larger facility in Ozark, Missouri, to support upcoming product lines[119]. - Worksport announced a 42% increase in national dealer partnerships over the preceding quarter[119]. - The transition to domestic manufacturing is expected to offset higher international shipping costs and improve supply chain resilience[109]. Market and Environmental Considerations - The Worksport SOLIS and COR products are positioned to capitalize on the rising popularity of electric vehicles, targeting consumers interested in clean energy solutions[98]. - The company is actively researching ways to mitigate the environmental impacts of battery recycling and precious metal demand[104]. - The company is closely monitoring the regulatory environment for electric vehicles, which may impact future sales and operations[100]. Balance Sheet Items - Accounts receivable increased by $472,485 at September 30, 2025, attributed to the development of the business-to-business sales channel[144]. - Inventory increased by $1,645,437 at September 30, 2025, as a result of the maturation of the production process[144]. - Prepaid expenses and deposits increased by $865,634 at September 30, 2025, primarily for future strategic marketing and raw materials deposits[145]. - Accounts payable and accrued liabilities increased by $1,477,537 at September 30, 2025, due to an increase in raw materials order volume[146]. Other Financial Information - The company reported net other expenses of $440,066 for the nine months ended September 30, 2025, compared to $407,543 for the same period in 2024[134]. - The company did not have any material off-balance sheet arrangements that could materially affect its financial condition[149]. - As a "smaller reporting company," the company is not required to provide certain market risk disclosures[150].