Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 104

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 104
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ition, we could be subject to adverse publicity. In particular, given the popularity of social media, any negative publicity, whether
true or not, could quickly proliferate and harm consumer perceptions and confidence in our brand. In addition, from time to time, our
products may be evaluated and reviewed by third parties. Any negative reviews or reviews which compare us unfavorably to competitors
could adversely affect consumer perception about our products.

The
US Central Bank has provided forward-looking guidance of relatively high interest rates plateauing for the near future.

We
may need to invest in additional machinery, equipment and land if demand for our products is higher than anticipated or if we secure
a supplier deal with a major original equipment manufacturer (OEM). With high interest rates, it will be less financially attractive
to finance such purchases, which may lead to an otherwise higher burn rate. High interest rates increase the amount that we must pay
for our mortgage on our West Seneca, NY property. At the same time, it lowers the attractiveness of refinancing, despite the fact that
our anticipated positive future cash flows would allow us to seek financing from a broader selection of lenders.

17

Continued
uncertain economic conditions, including inflation and the risk of a global recession could impair our ability to forecast and may harm
our business, operating results, including our revenue growth and profitability, financial condition and cash flows.

While
U.S. inflation rates have come down substantially from their 2022 highs, the U.S. economy is still experiencing higher than target inflation
rates, and high levels of inflation persist in many countries around the world. Historically, we have not experienced significant inflation
risk in our business. However, our ability to raise our product prices depends on market conditions, and there may be periods during
which we are unable to fully recover increases in our costs. In addition, the global economy suffers from slowing growth and elevated
interest rates, and many economists are still unsure whether a global recession may begin in the near future. If the global economy slows,
our business would likely be adversely affected.

Also,
a recession may result in job loss and lower discretionary funds among potential customers, lowering demand for automotive aftermarket
accessories. Part of our consumer base for SOLIS includes workers, particularly those in manufacturing and construction environments,
who may have lower job security in the event of a recession and, thus, have lower demand for the SOLIS. Commercial real estate values
may also decrease, which would lower the value of our production facility in