Company: WKSP
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010837
Chunk: 52

Company: Worksport Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 52
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 2024, the following transactions occurred:

During
the three months ended March 31, 2024, the Company sold 50,492 shares of common stock for a total net proceeds of $566,118. The sale
of shares was in connection with the shelf registration statement on Form S-3 effective on October 13, 2022, allowing the Company to
issue up to $30,000,000 of common stock and prospectus supplement covering the offering, issuance and sale of up to $13,000,000 of common
stock that may be issued and sold under an At The Market Offering Agreement dated as of September 30, 2022.

The
Company recognized consulting expense of $407,621 to share subscriptions payable from restricted shares and stock options to be issued.
As of March 31, 2024, the Company issued 21,454 restricted shares with a value of $304,188.

During
the three months ended March 31, 2024, the Company closed a sale of 237,224 shares of common stock for net proceeds of $1,535,591. In
association with the sale of common stock, the Company issued 147,789 pre-funded warrants and 770,026 warrants totaling proceeds of $1,093,492.

8.
Income Taxes

The
effective tax rate for the three months ended March 31, 2025 and 2024 was 22.9% before 100% allowance adjustments on net deferred income tax assets. The effective tax rate for the three months ended March 31, 2025
and 2024 was higher than expected from applying the U.S. federal statutory rate of 21%
to loss before income taxes due to tax benefits on losses generated outside the U.S. with higher statutory rates.

9.
Financial Instruments and Fair Value 

Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between
market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can
be used to estimate fair value. The definition of the fair value hierarchy is as follows:

Level
1 – Quoted prices in active markets for identical assets and liabilities.

Level
2 – Observable inputs other than quoted prices in active markets for similar assets and liabilities.

Level
3 – Inputs for which significant valuation assumptions are unobservable in a market and therefore value is based on the best available
data,