What changed in this filing

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Item 1. Financial Statements

2020-11-16 compared with 2020-08-27 · 378 added, 296 removed, 405 unchanged (62% of the section changed)

3 unchanged sentences

Current Assets

Cash and cash equivalents

and cash equivalents

Accounts receivable

Other receivable

Prepaid expenses and deposits

Total Current Assets

expenses and deposits

Current Assets

Investment (note

Property and Equipment, net

Right-of-use Asset, net (note 7)

Intangible Assets, net

Property and Equipment,

Right-of-use Asset,

Liabilities and Shareholders’

1 unchanged sentence

Current Liabilities

Accounts payable and accrued liabilities

Accounts payable

and accrued liabilities

Payroll taxes payable

Related party loan (note 12)

Current portion of notes payable (note 4(a))

Related party loan

Promissory notes

payable (note 4)

Loan payable (note

Current lease liability (note 7)

Total Current Liabilities

Long Term –

lease liability (note 7)

Long Term –

Notes Payable (note 4(b))

Total Liabilities

Current Liabilities

Lease Liability (note 7)

Shareholders’

Series A & B Preferred Stock, $0.0001 par value, 1,100,000 shares authorized, 1,000 Series A and 0 Series B shares issued and outstanding, respectively,

Common stock, $0.0001 par value, 299,000 ,000 shares authorized, 52,729,916 and 41,906,790 shares issued and outstanding, respectively

Series A & B Preferred Stock, $0.0001

par value, 1,100,000 shares authorized, 1,000 Series A and 0 Series B shares issued and outstanding, respectively,

Common stock, $0.0001 par value, 299,000,000

shares authorized, 61,259,391 and 41,906,790 shares issued and outstanding, respectively

Additional paid-in capital

4 unchanged sentences

(11,678,413 )

Cumulative translation adjustment

Total Shareholders’

Total Liabilities and Shareholders’

Cumulative translation

Shareholders’

Liabilities and Shareholders’

accompanying notes form an integral part of these condensed consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Operations and Comprehensive Loss

the Three and Six Months Ended June 30, 2020 and 2019

Three Months ended June 30

Six Months ended June 30,

Cost of Goods Sold

the Three and Nine Months Ended September 30, 2020 and 2019

Months ended September 30

Months ended September 30,

of Goods Sold

Operating Expenses

2 unchanged sentences

Professional fees

(Gain) loss on foreign exchange

Total operating expenses

Loss from operations

loss on foreign exchange

operating expenses

from operations

Other Income (Expense)

Interest expense

Total other income (expense)

Other Comprehensive Income (Loss)

Foreign currency translation adjustment

Comprehensive Loss

Loss per Share

Basic and Diluted

Weighted Average Number of Shares (basic and diluted)

(loss) on settlement of debt

other income (expense)

Income (Loss)

Other Comprehensive

Income (Loss)

currency translation adjustment

Comprehensive

Income (Loss)

Earnings (Loss) per Share

Weighted Average Number of Shares

accompanying notes form an integral part of these condensed consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

the Six Months Ended June 30, 2020 and 2019

the Nine Months Ended September 30, 2020 and 2019

Operating Activities

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation and amortization

Interest on lease liability

Amortization of debt discount

Amortization on OID interest

Shares issued for services

Changes in operating assets and liabilities (note 5)

Net cash provided by (used in) operating activities

Cash Flows from Investing Activities

Adjustments to reconcile net loss to

net cash from operating activities:

Depreciation and

Loss (Gain) on Settlement

Accrued interest

Interest on lease

Amortization of

debt discount

Amortization on

and warrants issued for services

Changes in operating

assets and liabilities (note 5)

Net cash provided

by (used in) operating activities

Cash Flows from Investing

Purchase of property and equipment

Purchase of investment (note 6)

Net cash used in investing activities

Purchase of investment

Net cash used in

investing activities

Financing Activities

2 unchanged sentences

Proceeds from notes payable (note 4(b))

Shareholder assumption of debt

Repayment of shareholder loans

Net cash provided by financing activities

Effects of exchange rate changes on cash

Repayment of notes payable

shareholder loans

cash provided by financing activities

of exchange rate changes on cash

Changes in cash

Cash and cash equivalents –

and cash equivalents –

beginning of year

Cash and cash equivalents –

and cash equivalents –

end of period

Supplemental disclosure of cash flow information:

Supplemental disclosure

of cash flow information:

Interest paid

Supplemental disclosure of non-cash flow investing and financing activities:

Shares issued for share subscription payable

Supplemental disclosure

of non-cash flow investing and financing activities:

Shares issued for share subscription

Reverse stock split

3 unchanged sentences

original issue discount

Conversion of Preferred Stock to Common Stock

Conversion of Preferred Stock to Common

Decrease in share subscription payable

Return and share cancellation

Conversion of convertible promissory

note to Common Stock

accompanying notes form an integral part of these condensed consolidated financial statements.

1 unchanged sentence

Statement of Shareholders’

the Six Months Ended June 30, 2020 and 2019

Subscriptions

the Nine Months Ended September 30, 2020 and 2019

Paid-in Capital

Subscriptions Receivable

Subscription Payable

Translation Adjustment

Stockholders’

Equity (Deficit)

at January 1, 2019

$ (10,354,299 )

of share subscriptions payable

dividend related to down-round features

for settlement of payables

of Preferred Stock

Issuance of share subscriptions payable

Deemed dividend related

to down-round features

Return and Cancellation of shares

Issuance for settlement

Conversion of Preferred

currency translation adjustment

at June 30, 2019

at September 30, 2019

$ (11,177,229 )

1 unchanged sentence

$ (11,678,413 )

for prepaid services

for prepaid services and subscriptions payable

of subscriptions payable

issuance in connection to convertible promissory note (note 4(b) and 10)

issuance in connection to convertible promissory note (note 4(b))

for settlement of payables

of Preferred Stock

at June 30, 2020

Issuance for services

Issuance for prepaid

services and subscriptions payable

Issuance of subscriptions

Issuance from subscriptions

Warrants issuance for

Conversion of convertible

promissory note to shares (note 4(b) and 10)

Warrants issuance in

connection to convertible promissory note (note 4(b) and 10)

Share issuance in connection

to convertible promissory note (note 4(b))

Issuance for settlement

Issuance of Preferred

at September 30, 2020

$ (12,627,854 )

2 unchanged sentences

Statement of Shareholders’

the Three Months Ended June 30, 2020 and 2019

Subscriptions

the Three Months Ended September 30, 2020 and 2019

Paid-in Capital

Subscriptions Receivable

Subscription Payable

Translation Adjustment

Stockholders’

at March 31, 2019

$ (11,445,850 )

of Preferred Stock

currency translation adjustment

Equity (Deficit)

at June 30, 2019

$ (11,447,598 )

at March 31, 2020

Return and Cancellation of shares

currency translation adjustment

at September 30, 2019

$ (11,177,229 )

for prepaid services

for prepaid services and subscriptions payable

of Series A Preferred Stock

at June 30, 2020

$ (12,022,864 )

Issuance for services

Issuance from subscriptions

Issuance of subscriptions

Warrants issuance in

connection to convertible promissory note (note 4(b) and 10)

Conversion of convertible

promissory note to shares (note 4(b) and 10)

Warrant issuance for

at September 30, 2020

$ (12,627,854 )

accompanying notes form an integral part of these condensed consolidated financial statements.

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of a normal recurring nature.

Operating results for the six-month period ended June 30, 2020 are not necessarily indicative of

the results that may be expected for the year ending December 31, 2020.

Operating results for the nine-month period ended September 30, 2020 are not necessarily indicative

of the results that may be expected for the year ending December 31, 2020.

The accompanying unaudited condensed consolidated financial

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will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.

During the six-month period ended June 30, 2020, the Company incurred a net loss of $344,451 and as of that date, the Company’s

During the nine-month period ended September 30, 2020, the Company incurred a net loss of $936,841 and as of that date, the Company’s

accumulated deficit was $12,615,254.

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result from the outcome of this risk and uncertainty.

Reclassification

comparative figures have been re-classified to conform to the current period’s presentation.

Revision of Prior Period Financial Statements

connection with the preparation of our consolidated financial statements, we identified an immaterial error related to the recognition

of deemed dividend related to down-round features along with the associated shares issuance and professional fees in the annual

of a deemed dividend related to down-round features along with the associated shares issuance and professional fees in the annual

periods in fiscal 2019 and first quarter of 2020.

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information presented herein for comparative purposes is included in Note 15.

(formerly Franchise Holdings International, Inc)

to the Condensed Consolidated Financial Statements

Significant Accounting Policies

1 unchanged sentence

audited financial statements for the year ended December 31, 2019.

consists of the following at June 30, 2020 and December 31, 2019:

(formerly Franchise Holdings International, Inc)

to the Condensed Consolidated Financial Statements

consists of the following at September 30, 2020 and December 31, 2019:

Finished goods

3 unchanged sentences

Promissory Notes

following tables shows the balance of the notes payable as of June 30, 2020 and December 31, 2019:

following tables shows the balance of the notes payable as of September 30, 2020 and December 31, 2019:

Balance as at December

1 unchanged sentence

Reclassification

Balance as at June 30, 2020

at September 30, 2020

Notes Payable

the six-months ended June 30, 2020 the Company reclassified $88,120 from accounts payable to notes payable.

the nine-months ended September 30, 2020 the Company reclassified $88,120 from accounts payable to notes payable.

the note is under negotiation.

the six-months ended June 30, 2020 the Company reclassified $11,058 from notes payable to other receivable.

the nine-months ended September 30, 2020 the Company reclassified a debit balance of $11,058 from notes payable to other receivable.

Convertible Promissory Notes

February 25, 2020, the Company entered into an agreement with Leonite Capital LLC, a Delaware limited liability company

(“Leonite”), pursuant to which the Company issued to Leonite a secured convertible promissory note in the aggregate

principal amount of $544,425 to be paid in tranches.

As additional consideration for the purchase of the note, (i) the Company

issued to Leonite 450,000 common shares, and (ii) the Company issued to Leonite a five-year warrant to purchase 900,000 common

shares at an exercise price of $0.10 per share (subject to adjustment), which may be exercised on a cashless basis.

February 25, 2020, the Company entered into an agreement with Leonite Capital LLC, a Delaware limited liability company (“Leonite”),

pursuant to which the Company issued to Leonite a secured convertible promissory note in the aggregate principal amount of $544,425

to be paid in tranches.

As additional consideration for the purchase of the note, (i) the Company issued to Leonite 450,000 common

shares, and (ii) the Company issued to Leonite a five-year warrant to purchase 900,000 common shares at an exercise price of $0.10

per share (subject to adjustment), which may be exercised on a cashless basis.

note carries an original issue discount of $44,425 to cover Leonite’s legal fees, accounting fees, due diligence fees and/or

1 unchanged sentence

Therefore, the purchase price of the note was

As of June 30, 2020, the Company has recorded $198,715, $182,500 principal and $16,215 original issue discount.

the Company issued 450,000 shares of common stock valued at $123,390 and a debt-discount related to the warrants valued at $59,110.

The Company amortized $42,038 of financing costs related to the shares and warrants for the six months ended June 30, 2020.

remaining net balance of the note at June 30, 2020 is $45,774 comprised of principal of $186,235 and net of unamortized debt discount

On February 28, 2020, the Company recorded $198,715, $182,500 principal and $16,215 original issue discount.

1, 2020 the Company recorded an additional $310,322, $285,000 principal and $25,322 original issue discount.

As of September 30,

2020, the Company has recorded $509,037, $467,500 principal and $41,537 original issue discount.

Furthermore, the Company issued

450,000 shares of common stock valued at $123,390 and a debt-discount related to the warrants valued at $344,110.

During the period

ended September 30, 2020 Leonite converted $226,839 of convertible promissory note into 2,520,434 common shares at $0.09 per share.

The original value of the convertible note converted was $182,565 as a result the Company recognized a loss of $44,274 on settlement

The Company amortized $198,060 of financing costs related to the shares and warrants for the nine months ended September

The remaining net balance of the note at September 30, 2020 is $16,942 comprised of principal of $286,382 and net of

unamortized debt discount of $269,440.

note bears interest at the rate of the greater of 10.2% per annum.

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the sale of any assets outside of the ordinary course of business or securities in any subsidiary.

As of June 30, 2020 the Company

has paid $7,400 in interest.

As of September 30, 2020 the

Company has paid $11,100 in interest.

(formerly Franchise Holdings International, Inc)

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(ii) 60% of the lowest

bid price during the twenty one consecutive trading day period immediately preceding the trading that the Company receives

a Notice of Conversion or (iii) the discount to market based on subsequent financing.

bid price during the twenty one consecutive trading day period immediately preceding the trading that the Company receives a Notice

of Conversion or (iii) the discount to market based on subsequent financing.

Notwithstanding

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of beneficial conversion feature

February 25, 2020 The Company allocated $198,715 as the proceeds from Leonite;

$182,500 principal and $16,215 original issue discount.

of September 30, 2020 The Company allocated $509,037 as the proceeds from Leonite;

$467,500 principal and $41,537 original issue

The Company allocated $123,390 to common shares and $242,100 to warrants calculated using the black-scholes model.

The effective

rate resulted in a beneficial conversion feature greater than the proceeds.

effective rate resulted in a beneficial conversion feature greater than the proceeds.

Allocated proceeds of Convertible

Promissory Note

Conversion Price

Number of shares of Common Stock that

would be issued upon conversion of Convertible Promissory Note

Conversion price

FMV of Common

Per Share Intrinsic Value of Beneficial Conversion Feature

Calculated Beneficial Conversion Feature

accordance to ASC 470-20-30 , if the intrinsic value of the beneficial conversion feature is greater than the proceeds allocated

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Changes in Cash Flows from Operating Assets and Liabilities

changes to the Company’s operating assets and liabilities for the six-months period ended June 30, 2020 and 2019 are as

Decrease (increase) in accounts receivable

changes to the Company’s operating assets and liabilities for the nine months period ended September 30, 2020 and 2019 are

Decrease (increase) in accounts

Decrease (increase) in other receivable

Decrease (increase) in inventory

Decrease (increase) in prepaid expenses and deposits

Decrease (increase) in prepaid expenses

Increase (decrease) in lease liability

Increase (decrease) in income taxes payable

Increase (decrease) in accounts payable and accrued liabilities

Increase (decrease) in income taxes

Increase (decrease)

in accounts payable and accrued liabilities

the year ended December 31, 2019, the Company entered into an agreement to purchase 10,000,000 shares for $50,000 which has been

1 unchanged sentence

The Company’s investment accounts for a 10% equity stake in a US based mobile phone development company.

As of June 30, 2020 the Company had advanced a total of $24,423 (December 31, 2019 - $15,658) and is advancing tranches of capital

As of September 30, 2020 the Company had advanced a total of $24,423 (December 31, 2019 - $15,658) and is advancing tranches of

capital as required.

Lease Liabilities

6 unchanged sentences

The Company has measured the right-of-use asset at an amount equal to the lease liability.

Company’s right-of-use asset for the six-months ended June 30, 2020 and December 31, 2019 are as follows:

June 30, 2020

December 31, 2019

Company’s right-of-use asset for the nine-months ended September 30, 2020 and December 31, 2019 are as follows:

Right-of-use asset

1 unchanged sentence

Long-term lease liability

(formerly Franchise Holdings International, Inc)

to the Condensed Consolidated Financial Statements

Lease Liabilities (continued)

components of lease expense are as follows:

June 30, 2020

June 30, 2019

Amortization of right-of-use

Interest on lease liability

Total lease cost

lease liability

of lease liability are as follows:

minimum lease payments as of June 30, 2020:

minimum lease payments as of September 30, 2020:

Total future minimum lease payments

amount representing interest

representing interest

Present value of future payments

1 unchanged sentence

Long term portion

(formerly Franchise Holdings International, Inc)

to the Condensed Consolidated Financial Statements

Shareholders’

the six-months ended June 30, 2020 the Company issued 1,333,333 and 240,000 common shares at $0.09 and 0.07 per share for $120,000

the nine-months ended September 30, 2020 the Company issued 2,413,022 common shares at $0.07 per share for $168,910 for consulting

the nine-months ended September 30, 2020, the Company issued 2,520,434 common shares pursuant to the conversion of the convertible

promissory note (note 4(b)) with a value of $226,839.

the the nine-months ended September 30, 2020, the Company entered into a share subscription agreement with a consultant of the

Company for 4,000,000 common shares valued at $250,000.

the nine-months ended September 30, 2020 the Company issued 1,333,333 and 240,000 common shares at $0.09 and 0.07 per share for

$120,000 and $16,800 respectively for prepaid advertising services.

As of June 30, 2020 the Company has expensed $6,620 from prepaid expenses.

the six-months ended June 30, 2020 the Company entered into a share subscription agreement with a consultant of the Company for

4,000,000 common shares valued at $125,000 for prepaid consulting services.

As of June 30, 2020 the Company issued 2,150,000 shares

with a value of $67,188.

As of June 30, 2020 the Company has expensed $62,500 from prepaid expenses.

the six-months ended June 30, 2020 the Company issued a consultant 4,000,000 common shares of subscription payable with a value

of $456,000 relating to the anti-dilution feature triggered on March 5, 2019 as noted below.

the six-months ended June 30, 2020 the Company issued 458,834 common shares pursuant to a subscription payable with a value of

the six-months ended June 30, 2020 the Company issued 450,000 shares in connection with the issuance of convertible promissory

As of September 30, 2020 the Company has expensed $53,293

from prepaid expenses.

the nine-months ended September 30, 2020 the Company entered into a share subscription agreement with a consultant of the Company

for 4,000,000 common shares valued at $125,000 for prepaid consulting services.

As of September 30, 2020 the Company issued 2,150,000

shares with a value of $67,188.

As of September 30, 2020 the Company has expensed $93,750 from prepaid expenses.

the nine-months ended September 30, 2020 the Company issued a consultant 5,686,978 common shares of subscription payable with

a value of $648,147 relating to the anti-dilution feature triggered on March 5, 2019 as noted below.

the nine-months ended September 30, 2020 the Company issued 458,834 common shares pursuant to a subscription payable with a value

the nine-months ended September 30, 2020 the Company issued 450,000 shares in connection with the issuance of convertible promissory

note (note 4(b)) at $0.27 per share.

the six-months ended June 30, 2020 the Company entered into a settlement to fulfill a debt purchase agreement entered in 2017

the nine-months ended September 30, 2020 the Company entered into a settlement to fulfill a debt purchase agreement entered in

2017 for 4,100,000 shares valued at $856,080 .

As of June 30, 2020 the Company has issued 2,190,959 shares.

the six-months ended June 30, 2020, Steven Rossi (the Company’s CEO) was issued 1,000 Series A Preferred Shares at $0.09

As of September 30, 2020 the Company has issued 4,100,000 shares.

the nine-months ended September 30, 2020, Steven Rossi (the Company’s CEO) was issued 1,000 Series A Preferred Shares at

$0.09 per share equal to 299,000 common shares voting rights.

the six-months ended June 30, 2019, the Company issued 2,680,084 common shares pursuant to a subscription payable to Consultant

the nine-months ended September 30, 2019, the Company issued 2,680,084 common shares pursuant to a subscription payable to Consultant

with a value of $379,494.

1 unchanged sentence

the Company for 1,500,000 common shares valued at $30,000.

the six-months ended June 30, 2019, Steven Rossi was issued 13,583,397 shares of Worksport, Ltd common stock as approved by the

board of directors, due to a conversion of all 1,000,000 shares of his Series A Preferred stock.

the six-month ended June 30, 2019 on March 5, 2019, the Company completed a share consolidation of the Company’s issued

the nine-months ended September 30, 2019, Steven Rossi was issued 13,583,397 shares of Worksport, Ltd common stock as approved

by the board of directors, due to a conversion of all 1,000,000 shares of his Series A Preferred stock.

the nine-month ended September 30, 2019 on March 5, 2019, the Company completed a share consolidation of the Company’s issued

and outstanding common shares based on six (6) pre-consolidation shares to one (1) post-consolidation share.

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retain earnings and share subscriptions payable (Note 15).

the six-months ended June 30, 2020 and 2019, the Company was authorized to issue 299,000,000 shares of its common stock with a

par value of $0.0001.

the nine-months ended September 30, 2020 and 2019, the Company was authorized to issue 299,000,000 shares of its common stock

with a par value of $0.0001.

All shares were ranked equally with regards to the Company’s residual assets.

5 unchanged sentences

Earnings per Share

the six-months ended June 30, 2020, Earnings per Share (EPS) is $(0.01) (basic and diluted) compared to the EPS for the six-months

ended June 30, 2019 of $(0.00) (basic and diluted) using the weighted average number of shares of 47,210,228 and 32,490,220 respectively.

per Share (EPS) is $(0.00) (basic and diluted) for the three months ended June 30, 2020 compare to the three months ended June

30, 2019 of $(0.00) (basic and diluted) using the weighted average number of shares of 49,337,497 and 39,897,421 respectively.

are 299,000,000 shares authorized, 52,729,916 and 40,897,532 shares issued and outstanding, as at June 30, 2020 and 2019 respectively.

As of June 30, 2020 the Company has 6,933,013 shares to be issued.

The computation of loss per share is based on the weighted

average number of shares outstanding during the period in accordance with ASC Topic No.

260, “Earnings Per Share”.

Shares underlying the Company’s outstanding warrants and convertible promissory notes were excluded due to the anti-dilutive

effect they would have on the computation.

At June 30, 2020 the Company has 900,000 warrants convertible to 900,000 common

shares and convertible promissory note convertible to 2,207,946 common shares for a total underlying common shares of 3,107,946.

At June 30, 2019 there were no underlying common shares.

the six-months ended June 30, 2020 the Company issued 900,000 warrants convertible to 1 common share each with an exercise period

the nine-months ended September 30, 2020, Earnings per Share (EPS) is $(0.02) (basic and diluted) compared to the EPS for the

nine-months ended September 30, 2019 of $0.00 (basic and diluted) using the weighted average number of shares of 50,547,286 (basic

and diluted) and 35,236,355 basic and 50,259,078 diluted respectively.

per Share (EPS) is $(0.01) (basic and diluted) for the three months ended September 30, 2020 compare to the three months ended

September 30, 2019 of $0.01 basic and $0.00 diluted using the weighted average number of shares of 57,148,856 (basic and diluted)

and 40,639,077 basic and 55,710,518 diluted respectively.

are 299,000,000 shares authorized, 61,259,391 and 39,906,790 shares issued and outstanding, as at September 30, 2020 and 2019

respectively.

As of September 30, 2020 the Company has 7,336,994 shares to be issued.

The computation of loss per share is based

on the weighted average number of shares outstanding during the period in accordance with ASC Topic No.

260, “Earnings Per

Share”.

Shares underlying the Company’s outstanding warrants and convertible promissory notes were excluded due to

the anti-dilutive effect they would have on the computation.

At September 30, 2020 the Company has 2,250,000 warrants convertible

to 2,250,000 common shares and convertible promissory note convertible to 3,448,025 common shares for a total underlying common

shares of 5,698,025.

At September 30, 2019 there were no underlying common shares.

the nine-months ended September 30, 2020 the Company issued 900,000 warrants convertible to 1 common share each with an exercise

period of 5 years.

The exercise price of the warrants is $0.10 per share (subject to adjustment) and may be exercised on a cashless

Refer to Note 4(b).

Exercise price

Number outstanding

Weighted average life (years)

Weighted average exercise price

June 30, 2020

June 30, 2019

Number of warrants

Weighted average price

Number of warrants

Weighted average price

Balance, beginning of year

Balance, end of period

the During the nine-months ended September 30, 2020 the Company issued 1,250,000 and 100,000 warrants convertible to 1 common

share each exercisable until March 30, 2025 and April 29, 2022 respectively.

The exercise price of the warrants

are $0.12 and $2 per share.

Contractual Life (Years)

April 29, 2022

February 25, 2025

March 20, 2025

average price

Balance, beginning

end of period

(formerly Franchise Holdings International, Inc)

1 unchanged sentence

Concentration of Customer Risk

following table includes the percentage of the Company’s sales to significant customers for the six-months ended June 30,

2020 and 2019, as well as the balance included in revenue and accounts receivable for each significant customer as at June 30,

following table includes the percentage of the Company’s sales to significant customers for the nine-months ended September

30, 2020 and 2019, as well as the balance included in revenue and accounts receivable for each significant customer as at September

30, 2020 and 2019.

A customer is considered to be significant if they account for greater than 10% of the Company’s annual sales.

A customer is considered to be significant if they account for greater than 10% of the Company’s annual

loss of any of these key customers could have an adverse effect on the Company’s business.

Related Party Transactions

the six-months ended June 30, 2020 the Company’s CEO and director paid on behalf of the Company’s lease payments

During the same period the Company repaid $710 to the Company’s CEO and director for a total net transaction

As of June 30, 2020 the Company has $32,737 in related party loan.

the nine-months ended September 30, 2020 the Company’s CEO and director paid on behalf of the Company’s lease payments

and other general expenses of $6,615.

During the same period the Company repaid $7,230 to the Company’s CEO and director

for a total net transaction of $615.

As of September 30, 2020 the Company has $28,023 in related party loan.

Contingent Liability

the six-months ended June 30, 2020, the Company reached a legal settlement with a supplier in which the Company is obligated to

pay $6,037 per month beginning on March 1, 2020 for four months until the settlement amount of $24,148 has been fully paid on

June 1, 2020.

Due to COVID-19 the Company has made total payments of $18,111 as of June 30, 2020.

The Company has subsequently

completed all required payments.

the six-months ended June 30, 2020 the Company received a loan of $32,439 from a unrelated third party with an interest rate of

10% per annum with a maturity date of December 31, 2021.

the six-months ended June 30, 2020 the Company received $28,397 ($40,000 CDN) interest free from the Government of Canada as part

of the COVID-19 small business relief program.

Repaying the balance of the loan on or before December 31, 2022 will result in

loan forgiveness of 25 percent.

of June 30, 2020 the Company accrued interest of $70.

the nine-months ended September 30, 2020, the Company reached a legal settlement with a supplier in which the Company is obligated

to pay $6,037 per month beginning on March 1, 2020 for four months until the settlement amount of $24,148 has been fully paid

on June 1, 2020.

As of September 30, 2020 the Company has completed all payments.

the nine-months ended September 30, 2020 the Company received a loan of $32,439, $10,000 and $108,000 from a unrelated third party

with an interest rate of 10% per annum with a maturity date of December 31, July 22 and August 31, 2021 respectively.

the nine-months ended September 30, 2020 the Company received $28,397 ($40,000 CDN) interest free from the Government of Canada

as part of the COVID-19 small business relief program.

Repaying the balance of the loan on or before December 31, 2022 will result

in loan forgiveness of 25 percent.

of September 30, 2020 the Company accrued interest of $2,226.

(formerly Franchise Holdings International, Inc)

1 unchanged sentence

Revision of Prior Period Financial Statements

the review for the six-months ended June 30, 2020 new information came to light regarding share issuances and an anti-dilution

the review for the nine-months ended September 30, 2020 new information came to light regarding share issuances and an anti-dilution

The share issuances for the three months ended March 31, 2020 were 2,000,000 and 458,834 common shares respectively.

7 unchanged sentences

cumulative effect of the adjustments on all prior periods to Shareholders’

Equity as of June 30, 2019, December 30,

2019 and March 31, 2020 reflected below:

Share Subscriptions

Share Subscription

Cumulative translation

Equity as of June 30, 2019, September 30, 2019,

December 30, 2019 and March 31, 2020 reflected below:

Subscriptions

Stockholders’

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$ (11,447,600 )

Balance at September,

$ (10,212,150 )

Balance at September 30, 2019, as revised

$ (11,177,230 )

Balance at December 31, 2019

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March 31, 2020 as follows

For the Three Months Ended March 31, 2020

As previously reported

the Three Months Ended March 31, 2020

Professional Fees

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Basic and Diluted

the nine months period ended September 30, 2019 the Company entered into an agreement with a third party to reserve 100,000 common

shares for consulting services at $0.0001 per share.

As of September 30, 2020, the third party has not exercised the shares.

Subsequent Events

Company has evaluated subsequent events through August 27, 2020 which is the date the financial statements were available

to be issued and the following events after June 30, 2020 occurred:

July 8 and August 14, 2020 the Company issued 2,400,000 and 1,700,000 common shares to a third-party consultant respectively.

July 22, 2020, the Company entered into a loan agreement for $10,000 with a maturity date of July 22, 2021 at an interest

rate of 10% per annum.

On July 29, 2020 the Company issued a warrant certificate that allows

the holder to purchase up to 1,250,000 common shares at $0.12 per shares exercisable on or before March 20, 2025.

Company has evaluated subsequent events through November 16, 2020 which is the date the financial statements were available

to be issued and the following events after September 30, 2020 occurred:

October 7, 2020 the Company issued 2,900,000 common shares from share subscription valued at $145,000

October 7, 2020 the Company issued 2,291,667 common shares from share subscription valued at $275,000

October 23, 2020 the Company reached a settlement agreement with a third party.

In accordance with the settlement agreement

the third party will release and cancel a reserve of 4,166,666 common shares of the Company.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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(formerly Franchise Holdings International, Inc) and its wholly owned subsidiary, Worksport Ltd.

for the six-months

ended June 30, 2020 and 2019, and the notes thereto.

for the nine-months

ended September 30, 2020 and 2019, and the notes thereto.

Additional information relating to Worksport Ltd is available at Worksport.ca.

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uncertainty and risk with respect to our performance, financial condition, results of operations and cash flows.

the six-months ended June 30, 2020, revenue generated from the entire line of Worksport products was $107,129, compared to $1,088,974

for the six-months ended June 30, 2019.

The year over year decrease of approximately 90% was attributed to the impact of COVID-19.

the six-months ended June 30, 2020, revenue generated in Canada was $11,815 compared to $24,894 for the same period in 2019, a

decrease of 53%.

For the three months ended June 30, 2020, revenue generated in Canada was $546 compared to $(628) for the same

period in 2019, an increase of 187%.

The rate of exchange between the Canadian Dollar and the United States Dollar during

the first six months of fiscal 2020 fluctuated due to COVID-19;

the Canadian Dollar decreasing in value compare to United States

Dollar on average by $0.1.

As a result, Canadian Dollars sales during the first six-months ended June 30, 2020 will be on average

lower compared to 2019 when converted to United States Dollar for financial statement reporting purposes.

For the six-months ended

June 30, 2020, gross revenue generated in the United States was $95,314 compared to $1,064,080 for the same period in 2019.

represents a year-over-year decrease in US-sourced revenue of approximately 91%.

For the three months ended June 30, 2020, gross

revenue generated in the United States was $65,556 compared to $517,324 for the same period in 2019, an decrease of 87%.

in revenue generated in Canada and United States can be attributed to the lockdown and stay-at-home orders due to the COVID-19

the nine months ended September 30, 2020, revenue generated from the entire line of Worksport products was $223,620, compared

to $1,959,027 for the nine months ended September 30, 2019.

The year over year decrease of approximately 89% was attributed to

the impact of COVID-19.

the nine months ended September 30, 2020, revenue generated in Canada was $10,990 compared to $74,058 for the same period in 2019,

a decrease of 85%.

For the three months ended September 30, 2020, the Company had refunds of $935 compared to revenue of $49,410

for the same period in 2019, an decrease of 102%.

The rate of exchange between the Canadian Dollar and the United States Dollar

during the first nine months of fiscal 2020 fluctuated due to COVID-19;

the Canadian Dollar decreasing in value compare to United

States Dollar on average by $0.1.

As a result, Canadian Dollars sales during the first nine-months ended September 30, 2020 will

be on average lower compared to 2019 when converted to United States Dollar for financial statement reporting purposes.

nine months ended September 30, 2020, gross revenue generated in the United States was $212,630 compared to $1,884,969 for the

same period in 2019.

This represents a year-over-year decrease in US-sourced revenue of approximately 89%.

For the three months

ended September 30, 2020, gross revenue generated in the United States was $117,426 compared to $820,643 for the same period in

2019, an decrease of 86%.

The decrease in revenue generated in Canada and United States can be attributed to the lockdown and

stay-at-home orders due to the COVID-19 pandemic resulting in lower consumer confidence and demand.

Worksport works closely with one major distributor in Canada, along with its own contracted distribution and inventory facility

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customers tend to provide larger sales volumes, greater margin of profit as well as greater protection against price erosion.

of sales decreased for the first six months of fiscal 2020, when compared to the first six months of fiscal 2019, by 89% from

of sales decreased for the first nine months of fiscal 2020, when compared to the first nine months of fiscal 2019, by 88% from

$1,473,150 to $180,028.

The decrease was primarily due to significantly lower demand as a result of COVID-19.

Our cost of sales,

as a percentage of sales, was approximately 80% and 74% for six-months ended June 30, 2020 and 2019, respectively.

Cost of sales

for the three months ended June 30, 2020 were $58,883 compared to $371,686 for the three months ended June 30, 2019.

relation to our cost of sales, as a percentage of sales, was approximately 89% and 72% for the three months ended June 30, 2020

cost of sales, freight costs accounted for 23% of cost of sales during the six-months ended June 30, 2020, whereas in 2019, it

accounted for 4% of cost of sales.

The increase in the percentage of cost of sales is due to increased shipping expenses due increase

demand of international delivery due to COVID-19.

Our cost of sales, as a percentage of sales, was approximately 81% and 75% for nine months ended September

30, 2020 and 2019, respectively.

Cost of sales for the three months ended September 30, 2020 were $94,134 compared to $668,516

for the three months ended September 30, 2019.

In relation to our cost of sales, as a percentage of sales, was approximately 81%

and 77% for the three months ended September 30, 2020 and 2019.

The decrease in cost of sales for the three and nine months ended

September 30, 2020 was primarily due to significantly lower consumer demand as the COVID-19 pandemic negatively effected the economy.

cost of sales, freight costs accounted for 42% of cost of sales during the nine months ended September 30, 2020, whereas in 2019,

it accounted for 2% of cost of sales.

The increase in the percentage of cost of sales is due to increased shipping expenses due

increase demand of international delivery as a result of COVID-19.

provides its distributors and online retailers an “all-in”

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Volume discounts are also offered to certain higher volume customers.

margin percentage for the six-month periods ended June 30, 2020 and 2019 were 20% and 26% respectively.

margin percentage for the nine month ended September 30, 2020 and 2019 were 19% and 25% respectively.

For the three month ended

June 30, 2020 and 2019 gross margin percentage were 11% and 28% respectively.

September 30, 2020 and 2019 gross margin percentage were 19% and 23% respectively.

The decrease in gross margin reflects the affect

COVID-19 had impacted the Company’s freight costs as stated above increasing from 4% to 42%.

expenses decreased for the six-months ended June 30, 2020 by $81,997 to $278,967 compared to $360,964 for the six-months ended

June 30, 2019.

For the three months ended June 30, 2020 operating expenses were $140,496 compared to $134,321 for the three months

ended June 30, 2019.

and administrative expense decreased by $11,057 from $57,787 to $46,730 during the six-months ended June 30, 2020.

three months ended June 30, 2020 general and administrative expense decreased by $4,392 from $17,216 to $12,824 compared to

the three month ended June 30, 2019.

The six and three months decrease is attributed to reduced general and administrative

expenses as a result of COVID-19.

Company also realized a gain on foreign exchange in the amount of $7,444 during the six-months ended June 30, 2020, a decrease

of $13,282 when compared to a gain on foreign exchange of $20,726 during the six-months ended June 30, 2019.

For the three

months ended June 30, 2020 the Company had a loss on foreign exchange of $282 compared to a gain on foreign exchange of $6,928

for the three months ended June 30, 2019.

The decrease on foreign exchange was the result of the Company’s reduced operations

in Canadian Dollars related expenses and sales.

fees which include accounting, legal and consulting fees, decreased from $273,984 for the six-months ended June 30,

2019 to $228,934 for the six-months ended June 30, 2020.

For the three months ended June 30, 2020 and 2019 the Company recognized

Professional fees of $119,469 and $101,482 respectively.

Professional fees decreased for the three and six-months ended June

30, 2020 and 2019 due to decreased consulting expense.

expenses increased for the nine months ended September 30, 2020 by $137,308 to $671,937 compared to $534,629 for the nine months

ended September 30, 2019.

For the three months ended September 30, 2020 operating expenses were $392,970 compared to $173,664

for the three months ended September 30, 2019.

and administrative expense decreased by $51,475 from $149,041 to $97,566 during the nine months ended September 30, 2020.

For the three months ended September 30, 2020 general and administrative expense decreased by $40,418 from $91,254 to $50,836

compared to the three month ended September 30, 2019.

The nine and three months decrease is attributed to reduced general

and administrative expenses as a result of COVID-19.

Company also realized a gain on foreign exchange in the amount of $4,845 during the nine months ended September 30, 2020,

a decrease of $38,582 when compared to a gain on foreign exchange of $43,427 during the nine months ended September 30, 2019.

For the three months ended September 30, 2020 the Company had a loss on foreign exchange of $2,599 compared to a gain on foreign

exchange of $22,701 for the three months ended September 30, 2019.

The decrease on foreign exchange was the result of the

Company’s reduced operations in Canadian Dollars related expenses and sales.

fees which include accounting, legal and consulting fees, increased from $366,843 for the nine months ended September 30,

2019 to $509,347 for the nine months ended September 30, 2020.

For the three months ended September 30, 2020 and 2019 the

Company recognized Professional fees of $280,413 and $92,858 respectively.

Professional fees increased for the three and nine

months ended September 30, 2020 compare to 2019 was due to the Company’

employing third party consultants to help expand

production and sales.

Income and Expenses

income and expenses for the six-months ended June 30, 2020 was $86,719 compared with $51,596 as at June 30, 2019.

of $35,123 can be attributed to increased interest expense being incurred by the Company during the six months ended June 30,

loss for the six-months ended June 30, 2020 was $344,451 compared to a net loss of $128,220 for the six-months ended June 30,

2019, a change of $216,231 or 169%.

For the three months ended June 30, 2020 net loss was $192,185 compare to $1,748 for the three

months ended June 30, 2019.

The increase in the net loss can be attributed to the decrease in net sales of $450,594 and $981,845

when comparing the three and six-months ended June 30, 2019 to 2020 as a result of COVID-19.

income and expenses for the nine months ended September 30, 2020 was $321,096 compared to an income of $190,901 as at September

A difference of $511,997.

For the three months ended September 30, 2020 and 2019 other income and expenses were $234,377

and income of $242,498 respectively.

The difference for the three and nine months ended September 30, 2020 and 2019 can be attributed

to the Company recognizing a loss on settlement of debt in for $44,274 compare to a gain on settlement of debt $250,778 respectively.

loss for the nine months ended September 30, 2020 was $949,441 compared to a net income of $142,149 for the nine months ended

September 30, 2019, a change of $1,091,590 or 768%.

For the three months ended September 30, 2020 net loss was $604,990 compare

to a net income of $270,370 for the three months ended September 30, 2019.

The increase in the net loss can be attributed to the

decrease in net sales of $753,562 and $1,959,027 when comparing the three and nine months ended September 30, 2019 to 2020 as

a result of COVID-19.

and Capital Resources

Flow Activities

decreased from June 30, 2019 to June 30, 2020 at $129,698 and $21,111 respectively, as a result of lower sales due to COVID-19.

Increase in accounts receivable at June 30, 2019 to 2020 were $60,649 to $35,406 respectively.

The increase in accounts receivable

as at June 30, 2020 was due to the lifting of COVID-19 quarantine measures.

Other receivable decreased by $9,657 due to funds

Decrease in inventory as at June 30, 2019 and 2020 was $3,820 and $60,136.

Decrease in inventory was a result of disruptions

to supplier manufacturing from the COVID-19 pandemic.

Prepaid expenses increased by $20,925 as at June 30, 2020 compared to a

decrease of $115,710 as at June 30, 2019.

The difference was due the Company entering into new consulting and marketing services

not yet to rendered.

Accounts payable and accrued liabilities decreased by $1,042 as at June 30, 2020 compare to June 30, 2019

with an increase of $233,074.

The decrease in payables is related to the slowdown in normal operations as a result of the COVID-19

the six-months ended June 30, 2020, the Company advanced a further $8,764 to a US based mobile phone development company.

the six-months ended June 30, 2019, the Company invested $1,198 in warehouse equipment.

the first six-months of fiscal 2020, the Company received $182,500 in convertible promissory note, $4,099 from shareholder loans,

loan of $32,439 from an unrelated third party and $28,397 ($40,000 CDN) from the Government of Canada.

During the first

six-months of fiscal 2019, the Company issued $30,000 in issuance of common stock for cash and repayment of $4,312 of shareholder

increased from September 30, 2019 to September 30, 2020 at $178,752 to $467,133, as a result of funds received from financing

Increase in accounts receivable at September 30, 2019 to 2020 were $187,706 and $122,606 respectively.

in accounts receivable as at September 30, 2020 was due to the lifting of COVID-19 quarantine measures.

Other receivable decreased

by $22,970 due to funds being received from sales tax refund.

Decrease in inventory as at September 30, 2019 and 2020 were $91,038

Decrease in inventory was a result of disruptions to supplier manufacturing from the COVID-19 pandemic.

Prepaid expenses

decreased by $48,642 as at September 30, 2020 compared to a decrease of $97,737 as at September 30, 2019.

The difference was due

the Company entering into new consulting and marketing services not yet to fully rendered.

Accounts payable and accrued liabilities

decreased by $73,201 as at September 30, 2020 compare to September 30, 2019 with an increase of $437,347.

The decrease in payables

as at September 30, 2020 is due to the Company increasing payment to vendors compare to expenses being incurred.

the nine months ended September 30, 2020, the Company advanced a further $8,765 to a US based mobile phone development company.

the nine months ended September 30, 2020, the Company purchased $7,962 in patents and leasehold improvements.

the nine months ended September 30, 2019, the Company invested $84,149 in warehouse equipment, product moulds, patents, trademarks,

and leasehold improvements.

the nine months ended September 30, 2019, the Company advanced a further $15,658 to a US based mobile phone development company.

the first nine months of fiscal 2020, the Company received $467,500 in convertible promissory note, made repayment of $615 and

$16,150 to shareholder loans and convertible promissory note respectively.

During the same period the Company received a loan

of $150,439 from an unrelated third party and $28,397 ($40,000 CDN) from the Government of Canada.

The Company also received $250,000

in share subscription for 4,000,000 common stock.

the first nine months of fiscal 2019, the Company issued $30,000 in issuance of common stock for cash and repayment of $9,395

of shareholder loans.

Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements