| Schedule of Long Term Debt |
Long-term
debt consists of:
Schedule of Long Term Debt
| | |
June 30, 2025 | | |
December
31, 2024 | |
| Revolving Credit Facility (a) | |
$ | 1,126,961 | | |
$ | 3,808,025 | |
| Other (b) | |
| 1,351,458 | | |
| 1,456,485 | |
| Long-term debt | |
| 2,478,419 | | |
| 5,264,510 | |
| Less deferred debt issuance cost | |
| (149,191 | ) | |
| (260,513 | ) |
| Less current installments | |
| (235,865 | ) | |
| (222,992 | ) |
| Long-term debt | |
$ | 2,093,363 | | |
$ | 4,781,005 | |
| a) |
On
July 19, 2024, the Company, as the guarantor, and Worksport New York Operations Corporation as well as Worksport USA Operations Corporation,
entered into a $6,000,000
Revolving Financing and Assignment
Agreement with an external lending entity with a maturity date of July 18, 2026, or 24
months. Upon transaction close, the
Company drew down approximately $5.06
million of the Revolving Credit Facility,
net of $790,000
of interest reserve required to be
withheld to ensure interest payments by the Company. The Company used $4.73
million of the drawn down amount
to refinance the Company’s mortgage on the Company’s real property located at 2500 North America Dr. in West Seneca, New
York, and additionally drew approximately $330,000
to fund operations. Interest on the
outstanding Revolving Credit Facility is based on the greater of the prime rate or 6.0% plus an additional 300 basis points. At June
30, 2025, the outstanding balance of this loan was $1,126,961
(net of issuance costs of $113,656). |
For collateral, the lender holds a first position on the Company’s major asset classes (accounts receivable, the factory in New York, and inventory) other than the Company’s equipment. A non-usage fee of 0.25% is assessed quarterly and applied to the difference between the quarter’s average daily outstanding loan balance and the total credit facility amount. As of June 30, 2025, the Company had an available balance of $4,763,700 to borrow on the Revolving Credit Facility.
| b) |
On September 4, 2024, the Company, through its wholly owned
subsidiary, Worksport USA Operations Corporation, entered into a $1,487,200 credit and security agreement with an external lending entity
with a maturity date of September 1, 2027, which is 36 months from initial funding. Upon transaction close, the Company received net
proceeds of $1,412,750 (net of issuance costs of $43,735). The Company and its wholly owned subsidiary, Worksport New York Operations
Corporation, serve as guarantors on the loan. For collateral, the lender holds a first position on the Company’s equipment, which
is primarily manufacturing and warehousing equipment. Interest on the loan is based on the prime rate plus
700 basis points per annum.
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The Company
is in compliance with all covenants.
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