Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 13

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 8
Chunk 13
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ories are stated at the lower of cost or net realizable value. The cost of inventory is measured on a weighted average cost
method. Cost includes purchase price of materials, freight, and related costs required to bring the goods to Company warehouses. Inventories
are reviewed to determine if quantities are in excess of forecasted usage or if they become obsolete.

Property
and equipment, net – Property and equipment are measured at cost. Maintenance and repair costs are charged to expense when
incurred. Depreciation is recognized on a straight-line method based on the following estimated useful lives:

 Schedule
of Estimated Useful Lives of Property and Equipment 

    Furniture
    and equipment
     
    5
    years
  
    Automobile
     
    5
    years
  
    Computers
     
    3
    years
  
    Leasehold
    improvements
     
    15
    years or lease term, if shorter
  
    Manufacturing
    equipment
     
    5-15
    years
  
    Building
     
    15
    years

Right-of-use
assets - The Company recognizes leases in accordance with ASC 842, which requires lessees to recognize operating leases on the balance
sheet as right-of-use assets and lease liabilities based on the value of the discounted future lease payments.

Intangible
assets  – Patents and other intangibles are amortized using the straight-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,