Company: WKSP
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022113
Chunk: 19

Company: Worksport Ltd
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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.
As of September 30, 2024, the Company issued 333,841 restricted shares with a value of $382,700.

During
the nine months ended September 30, 2024, the Company closed a sale of 2,372,240
shares of common stock for net proceeds of $1,535,591.
In association with the sale of common stock, the Company issued 1,477,892
pre-funded warrants and 7,700,264
warrants totaling proceeds of $1,093,492.

During
the nine months ended September 30, 2024, the Company closed a sale of 950,000 shares of common stock for proceeds of $380,000. In connection
with the sale of common stock, the Company issued 1,900,000 warrants. Refer to Note 15. As of September 30, 2024, the shares have not
been issued.

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8.
Income Taxes

The
effective tax rate for the nine months ended September 30, 2025 and 2024 was 22.9% before 100% allowance adjustments on net deferred income
tax assets. The effective tax rate for the nine months ended September 30, 2025 and 2024 was higher than expected from applying the U.S.
federal statutory rate of 21% to loss before income taxes due to tax benefits on losses generated outside the U.S. with higher statutory
rates.

9.
Financial Instruments and Fair Value

Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between
market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can
be used to estimate fair value. The definition of the fair value hierarchy is as follows:

Level
1 – Quoted prices in active markets for identical assets and liabilities.

Level
2 – Observable inputs other than quoted prices in active markets for similar assets and liabilities.

Level
3 – Inputs for which significant valuation assumptions are unobservable in a market and therefore value is based on the best available
data, some of which is internally developed and considers risk premiums that a market participant would require.

The
Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, revolving line of credit,
and long-term debt. The fair values of cash and cash equivalents, accounts receivable and accounts payable approximate their carrying
value because