Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 116

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 116
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. For instance, the U.S. government has imposed tariffs on certain foreign goods, including steel and certain commercial
vehicle parts, which have resulted in increased costs for goods imported into the U.S. In response to these tariffs, a number of U.S.
trading partners have imposed retaliatory tariffs on a wide range of U.S. products. If we are unable to pass price increases on to our
customer base or otherwise mitigate the costs, or if demand for our products decreases due to the higher cost, our results of operations
could be materially adversely affected. In addition, further tariffs have been proposed by the United States and its trading partners
and additional trade restrictions could be implemented.

There
are risks associated with outsourced production in China, and their laws which may have a material adverse effect on our financial stability.

We
purchase all our soft tonneau cover finished goods from two suppliers in China. Changes in Chinese laws and regulations, or their interpretation,
or the imposition of confiscatory taxation or restrictions are matters over which we have no control. While the Chinese government has
been pursuing economic reform policies that encourage private economic activity and greater economic decentralization, there is no assurance
that the Chinese government will continue to pursue these policies, or that it will not significantly alter these policies from time
to time without notice.

25

For
example, the Chinese government has enacted some laws and regulations dealing with matters such as corporate organization and governance,
foreign investment, commerce, taxation and trade. However, their experience in implementing, interpreting and enforcing these laws and
regulations is limited and, in turn, our ability to enforce commercial claims or to resolve commercial disputes is unpredictable. If
our business ventures with Chinese manufacturers and suppliers are unsuccessful, or other adverse circumstances arise from these transactions,
we face the risk that the parties to these ventures may seek ways to terminate the transactions. The resolution of these matters may
be subject to the exercise of considerable discretion by agencies of the Chinese government, and forces unrelated to the legal merits
of a particular matter or dispute may influence their determination.

Any
rights we may have to specific performance or to seek an injunction under Chinese law are severely limited, and, without a means of recourse
by virtue of the Chinese legal system, we may be unable to prevent these situations from occurring. The occurrence of any such events
could have a material adverse effect on our business, financial condition and results of operations in such guises as currency conversion,
imports and sources of supply, devaluations of currency or the national