Company: WKSP
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000850
Chunk: 329

Company: Worksport Ltd
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 329
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Equity and Related Transactions

Description
of the Matter

As
discussed in Notes 7, 15, and 16 to the consolidated financial statements, the Company has issued a significant amount of equity securities.
The tracking of these transactions can be complicated and require management to estimate the value of equity securities using a Black
Scholes option pricing model. We identified the fair market value of equity transactions to be a critical audit matter, as the calculations
can be complex and subject to error.

How
We Addressed the Matter in Our Audit

Our
auditing procedures related to equity transactions included the following, among others:

    ●
    We
    evaluated the appropriateness and consistency of management’s methods used to develop its estimates.

    ●
    We
    gained an understanding of management’s process to record the equity transactions.

    ●
    We
    obtained management’s calculations and tested the clerical accuracy and inputs used.

    ●
    We
    agreed the basic terms to source agreements and considered key assumptions.

    ●
    We
    recalculated the recorded values and conversion amounts.

Going
Concern

Description
of the Matter

As
discussed in Note 2 to the consolidated financial statements, the Company has experienced recurring net losses that raise substantial
doubt about the Company’s ability to continue as a going concern. Upon analysis of the Company’s current financial situation
and projected outlooks, we believe there is substantial doubt about the Company’s ability to continue as a going concern.

How
We Addressed the Matter in Our Audit

Our
auditing procedures related to going concern included the following, among others:

    ●
    We
    obtained the Company’s evaluation of its ability to continue as a going concern and evaluated the Company’s plans to
    address these concerns.

    ●
    We
    analyzed the Company’s current state of operations.

    ●
    We
    evaluated the Company’s current and projected cash flow.

We
have served as the Company’s auditor since 2022.

/s/
Lumsden & McCormick, LLP

Buffalo,
New York

March
27, 2025

PCAOB
ID Number: 130

44

Worksport
Ltd.

Consolidated
Balance Sheets

December
31, 2024 and 2023

    2024  
    2023 
  
    ASSETS 

    Current assets 

    Cash and cash
    equivalents 
    $