Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 531

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 8
Chunk 531
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 reporting described below.

Material
Weakness in Internal Control over Financial Reporting

We
have not designed written policies and procedures at a sufficient level of precision to support the operating effectiveness of the controls
to prevent and detect potential errors. We also did not maintain adequate documentation to evidence the operating effectiveness of certain
control activities. Lastly, we did not maintain appropriate access to certain systems and did not maintain appropriate segregation of
duties related to processes associated within those systems.

These
control deficiencies resulted in several misstatements to the preliminary financial statements that were corrected and/or deemed immaterial
in the aggregate prior to issuance of the financial statements. These control deficiencies create a reasonable possibility that a material
misstatement to the financial statements will not be prevented or detected on a timely basis, and therefore we concluded that the deficiencies
represent material weaknesses in our internal control over financial reporting and our internal control over financial reporting was
not effective as of December 31, 2024.

66

Remediation
Plan

During
the year ended December 31, 2024, we continued to enhance our internal control over financial reporting in an effort to remediate the
material weaknesses described above. Measures taken in this remediation included investing in additional, senior accounting personnel ,
establishing a clearer organizational structure, implementing additional enterprise resource planning system modules, and formalizing
internal processes and procedures.

Our
remediation process includes, but is not limited to:

    ●
    Investing in IT systems
    to enhance our operational and financial reporting and internal controls as well as creating reusable queries saved in our enterprise
    resource planning system to easily generate month-end workpapers for more accurate and timely month closes.

    ●
    Formalizing a month-end
    checklist to significantly reduce the change of any closing item being missed or delayed.

    ●
    Enhancing the organizational
    structure to support financial reporting processes and internal controls.

    ●
    Providing guidance, education
    and training to employees relating to our accounting policies and procedures.

    ●
    Further developing and
    documenting detailed policies and procedures regarding business processes for significant accounts, critical accounting policies
    and critical accounting estimates.

    ●
    Establishing effective
    general controls over IT systems to ensure that information produced can be relied upon by process level controls is relevant and
    reliable.

We
expect to remediate these material weaknesses in the second quarter of 2025 and beyond. However, we may discover additional material
weaknesses that may require additional time