Company: WKSP
Filing Date: 2025-03-28
Form Type: S-1
Source: 0001641172-25-001309
Chunk: 40

Company: Worksport Ltd
Filing Date: 2025-03-28
Form: S-1
Chunk 40
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 it owns
or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment company,” as such term
is defined in the 1940 Act, and are not registered as an “investment company” under the 1940 Act as of the date of this registration
statement.

While senior SEC officials have stated their view
that bitcoin is not a “security” for purposes of the federal securities laws, and that XRP is not a “security”
in connection with secondary transactions, a contrary determination by the SEC could lead to our classification as an “investment
company” under the 1940 Act, if the portion of our assets consists of investments in bitcoins exceeds 40% safe harbor limits prescribed
in the 1940 Act, which would subject us to significant additional regulatory controls that could have a material adverse effect on our
business and operations and may also require us to change the manner in which we conduct our business.

We monitor our assets and income for compliance under
the 1940 Act and seek to conduct our business activities in a manner such that we do not fall within its definitions of “investment
company” or that we qualify under one of the exemptions or exclusions provided by the 1940 Act and corresponding SEC regulations.
If bitcoin or XRP is determined to constitute a security for purposes of the federal securities laws, we would take steps to reduce the
percentage of bitcoins and XRP, as applicable, that constitute investment assets under the 1940 Act. These steps may include, among others,
selling bitcoins that we might otherwise hold for the long term and deploying our cash in non-investment assets, and we may be forced
to sell our bitcoins at unattractive prices. We may also seek to acquire additional non-investment assets to maintain compliance with
the 1940 Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise
attractive to our business. Any of these actions could have a material adverse effect on our results of operations and financial condition.
Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid being deemed to be an investment
company in accordance with the safe harbor. If we were unsuccessful, and if bitcoin is determined to constitute a security for purposes
of the federal securities laws, then