Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 418

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7A
Chunk 418
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 and comprehensive loss.

Use
of estimates – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual
results could differ from these estimates and assumptions.

Revenue
recognition – In accordance with Accounting Standards Codification (ASC) 606 Revenue from Contracts with Customers, sales are
recognized when (1) products are shipped, with no right of return except for defective products, and the title and risk of loss has passed
to customers; and (2) when they are delivered based on the terms of the sale, and there is an identifiable contract with a customer with
defined performance obligations, the transaction price is determinable, and the entity has fulfilled its performance obligation. Revenue
related to shipping and handling costs billed to customers is included cost of sales and presented net of related shipping and handling costs.

Cost
of sales – Includes costs of products sold, which include but are not limited to: purchased product, raw material, direct labor,
shipping and handling costs, depreciation and amortization, indirect costs and overhead charges.

Research
and development – Research and development costs are expensed as incurred and include consulting and material
costs.

Advertising costs – The Company expenses
advertising costs as incurred and includes expenses in selling and marketing.

Share-based
payments - The Company offers a share option plan for its directors, officers, employees, and consultants. ASC 718
“Compensation – Stock Compensation” prescribes accounting and reporting standards for all share-based payment
transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue
shares, options, and other equity instruments such as stock appreciation rights. Share-based payments to employees, including grants
of employee stock options, are recognized as compensation expense in the financial statements based on their fair values at the time
of grant. Compensation expense is included in general and administrative expenses. Compensation expense is recognized over the estimated
period during which an employee is required to provide services in exchange for the award, known as the requisite service period
(usually the vesting period). The Company elected to account for forfeitures when the forfeiture of the underlying awards occur.

Measurement
of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods
or services received;