Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 105

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 105
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 West Seneca, NY.

Our
business and operations would suffer in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity or a
natural disaster.

There
are growing risks related to the security, confidentiality and integrity of personal and corporate information stored and transmitted
electronically due to increasingly diverse and sophisticated threats to networks, systems and data security. Potential attacks span a
spectrum from attacks by criminal hackers, hacktivists, and nation state or state-sponsored actors, to employee malfeasance and human
or technological error.

Despite
the implementation of security measures, our internal computer systems, and those of third parties on which we rely (including our vendors,
contractors and other third-party partners who process information on our behalf or have access to our systems), are vulnerable to damage
from computer viruses, malware, ransomware, phishing attacks and other forms of social engineering, denial-of-service attacks, third
party or employee theft or misuse and other negligent actions, natural disasters, terrorism, war, telecommunication and electrical failures,
cyberattacks or cyber-intrusions over the internet, security incidents, disruptions, attachments to emails, persons inside our organization,
or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyberattacks
or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number,
intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur
and cause interruptions in our operations, it could result in a material disruption of our product development programs. To the extent
that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure
of confidential or proprietary information, we could incur material legal claims (including class claims) and liability, substantial
remediation costs, regulatory enforcement, liability under data protection laws, additional reporting requirements and damage to our
reputation, and the further development of our product lines could be delayed.

To
mitigate risks associated with cybersecurity attacks, we have cybersecurity insurance coverage in the aggregate amount of $1,000,000
per annual policy period, which covers damages from a range of potential cybersecurity issues including but not limited to property damage,
privacy liability, privacy regulatory defense, cyber extortion, and post breach remediation.

We
may not be able to accurately estimate the demand for our tonneau covers, which could result in inefficiencies in our production and