Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 114

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 114
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 growth requirements. Alternatively, in the case of generic
competition, competitors’ products may be of equal or better quality and sold at substantially lower prices than our products.
At times, competitors may also release a generic or re-branded version of a current and successful product at a substantially reduced
price in efforts to increase revenues or market share. As a result, if we fail to maintain our competitive position, this could have
a material adverse effect on our business, cash flow, results of operations, financial position and prospects.

23

We
may not have sufficient product liability insurance to cover potential damages.

The
existence of any defects, errors or failures in our products or the misuse of our products could also lead to product liability claims
or lawsuits against us. While we had insurance coverage of $2,000,000 for the year ended December 31, 2024, we have no assurance that
this insurance will be adequate to protect us from all material judgments and expenses related to potential future claims or that these
levels of insurance will be available at economical prices, if at all. To that extent, product liability insurance is conditional and
up for further investigation. A successful product liability claim could result in substantial costs for us. Even if we are fully insured
as it relates to a claim, a claim could nevertheless diminish our brand and divert management’s attention and resources, which
could have a negative impact on our business, financial condition and results of operations.

We
may produce products of inferior quality which would cause us to lose customers.

Although
we make an effort to ensure the high quality of our products, they could from time to time contain defects, anomalies or malfunctions
that are undetectable at the time of shipment. These defects, anomalies or malfunctions could be discovered after our products are shipped
to customers, resulting in the return or exchange of our products, customers’ claims for compensatory damages or discontinuation
of the use of our products, which could negatively impact our operating results. We do not presently have product recall (or similar
function) insurance that protects a company against broad-scale product manufacturing defects, engineering defects and the costs related
to a broad product recall such as shipping, replacement or repairs. Even if in place, there is no guarantee that the full costs of any
reimbursements or claims, lawsuits or litigation would be covered by such insurance.

Geopolitical
conditions, including direct or indirect acts of war or terrorism, could have an adverse effect on our operations and financial results