Company: WKSP
Filing Date: 2025-11-14
Form Type: S-3
Source: 0001493152-25-023663
Chunk: 40

Company: Worksport Ltd
Filing Date: 2025-11-14
Form: S-3
Chunk 40
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, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our bitcoin at favorable prices or at all. For example, a number of bitcoin trading venues temporarily halted deposits and withdrawals in 2022. As a result, our bitcoin holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, bitcoin we may hold with our custodians and transact with our trade execution partners may not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered bitcoin or otherwise generate funds using our bitcoin holdings, including in particular during times of market instability or when the price of bitcoin has declined significantly. If we are unable to sell our bitcoin or XRP, enter into additional capital raising transactions using bitcoin or XRP as collateral, or otherwise generate funds using our bitcoin or XRP holdings, or if we are forced to sell our bitcoin or XRP at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin and XRP trading venues, bitcoin and XRP trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin and XRP trading venues and adversely affect the value of our bitcoin and XRP.

Bitcoin and XRP trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many bitcoin and XRP trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in bitcoin and XRP trading venues, including prominent exchanges that handle a significant volume of bitcoin and XRP trading and/or are subject to regulatory oversight, in the event one or more bitcoin and XRP trading venues cease or pause for a prolonged period the trading of bitcoin, XRP or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

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In 2019, there were reports claiming that