Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 152

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1
Chunk 152
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-line method over their estimated useful lives.
Intangible assets, such as trademarks with indefinite lives, are not amortized. 

Valuation
of long-lived assets – Intangible assets are evaluated for impairment at least annually or when events or circumstances arise
that indicate the existence of impairment. The Company evaluates the recoverability of identifiable intangible assets whenever events
or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. When indicators of impairment
exist, the Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it.
Should the sum of the expected future cash flows be less than the carrying value of the asset being evaluated, an impairment loss would
be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value.
The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being
evaluated. These assumptions require significant judgment, and actual results may differ from assumed and estimated amounts. During the
years ended December 31, 2024 and 2023, the Company had no impairment losses related to intangible assets.

    50

Worksport
                                            Ltd.

Notes
to the Consolidated Financial Statements

December
31, 2024 and 2023

1.
Description of Business and Significant Accounting Policies (continued)

Product
warranties - The Company currently offers a three year limited warranty  against defective products out-of-the-box.
Customers who are not satisfied with their purchase may attempt to have their purchases reimbursed outside of the warranty
period.

Financial
instruments - FASB ASC 825, Disclosures about Fair Value of Financial Instruments, requires disclosures of the fair value of financial
instruments. The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts
receivable, and accounts payable and accrued liabilities, approximates their fair values because of the short-term maturities of these
instruments. The carrying value of the loan payable approximates fair value as its interest rate fluctuates with market interest rates.
We do not hold or issue financial instruments for trading purposes.

Related
party transactions - All transactions with related parties are in the normal course of operations and are measured at the exchanged
amount.

Reclassifications
– Certain prior year amounts have been reclassified to conform to current year’s presentation. The Company reclassified
accrued liabilities of $800,283 and $190