Company: WKSP
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023334
Chunk: 7

Company: Worksport Ltd
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 7
---
 effective for our annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the
potential effect that the updated standard will have on the financial statements and related disclosures.

In
November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense
Disaggregation Disclosures” to enhance disclosure of specified categories of expenses (purchases of inventory, employee
compensation, depreciation and amortization) included in certain expense captions presented on the face of the income statement. ASU
2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning
after December 15, 2027, with early adoption permitted. The Company is currently evaluating the potential effect that the updated
standard will have on the financial statements and related disclosures.

The
company considers the applicability and impact of all ASUs. ASUs not listed were assessed and determined to be either not applicable
or had or are expected to have an immaterial impact on the financial statements and related disclosures.

    8

2.
Going Concern

As
of June 30, 2025, the Company had $1,393,140 in cash and cash equivalents. The Company also has availability on its revolving line of credit
of $4,763,700. The Company has generated only limited revenues and has relied primarily upon capital generated from public and private offerings
of its securities. Since the Company’s acquisition of Worksport in 2014, it has never generated a profit. As of June 30, 2025,
the Company had an accumulated deficit of $72,671,914.

The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates
the realization of assets and the liquidation of liabilities in the normal course of business. During the three months ended June 30,
2025, the Company had net losses of $3,734,484 (2024 - $4,013,399). During the six months ended June 30, 2025, the Company had net losses of $8,194,948
(2024 - $7,728,056). As of June 30, 2025, the Company had working capital of $4,758,042 (December 31, 2024 – $7,304,110) and had an accumulated