Company: WKSP
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023334
Chunk: 50

Company: Worksport Ltd
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 8
Chunk 50
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(Unaudited)

1.
Description of Business and Significant Accounting Policies

The
accompanying unaudited consolidated condensed financial statements have been prepared in accordance with U.S. generally accepted accounting
principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion
of management, all adjustments consisting of normal recurring adjustments considered necessary for the fair presentation of results for
the interim period have been included. The results of operations for the three and six months ended June 30, 2025 are not necessarily
indicative of the results expected for the full year. The accompanying unaudited consolidated condensed financial statements should be
read in conjunction with the financial statements and notes thereto included in our Form 10-K for the fiscal year ended December 31,
2024. All references to years in these financial statements are fiscal years.

Reclassifications
– Certain prior year amounts have been reclassified to conform to current year’s presentation. The Company reclassified research
and development of $304,833 and $1,045,864 for the three months ended June 30, 2025 and 2024, respectively, which were reclassified from general
and administrative expense, to research and development expense. The Company reclassified research and development of $674,434 and $1,415,465 for
the six months ended June 30, 2025 and 2024, respectively, which were reclassified from general and administrative expense to research
and development expense. This change improves the disclosure of costs to develop new products and technologies and reflects the Company’s
ongoing investment in innovation. The change also provides a more accurate depiction of the Company’s operating performance.

Recent
accounting pronouncements

Recent
accounting pronouncements adopted

In
November 2023, the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU) 2023-07 “Segment Reporting
(Topic 280): Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements
for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for our
annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. We adopted
this standard for the year ended December 31, 2024, and applied the amendments retrospectively to all prior periods presented. Refer
to