Company: WKSP
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023334
Chunk: 17

Company: Worksport Ltd
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 17
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 ended December 31, 2023, the Company signed a lease agreement for office space to be used as an R&D facility pursuant
to a one-year
lease with an option to extend the lease for an additional year, dated June 1, 2023, for a monthly rent of $3,350.
The lease was renewed effective June 1, 2024 at a rate of $3,600
per month with a termination
date of May 31, 2025. The lease was not renewed. The Company accounted for the lease under ASC 842 whereby it recognizes a
lease liability and a right-of-use asset. The lease liability is measured at the present value of the remaining lease payments,
discounted using the Company’s incremental borrowing rate of 10%.
The Company measured the right-of-use asset at an initial amount equal to the lease liability.

On April 1, 2025, the Company signed a lease agreement for 12,500 square feet of office space to be used as a R&D facility pursuant
to a three-year lease with an option to extend the lease for an additional two years. The lease was effective on May 1, 2025 at a rate
of $9,659 per month with a termination date of April 30, 2028. The Company accounted for the lease under ASC 842 whereby it recognizes
a lease liability and a right-of-use asset. The lease liability is measured at the present value of the remaining lease payments, discounted
using the Company’s incremental borrowing rate of 15%. The Company measured the right-of-use asset at the initial amount equity
to the lease liability.

The
Company’s right-of-use asset and lease liability as of June 30, 2025, and December 31, 2024, are as follows:

Schedule Right-of-use Asset 

    June
    30, 2025

    December
    31, 2024

    Right-of-use
    asset
     
    $
    731,633

    $
    595,415

    Current
    lease liability
     
    $
    323,698

    $
    246,535

    Long-term
    lease liability
     
    $
    437,266

    $
    368,472

The
following is a summary of the Company’s total lease costs during the six months ended June 30, 2025 and 2024:

Schedule
of