Company: WKSP
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023334
Chunk: 34

Company: Worksport Ltd
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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. These situations remain uncertain, and while
it is difficult to predict the impact of any of the foregoing, the conflicts and actions taken in response to these conflicts could increase
our costs, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all,
or otherwise adversely affect our business, financial condition, and results of operations.

While
we do not have any direct operations or significant sales in the Middle East, geopolitical tensions and ongoing conflicts in the region,
particularly between Israel and Hamas, may lead to global economic instability and fluctuating energy prices that could materially affect
our business. It is not possible to predict the broader consequences of the Israel-Hamas war, including related geopolitical tensions,
and the measures and actions taken by other countries in respect thereof, which could materially adversely affect global trade, currency
exchange rates, regional economies and the global economy. While it is difficult to predict the impact of any of the foregoing, the Israel-Hamas
war may increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when
needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition and results of operations.

Foreign
Currencies

We
are subject to foreign exchange risk as we manufacture certain products and components in China, market extensively in both Canadian
and U.S. markets, employ people residing in both the U.S. and Canada and, to date, have raised funds in Canadian Dollars. Meanwhile,
we report results of operations in U.S. Dollars. Since our Canadian customers pay in Canadian Dollars, we are subject to gains and losses
due to fluctuations in the USD relative to the Canadian Dollar. Our manufacturers in China are paid in USD to better avoid the relatively
greater fluctuation of the Chinese Yuan. To the extent the U.S. dollar strengthens against any of these foreign currencies, the translation
of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for our operations.

Tariffs

Worksport’s
hard tonneau covers—led by the AL3 and AL4 models—are manufactured in the U.S. using predominantly American aluminum, providing
strong resilience against tariffs. Soft covers, currently sourced from China, account for a minor portion of revenue, with domestic sourcing
options actively under review. The upcoming SOLIS solar cover will be built in the U.S., with solar panels expected to be sourced from
India, a country maintaining relatively stable trade relations with the U.S