Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 117

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 117
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ization or other expropriation of private enterprises.

In
that context, we may have to evaluate the feasibility of acquiring alternative or fallback manufacturing capabilities to support the
production of our existing and future soft tonneau cover products. Such a development could adversely affect our cost structure inasmuch
as we would be required to support sales at an acceptable cost and might have relatively limited time to adapt. We have mitigated such
risks by stockpiling soft tonneau covers for domestic sales, but we will still rely on outsource manufacturing for additional soft cover
production, as we have not manufactured our own soft tonneau covers in the past and are not planning to do so in the short term.

We
engage in cross-border sales transactions which present tax risks among other obstacles.

Cross-border
sales transactions carry a risk of changes in import tax and/or duties related to the import and export of our product, which can result
in pricing changes, which will affect revenues and earnings. Cross-border sales transactions carry other risks including, but not limited
to, changing regulations, wait times, customs inspection and lost or damaged product.

We
are subject to foreign currency risk which may adversely affect profitability.

We
are subject to foreign exchange risk. We manufacture soft tonneau covers in China , source raw materials for hard tonneau covers
from the U.S., Canada and China, work with U.S. and Canada-based service providers, and employ individuals in the U.S. and Canada. Meanwhile,
we report results of operations in U.S. Dollars (USD). Large fluctuations in the exchange between foreign currencies and USD may adversely
affect profitability.

Changes in U.S. government
policies or regulations, including potential rollbacks of electric vehicle initiatives, could adversely affect our business, strategy,
and growth prospects.

Our business strategy may rely,
in part, on regulatory support for electric vehicle adoption, including incentives, mandates, infrastructure investment and emissions
regulations. However, President Donald Trump has signed an executive order titled Unleashing American Energy, indicating that his
administration intends to reverse electric vehicle mandates implemented by the prior administration. In addition, President Trump has
paused billions of dollars in federal funding allocated toward EV charging infrastructure.

The actions reflect a shift in
federal energy and transportation policy, and the future of the U.S. regulatory environment surrounding electric vehicles remains uncertain.
Any reduction or elimination of governmental support for EV adoption or related infrastructure development could negatively impact market
demand, hinder our growth initiatives and materially affect our financial condition and results