UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 001-40681 Worksport Ltd. (Exact Name of Small Business Issuer as specified in its charter) Nevada 35-2696895 (State or other jurisdiction of (I.R.S. Employer incorporation or organization ...

For Quarterly Period Ended: September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File No. 001-40681 Worksport Ltd. (Exact Name of Small Business Issuer as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Nevada 35-2696895 (State or Other Jurisdi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended: June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File No. 001-40681 Worksport Ltd. (Exact Name of Small Business Issuer as specified in its charter) (State or Other Jurisdiction of (I.R.S. Employ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended: March 31, 2021 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File No. 000-27631 Worksport Ltd. (Exact Name of Small Business Issuer as specified in its charter) (State or Other Jurisdiction of (I.R.S. E ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-27631 WORKSPORT LTD. (Exact name of registrant as specified in its charter) | Nevada | | --- | (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Ident ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended September 30, 2020 or [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from ______________________ to _____________________ Commission File Number: 000-27631 Worksport Ltd. (formerly Franchise Holdings International, Inc) (Exact name of regis ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended June 30, 2020, show a significant revenue decline and increased net loss, primarily due to the COVID-19 pandemic, with a shareholders' deficit and going concern uncertainty [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2020, the company reported total assets of **$742,729** and a shareholders' deficit of **$782,622**, reflecting an increase in assets and a slight improvement in the deficit from December 31, 2019 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2020 ($) | December 31, 2019 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $21,111 | $11,993 | | Total Current Assets | $519,498 | $253,685 | | Total Assets | $742,729 | $481,308 | | **Liabilities & Shareholders' Deficit** | | | | Total Current Liabilities | $1,452,715 | $1,324,684 | | Total Liabilities | $1,525,351 | $1,363,869 | | Total Shareholders' Deficit | $(782,622) | $(882,561) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2020, net sales significantly decreased to **$107,129**, resulting in a net loss of **$344,451**, primarily due to the COVID-19 pandemic Statement of Operations Summary (Unaudited) | Metric | Six Months Ended June 30, 2020 ($) | Six Months Ended June 30, 2019 ($) | | :--- | :--- | :--- | | Net Sales | $107,129 | $1,088,974 | | Gross Profit | $21,235 | $284,340 | | Loss from operations | $(257,732) | $(76,624) | | Net Loss | $(344,451) | $(128,220) | | Loss per Share (Basic and Diluted) | $(0.01) | $(0.00) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2020, the company used **$229,553** in cash from operating activities, offset by **$247,435** from financing, resulting in a slight increase in cash and cash equivalents to **$21,111** Cash Flow Summary (Unaudited) | Activity | Six Months Ended June 30, 2020 ($) | Six Months Ended June 30, 2019 ($) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(229,553) | $99,896 | | Net cash used in investing activities | $(8,764) | $(1,198) | | Net cash provided by financing activities | $247,435 | $25,688 | | **Change in cash** | **$9,118** | **$104,375** | | **Cash and cash equivalents – end of period** | **$21,111** | **$129,698** | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies, a going concern warning due to recurring losses and accumulated deficit, new financing agreements, a COVID-19 relief loan, high customer concentration, and prior period financial revisions - The company's financial statements have been prepared on a going concern basis, but recurring net losses (**$344,451** for the six months ended June 30, 2020) and a significant accumulated deficit (**$12,022,864**) raise substantial doubt about its ability to continue[23](index=23&type=chunk) - On February 25, 2020, the company issued a secured convertible promissory note to Leonite Capital for an aggregate principal amount of **$544,425**. As part of the deal, Leonite received **450,000** common shares and a five-year warrant to purchase **900,000** common shares[32](index=32&type=chunk) - The company received a **$28,397** (**$40,000 CDN**) interest-free loan from the Government of Canada under the COVID-19 small business relief program. **25%** of the loan may be forgiven if repaid by December 31, 2022[69](index=69&type=chunk) - Financial statements for prior periods were revised to correct an immaterial error related to the recognition of a deemed dividend from an anti-dilution feature triggered in March 2019[71](index=71&type=chunk)[72](index=72&type=chunk) Significant Customer Sales Concentration | Customer | 2020 (% of Sales) | 2019 (% of Sales) | | :--- | :--- | :--- | | Customer A | 55.7% | 3.9% | | Customer B | 11.3% | 2.0% | | Customer C | - | 86.5% | - Subsequent to June 30, 2020, the company issued a total of **4,100,000** common shares to a consultant, entered a new **$10,000** loan agreement, and issued a warrant to purchase **1,250,000** common shares[73](index=73&type=chunk)[74](index=74&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **90%** revenue decline and widened net loss for H1 2020 to the COVID-19 pandemic, which disrupted operations and increased freight costs, while the company secured financing to support liquidity [COVID-19 Impact](index=21&type=section&id=COVID-19%20Impact) The company anticipates continued disruptions to manufacturing and sales due to the COVID-19 pandemic, leading to low consumer confidence and material uncertainty for future performance - The company anticipates disruptions to manufacturing and a significant reduction in sales due to lockdown orders and low consumer confidence resulting from the COVID-19 pandemic[79](index=79&type=chunk) - The pandemic and its impact on the global supply chain and financial markets present material uncertainty and risk to the company's performance, financial condition, and cash flows[80](index=80&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Revenue for H1 2020 plummeted **90%** to **$107,129**, increasing cost of sales as a percentage of sales and decreasing gross margin to **20%**, resulting in a **169%** increase in net loss to **$344,451** Revenue and Gross Margin Comparison (Six Months Ended June 30) | Metric | 2020 ($) | 2019 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $107,129 | $1,088,974 | -90% | | Gross Margin % | 20% | 26% | -6 p.p. | | Net Loss | $(344,451) | $(128,220) | +169% | - The decrease in gross margin was primarily driven by increased freight costs, which accounted for **23%** of cost of sales in H1 2020, up from **4%** in H1 2019[86](index=86&type=chunk)[88](index=88&type=chunk) - Operating expenses decreased by **$81,997** for the six-month period, mainly due to lower professional fees and general and administrative expenses as a result of reduced operations during the pandemic[89](index=89&type=chunk)[91](index=91&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased to **$21,111** by June 30, 2020, due to lower sales and operating cash usage, but liquidity was bolstered by a convertible promissory note and government relief loans - Cash used in operations was **$229,553**, a reversal from cash provided by operations of **$99,896** in the prior year, driven by lower sales and disruptions from COVID-19[14](index=14&type=chunk)[92](index=92&type=chunk) - Financing activities provided **$247,435** in cash, primarily from a convertible promissory note (**$182,500**), a third-party loan (**$32,439**), and a Canadian government COVID-19 relief loan (**$28,397**)[95](index=95&type=chunk) - The company has no off-balance sheet arrangements[96](index=96&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from providing quantitative and qualitative disclosures about market risk as a "smaller reporting company" - As a "smaller reporting company," the registrant is exempt from providing quantitative and qualitative disclosures about market risk[99](index=99&type=chunk) [Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2020, due to limited staff and the absence of a formal audit committee with a financial expert - The CEO and CFO concluded that the company's disclosure controls and procedures are not effective as of June 30, 2020[101](index=101&type=chunk) - The ineffectiveness is due to a limited number of employees, which prohibits segregation of duties, and the absence of a formal audit committee with a financial expert[102](index=102&type=chunk) - There were no changes in internal control over financial reporting during the period that materially affected, or are reasonably likely to materially affect, internal controls[103](index=103&type=chunk) [PART II OTHER INFORMATION](index=25&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material legal proceedings, nor are any currently contemplated or threatened - The company is not involved in any material legal proceedings[105](index=105&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Worksport Ltd. is not required to provide risk factor disclosures in its Form 10-Q and refers to its 2019 Form 10-K - The company is a smaller reporting company and is not required to provide this information. It refers to its 2019 Form 10-K for risk factors[106](index=106&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not complete any unregistered sales of equity securities during the six months ended June 30, 2020 - No unregistered sales of equity securities were completed during the six months ended June 30, 2020[107](index=107&type=chunk) [Defaults Upon Senior Securities](index=25&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities - There have been no defaults upon senior securities[108](index=108&type=chunk) [Other Information](index=25&type=section&id=Item%205.%20Other%20Information) As a "smaller reporting company," the registrant is exempt from providing information in this item - As a "smaller reporting company," the registrant is exempt from providing information in this item[110](index=110&type=chunk) [Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including corporate governance documents, officer certifications, and XBRL data files - Exhibits filed include corporate governance documents (Articles of Incorporation, By-Laws), officer certifications (302, 906), and XBRL financial data[111](index=111&type=chunk) [Signatures](index=27&type=section&id=SIGNATURES) [Signatures](index=27&type=section&id=Signatures) The quarterly report was signed on August 27, 2020, by CEO Steven Rossi and CFO Michael Johnston - The report was signed on August 27, 2020, by CEO Steven Rossi and CFO Michael Johnston[116](index=116&type=chunk)[117](index=117&type=chunk)

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2020, covering balance sheets, operations, cash flows, and shareholders' deficit, highlighting going concern risk and new financing [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2020, total assets increased to **$682,220** from **$481,308**, while total liabilities grew to **$1,409,547**, and shareholders' deficit improved to **$(727,327)** Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $452,345 | $253,685 | | **Total Assets** | $682,220 | $481,308 | | **Total Current Liabilities** | $1,364,075 | $1,324,684 | | **Total Liabilities** | $1,409,547 | $1,363,869 | | **Total Shareholders' Deficit** | $(727,327) | $(882,561) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net sales for Q1 2020 sharply declined to **$41,027** from **$572,278** in Q1 2019, resulting in a widened net loss of **$192,266** Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net Sales | $41,027 | $572,278 | | Gross Profit | $14,016 | $139,330 | | Loss from operations | $(164,455) | $(87,314) | | Net Loss | $(192,266) | $(126,473) | | Basic and Diluted Loss per Share | $(0.00) | $(0.005) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to **$181,035** in Q1 2020, while financing activities provided **$188,817**, leading to a slight cash decrease Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(181,035) | $(38,539) | | Net cash used in investing activities | $(8,765) | $0 | | Net cash provided by financing activities | $188,817 | $25,951 | | **Change in cash** | **$(983)** | **$(3,423)** | [Consolidated Statement of Shareholders' Deficit](index=7&type=section&id=Consolidated%20Statement%20of%20Shareholders'%20Deficit) Shareholders' deficit improved from **$(882,561)** to **$(727,327)** in Q1 2020, driven by non-cash activities like stock issuance and warrant related to convertible notes - The total stockholders' deficit improved from **$(882,561)** on January 1, 2020, to **$(727,327)** on March 31, 2020[14](index=14&type=chunk) - Key activities impacting shareholders' equity included issuing **2,000,000** shares for services (**$40,000**), warrants related to a convertible note (**$59,110**), and shares for settlement of payables[14](index=14&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes disclose a 'going concern' issue due to a **$192,266** net loss and **$10.96 million** accumulated deficit, functional currency change, new financing, customer concentration, and COVID-19 impact - The company's ability to continue as a going concern is in substantial doubt due to a net loss of **$192,266** for the quarter and an accumulated deficit of **$10,961,172** as of March 31, 2020[18](index=18&type=chunk) - Effective January 1, 2020, the company changed the functional currency of its subsidiary from Canadian dollars to United States dollars[16](index=16&type=chunk) - On February 25, 2020, the company issued a secured convertible promissory note to Leonite Capital LLC for an aggregate principal amount of **$544,425**, along with **450,000** common shares and **900,000** warrants[38](index=38&type=chunk) Customer Sales Concentration Q1 2020 vs Q1 2019 | Customer | 2020 Sales % | 2019 Sales % | | :--- | :--- | :--- | | Customer A | 37.5% | - | | Customer B | 34.5% | - | | Customer C | 14.8% | 12.7% | | Customer D | - | 79.2% | - Subsequent to the quarter end, the company changed its name to Worksport Ltd, issued preferred stock, and anticipates that sales will remain low in Q2 2020 due to the impact of COVID-19[52](index=52&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes a **93%** Q1 2020 revenue decline to COVID-19, leading to a **$192,266** net loss despite improved gross margin, with liquidity reliant on financing activities [COVID-19 Impact](index=15&type=section&id=COVID-19%20Impact) COVID-19 significantly disrupted manufacturing and sales in the US, Canada, and China, leading to anticipated low sales and material uncertainty for future financial performance - The company expects a disruption to its manufacturing with a significant reduction in sales due to lockdown orders in the United States, Canada, and China[57](index=57&type=chunk) - The pandemic presents material uncertainty and risk with respect to the company's performance, financial condition, results of operations, and cash flows[58](index=58&type=chunk) [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Q1 2020 revenue decreased **93%** to **$41,027** due to COVID-19, resulting in a **52%** increased net loss of **$192,266**, despite gross margin improving to **34%** Financial Performance Summary | Metric | Q1 2020 | Q1 2019 | Change | | :--- | :--- | :--- | :--- | | Revenue | $41,027 | $572,278 | -93% | | Cost of Sales | $27,011 | $432,948 | -94% | | Gross Margin % | 34% | 24% | +10 p.p. | | Net Loss | $(192,266) | $(126,473) | +52% | [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) Cash remained stable at **$11,010** in Q1 2020, with operations primarily funded by **$182,500** from a convertible promissory note and **$6,317** from shareholder loans - Cash remained stable, moving from **$11,993** at year-end 2019 to **$11,010** at March 31, 2020[71](index=71&type=chunk) - Financing activities in Q1 2020 included **$182,500** from a convertible promissory note and **$6,317** from shareholder loans[72](index=72&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=17&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' Worksport, Ltd. is exempt from providing quantitative and qualitative disclosures about market risk - The company is exempt from providing quantitative and qualitative disclosures about market risk because it qualifies as a "smaller reporting company"[76](index=76&type=chunk) [Controls and Procedures](index=18&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2020, due to limited employees and lack of a formal audit committee - The CEO and CFO concluded that the company's disclosure controls and procedures are not effective as of March 31, 2020[78](index=78&type=chunk) - The ineffectiveness is attributed to a limited number of employees, which prohibits a segregation of duties, and the lack of a formal audit committee[79](index=79&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=19&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material legal proceedings, nor are any contemplated or threatened - The company is not a party to any material or legal proceeding[82](index=82&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A%20Risk%20Factors) As a smaller reporting company, Worksport is not required to provide risk factor disclosures in this Form 10-Q, referring to its 2019 Form 10-K - As a smaller reporting company, the registrant is not required to provide information on risk factors in this report[83](index=83&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=19&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not complete any unregistered sales of equity securities during the three months ended March 31, 2020 - During the three months ended March 31, 2020, the Company did not complete any unregistered sale of equity securities[84](index=84&type=chunk) [Defaults Upon Senior Securities](index=19&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company confirms there have been no defaults upon its senior securities - There have been no defaults upon senior securities[85](index=85&type=chunk) [Mine Safety Disclosures](index=19&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - Not applicable[86](index=86&type=chunk) [Other Information](index=19&type=section&id=Item%205.%20Other%20Information) As a 'smaller reporting company,' Worksport is not required to provide information under this item - As a "smaller reporting company," the company is not required to provide the information in this Item[87](index=87&type=chunk) [Exhibits](index=20&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including Articles of Incorporation, By-Laws, CEO/CFO certifications, and XBRL documents - The report includes exhibits such as CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL Instance Documents[89](index=89&type=chunk)

Part I [Business](index=5&type=section&id=ITEM%201.%20BUSINESS) Worksport Ltd. designs and manufactures innovative, competitively priced tonneau covers for pickup trucks, targeting North American aftermarket and OEM markets - The company's primary business is conducted through its subsidiary, **Worksport Ltd.**, acquired in December 2014, focusing on designing and manufacturing innovative tonneau covers for pickup trucks[12](index=12&type=chunk)[13](index=13&type=chunk) - The specialty-equipment market was valued at **$42.92 billion in 2017** and is projected to grow, supported by a strong economy and high consumer confidence[15](index=15&type=chunk)[16](index=16&type=chunk) - Worksport targets master warehouse distributors, dealers, and OEM vehicle manufacturers such as **Toyota, Ford, and General Motors**, distributing through Canadian distributors and primarily US dealers and wholesalers[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - The main competitor is **Truck Hero Group**; Worksport competes by offering aggressively priced products, such as its Tri Fold cover at **US$239** compared to competitors' prices ranging from **$269 to $425**[34](index=34&type=chunk)[36](index=36&type=chunk) - Worksport's strategy includes growing **private label sales** and expanding its intellectual property portfolio, holding **3 granted patents and 3 pending applications** in Canada and the USA as of 2019[39](index=39&type=chunk)[42](index=42&type=chunk) Current Patent and Trademark Portfolio | PATENT | DESCRIPTION | STATUS | AREA | STATUS | | :--- | :--- | :--- | :--- | :--- | | 62/823,316 | 3 LATCHES | APPLICATION | WORLD WIDE | PENDING | | US20170355251A1 | QUATTRO | GRANTED | US | EXPIRES IN 2035 | | US10252676B2 | TOOL BAG | GRANTED | US | EXPIRES IN 2035 | | WO2017070786A1 | ALPHA (BRANCH OFF TERRAVIS) | WORLDWIDE PCT APPLICATION | WORLD WIDE | PENDING | | US8814249B2 | SMART LATCH | GRANTED | US | EXPIRES IN 2040 | | 1920142 | WORKSPORT LOGO MARK | TRADEMARK APPLICATION IN CANADA | CANADA | GRANTED | | 1921043 | WORKSPORT WORD MARK | TRADEMARK APPLICATION IN CANADA | CANADA | GRANTED | | 88/120,025 | WORKSPORT WORK MARK | TRADEMARK APPLICATION IN US | US | GRANTED | | 88/120,020 | WORKSPORT LOGO MARK | TRADEMARK APPLICATION IN THE US FOR LOGO. | US | GRANTED | [Risk Factors](index=14&type=section&id=ITEM%201A%20RISK%20FACTORS) As a "smaller reporting company," the company is not required to provide information for this item [Properties](index=14&type=section&id=ITEM%202.%20PROPERTIES) The company uses Toronto office space and a US third-party logistics warehouse, relying on contracted partners with minimal owned equipment - The company utilizes a bonded third-party logistics warehouse in the USA for stocking all Worksport products, with an annual rent of about **$10,000**[65](index=65&type=chunk) [Legal Proceedings](index=14&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) A legal proceeding with a supplier was settled in February 2020, requiring a **$24,148** payment in installments - A legal proceeding with a supplier was settled on February 6, 2020; the company agreed to pay **$24,148** in four monthly installments of **$6,037**, starting March 1, 2020[66](index=66&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=15&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY,%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on OTCQB, with **47 million** shares outstanding as of May 2020; no dividends are planned, and an equity incentive plan exists - The company's common stock is traded on the OTC Markets (OTCQB) under the symbol "**FNHI**"[69](index=69&type=chunk) - As of May 14, 2020, there were **47,037,772** shares of common stock and **1,000** shares of preferred stock outstanding[5](index=5&type=chunk) - The company has never declared or paid dividends on its common stock and does not plan to in the foreseeable future[73](index=73&type=chunk) - During the year ended December 31, 2019, the company raised **$30,000** in an unregistered equity sale, issuing **250,000** common shares[76](index=76&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Revenue increased **300%** to **$1.93 million** in 2019, net loss decreased **76%**, but gross margin declined and cash fell Revenue Performance (2018 vs. 2019) | Metric | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$1,926,405** | **$481,521** | **+300%** | | U.S. Revenue | $1,860,563 | $416,331 | +347% | | Private Label Sales | $1,912,401 | $265,969 | +619% | | Online Retailer Sales | $174,793 | $151,285 | +16% | - Gross margin decreased from **20% in 2018 to 12% in 2019**, attributed to foreign exchange rate fluctuations and increased US warehousing costs[86](index=86&type=chunk) - Operating expenses decreased by **36%** year-over-year, from **$1,307,741 in 2018 to $831,973 in 2019**, largely due to a **69%** decrease in consulting fees[89](index=89&type=chunk)[97](index=97&type=chunk) - Net loss for 2019 was **$414,607**, a **76%** decrease from the **$1,763,038** net loss in 2018, driven by higher gross profit, lower operating expenses, and a gain on debt settlement[92](index=92&type=chunk)[97](index=97&type=chunk) - Cash decreased by **53%** from **$25,323** at the end of 2018 to **$11,993** at the end of 2019, partly due to the US-China trade dispute[92](index=92&type=chunk) [Financial Statements and Supplementary Data](index=19&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) The 2019 financial statements include a 'going concern' warning due to losses and accumulated deficit, noting customer concentration and COVID-19 impact - The independent auditor's report highlights a '**going concern**' issue, citing the company's net losses and accumulated deficit as factors that raise substantial doubt about its ability to continue operations[102](index=102&type=chunk)[115](index=115&type=chunk) Consolidated Statement of Operations Highlights | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Net Sales | $1,926,405 | $481,521 | | Gross Profit | $238,547 | $96,614 | | Loss from operations | ($593,424) | ($1,211,127) | | Net Loss | ($414,607) | ($1,763,038) | | Loss per Share (basic and diluted) | ($0.01) | ($0.08) | Consolidated Balance Sheet Highlights | Metric | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $11,993 | $25,323 | | Total Assets | $481,308 | $557,368 | | Total Liabilities | $1,363,869 | $780,928 | | Total Shareholders' Deficit | ($882,561) | ($223,560) | - The company has a significant customer concentration risk, with one customer (Customer A) accounting for **89%** of total sales in 2019, up from **37.8%** in 2018[178](index=178&type=chunk)[180](index=180&type=chunk) - The company has a supplier concentration risk, purchasing all of its inventory from a single source in Asia[177](index=177&type=chunk) - Subsequent to year-end, the company changed its name to **Worksport Ltd.**, took on a new secured promissory note for **$544,425**, and expects sales to decrease significantly in the first half of 2020 due to the **COVID-19 pandemic**[200](index=200&type=chunk) [Controls and Procedures](index=43&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management found disclosure controls and internal financial reporting ineffective due to material weaknesses like resource limitations and lack of independent board members - Management concluded that disclosure controls and procedures were not effective as of the end of the fiscal year[198](index=198&type=chunk) - Internal control over financial reporting was deemed ineffective due to material weaknesses, including a lack of sufficient resources, inability to separate duties, and inconsistent accounting policies[203](index=203&type=chunk) - A specific material weakness noted is that the Board of Directors does not have any independent members, and no director qualifies as an audit committee financial expert[204](index=204&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=46&type=section&id=ITEM%2010.%20DIRECTORS,%20EXECUTIVE%20OFFICERS,%20AND%20CORPORATE%20GOVERNANCE) The report identifies directors and executive officers, noting the board lacks independent members, while an audit committee has been established Directors and Executive Officers | Name | Position Held | | :--- | :--- | | Steven Rossi | President, Secretary and Director | | Michael Johnston | Chief Financial Officer | | Paul Haber | Director | | Lorenzo Rossi | Director | | Craig Loverock | Director; Chair of Audit Committee | - The Board of Directors does not have any members who are considered independent[230](index=230&type=chunk) - An audit committee has been established, chaired by **Craig Loverock**[217](index=217&type=chunk) [Executive Compensation](index=48&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation for 2019 primarily consisted of a salary paid to Steven Rossi, with no formal employment agreements in place Executive Salaries | Executive | Position | 2019 Salary | 2018 Salary | | :--- | :--- | :--- | :--- | | Steven Rossi | President, CEO | $65,589 | $63,796 | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=48&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) As of May 2020, CEO Steven Rossi was the largest beneficial owner with **29%** of common shares and significant voting control via preferred stock - As of May 14, 2020, **Steven Rossi** beneficially owned **13,583,397** common shares, representing **29%** of the outstanding shares[226](index=226&type=chunk) - Mr. Rossi also owns **1,000** shares of Series B Preferred Stock, with each share having voting rights equal to **10,000** shares of common stock[226](index=226&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=50&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS,%20AND%20DIRECTOR%20INDEPENDENCE) The company has related-party transactions with CEO Steven Rossi, including a patent license and salary payments, and the board lacks independent directors - Worksport licenses U.S. Patent **8,814,249** from CEO **Steven Rossi** and has paid **$7,718** in related patent filing expenses[228](index=228&type=chunk) - During fiscal year 2019, CEO **Steven Rossi** was paid a salary of **$65,589**[228](index=228&type=chunk) - The Board of Directors has determined that no board members are considered independent based on NASDAQ's definition[230](index=230&type=chunk) [Principal Accounting Fees and Services](index=50&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Haynie & Company billed **$84,287** in audit fees for 2019, with an audit committee evaluating the auditor's engagement Audit Fees | Fiscal Year | Auditor | Fees Billed | | :--- | :--- | :--- | | 2019 | Haynie & Company | $84,287 | | 2018 | Haynie & Company | $38,200 | Part IV [Exhibits, Financial Statement Schedules](index=51&type=section&id=ITEM%2015.%20EXHIBITS,%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists key exhibits filed with the 10-K report, including corporate documents, agreements, and CEO/CFO certifications - Lists key corporate documents filed as exhibits, including Articles of Incorporation, Bylaws, and the Definitive Share Exchange Agreement for the acquisition of **Worksport, Ltd.**[234](index=234&type=chunk) - Includes the patent license agreement with **Steven Rossi** and various service and shipping agreements[234](index=234&type=chunk) - Certifications from the CEO/CFO pursuant to Sections **302** and **906** of the Sarbanes-Oxley Act are filed as exhibits **31.1** and **32.1**[234](index=234&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended September 30, 2019 For the Transition period from ______________________ to _____________________ Commission File Number: 000-27631 FRANCHISE HOLDINGS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) NEVADA 65-0782227 ...