Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 149

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 149
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les (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”).

Consolidation
– The Company’s consolidated financial statements consolidate the accounts of the Company. All intercompany transactions,
balances and unrealized gains or losses from intercompany transactions have been eliminated upon consolidation.

Foreign
currency translation and presentation – The consolidated financial statements are presented in United States Dollars. The functional
currency of the Company and all its subsidiaries is the United States Dollar. Transactions denominated in foreign currencies are initially
recorded in the functional currency using exchange rates in effect at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies are translated into the functional currency using exchange rates in effect at the dates of the transactions.
All exchange gains and losses are included in the statement of operations 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