Worksport Seeks to Boost Equity Plan to 18% Quarterly Evergreen

TL;DR

**WKSP's board is pushing for massive equity dilution with an 18% quarterly evergreen plan, signaling a potential red flag for common shareholders.**

AI Summary

Worksport Ltd. (WKSP) is holding its 2025 Annual Meeting of Stockholders on December 11, 2025, at its headquarters in West Seneca, NY. Key proposals include the election of five directors, ratification of Lumsden & McCormick, LLP as auditors for fiscal year 2025, and approval of non-plan stock option grants. Critically, the company seeks to amend its 2022 Equity Incentive Plan to change the evergreen formula from an annual 15% increase to a quarterly 18% increase of outstanding common stock, significantly increasing potential dilution. As of October 30, 2025, there were 8,250,442 shares of common stock and 100 shares of Series A Preferred Stock outstanding, with Steven Rossi holding 100% of the Series A Preferred Stock, granting him 51% of the total voting power. The Board unanimously recommends voting FOR all proposals, including the equity plan amendments and the adjournment proposal.

Why It Matters

This DEF 14A filing reveals Worksport's aggressive move to increase its equity incentive plan's evergreen percentage from 15% annually to 18% quarterly, which could lead to substantial dilution for existing common stockholders. For investors, this means a potentially larger pool of shares issued to executives and employees, impacting per-share value and ownership percentages. Employees and executives stand to benefit from increased stock-based compensation, aligning incentives but also raising questions about shareholder value. In a competitive market, such a compensation structure could attract talent but also signal a reliance on equity over cash, which might be viewed negatively by some investors.

Risk Assessment

Risk Level: high — The proposal to increase the evergreen percentage in the 2022 Equity Incentive Plan from an annual 15% to a quarterly 18% of outstanding common stock represents a significant risk of dilution. This change could lead to a much faster and larger issuance of new shares, potentially eroding the value of existing common stock holdings. Furthermore, Steven Rossi's beneficial ownership of 100% of the Series A Preferred Stock, granting him 51% of the total voting power, concentrates control and could allow these dilutive proposals to pass despite potential common shareholder opposition.

Analyst Insight

Investors should carefully review Proposal 4 regarding the 2022 Equity Incentive Plan amendments and consider voting AGAINST the increase in the evergreen percentage from 15% annually to 18% quarterly to mitigate potential dilution. Given Steven Rossi's controlling voting power, common shareholders should actively engage and voice their concerns, as his vote will be decisive.

Key Numbers

• 18% — Proposed quarterly evergreen percentage increase (Increase from 15% annual to 18% quarterly for the 2022 Equity Incentive Plan)
• 15% — Current annual evergreen percentage increase (Current annual increase for the 2022 Equity Incentive Plan)
• 51% — Voting power of Series A Preferred Stock (Steven Rossi beneficially owns 100% of Series A Preferred Stock, granting him 51% of total voting power)
• 8,250,442 — Shares of common stock outstanding (As of October 30, 2025)
• 100 — Shares of Series A Preferred Stock outstanding (As of October 30, 2025)
• 2025-12-11 — Date of Annual Meeting (The 2025 Annual Meeting of Stockholders will be held on this date)
• 2025-10-16 — Record Date for voting (Stockholders of record on this date are entitled to vote)

Key Players & Entities

• Worksport Ltd. (company) — Registrant
• Steven Rossi (person) — Chief Executive Officer, President, Chairman of the Board, and beneficial owner of 100% of Series A Preferred Stock
• Lumsden & McCormick, LLP (company) — Independent auditors for fiscal year ending December 31, 2025
• Nasdaq Listing Rule 5635(c) (regulator) — Rule governing non-plan stock option grants
• Securities and Exchange Commission (regulator) — Regulatory body
• Lorenzo Rossi (person) — Director nominee
• Craig Loverock (person) — Director nominee
• William Caragol (person) — Director nominee
• Ned L. Siegel (person) — Director nominee
• BetaNXT (company) — Proxy materials provider

FAQ

Risk Factors

• Significant Increase in Potential Share Dilution [high — financial]: The company seeks to amend its 2022 Equity Incentive Plan to change the evergreen formula from an annual 15% increase to a quarterly 18% increase of outstanding common stock. This substantial increase in the rate at which new shares can be issued under the plan poses a significant risk of dilution to existing common stockholders.
• Concentration of Voting Power [high — financial]: Steven Rossi holds 100% of the Series A Preferred Stock, which grants him 51% of the total voting power. This concentration means that a single individual has a controlling influence over stockholder votes, potentially limiting the influence of other shareholders.

Industry Context

Worksport operates in the automotive aftermarket and accessory sector, specifically focusing on truck bed covers and related products. The industry is competitive, with established players and emerging companies vying for market share. Trends include increasing demand for innovative and technologically advanced accessories, as well as a growing emphasis on sustainability and electric vehicle integration.

Regulatory Implications

As a publicly traded company, Worksport is subject to SEC regulations and stock exchange rules. The proposed amendments to the equity incentive plan require shareholder approval and must comply with relevant securities laws to prevent excessive dilution and ensure fair governance practices.

What Investors Should Do

1. Carefully review the proposed amendments to the 2022 Equity Incentive Plan.
2. Assess the voting power concentration held by Steven Rossi.
3. Evaluate the rationale behind the proposed increase in equity awards.

Key Dates

• 2025-12-11: 2025 Annual Meeting of Stockholders — Key decisions regarding director elections, auditor ratification, stock option grants, and equity plan amendments will be made.
• 2025-10-16: Record Date for voting — Establishes the list of shareholders entitled to vote at the annual meeting.

Glossary

DEF 14A

A proxy statement filed by public companies with the U.S. Securities and Exchange Commission (SEC) detailing information about the annual meeting of shareholders and the matters to be voted upon. (This document provides the detailed information about Worksport's upcoming annual meeting and the proposals being presented to shareholders.)

Equity Incentive Plan

A plan established by a company to grant equity-based compensation, such as stock options or restricted stock units, to employees, directors, or consultants. (Worksport is seeking to amend its existing plan, which will directly impact potential future share issuances and dilution.)

Evergreen Formula

A provision in an equity incentive plan that automatically replenishes the number of shares available for grant each year, typically based on a percentage of outstanding shares. (The proposed change to the evergreen formula from 15% annually to 18% quarterly is a critical point of concern due to its dilutive impact.)

Series A Preferred Stock

A class of preferred stock that typically has rights and privileges senior to common stock, often including voting rights. (In Worksport's case, the Series A Preferred Stock held by Steven Rossi grants him a majority of the voting power, significantly influencing corporate decisions.)

Dilution

The reduction in the ownership percentage of a share of stock caused by the issuance of new shares. (The proposed changes to the equity incentive plan's evergreen formula are expected to lead to significant dilution for existing common stockholders.)

Year-Over-Year Comparison

This filing indicates a significant shift in the company's approach to equity compensation, with a proposed substantial increase in the rate of share issuance under the equity incentive plan. While specific comparative financial metrics from a prior DEF 14A are not detailed here, the proposed changes to the evergreen formula from 15% annually to 18% quarterly represent a material change in potential dilution compared to previous structures.

Filing Documents

• formdef14a.htm (DEF 14A) — 516KB
• formdef14a_001.jpg (GRAPHIC) — 13KB
• formdef14a_002.jpg (GRAPHIC) — 2KB
• formdef14a_003.jpg (GRAPHIC) — 3KB
• formdef14a_004.jpg (GRAPHIC) — 3KB
• proxy_001.jpg (GRAPHIC) — 1039KB
• proxy_002.jpg (GRAPHIC) — 737KB
• 0001493152-25-020401.txt ( ) — 5289KB
• wksp-20241231.xsd (EX-101.SCH) — 4KB
• wksp-20241231_def.xml (EX-101.DEF) — 8KB
• wksp-20241231_lab.xml (EX-101.LAB) — 56KB
• wksp-20241231_pre.xml (EX-101.PRE) — 40KB
• formdef14a_htm.xml (XML) — 131KB

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 17

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 25 SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 26 PROPOSAL No. 2: RATIFICATION OF APPOINTMENT OF AUDITORS 27 PROPOSAL No. 3: APPROVAL AND RATIFICATION OF NON-PLAN STOCK OPTION GRANTS 28 PROPOSAL No. 4: APPROVAL OF AMENDMENTS TO THE WORKSPORT LTD. 2022 EQUITY INCENTIVE PLAN 29 PROPOSAL No. 5: ADJOURNMENT OF ANNUAL MEETING 29 CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE 30 STOCKHOLDER PROPOSALS AND NOMINATION PROCEDURES 31 DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS 31 OTHER MATTERS 31 ACCESS TO THE ANNUAL MEETING 31 3 PROXY SUMMARY INFORMATION To assist you in reviewing this meeting's proposals, we call your attention to the following proxy summary. This is only a summary; please review this Proxy Statement in full. Summary of Stockholder Voting Matters Proposal For More Information Board of Directors Recommendation

: Election of five directors,

Item 1: Election of five directors, Steven Rossi, Lorenzo Rossi, Craig Loverock, William Caragol and Ned L. Siegel, each to hold office until our Annual Meeting of Stockholders to be held in 2026 and until their respective successor is duly elected and qualified; Page 9 FOR

: Ratification of appointment

Item 2: Ratification of appointment of Lumsden & McCormick, LLP to serve as independent auditors of the Company for the fiscal year ending December 31, 2025 Page 27 FOR

: Approval and ratification

Item 3: Approval and ratification of certain non-plan stock option grants previously approved by the Board of Directors pursuant to Nasdaq Listing Rule 5635(c). Page 28 FOR

: Approval of amendments

Item 4: Approval of amendments to the Worksport Ltd. 2022 Equity Incentive Plan to (i) change the evergreen formula from an annual increase to a quarterly increase, and (ii) increase the evergreen percentage from 15% to 18% of the Company's outstanding common stock, as determined on the last day of each calendar quarter. Page 29 FOR

: Approval of the adjournment

Item 5: Approval of the adjournment of the Annual Meeting, to permit further solicitation of proxies, if necessary or appropriate. Page 29 FOR QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING Q: Why did I receive a Notice of Internet Availability of Proxy Materials? A: In accordance with rules adopted by the Securities and Exchange Commission (the "SEC"), we have elected to deliver this Proxy lieu of mailing printed copies of these materials to each of our stockholders (the "Notice Process"). If you received a Notice of Internet Availability of Proxy Materials (the "Notice") by mail, you will not receive printed copies of our proxy materials unless you request them. Instead, the Notice provides instructions on how to access this Proxy Statement and our 2024 Annual Report online, as well as how to obtain printed copies of these materials by mail. We believe that the Notice Process allows us to provide our stockholders with the information they need in a more timely manner than if we had elected to mail printed materials, while reducing the environmental impact of, and lowering the costs associated with, the printing and distribution of our proxy materials. The Notice is being mailed on or about October 31, 2025 to stockholders of record at the close of business on October 16, 2025 (the "Record Date") and this Proxy Statement and our 2024 Annual Report will be available at www.proxydocs.com/WKSP beginning on October 31, 2025. If you received a Notice by mail, but would rather receive printed copies of our proxy materials, please follow the instructions included in the Notice. You will not receive a Notice if you have previously elected to receive printed copies of our proxy materials. Q: Can I vote my shares by filling out and returning the Notice? A: No. However, the Notice contains instructions on how to vote your shares b

View Full Filing

View this DEF 14A filing on SEC EDGAR