Company: WKSP
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001493152-25-022113
Chunk: 56

Company: Worksport Ltd
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 56
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(Unaudited)

1.
Description of Business and Significant Accounting Policies

The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted
accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In
the opinion of management, all adjustments consisting of normal recurring adjustments considered necessary for the fair presentation
of results for the interim period have been included. The results of operations for the three and nine months ended September 30,
2025 are not necessarily indicative of the results expected for the full year. The accompanying unaudited condensed consolidated 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 $301,095 and $396,446 for the three months ended September 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 $975,529 and
$1,811,911 for the nine months ended September 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.