Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 318

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 318
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slow-moving or obsolete inventory by principally using a formula-based method that increases the valuation reserve as the inventory ages.
We also take specific circumstances into consideration. We consider overall inventory levels in relation to forecasted demand. Changes
in these and other factors, such as low demand or technological obsolescence, could cause us to establish or increase our inventory reserves,
which would negatively impact our gross margin.

35

Reviews
of Impairment of Long-Lived Assets – Long-lived assets held for use, which primarily includes finite-lived intangible assets,
property, plant and equipment, and right-of-use assets, are evaluated for impairment whenever events or circumstances indicate that the
undiscounted cash flows to be generated by their use over their expected useful lives and eventual disposition are less than carrying
value. The long-term nature of these assets requires the estimation of their cash inflows and outflows several years into the future
and only takes into consideration technological advances known at the time of the impairment test.

Income
Taxes – Our annual tax rate is based on our operating results before taxes by jurisdiction, applicable statutory tax rates,
the impacts of permanent differences, tax incentives, and tax planning opportunities in the jurisdictions in which we operate. Significant
judgment is required in determining our annual tax rate and evaluating our tax positions. We record reserves against tax benefits when
it is more likely than not that we will not sustain a position if the appropriate taxing jurisdiction had full information and examined
our position. We adjust these reserves when facts and circumstances change, and there is a considerable amount of judgment in making
these assessments. For further information, refer to Note 8, Income Taxes of Part III Item 8, Financial Statements and Supplementary
Data, of this report.

Split

On March 18, 2025, we effected
a 1:10 stock split of our authorized shares of common stock and simultaneously reduced the number of authorized shares of common stock
from 299,000,000 to 29,900,000.

Consolidated 
Results of Operations

The
following is a discussion of our results of operations in 2024 compared to 2023.

Net
sales

For
the year ended December 31, 2024, net sales were $8,484,379, as compared to $1,529,632 for the year ended December 31, 2023. Year-over-year
sales increased by approximately 455%. For the year ended December 31, 2024, net sales generated in