Company: WKSP
Filing Date: 2025-03-28
Form Type: S-1
Source: 0001641172-25-001309
Chunk: 35

Company: Worksport Ltd
Filing Date: 2025-03-28
Form: S-1
Chunk 35
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 bitcoin acquisition strategy otherwise proves unsuccessful, our financial condition,
results of operations, and the market price of our common stock would be materially adversely impacted.

We will be subject to counterparty risks, including in particular risks relating to our custodians.Although we intend to implement various measures that are designed to mitigate
our counterparty risks, including by storing substantially all of the bitcoin we may own in custody accounts at U.S.-based, institutional-grade
custodians and negotiating contractual arrangements intended to establish that our property interest in custodially-held bitcoin is not
subject to claims of our custodians’ creditors, applicable insolvency law is not fully developed with respect to the holding of
digital assets in custodial accounts. If our custodially-held bitcoin were nevertheless considered to be the property of our custodians’
estates in the event that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated
as a general unsecured creditor of such custodians, inhibiting our ability to exercise ownership rights with respect to such bitcoin and
this may ultimately result in the loss of the value related to some or all of such bitcoin. Even if we are able to prevent our bitcoin
from being considered the property of a custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we
would still be delayed or may otherwise experience difficulty in accessing our bitcoin held by the affected custodian during the pendency
of the insolvency proceedings. Any such outcome could have a material adverse effect on our financial condition and the market price of
our common stock.

The broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of bitcoin.A series of recent high-profile
bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset
industry, including the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, FTX Trading and Genesis
Global Capital, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets
industry, including Signature Bank and Silvergate Bank, SEC enforcement actions against Coinbase, Inc. and Binance Holdings Ltd., the
placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s Department of Business and
Industry, and the filing and subsequent settlement of a civil fraud lawsuit by the New York Attorney General against Genesis Global Capital,