Company: WKSP
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023334
Chunk: 6

Company: Worksport Ltd
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 6
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 the three and six months ended June 30, 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 $304,833 and $1,045,864 for the three months ended June 30, 2025 and 2024, respectively, which were reclassified from general
and administrative expense, to research and development expense. The Company reclassified research and development of $674,434 and $1,415,465 for
the six months ended June 30, 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 FASB issued ASU 2023-09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures”
to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09
is