Company: WKSP
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010837
Chunk: 44

Company: Worksport Ltd
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 44
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Notes
to the Condensed Consolidated Financial Statements

(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 months ended March 31, 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 $369,601 and $381,000 for the three months ended March 31, 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 Note 17, Segment Reporting. The adoption of this standard did not have a material effect on the financial statements and related disclosures.

Recent
accounting pronouncements not yet adopted

In
December 2023, the FAS