What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-31 compared with 2021-04-13 · 1013 added, 790 removed, 356 unchanged (84% of the section changed)

1 unchanged sentence

TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheet at December 31, 2020 and 2019

Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2020 and 2019

Consolidated Statements of Stockholders’

Equity for the year ended December 31, 2020 and 2019

Consolidated statements of Cash Flow for the year ended December 31, 2020 and 2019

Notes to the Financial Statements

of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets at December 31, 2021 and 2020

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2021 and 2020

Consolidated Statements of Shareholders’ Equity (deficit) for the year ended December 31, 2021 and 2020

Consolidated Statements of Cash Flow for the years ended December 31, 2021 and 2020

to Audited Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and

of Worksport Ltd.

Stockholders of Worksport, LTD (formerly Franchise Holdings International, Inc.)

on the Financial Statements

have audited the accompanying consolidated balance sheets of Worksport, LTD (the Company) as of December 31, 2020 and 2019, and the related

statements of operations, comprehensive loss, stockholders’

equity, and cash flows for each of the years in the two-year period

ended December 31, 2020, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the

results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with

accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

have audited the accompanying consolidated balance sheets of Worksport, LTD (the Company) as of December 31, 2021, and 2020, and the

related statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the years in

the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and

2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity

with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

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we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of m000aterial misstatement of the financial statements, whether due to error

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

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accounts or disclosures to which they relate.

Promissory Note

discussed in Note 8 to the financial statements, the Company entered into a secured convertible promissory note which included

an original issue discount and is convertible at a set price which was lower than market on the date of issuance.

The promissory

note was issued with warrants.

The Company accounted for the conversion feature as a beneficial conversion feature.

was recorded for the beneficial conversion feature and the relative value of the warrants after considering the original issue

identified the conversion feature as a critical audit matter because accounting for such features is complex and requires management

to consider alternative reporting models.

Convertible debt also requires management to complete complex calculations and include significant

disclosures in their notes to the financial statements.

These matters involve a large degree of expertise and judgment on the part of

In turn, it required us to use significant effort and judgment.

Transactions and Conversion of Debt Securities

discussed in Note 8, 9, 10, and 22 to the financial statements, the Company has issued a significant amount of equity securities, many

of which were issued to settle its promissory notes and convertible notes payable.

Many of the notes are issued with original issuance

discounts and with warrants which are valued and recorded as a discount to the notes.

The tracking of these transactions can be complicated

and require management to estimate the value of equity securities using a Black Sholes option pricing model.

We identified the fair market value of debt and equity transactions and

related conversions to be a critical audit matter.

The calculations can be complex and subject to error.

address this critical audit matter, we gained an understanding of Management’s process to record the equity and debt transactions.

We obtained their calculations and tested its clerical accuracy and the inputs.

We agreed the basic terms to source agreements and considered

key assumptions.

Finally, we recalculated the recorded values and conversion amounts.

Haynie & Company

Lake City, Utah

have served as the Company’s auditor since 2016.

(formerly Franchise Holdings International, Inc.)

have served as the Company’s auditor since 2016.

Balance Sheets

11 unchanged sentences

Intangible Assets, net (note 6)

Liabilities and Stockholders’

Liabilities and Shareholders’ Deficit

Current Liabilities

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Total Current Liabilities

Long Term–Lease Liability (Note 19)

Long Term – Lease Liability (note 18)

Total Liabilities

Stockholders’

Equity (Deficit)

Series A & B Preferred Stock, $0.0001 par value, 1,100,000 shares authorized, 1,000 Series A and 0 Series B issued and outstanding, respectively (Note 9)

Shareholders’ Equity (Deficit)

Series A & B Preferred Stock, $ 0.0001 par value, 1,100,000 shares authorized, 100 Series

A and 0 Series B issued and outstanding, respectively (note 10)

Common stock, $ 0.0001 par value, 299,000,000 shares authorized, 16,951,034 and 3,820,619 shares issued and outstanding, respectively (note 10)

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Cumulative translation adjustment

Total Stockholders’

Equity (Deficit)

Total Liabilities and Stockholders’

Equity (Deficit)

Total Shareholders’ Equity (Deficit)

Total Liabilities and Shareholders’ Equity (Deficit)

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

(formerly Franchise Holdings International, Inc.)

Statements of Operations and Comprehensive Loss

1 unchanged sentence

Cost of Goods Sold

Gross Profit (Loss)

Operating Expenses

General and administrative

Sales and marketing

Professional fees

Loss (gain) on foreign exchange

Sales and marketing (including non-cash expense of 2021 - $ 884,446 (2020 - $ 90,164 ))

Professional fees (including non-cash expense of 2021 - $ 3,035,596 (2020 - $ 325,502 ))

Loss on foreign exchange

Total operating expenses

Loss from operations

( 7,561,731 )

Other Income (Expense)

Interest expense (note 9)

Gain (loss) on settlement of debt

Interest income

Bad debt expense

Gain on settlement of debt

Total other (expense)

Other Comprehensive Loss

Foreign currency translation adjustment

Comprehensive Loss

( 7,897,085 )

( 1,187,620 )

Loss per Share (basic and diluted)

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accompanying notes form an integral part of these consolidated financial statements

(formerly Franchise Holdings International, Inc.)

Statements of Stockholders’

Statements of Shareholders’ Deficit

31, 2021 and 2020

Subscriptions

Stockholders’

at January 1, 2019

Preferred Stock

Additional Paid-in

Share Subscriptions

Share Subscription

Cumulative Translation

Total Stockholders’ Equity

Balance at January 1, 2020

$ ( 11,678,413 )

Issuance of share subscriptions payable

Deemed dividend related to

down-round features

Return and Cancellation of shares

Issuance for settlement of

Conversion of Preferred Stock

currency translation adjustment

at December 31, 2019

$ ( 882,561 )

Issuance for services

Issuance for prepaid services

and subscriptions payable

Issuance from subscriptions

Issuance for prepaid services and subscriptions payable

Issuance from subscriptions payable

( 1,729,227 )

Issuance of shares from Reg-A

Stock split provision

Stock split provision, shares

Conversion of preferred stock to common stock

Conversion of preferred stock to common stock, shares

Issuance for services and subscriptions payable

Issuance for services and subscriptions payable, shares

Public offering

Public offering, shares

Share issuance cost

Cancellation of reserved shares

Issuance of shares from private placement

Issuance of shares from private placement, shares

Warrants issuance for services

Conversion of convertible promissory

note to shares (Note 8 and 22)

Warrants issuance in connection

to convertible promissory note (Note 8 and 22)

Share issuance in connection

to convertible promissory note (Note 8)

Conversion of convertible promissory note to shares (note 9 and 22)

Warrant exercise

Warrant exercise, shares

Loan repayment

Loan repayment, shares

Warrants issuance in connection to convertible promissory note (note 9 and 22)

Share issuance in connection to convertible promissory note (note 9)

Issuance of Preferred Stock

at December 31, 2020

( 1,187,620 )

Balance at December 31, 2020

$ ( 12,866,033 )

Stock split provision

Conversion of preferred stock to common stock

Issuance for services and subscriptions payable

Public offering

Share issuance cost

( 4,459,892 )

Issuance of shares from private placement

Warrants issuance for services

Conversion of convertible promissory note to shares (note 9)

Warrant exercise (note 22)

Loan repayment (note 8 and 19)

( 7,897,085 )

Balance at December 31, 2021

$ ( 20,849,805 )

accompanying notes form an integral part of these consolidated financial statements

(formerly Franchise Holdings International, Inc.)

Statements of Cash Flows

2 unchanged sentences

$ ( 7,897,085 )

$ ( 1,187,620 )

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

Amortization of prepaid services paid by shares issuance

Shares and warrants issued for services

Loss on impairment

Bad debt expense

Shares, options and warrants issued for services

Depreciation and amortization

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Amortization on OID interest

Gain on settlement of debt

Gain/(loss) on settlement of debt

Adjustments to reconcile net income loss to cash provided by (used in) operating activities

( 3,433,930 )

Changes in operating assets and liabilities (note 14)

Net cash used in operating activities

( 4,046,705 )

Cash Flows from Investing Activities

Repayment of lease liability

Purchase of investment (note 18)

Purchase of intangible assets

Purchase of property and equipment

( 1,101,784 )

Net cash used in investing activities

( 1,131,735 )

Financing Activities

Proceeds from issuance of stock for cash

Repayment of lease liability

Proceeds from issuance of common shares, net of issuance cost

Proceeds from warrant exercise

Proceeds from share subscriptions

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Proceeds from promissory notes

Stockholder Assumption of Debt

Shareholder Assumption of Debt

Repayments on loan payable

Repayments on promissory notes (note 9)

Net cash provided by financing activities

Effects of Foreign Currency Translation

Change in cash

Cash and cash equivalents–beginning of year

Cash and cash equivalents - beginning of year

Cash and cash equivalents end of year

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Interest paid

Supplemental Disclosure of non-cash investing and financing Activities

Share cancellation

Shares issued to service providers

Supplemental Disclosure of non-cash activities

Shares issued for purchase of software

Shares and warrants issued to service providers and prepaid services expense

Cashless warrant exercise

Conversion of preferred Stock to common stock

Shares issued for share subscriptions payable

Recognition of operating lease right of use asset and liability

Shares issued for loan repayment

Conversion of convertible promissory note to common stock

Convertible promissory note–equity discount

Convertible promissory note–original issue discount

Convertible promissory note – equity discount

Convertible promissory note – original issue discount

Stock split provision

Reverse stock split

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

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

1 unchanged sentence

Nature of Operations and Reverse Acquisition Transaction

(the “Company”

) was incorporated in the state of Nevada on April 2, 2003.

During the year ended December 31,

2014, the Company completed a reverse acquisition transaction (the “Reverse Acquisition”

) with TruXmart Ltd.

( “TruXmart”

(the “Company”) was incorporated in the State of Nevada on April 2, 2003.

During the year ended December 31, 2014, the

Company completed a reverse acquisition transaction (the “Reverse Acquisition”) with TruXmart Ltd.

(“TruXmart”).

On May 2, 2018, Truxmart legally changed its name to Worksport Ltd.

( “Worksport”

Worksport designs and distributes

truck tonneau covers in Canada and the United States.

(“Worksport”).

Worksport designs and distributes truck

tonneau covers in Canada and the United States.

on May 5, 2021 Terravis Energy Inc.

was incorporated in the State of Colorado.

On August 20, 2021, the Company was issued 100

common shares at par value of $ 0.0001

per share for a controlling interest in Terravis

May 21, 2021, the Board of Directors authorized the submission of a Certificate of Change/Amendment to the Nevada Secretary of State

in which the Company sought to affect a reverse split of its common stock at the rate of 1 for 20 for the purpose of increasing the per

share price for the Company’s stock in an effort to meet the minimum listing requirements of the NADAQ.

The Certificate of Change

was submitted to the Nevada Secretary of State on May 21, 2021 and the FINRA corporate action was announced on August 3, 2021.

declared the 1 for 20 reverse stock split effective on August 4, 2021 .

These consolidated financial statements including, prior period

comparative share amounts, have been retrospectively restated to reflect this reverse split.

Basis of Presentation and Business Condition

Statement of Compliance

Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States

( “GAAP”

) as issued by the Financial Accounting Standards Board ( “FASB”

Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States

(“GAAP”) as issued by the Financial Accounting Standards Board (“FASB”).

Basis of Measurement

Company’s financial statements have been prepared on the accrual basis.

Consolidation

Company’s consolidated financial statements consolidate the accounts of the Company and its wholly-owned subsidiary.

All intercompany

transactions, balances and unrealized gains or losses from intercompany transactions have been eliminated upon consolidation.

Company’s consolidated financial statements consolidate the accounts of the Company and its wholly owned subsidiaries.

intercompany transactions, balances and unrealized gains or losses from intercompany transactions have been eliminated upon consolidation.

Functional and Presentation Currency

January 1, 2020, the Company changed the functional currency of its subsidiary to United States dollars given the increasing prevalence

dollar-denominated activities of the subsidiary over time.

The change in functional currency from Canadian dollars to United

States dollars is accounted for prospectively from January 1, 2020.

The subsidiary’s balance sheet was converted from Canadian

dollars to United States dollars using the year ended December 31, 2019 United States dollar balance as the opening for January 1, 2020

in accordance with Accounting Standards Codification (ASC) 830 .

These financial statements are presented in United States dollars.

The functional and presentation currency of the Company and its subsidiary is the United States dollar.

As a result of the change in

functional currency the Company recognized a loss on foreign exchange of $29,940.

consolidated financial statements are presented in United States Dollars.

The functional currency of the Company and its subsidiaries

are United States Dollar.

For purposes of preparing these consolidated financial statements, transactions denominated in Canadian Dollar

were converted to United States Dollar at the spot rate.

Transaction gains and losses resulting from fluctuations in currency exchange

rates on transactions denominated in currencies other than the functional currency are recognized as incurred in the accompanying consolidated

statement of operations and comprehensive loss.

Use of Estimates

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Business condition

Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s

ability to continue as a going concern within one year after the date the financial statements are issued.

of December 31, 2020, the Company had working capital deficiency of $33,289 and an accumulated deficit of $12,866,033.

As of December

31, 2020, the Company had cash and cash equivalents of $1,107,812.

Based on its current operating plans, the Company believes it has

sufficient level of funding for anticipated operations, capital expenditures and debt repayments for a period of at least 12 months from

the issuance date of this annual report.

(formerly Franchise Holdings International, Inc.)

of December 31, 2021, the Company had working capital of $ 32,235,216 (2020 – working capital deficiency of $ 33,289 ) and an accumulated

deficit of $ 20,849,805 (2020 - $ 12,866,033 ).

As of December 31, 2021, the Company had cash and cash equivalents of $ 28,567,333 (2020

- $ 1,107,812 ).

Based on its current operating plans, the Company believes it has sufficient level of funding for anticipated operations,

capital expenditures and debt repayments for a period of at least 12 months from the issuance date of this Annual Report.

the year ended December 31, 2021 the Company through its Reg-A public offering, private placement offering, unwritten public offering

and exercises of warrants had raised in aggregate of approximately $ 32,500,000 .

on the Company’s future operating plans, existing cash of $ 28,567,333 , combined with possible warrants exercises of approximately

$ 38,500,000 ;

management believes the Company have sufficient funds to meet its contractual obligations and working capital requirements

for the next 12 months and the foreseeable future.

to the Consolidated Financial Statements

31, 2021 and 2020

the year ended December 31, 2020 and subsequent to the year ended the Company through its Reg-A public offering, private placement

offering, and exercises of warrants had raised in aggregate of approximately $7,400,000.

In addition, as of April 2021

the Company has approximately 45,840,121 warrants exercisable at $0.20 per warrant compare to an average share price of approximately

$0.40 per share, anticipating additional warrant exercises.

to year ended December 31, 2020 the Company intents to introduce several new tonneau covers most significant of which is the TerraVis.

TerraVis is a solar cover tonneau cover will give pickup truck owners rechargeable portable power and add range to upcoming EV pickup

The Company anticipates that the introduction of these new products will sufficiently improve the Company’s financial position.

on the Company’s future operating plans, existing cash of $1,107,812, additional funds of approximately $6,300,000 raised subsequent

to year ended, combined with possible warrants exercises of approximately $9,100,000;

management believes the Company have sufficient

funds to meet its contractual obligations and working capital requirements for the next 12 months and the foreseeable future.

Basis of Presentation and Business Condition (continued)

Reclassification

comparative figures have been reclassified 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 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.

In accordance with SAB (Staff Accounting Bulletins) Topic 1.M, “Materiality,”

SAB (Staff Accounting Bulletins) Topic 1.N, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements

in Current Year Financial Statements,”

we evaluated the error and determined that the related impact was not material to our financial

statements for any prior annual or interim period, but that correcting the cumulative impact of the error would be significant to our

results of operations and equity fiscal and interim periods of 2019 and 2020.

Accordingly, we have revised previously reported financial

information for such immaterial error, as previously disclosed in our Annual Report on Form 10-K for the fiscal year 2019.

of revisions to certain previously reported financial information presented herein for comparative purposes is included in note 23.

amounts in the prior period Consolidated Statements of Cash Flows for the year ended December 31, 2020 have been reclassified to conform

with current period presentation.

The Company reclassified $ 31,193 of changes from accounts payable and accrued liabilities under operating

assets and liabilities to repayment of lease liability under financing activities.

This reclassification resulted in a decrease in net

cash used by operating activities from $ 726,304 to $ 695,112 and decrease in net cash provided by financing activities from $ 1,838,850

to $ 1,807,657 .

This reclassification did not have any effect on the reported results of operations.

Significant Accounting Policies

and Cash Equivalents –Cash and cash equivalents includes cash on account and demand deposits with maturities of three months

Receivables–

accounts receivable are stated at the amount the Company expects to collect.

and Cash Equivalents - Cash and cash equivalents includes cash on account and demand deposits with maturities of three months or

- Trade accounts receivable are stated at the amount the Company expects to collect.

Receivables are reviewed individually for collectability.

If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments,

allowances may be required.

Company offers credit terms on the sale of the Company’s products to a significant majority of the Company’s customers and

requires no collateral from these customers.

The Company performs ongoing credit evaluations of customers’

financial condition

and maintains an allowance for doubtful accounts receivable based upon the Company’s historical experience and a specific review

The Company performs ongoing credit evaluations of customers’ financial condition

and maintains an allowance for doubtful accounts receivable based upon the Company’s historical experience and a specific review

or accounts receivable at the end of each period.

As at December 31, 2021 and 2020, the Company had no allowance for doubtful accounts.

Inventory–

is stated at the lower of cost or net realizable value, with cost being determined by a weighted average basis.

Cost includes the cost

of materials plus direct labor applied to the product.

Warranties–

Company offers limited warranties against defective products.

Customers who are not satisfied with their purchase may attempt to have

their purchases reimbursed outside past the warranty period.

For the years ending December 31, 2020 and 2019, the Company incurred warranty

expenses of $0 and $2,106.

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

31, 2020 and 2019

Significant Accounting Policies ( continued)

Recognition–

Beginning after December 15, 2018, for public entities reporting Revenue from Contracts with Customers, ASC 606,

a new accounting standard for revenue recognition was issued.

Sales are recognized when products are shipped, with no right of return

but reimbursement maybe offered for defective products and the title and risk of loss has passed to unaffiliated customers or when they

are delivered based on the terms of the sale, there is an identifiable contract with a customer with defined performance obligations,

the transaction price is determinable and the entity has fulfilled its performance obligation.

Revenue related to shipping and handling

costs billed to customers is included in net sales and the related shipping and handling costs are included in cost of products sold.

These standards have had no effect on the reported consolidated financial statements.

and Equipment–

Capital assets are recorded at cost and are amortized using the straight-line method over the following estimated

useful lives:

- Inventory is stated at the lower of cost or net realizable value, with cost being determined by a weighted average basis.

includes the cost of materials plus direct labor applied to the product.

- The Company offers limited warranties against defective products.

Customers who are not satisfied with their purchase may attempt

to have their purchases reimbursed outside past the warranty period.

Recognition – In

accordance with ASC 606 Revenue from Contracts with Customers, sales are recognized when products are shipped, with no right

of return but reimbursement maybe offered for defective products and the title and risk of loss has passed to unaffiliated customers

or when they are delivered based on the terms of the sale, there is an identifiable contract with a customer with defined performance

obligations, the transaction price is determinable, and the entity has fulfilled its performance obligation.

Revenue related to shipping

and handling costs billed to customers is included in net sales and the related shipping and handling costs are included in cost of products

and Equipment - Capital

assets are recorded at cost and are depreciated using the straight-line method over the following estimated useful lives:

Schedule of Estimated Useful Lives of Property and Equipment

and equipment

at December 31, 2020, the Company does not take depreciation for the following items:

product molds, trademarks and the website.

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary

payments - The Company offers a share option plan for its directors, officers, employees and consultants.

ASC 718 “Compensation

– Stock Compensation” prescribes accounting and reporting standards for all share-based payment transactions in which

employee services are acquired.

Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other

equity instruments such as employee stock ownership plans and stock appreciation rights.

Share-based payments to employees, including

grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values.

expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the

requisite service period (usually the vesting period).

of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:

(a) the goods

or services received;

or (b) the equity instruments issued.

The fair value of the share-based payment transaction is determined at the

earlier of the performance commitment date or performance completion date.

Taxes - Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary

differences between the amount of taxable income and pretax financial income, and between the tax bases of assets and liabilities and

7 unchanged sentences

upon examination by the tax authorities.

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

1 unchanged sentence

Significant Accounting Policies (continued)

Currency Translation–

Transactions denominated in foreign currencies are initially recorded in the functional currency using

exchange rates in effect at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated

into the functional currency using at the historical exchange rates in effect at the dates of the transactions.

All exchange gains and

losses are included in the statement of operations and comprehensive loss.

Instruments–

Financial Accounting Standards Board’s (FASB) ASC 825, Disclosures about Fair Value of Financial Instruments,

requires disclosures of the fair value of financial instruments.

The carrying value of the Company’s current financial instruments,

which include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities and stockholder loan, approximates

their fair values because of the short-term maturities of these instruments.

Measurement–

Company initially measures its financial instrument at fair value, except for certain non-arm’s length transactions.

subsequently measures all its financial assets and financial liabilities at amortized cost, except for investments in equity instruments

that are quoted in an active market, which are measured at fair value.

Changes in fair value are recognized in earnings for the period

in which they occur.

Currency Translation - Transactions denominated in foreign currencies are initially recorded in the functional currency using exchange

rates in effect at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into

the functional currency using at the historical exchange rates in effect at the dates of the transactions.

All exchange gains and losses

are included in the statement of operations and comprehensive loss.

Instruments - Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) 825, Disclosures about Fair

Value of Financial Instruments, requires disclosures of the fair value of financial instruments.

The carrying value of the Company’s

current financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities

and shareholder loan, approximates their fair values because of the short-term maturities of these instruments.

- The Company initially measures its financial instrument at fair value, except for certain non-arm’s length transactions.

The Company subsequently measures all its financial assets and financial liabilities at amortized cost, except for investments in equity

instruments that are quoted in an active market, which are measured at fair value.

Changes in fair value are recognized in earnings for

the period in which they occur.

assets measured at amortized cost include cash and cash equivalents, accounts receivable, related party receivable, other receivables

2 unchanged sentences

and promissory note payable.

Party Transactions–

All transactions with related parties are in the normal course of operations and are measured at the exchange

Assets and Impairment–

Patents and other intangibles are amortized using the straight-line method over their estimated useful

Party Transactions - All transactions with related parties are in the normal course of operations and are measured at the exchange amount.

Assets and Impairment – Patents and other intangibles are amortized using the straight-line method over their estimated useful

Intangible assets, such as trademarks with indefinite live are not amortized.

2 unchanged sentences

The Company evaluates the recoverability

of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount

may not be recoverable.

11 unchanged sentences

intangible assets.

Accounting –On January 1, 2019, the Company adopted the new accounting standards ASC 842 that requires lessees to recognize

operating leases on the balance sheet as right-of-use assets and lease liabilities based on the value of the discounted future lease

Accounting - On January 1, 2019, the Company adopted the new accounting standards ASC 842 that requires lessees to recognize operating

leases on the balance sheet as right-of-use assets and lease liabilities based on the value of the discounted future lease payments.

Expanded disclosures about the nature and terms of lease agreements are required prospectively and are included in Note 18.

Upon adoption, the Company also recognized right-of-use assets and lease liabilities of $68,516.

(formerly Franchise Holdings International, Inc.)

Accounting Pronouncements

October 2021, the FASB issued ASU No.

2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities

(deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606.

At the acquisition date, the acquirer

applies the revenue model as if it had originated the acquired contracts.

The ASU is effective for annual periods beginning after December

15, 2022, including interim periods within those fiscal years.

Adoption of the ASU should be applied prospectively.

Early adoption is

also permitted, including adoption in an interim period.

If early adopted, the amendments are applied retrospectively to all business

combinations for which the acquisition date occurred during the fiscal year of adoption.

Management is currently evaluating the impact

the adoption of this new guidance will have on its consolidated financial statements and does not anticipate a material impact.

November 2021, the FASB issued ASU No.

2021-10, Government Assistance (Topic 832).

This ASU requires business entities to disclose information

about government assistance they receive if the transactions were accounted for by analogy to either a grant or a contribution accounting

The disclosure requirements include the nature of the transaction and the related accounting policy used, the line items on the

balance sheets and statements of operations that are affected and the amounts applicable to each financial statement line item and the

significant terms and conditions of the transactions.

The ASU is effective for annual periods beginning after December 15, 2021.

disclosure requirements can be applied either retrospectively or prospectively to all transactions in the scope of the amendments that

are reflected in the financial statements at the date of initial application and new transactions that are entered into after the date

of initial application.

Management is currently evaluating the impact the adoption of this new guidance will have on its consolidated

financial statements and does not anticipate a material impact.

to the Consolidated Financial Statements

31, 2021 and 2020

Accounting Pronouncements

August 2020, the FASB issued ASU 2020-06, “Debt–Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging–Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity.”

The new guidance eliminates two of the three models in ASC 470-20, which required entities to account

for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock.

As a result, only conversion features accounted for under the substantial premium model in ASC 470-20 and those that require bifurcation

in accordance with ASC 815-15 will be accounted for separately.

In addition, the amendments in ASU 2020-06 eliminates some of the requirements

in ASC 815-40 related to equity classification.

The amendments in ASU 2020-06 further revised the guidance in ASC 260, Earnings Per Share

(“EPS”), to address how convertible instruments are accounted for in calculating diluted EPS and requires enhanced disclosures

about the terms of convertible instruments and contracts in an entity’s own equity.

The new standard is effective for the Company

for fiscal years beginning after December 15, 2023, including interim periods within these fiscal years, with early adoption permitted.

Management is currently evaluating the impact the adoption of this new guidance will have on its consolidated financial statements and

does not anticipate a material impact.

consists of the following at December 31, 2021 and 2020:

Schedule of Inventory

Finished goods

1 unchanged sentence

Raw materials

Prepaid inventory

the year ended December 31, 2019, the Company recognized a loss on impairment of inventory $54,292.

Property and Equipment

classes of property and equipment at December 31, 2021 and 2020 are as follows:

Schedule of Property and Equipment

Product molds

Leasehold Improvements

Balance–January 1, 2020

Balance–December 31, 2020

Product molds

Leasehold Improvements

Balance – January 1, 2021

Balance – December 31, 2021

Accumulated Depreciation

Balance–January 1, 2020

Balance–December 31, 2020

Balance – January 1, 2021

Balance – December 31, 2021

Net amount as at December 31, 2021

1 unchanged sentence

Leasehold Improvements

Balance–January 1, 2019

Balance–December 31, 2019

Balance – January 1, 2020

Balance – December 31, 2020

Accumulated Depreciation

Balance–January 1, 2019

Balance–December 31, 2019

Balance – January 1, 2020

Balance – December 31, 2020

Net amount as at December 31, 2020

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

31, 2020 and 2019

the years ended December 31, 2021 and 2020, the Company recognized depreciation expense of $ 64,497 and $ 3,184 , respectively.

property and equipment, as well as any future purchases of property and equipment have been pledged as security for the notes payable

disclosed in Notes 7 and 8.

disclosed in note 8.

to the Consolidated Financial Statements

31, 2021 and 2020

Intangible Assets

assets consist of costs incurred to establish the Worksport Tri-Fold and Smart Fold patent technology, Worksport trademarks, as well

as the Company’s website.

as the Company’s website and sales CRM system.

The patent was issued in 2014 and 2019.

The patent will be amortized on a straight-line basis over its

useful life of 25 years.

The Company’s trademark and website are reassessed every year for amortization/impairment;

has determined that amortization/impairment is not necessary for the current year ended December 31, 2020.

The change in intangible assets

for the years ending December 31, 2020 and 2019 are as follows:

Balance–January 1, 2020

Balance–December 31, 2020

The patent will be amortized on a straight-line

basis over its useful life of 25 years.

The Company’s sales CRM system is currently in testing and development which is expected

to be completed in 2022, as such no amortization has been recorded.

The Company’s trademark and website are reassessed every year

for amortization/impairment;

the Company has determined that amortization/impairment is not necessary for the current year ended December

The change in intangible assets for the years ending December 31, 2021 and 2020 are as follows:

Schedule of Change in Intangible Assets

Balance – January 1, 2021

Balance – December 31, 2021

Accumulated Depreciation

Balance–January 1, 2020

Balance–December 31, 2020

Balance – January 1, 2021

Balance – December 31, 2021

Net amount as at December 31, 2021

Balance–January 1, 2019

Balance–December 31, 2019

Accumulated Depreciation

Balance–January 1, 2019

Balance–December 31, 2019

Balance – January 1, 2020

Balance – December 31, 2020

Accumulated Amortization

Balance – January 1, 2020

Balance – December 31, 2020

Net amount as at December 31, 2020

of the patent over the next five years and beyond December 31, 2021 is as follows:

Schedule of Amortization of Patent

2027 and later

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

31, 2021 and 2020

Prepaid expenses and deposits

of December 31, 2021 and 2020 prepaid expenses and deposits consists of the following:

Schedule of Prepaid Expenses and Deposits

Consulting, services and advertising

expenses and deposits, net

of December 31, 2021 prepaid expense and deposit consists of $ 4,328,389 in prepaid consulting, services and advertising for third party

consultants through the issuance of shares and stock options.

Promissory Notes

following tables shows the balance of the notes payable as of December 31, 2021 and 2020:

Balance as at December 31, 2018

Schedule of Notes Payable

Balance as at December 31, 2019

1 unchanged sentence

Balance as at December 31, 2020

the year ended December 30, 2020, the Company reclassified $88,120 from accounts payable to promissory notes.

The terms of the note is

under negotiation and is currently due on demand.

the year ended December 30, 2020, the Company reclassified a debit balance of $11,058 from notes payable to other receivable.

Balance as at December 31, 2021

the year ended December 31, 2020, the Company reclassified $ 99,177 from

accounts payable to promissory notes and from promissory notes to other receivable.

The terms of the note is under

negotiation and is currently due on demand.

the year ended December 31, 2016, the Company issued a secured promissory note in the amount of $ 73,452 ($ 123,231 Canadian Dollars),

3 unchanged sentences

The secured promissory note bears interest at a rate of 18 % per annum.

terms of the original note including these additions are due upon completion of going public on the Canadian Securities Exchange, with

no change in interest rate.

The secured promissory note is secured by all present and after-acquired property and assets of the Company.

During the year ended December 31, 2019, the Company extended the maturity dates of the secured promissory notes to be due on April 1,

As at December 31, 2020, principal balance owing was $96,091 ($123,231 Canadian dollars) (2019–$96,091 ($123,231 Canadian

As of December 31, 2020, the accrued interest on this note payable was $48,770 ($64,102 Canadian dollars) (2019–$32,277

terms of the original note including these additions are due “upon completion of going public on the Canadian Securities Exchange,

with no change in interest rate.

The secured promissory note is secured by all present and after-acquired property and assets of the

During the year ended December 31, 2019, the Company extended the maturity dates of the secured promissory notes to be due on

April 1, 2021.

As at December 31, 2021, principal balance owing was $ 96,091 ($ 123,231 Canadian Dollars) (2020 - $ 96,091 ($ 123,231 Canadian

As of December 31, 2021, the accrued interest on this note payable was $ 66,380 ($ 86,284 Canadian Dollars) (2020 - 48,770 ($ 64,102

Canadian Dollars)) included in accounts payable and accrued liabilities.

As of December 31, 2020, the Company and the secured

promissory note holder are in dispute.

As of December 31, 2021, the Company and the secured promissory

note holder are in dispute.

the year ended December 31, 2016, the Company issued secured promissory notes in the amount of $ 79,000 .

5 unchanged sentences

notes to be due on April 1, 2021.

As at December 31, 2020 principal balance owing was $79,000 (2019–$79,000).

As of December 31,

2020, the accrued interest on this note payable was $31,000 (2019–16,780) included in accounts payable and accrued liabilities.

As of December 31, 2020, the Company and the secured promissory note holder are in dispute.

the year ended December 31, 2017, the Company issued a secured promissory note in the amount of $9,545 ($12,000 Canadian dollars).

secured promissory note was due in August 2018 and bears interest at a rate of 18% per annum, payable monthly.

During the year ended

December 31, 2019, the Company made a repayment of $9,545 ($12,000 Canadian dollars).

As of December 31, 2020, the unsecured promissory

note has been repaid in full.

the years ended December 31, 2017, the Company issued secured promissory notes in the amount of $53,848 ($67,700 Canadian dollars).

secured promissory notes were due in October and November 2018 and bears interest at a rate of 12% per annum.

The secured promissory

notes are secured by Company inventory and personal assets held by the CEO.

During the year ended December 31, 2019, the Company extended

the maturity date of the secured promissory notes to November 3, 2020.

As at December 31, 2021 principal balance owing was $ 79,000 (2020 - $ 79,000 ).

Canadian dollars) (2019–$53,848 ($67,700 Canadian dollars)).

As of December 31, 2020, the accrued interest on this note payable

was $14,050 ($18,740 Canadian dollars) (2019–$8,174 ($10,616 Canadian dollars)) included in accounts payable and accrued liabilities.

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

31, 2020 and 2019

to the year ended on February 9, 2021, the Company made a repayment of $62,905 (principal and interest) for the above secured promissory

note issued during the year ended December 31, 2017.

As of December 31, 2021,

the accrued interest on this note payable was $ 45,181 (2020 – $ 31,000 ) included in accounts payable and accrued liabilities.

of December 31, 2021, the Company and the secured promissory note holder are in dispute.

the years ended December 31, 2017, the Company issued secured promissory notes in the amount of $ 53,848

The secured promissory notes

are due in August and November 2018 and bear interest at a rate of 12% per annum.

The secured promissory notes are secured by Company

inventory and personal assets held by the CEO.

During the year ended December 31, 2019 the Company extended the maturity dates of this

secured promissory note to November 3, 2020.

During the year ended December 31, 2019, the Company a principal repayment of $10,000.

at December 31, 2020, principal balance owing was $50,000 (2019–$50,000).

As of December 31, 2020, the accrued interest on this

note payable was $22,703 (2019–$16,703) included in accounts payable and accrued liabilities.

As the note is outstanding beyond

its maturity date interest rate increased from 12% to 22%.

Canadian Dollars).

secured promissory notes were due in October and November 2018 and

bears interest at a rate of 12 %

The secured promissory notes are secured by Company inventory and personal assets held by the CEO.

During the year ended December

31, 2019, the Company extended the maturity date of the secured promissory notes to November 3, 2020.

During the year ended December

31, 2021, the Company and promissory note holders reached an agreement to repay $ 62,905

Canadian Dollars) in cash for outstanding

principal of $ 53,848

and interest of $ 14,740 .

As a result of the Company recognized a gain on settlement of debt of $ 5,682 .

As of December 31, 2021 the secured promissory notes has been settled.

the years ended December 31, 2017, the Company issued secured promissory notes in the amount of $ 60,000 .

secured promissory notes are due in August and November 2018 and

bear interest at a rate of 12 %

The secured promissory notes are secured by Company inventory and personal assets held by the CEO.

During the year ended December

31, 2019 the Company extended the maturity dates of this secured promissory note to November

During the year ended December 31, 2019,

the Company made a principal repayment of $ 10,000 .

During the year ended December 31, 2021 the Company and secured promissory note holder agreed to repay all outstanding principal and

interest through the issuance of 36,048

post-stock split

common shares valued at $ 0.09

As at December 31, 2021, the Company

had recorded principal and interest of $ 73,886

as a result of the share repayment the Company

recognized a gain on settlement of $ 8,997 .

As of December 31, 2021 the secured promissory notes has been repaid in full.

amounts repayable under promissory notes and secured promissory notes at December 31, 2021 and 2020 are as follows:

Schedule of Secured Notes Payable

Balance owing

1 unchanged sentence

Long-term portion

to the Consolidated Financial Statements

31, 2021 and 2020

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 shares of common

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

$0.10 per share (subject to adjustment), which may be exercised on a cashless basis.

Refer to note 22 for warrant valuation.

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

transactional costs incurred in connection with the purchase of the note.

Therefore, the purchase price of the note was $500,000.

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

On September 1, 2020 the Company

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

As of December 31, 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.

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 22,500

post-stock split

common shares, and (ii) the Company issued to Leonite a five -year

warrant to purchase 45,000

post-stock split common shares at an exercise

price of $ 2.00

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 other transactional costs incurred in connection with the purchase of the note.

Therefore, the purchase

price of the note was $ 500,000 .

On February 28, 2020, the Company recorded $ 198,715 ,

principal and $ 16,215

original issue discount.

On September 1, 2020

the Company recorded an additional $ 310,322 ,

principal and $ 25,322

original issue discount.

As of December 31, 2020,

the Company has recorded $ 509,037 ,

principal and $ 41,537

original issue discount.

Furthermore, the Company

issued 22,500

post-stock split

shares of common stock valued at $ 123,390

and a debt-discount related to the warrants valued

at $ 344,110 .

During the year ended December 31, 2020 Leonite converted $ 226,839

$226,839 of convertible promissory note into 2,520,434 shares of common stock at $0.09 per share.

of convertible promissory note into 126,022

post-stock split

common shares at $ 1.80

The original value of the convertible

note converted was $182,565 as a result the Company recognized a loss of $44,274 on settlement of debt.

The Company amortized $273,405

of financing costs related to the shares and warrants for the year ended December 31, 2020.

The remaining net balance of the note at

December 31, 2020 is $98,982 comprised of principal of $293,077 and net of unamortized debt discount of $194,095.

to the year ended December 31, 2020 the Company issued 4,092,431 shares of common stock at $0.09 per share to Leonite to settle all outstanding

principal and interest.

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

Any amount of principal or interest on the note which is not paid

by the maturity date shall bear interest at the rate at the lesser of 24% per annum or the maximum legal amount permitted by law (the

“Default Interest”).

(formerly Franchise Holdings International, Inc.)

note converted was $ 182,565

as a result the Company recognized a loss of

on settlement of debt.

During the year ended

December 31, 2021 Leonite converted its remaining outstanding principal and interest into common shares.

Leonite received 204,622

common shares at $ 1.80

per share valued at $ 368,318 .

The original value of the convertible note converted

including interest was $ 325,667 .

As a result the Company recognized a loss of $ 42,651

on settlement of debt.

In connection with the

settlement the Company expensed the remaining $ 148,027

of the original debt discount to interest expense.

As of December 31, 2021 the convertible promissory note has been settled.

Company amortized $ 58,146 (2020 - $ 11,677 ) of financing costs related to the shares and warrants for the year ended December 31, 2021.

The remaining net balance of the note as at December 31, 2021 is $ 0 (2020 - $ 12,715 ) comprised of principal of $ 0 (2020 - $ 183,538 ) and

net of unamortized debt discount of $0 (2020 - $170,823).

Shareholders’ Equity (Deficit)

year ended December 31, 2021, the following transactions occurred:

the year ended December 31, 2021, the Company issued a total of 1,502,410

(pre-stock split 30,048,199 )

common shares relating to the Reg-A public offering.

Of the shares issued 15,500

(pre-stock split of 310,000 )

common shares valued at $ 31,200

were from share subscription payable and 750

(pre-stock split of 15,000 ) common shares

were cancelled and refunded valued at $ 1,500 .

The Company raised $ 3,003,321

and incurred share issuance cost of $ 123,984 .

the year ended December 31, 2021, the Company had a underwriters’ public offering for 3,272,727

units consisting of 1 common share and 1 warrant

In addition, the Company has granted

the underwriter of the offering the option to purchase 490,909

warrants and/or an additional 490,909

common shares for 45 days after the closing of

During the year ended December 31, 2021, the underwriter purchased 210,909

common shares at $ 5.49

per share and additional 490,909

warrants (refer to note 22).

A cumulative 3,483,636

post-stock split

common shares were issued in connection with offering for $ 21,805,361

incurring share issuance costs of $ 4,335,908 .

As of December 31, 2021 the Company issued on aggregate of 4,986,046

post-stock split common shares for public offerings incurring total issuance cost of $ 4,459,892 .

the year ended December 31, 2021 the Company raised $ 4,081,980

through private placement offerings of 2,040,990

units for 1 common share and 2 warrants at $ 2

As such the Company issued 2,040,990

(pre-stock split of 40,819,800 )

common shares in connection with the private offering.

the ended year ended December 31, 2021 2,488,721

warrants were exercised for 2,287,511

(pre-stock split of 32,468,420 and post-stock

split of 664,090 ) common shares.

As of December

31, 2021, 2,287,511

common shares were issued valued at $ 8,454,564 .

Refer to note 22.

the year ended December 31, 2021, the Company entered into a loan settlement agreement with a loan holder to issue 62,006

(pre-stock split of 1,240,111 )

common shares at $ 1.80

per share for all outstanding loan principal

and interest valued at $ 111,610 .

As of the date of the settlement the Company had $ 157,787

loan payable, resulting in the Company recognized a gain on

settlement of $ 46,176 .

Refer to note 19.

As of December 31, 2021 the Company issued 62,006

common shares.

the year ended December 31, 2021 the Company entered into a promissory notes payable settlement agreement with a note holder to issue

(pre-stock split of 720,960 )

common shares valued at $ 1.80

per share for a total value of $ 64,890 .

As of the date of the settlement the Company had $ 73,886

promissory notes payable, resulting in the Company

recognized a gain on settlement of $ 8,997 .

Refer to note 8.

As of December 31, 2021 the Company issued 36,048

common shares.

the year ended December 31, 2021 the Company entered into a settlement agreement with the convertible promissory note holder to settle

all outstanding principal and interest.

The Company issued 204,622

(pre-stock split of 4,092,440 )

common shares at $ 1.80

per share valued at $ 368,318 .

As of the date of the settlement the Company had $ 325,667

convertible promissory note, resulting in the

Company recognizing a loss of $ 42,651

on settlement of debt.

Refer to note 9.

the year ended December 31, 2021 the Company issued 1,717,535

(pre-stock split of 34,350,700 )

common shares to Steve Rossi, the Company’s Chief Executive Officer and Director, in connection with his Employment Agreement in

consideration for Mr.

Rossi agreeing to amend the Series A Certificate of Designation to eliminate the Series A Preferred Stock conversion

rights and returning 900 Series A Preferred Stock to the Company.

to the Consolidated Financial Statements

31, 2021 and 2020

on March 18, 2020 and on the same day of each and every calendar month thereafter throughout the term of the note, the Company shall

make monthly payments of interest only due under the note to Leonite at the Stated Rate as set forth above.

The Company shall pay to

Leonite on an accelerated basis any outstanding principal amount of the note, along with accrued, but unpaid interest, from:

proceeds of any future financings by the Company, but not its subsidiaries, whether debt or equity, or any other financing proceeds,

except any transaction having a specific use of proceeds requirement that such proceeds are to be used exclusively to purchase the assets

or equity of an unaffiliated business and the proceeds are used accordingly;

(ii) net proceeds from any sale of assets of the Company

or any of its subsidiaries other than sales of assets in the ordinary course of business or receipt by the Company or any of its subsidiaries

of any tax credits existing prior to the date of the note;

and (iii) net proceeds from the sale of any assets outside of the ordinary

course of business or securities in any subsidiary.

As of December 31, 2020, the Company has paid $11,100 in interest.

note will mature 18 months from the issue date, or August 25, 2021, at which time the principal amount and all accrued and unpaid interest,

if any, and other fees relating to the note, will be due and payable.

Unless an event of default as set forth in the note has occurred,

the Company has the right to prepay principal amount of, and any accrued and unpaid interest on, the note at any time prior to the maturity

date at 100% of the principal amount plus any accrued and unpaid interest plus the lesser of (i) nine months of unaccrued interest or

(ii) all unaccrued interest through the remainder of the term.

note contains customary events of default, including in the event of (i) nonpayment, (ii) a breach by the Company of its covenants under

the securities purchase agreement or any other agreement entered into in connection with the securities purchase agreement, or a breach

of any of representations or warranties under the note, or (iii) the bankruptcy of the Company.

The note also contains a cross-default

provision, whereby a default by the Company of any covenant or other term or condition contained in any of the other financial instrument

issued by the Company to Leonite or any other third party after the passage all applicable notice and cure or grace periods that results

in a material adverse effect shall, at Leonite’s option, be considered a default under the note, in which event Leonite shall be

entitled to apply all rights and remedies under the terms of the note.

the note, Leonite has the right at any time at its option to convert all or any part of the outstanding and unpaid principal amount and

accrued and unpaid interest of the note into fully paid and non-assessable shares of common stock of the Company.

The number of shares

of common stock to be issued upon each conversion of the note shall be determined by dividing the conversion amount by the applicable

conversion price then in effect.

The conversion amount is the sum of:

(i) the principal amount of the note to be converted plus (ii)

at Leonite’s option, accrued and unpaid interest, plus (iii) at Leonite’s option, Default Interest, if any, plus (iv) Leonite’s

expenses relating to a conversion, plus (v) at Leonite’s option, any amounts owed to Leonite.

The conversion price shall be $0.09

per share (subject to adjustment as further described in the note for common share distributions and splits, certain fundamental transactions,

and anti-dilution adjustments), provided that at any time after any event of default under the note, the conversion price shall immediately

be equal to the lesser of (i) the fixed conversion price ($0.09);

(ii) 60% of the lowest bid price during the 21 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

the foregoing, in no event shall Leonite be entitled to convert any portion of the note in excess of that portion of the note upon conversion

of which the sum of (1) the number of shares of common stock beneficially owned by Leonite and its affiliates (other than shares of common

stock which may be deemed beneficially owned through the ownership of the unconverted portion of the note or the unexercised or unconverted

portion of any other security of the Company subject to a limitation on conversion or exercise analogous to the limitations contained

in the note, and, if applicable, net of any shares that may be deemed to be owned by any person not affiliated with Leonite who has purchased

a portion of the note from Leonite) and (2) the number of shares of common stock issuable upon the conversion of the portion of the note

with respect to which the determination of this proviso is being made, would result in beneficial ownership by Leonite and its affiliates

of more than 4.99% of the outstanding shares of common stock of the Company.

Such limitations on conversion may be waived (up to a maximum

of 9.99%) by Leonite upon, at its election, not less than 61 days’

prior notice to the Company, and the provisions of the conversion

limitation shall continue to apply until such 61st day (or such later date, as determined by Leonite, as may be specified in such notice

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

Shareholders’ Equity (Deficit) (continued)

the year ended December 31, 2021, the Company entered into consulting agreements with third party consultants for 380,000

post-stock split

shares of common stock valued at $ 1,648,700

for consulting services.

As of December 31, 2021,

the Company issued 370,000

post-stock split common shares

valued at $ 1,562,700

to the third-party consultants for services received.

The remaining 10,000

post-stock split common share will be expensed

throughout the term of the agreement as the Company accrues the stock payable.

As of December 31, 2021, the Company recorded $ 66,329

share subscriptions payable for the outstanding 10,000 post-stock split common shares.

As of December 31, 2021 the Company expensed

$ 337,091 to advertising and consulting and capitalized $ 502,534 to intangible assets.

the year ended December 31, 2021, the Company issued 259,808

(pre-stock split of 5,196,160 )

common shares valued at $ 741,159

for consulting and prepaid services, $ 241,559

were issued from share subscriptions payable.

As of December 31, 2021 the Company consulting expense of $ 497,752 .

During the same period the Company issued 150,000

(pre-stock split of 3,000,000 ) common shares

valued at $ 390,000

for consulting services.

During the same period

the Company issued 3,350

(pre-stock split of 67,000 )

common shares for employee compensation valued at $ 24,121 .

the year ended December 31, 2021, the Company granted and issued 775,000

post-stock split

restricted shares valued at $ 4,121,000

of the Company to consultants for services to

be rendered over a period of 12 and 24 months.

Upon issuance 775,000

of the restricted shares vested immediately and

As of December 31, 2021, the Company recognized consulting and advertising expense of $ 796,000

and $ 3,325,000

note shall give Leonite a senior secured obligation of the Company, with first priority over all current and future indebtedness

of the Company and any subsidiary.

of Beneficial Conversion Feature

of December 31, 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 shares of common stock and $242,100 to warrants calculated using the Black-Scholes

The 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 stock

Per Share Intrinsic Value of Beneficial Conversion Feature

Calculated Beneficial Conversion Feature

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

allocated to the convertible promissory note, the amount of the discount assigned to the beneficial conversion feature shall be

limited to the amount of the proceeds allocated to the convertible promissory note.

As such, the beneficial conversion feature

of the convertible promissory note is equal to $467,500 with an excess of $466,146.

Stockholders’

Equity (Deficit)

the year ended December 31, 2020 the Company issued 2,413,022 shares of common stock at $0.07 per share for $168,910 for consulting

to prepaid expense.

the year ended December 31, 2021, the Company granted 45,000

post-stock split

restricted shares of the Company to directors of the Company.

Upon being granted 15,000

of the restricted shares vested immediately,

shall vest on January 1, 2022.

As of December

31, 2021 the Company recognized consulting expense of $ 258,618

to share subscriptions payable.

As of December

31, 2021, the restricted shares have not been issued.

Refer to note 22 and 23 for additional shareholders’

equity (deficit) for consulting expense of $ 37,000 related to warrant issuance and $ 1,551,111 to share subscriptions payable for consulting

and advertising expense related to stock options.

the year ended December 31, 2021, the Company completed a share consolidation of the Company’s issued and outstanding common shares

based on twenty (20) pre-consolidation shares to one (1) post-consolidation share.

As a result of the share consolidation a anti-dilution

clause was triggered resulting in the Company issuing 237,500 common shares valued at $ 86,687 .

year ended December 31, 2020, the following transactions occurred:

the year ended December 31, 2020, the Company issued 120,651 (pre-stock split of 2,413,022 )

common shares at $ 0.07

per share for $ 168,910

for consulting services.

the year ended December 31, 2020, the Company entered into a share subscription agreement with a consultant of the Company for 200,000

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

The Company also entered into two prepaid

advertising services agreement for 1,333,333 and 240,000 shares of common stock at $0.09 and 0.07 per share for $120,000 and $16,800

(pre-stock split of 4,000,000 )

common shares valued at $ 125,000

for prepaid consulting services.

also entered into two prepaid advertising services agreement for 66,667 (pre-stock split of 1,333,333 )

and 12,000 (pre-stock split of

240,000 ) common

shares at $ 0.09

per share for $ 120,000

respectively.

As of December 31, 2020, the Company has expensed $215,164 from prepaid expenses.

As of December 31, 2020, the Company

issued 3,723,333 shares of common stock from share subscriptions payable for services render.

Subsequent to year ended December

31, 2020 the Company issued the remaining 1,850,000 shares of common stock valued at $67,188.

has expensed $ 215,164

from prepaid expenses.

As of December 31, 2020,

the Company issued 186,167 (pre-stock split of 3,723,333 )

common shares from share subscriptions payable

for services render.

Subsequent to year ended December 31, 2020, the Company issued the remaining 92,500 (pre-stock split of 1,850,000 )

common shares valued at $ 67,188 .

the year ended December 31, 2020, the Company entered into a share subscription agreement with a consultant of the Company for 62,308

1,246,154 shares of common stock valued at $162,000 for prepaid consulting services.

As of December 31, 2020, no shares have been

As of December 31, 2020, the Company has expensed $18,900 from prepaid expenses.

Subsequent to year ended December 31,

2020 the Company issued 1,246,154 shares of common stock.

the year ended December 31, 2020 the Company entered into an advertising service agreement to issue 225,000 shares of common stock

and warrants.

The warrants are convertible at a ratio of 1:1 and are exercisable until December 31, 2021 at $0.20 per warrant.

The shares valued at $21,747 have been included in share subscriptions payable.

The warrants valued at $16,503 have been included

in additional paid-in capital.

Subsequent to year ended December 31, 2020 the Company issued 225,000 shares of common stock.

(pre-stock split of 1,246,154 )

common shares valued at $ 162,000

for prepaid consulting services.

As of December

31, 2020, no shares have been issued.

As of December 31, 2020, the Company has expensed $ 18,900

from prepaid expenses.

Subsequent to year ended

December 31, 2020 the Company issued 62,308 (pre-stock split of 1,246,154 )

common shares.

the year ended December 31, 2020, the Company entered into an advertising service agreement to issue 11,250 (pre-stock split of 225,000 )

common shares and warrants.

warrants are convertible at a ratio of 1:1 and are exercisable until December 31, 2021, at $ 0.20 per

The shares valued at $ 21,747

have been included in share subscriptions payable.

The warrants valued at $ 16,503

have been included in additional paid in capital.

Subsequent to year ended December 31, 2020, the Company issued 11,250 (pre-stock split of 225,000 )

common shares.

the year ended December 31, 2020, the Company entered into a share subscription agreement with a consultant of the Company for 200,000

4,000,000 shares of common stock valued at $250,000.

During the year ended December 31, 2020, the Company issued 11,337,479 shares

of common stock from shares of subscription payable with a combined value of $1,123,147.

5,686,978 of the shares of common stock

issued from subscription payable valued at $648,147 relates to the anti-dilution feature triggered on March 5, 2019 as noted below.

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

31, 2020 and 2019

Stockholders’

Equity (Deficit) (continued)

(pre-stock split of 4,000,000 )

common shares valued at $ 250,000 .

During the year ended December 31, 2020, the Company issued 566,874 (pre-stock split of 11,337,479 )

common shares from shares of subscription

payable with a combined value of $ 1,123,147 .

284,349 (pre-stock split of 5,686,978 )

of the common shares issued from subscription

payable valued at $ 648,147

relates to the anti-dilution feature triggered

on March 5, 2019, as noted below.

the year ended December 31, 2020, the Company entered into a settlement to fulfill a debt purchase agreement entered in 2017 for 205,000

(pre-stock split of 4,100,000 )

shares valued at $ 856,080 .

As of December 31, 2020, the Company has issued 4,100,000 shares from share subscriptions

the year ended December 31, 2020 the Company initiated a Reg-A public offering at $0.10 per share and warrant.

As of December 31, 2020, the Company has issued 205,000 (pre-stock split of 4,100,000 )

shares from share subscriptions payable.

the year ended December 31, 2020, the Company initiated a Reg-A public offering at $ 0.10

per share and warrant.

As of December 31, 2020,

31, 2020, the Company raised $1,017,617 incurring share issuance cost of $55,004.

As of December 31, 2020, the Company issued

9,961,301 shares of common stock valued at $996,301.

As of December 31, 2020, the Company has 327,000 shares of common stock valued

at $32,701 to be issued.

Refer to note 25 for subsequent issuance.

the Company raised $ 1,017,617

incurring share issuance cost of $ 55,004 .

As of December 31, 2020, the Company issued 498,065 (pre-stock split of 9,961,301 )

common shares valued at $ 996,301 .

As of December 31, 2020, the Company has 16,350 (pre-stock split of 327,000 )

common shares valued at $ 32,701

to be issued.

the year ended December 31, 2020, the issued 100,000 warrants for services valued at $ 12,600 .

2 unchanged sentences

In accordance with the settlement

agreement, 4,166,667 post-stock split (25,000,000 pre-stock split), reserved shares were released and returned to the Company

valued at $325,000.

the year ended December 31, 2020, the Company issued 2,520,434 shares of common stock pursuant to the conversion of the convertible

promissory note (Note 8) with a value of $226,839.

the year ended December 31, 2020 the Company issued 450,000 shares in connection with the issuance of convertible promissory note

(Note 8) at $0.27 per share.

the year ended December 31, 2020, Steven Rossi (the Company’s CEO) was issued 1,000 Series A Preferred Shares at $0.09 per

share equal to 299,000 shares of common stock voting rights for services rendered.

the year ended December 31, 2019, the Company issued 1,901,455 shares of common stock, previously recorded as subscription payable

to a consultant with a value of $290,730.

In addition, the Company also issued to the same consultant 2,778,629 shares of common

stock at $0.02 per share for $55,573 for additional consulting serviced performed.

During the same period, the Company entered

into a share subscription agreement with a consultant of the Company for 1,500,000 shares of common stock valued at $30,000.

the shares have not yet been issued, the $30,000 has been recorded as share subscriptions payable.

year ended December 31, 2019, the Company reached a legal settlement agreement (the “unwinding”

) with an individual

investor to dissolve the Debt Settlement and Mutual Release Agreement entered into on January 12, 2018.

In accordance with the

settlement agreement, 19,055,551 pre-stock split (990,742 post-stock split), reserved shares with a value of $325,000 recorded

in share subscription payable were released and returned to the Company.

the year ended December 31, 2019, Steven Rossi was issued 13,583,397 shares of Franchise Holdings International, Inc 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 year ended December 31, 2019, the Company completed a share consolidation of the Company’s issued and outstanding shares

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

The consolidation reduced the number

of issued and outstanding shares of common stock of the Company from 147,804,298 pre-consolidation shares of common stock to approximately

24,634,051 post-consolidation shares of common stock.

While the share consolidation occurred during the year ended December 31,

2019, the Company has accounted for the effects retrospectively as such, the schedules and all references to shares, options and

warrants throughout the financial statements have been updated to reflect the number of post-consolidation securities.

March 5, 2019 immediately following the share consolidation the anti-dilution feature under the Investment and Co-operation agreement,

dated November 1, 2017 came into effect.

As part of the anti-dilution feature the Company is obligated to issue an additional

8,465,608 shares at $0.11 per share for a total of $965,079.

The Company recognized a non-cash deemed dividend of $965,079 to

retain earnings and share subscriptions payable (Note 23).

the year ended December 31, 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.

During 2020 and 2019, the

Company was authorized to issue 1,100,000 shares of its Series A and Series B Preferred Stock with a par value of $0.0001.

A Preferred Stock have voting rights equal to 299 shares of common stock, per share of preferred stock .

Series B Preferred

Stock have voting rights equal to 10,000 shares of common stock, per share of preferred stock.

(formerly Franchise Holdings International, Inc.)

agreement, 4,166,667

(pre-stock split of 25,000,000 ),

reserved shares were released and returned to the Company valued at $ 325,000 .

This transaction resulted in a gain on debt settlement of $ 229,142 .

to the Consolidated Financial Statements

31, 2021 and 2020

Shareholders’ Equity (Deficit) (continued)

the year ended December 31, 2020, the Company issued 126,022 (pre-stock split of 2,520,434 )

common shares at $ 0.09

per common share pursuant to the conversion of

the convertible promissory note (note 9) with a value of $ 226,839 .

The original value of the convertible promissory note converted was $ 182,565

as a result of the conversion the Company recognized

a loss of $ 44,274

on settlement of debt.

the year ended December 31, 2020, the Company issued 22,500 (pre-stock split of 450,000 )

shares in connection with the issuance of convertible

promissory note (note 8) at $ 0.27

the year ended December 31, 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 for services rendered .

the year ended December 31, 2021 and 2020, the Company was authorized to issue 299,000,000

shares of its common stock with a par value of

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

During 2021 and 2020, the Company was authorized

shares of its Series A and 100,000

Series B Preferred Stock with a par value of

A preferred Stock have voting rights equal to 299 shares of common stock, per share of preferred stock.

Series B preferred Stock

have voting rights equal to 10,000 shares of common stock, per share of preferred stock .

Related Party Transactions

the year ended December 31, 2020, the Company repaid $5,245 to the Company’s CEO and director.

As of December 31, 2020,

the Company has $23,393 in related party loan.

the year ended December 31, 2020, the Company recorded salaries expense of $64,903 (2019–$65,589) related to services rendered

to the Company by its CEO.

the year ended December 31, 2019, the Company incurred $112,665 payable to a U.S.-based corporation with whom the Company’s

CEO and director is also a stockholder.

The corporation is to help facilitate the purchase of inventory for the Company.

the year ended December 31, 2021, the Company recorded salaries expense of $ 410,573

(2020 - $ 64,903 )

related to services rendered to the Company by its CEO.

During the same period the Company recorded salaries expense of $ 125,707

to an officer of the Company and director.

the years ended December 31, 2021 and 2020, the Company’s CEO paid on behalf of the Company $ 12,154 ( 2020- repayment of

As of December 31, 2021, the Company has a payable of $ 35,547 (2020 - $ 23,393 ).

the year ended December 31, 2021, the Company paid a director of the Company $ 50,000 for services rendered from 2015 to 2020.

the year ended December 31, 2021, the Company paid $ 59,203 to a U.S.-based corporation which the Company’s CEO and director is

also a stockholder.

to note 10 and 23 for additional related party transactions.

The income tax expense for the year ended December 31, 2021 and 2020 is reconciled per the schedule below:

Schedule of Reconciliation of Income Tax

Net loss before income taxes

$ ( 7,897,086 )

$ ( 1,187,620 )

Non-deductible portion of meals and entertainment

2 unchanged sentences

Lease payments

Gain on impairment

Gain Settlement of Debt

Gain/(loss) on Settlement of Debt

Adjusted net loss for tax purposes

( 3,947,186 )

Statutory rate

Income tax benefit

( 1,026,435 )

Increase in valuation allowance

Provision for income taxes

to the Consolidated Financial Statements

31, 2021 and 2020

Income Taxes (continued)

Deferred Income Tax Assets

tax effects of temporary differences that give rise to the deferred income tax assets at December 31, 2021 and 2020 are as follows:

Schedule of Deferred Income Tax Assets

Net operating loss carry forwards

Transaction costs

Deferred tax assets not recognized

( 2,358,455 )

( 1,365,333 )

Net deferred tax asset

Cumulative Net Operating Losses

Company has non-capital losses carried forward of approximately $5,897,000 available to reduce future years’

taxable income.

Company has non-capital losses carried forward of approximately $ 10,197,000

available to reduce future years’ taxable

These losses will expire as follows:

Schedule of Cumulative Non-capital Losses

United States

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

31, 2020 and 2019

Income Taxes (continued)

Non-capital losses carried forward Total

net operating loss carryforwards of approximately $ 10,197,000 may be offset against future taxable income for the years 2022 through

No tax benefit from continuing or discontinued operations have been reported in the December 31, 2020 consolidated financial

statements since the potential tax benefit is offset by a valuation allowance of the same amount.

to change in ownership provisions of the Tax Reform Act of 1986, net operation loss carryforwards for federal income tax reporting

purposes are subject to annual limitations.

Should a change in ownership occur, net operating loss carryforwards may be limited

as to use in future years.

No tax benefit from continuing or discontinued operations have been reported in the December 31, 2021 consolidated financial statements

since the potential tax benefit is offset by a valuation allowance of the same amount.

to change in ownership provisions of the Tax Reform Act of 1986, net operation loss carryforwards for Federal income tax reporting purposes

are subject to annual limitations.

Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future

Company complies with the provisions of FASB ASC 740 in accounting for its uncertain tax positions.

1 unchanged sentence

of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.

ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely that not that the

tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

has determined that the Company has no significant uncertain tax positions requiring recognition under ASC 740.

Under ASC 740,

the Company may recognize the tax benefit from an uncertain tax position only if it is more likely that not that the tax position will

be sustained on examination by the taxing authorities, based on the technical merits of the position.

The Company has determined that

the Company has no significant uncertain tax positions requiring recognition under ASC 740.

Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

The Company had no accruals for interest and tax penalties at December 31, 2020 and 2019.

Company does not expect the amount of unrecognized tax benefits to materially change within the next 12 months.

Company had no accruals for interest and tax penalties at December 31, 2021 and 2020.

Company does not expect the amount of unrecognized tax benefits to materially change within the next twelve months.

Company is required to file income tax returns in the U.S.

and Canadian federal jurisdictions, as well as the states of New York,

New Jersey, and Utah and in the province of Ontario.

The Company is no longer subject to income tax examinations by tax authorities

for tax years ending before December 31, 2017.

and Canadian Federal jurisdictions, as well as the states of New York, New

Jersey, and Utah and in the province of Ontario.

The Company is no longer subject to income tax examinations by tax authorities for tax

years ending before December 31, 2018.

Financial Instruments

Company is exposed to credit risk on the accounts receivable from its customers.

In order to reduce its credit risk, the Company

has adopted credit policies which include the analysis of the financial position of its customers and the regular review of their

credit balances.

The Company incurred no bad debt expense during the year ended December 31, 2020 and 2019.

In order to reduce its credit risk, the Company has

adopted credit policies which include the analysis of the financial position of its customers and the regular review of their credit

The Company incurred bad debt expense of $ 62,329

during the year ended December 31, 2021 and

the year ended December 31, 2020.

Company is exposed to currency risk on its sales and purchases denominated in Canadian Dollars.

The Company actively manages these

risks by adjusting its pricing to reflect currency fluctuations and purchasing foreign currency at advantageous rates.

The Company actively manages these risks

by adjusting its pricing to reflect currency fluctuations and purchasing foreign currency at advantageous rates.

to the Consolidated Financial Statements

31, 2021 and 2020

Financial Instruments (continued)

risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities.

relies on cash flows generated from operations, as well as injections of capital through the issuance of the Company’s capital

stock to settle its liabilities when they become due.

Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and current

The Company relies

on cash flows generated from operations, as well as injections of capital through the issuance of the Company’s capital stock to

settle its liabilities when they become due.

Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and current liabilities.

Concentration

1 unchanged sentence

Company purchases all of its inventory from one supplier source in Asia.

The Company carries significant strategic inventories

of these materials to reduce the risk associated with this concentration of suppliers.

Strategic inventories are managed based

To date, the Company has been able to obtain adequate supplies of the materials used in the production of its products

in a timely manner from existing sources.

The loss of this key supplier or a delay in shipments could have an adverse effect on

its business.

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

31, 2020 and 2019

Financial Instruments ( continued)

The Company carries significant strategic inventories of these

materials to reduce the risk associated with this concentration of suppliers.

Strategic inventories are managed based on demand.

the Company has been able to obtain adequate supplies of the materials used in the production of its products in a timely manner from

existing sources.

The loss of this key supplier or a delay in shipments could have an adverse effect on its business.

Concentration

of Customer Risk

following table includes the percentage of the Company’s sales to significant customers for the fiscal years ended December

following table includes the percentage of the Company’s sales to significant customers for the fiscal years ended December 31,

2021 and 2020.

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.

At December 31, 2020 customer

A represented 0% of the Company’s revenue compare to 89% or $1,912,401 of Company revenue in 2019.

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

Schedule of Significant Customer Risk Percentage

Concentration of revenues

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

At December 31, 2021 customer A represented

33.4 % at $ 106,988 of the Company’s revenue compare to 26.1 % at $ 190,313 of Company revenue in 2020.

Customer B represented 29.3 %

51% of the Company’s revenue at $190,313.

Customer C represented 26% or $97,514 of the Company’s revenue compare to

2019 of 3% or $67,018.

of the Company’s revenue at $ 93,622 compared to 2020 of 51 % or $ 190,313 .

Customer C represented 14.90 % or $ 47,604 of the Company’s

revenue compared to 2020 of 0 % or $ 0 .

Changes in Cash Flows from Operating Assets and Liabilities

changes to the Company’s operating assets and liabilities for the years ended December 31, 2020 and 2019 are as follows:

The changes to the Company’s operating assets and liabilities for

the years ended December 31, 2021 and 2020 are as follows:

Schedule of Changes in Operating Assets and Liabilities

Decrease (increase) in accounts receivable

$ ( 119,813 )

Decrease (increase) in other receivable

2 unchanged sentences

Increase (decrease) in lease liability

Increase (decrease) in income taxes payable

Increase (decrease) in taxes payable

Increase (decrease) in accounts payable and accrued liabilities

the year ended December 31, 2020 the Company entered into an agreement with a third party advisor to reserve for issuance 100,000

shares of common stock at $0.0001 per share for consulting services.

As of December 31, 2020, the third party has not exercised

Refer note 25 for subsequent event.

Gain (Loss) on Settlement of Debt

the year ended December 31, 2020 a convertible promissory note was converted into 2,520,434 shares of common stock at $0.09 per

share for $226,839.

The original value of the convertible promissory note converted was $182,565 as a result of the conversion

the Company recognized a loss of $44,274 on settlement of debt.

the year ended December 31, 2020, the Company reached a legal settlement agreement with an investor.

In accordance with the settlement

agreement, 4,166,667 post-stock split (25,000,000 pre-stock split), reserved shares were released and returned to the Company.

This transaction resulted in a gain on debt settlement of $229,142.

year ended December 31, 2019, the Company reached a legal settlement agreement (the “unwinding”

) with an individual

investor to dissolve the Debt Settlement and Mutual Release Agreement entered into on January 12, 2018.

In accordance with the

settlement agreement, 19,055,551 pre-stock split, reserved shares were released and returned to the Company.

In addition, 5,944,449

pre-stock split (990,742 post-stock split) shares already issued were returned to the Company’s treasury, and cancelled,

reducing the Company’s issued and outstanding shares accordingly.

The Company closed the unwinding in August 2019.

(formerly Franchise Holdings International, Inc.)

Changes in operating assets and liabilities

$ ( 612,775 )

$ ( 170,092 )

to the Consolidated Financial Statements

31, 2021 and 2020

Contingent Liability

Commitments and contingencies

the year ended December 31, 2021 the Company entered into an amended agreement to reserve an additional 7,500

common shares for consulting services.

the year ended December 31, 2020 the Company entered into an agreement with a third-party advisor to reserve for issuance 5,000

post-stock split

common shares for consulting services.

As of December 31, 2021, 12,500

post-stock split

common shares were issued to the third party.

the year ended December 31, 2021 the Company entered into an agreement with a third-party advisor to reserve for sale and issuance 15,000

post-stock split

common shares for consulting services at a $ 0.001

the year ended December 31, 2020 the Company (defendant) is currently in an ongoing legal proceeding with a promissory notes payable

1 unchanged sentence

As of December 31, 2021, the outcome of the legal proceeding is uncertain.

the year ended December 31, 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 December 31, 2020, the Company has completed all payments.

the year ended December 31, 2019 the Company entered into an agreement with a debtor for the settlement of outstanding notes payable

of $56,723 ($75,000 CAD).

The Company will issue to the debtor 1,500,000 shares of common stock for the settlement of the outstanding

notes payable upon listing on the Canadian Securities Exchange.

The agreement was subsequently cancelled after year end.

the year ended December 31, 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.

December 31, 2020, the Company has completed all payments.

Reverse Stock Split

March 8, 2019, the Board of Directors authorized the submission of a Certificate of Change/Amendment to the Nevada Secretary of

State in which the Company sought to affect a reverse split of its common stock at the rate of one-for-six for the purpose of

increasing the per share price for the Company’s stock in an effort to meet the minimum listing requirements of the Canadian

Stock Exchange ( “CSE”

The Certificate of Change was submitted to the Nevada Secretary of State on March 20,

2019 and the FINRA corporate action was filed on March 21, 2019.

FINRA declared the one-for-six reverse stock split effective

on March 29, 2019.

These financial statements including, prior period comparative share amounts, have been retrospectively restated

to reflect this reverse split.

May 21, 2021, the Board of Directors authorized the submission of a Certificate of Change/Amendment to the Nevada Secretary of State

in which the Company sought to affect a reverse split of its common stock at the rate of 1 for 20 for the purpose of increasing the per

share price for the Company’s stock in an effort to meet the minimum listing requirements of the NADAQ.

The Certificate of Change

was submitted to the Nevada Secretary of State on May 21, 2021 and the FINRA corporate action was announced on August 3, 2021.

declared the 1 for 20 reverse stock split effective on August 4, 2021 .

These consolidated financial statements including, prior period

comparative share amounts, have been retrospectively restated to reflect this reverse split.

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

have been issued to the Company.

The Company’s investment accounts for a 10% equity stake in a privately owned U.S.-based

mobile phone development company.

As of December 31, 2020, the Company had advanced a total of $15,658 and is advancing trenches

of capital as required by the Company.

The shares have been

issued to the Company.

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

As of December 31, 2021, the Company had advanced a total of $ 24,423 and is advancing tranches of capital as required

by the Company.

Lease Liabilities

the year ended December 31, 2019, the Company signed a lease agreement for warehouse space to commence on August 1, 2019 and end

on July 31, 2022 with monthly lease payments of $2,221.

The Company has accounted for its leases upon adoption of ASC 842 whereby

it recognizes a lease liability and a right-of-use asset at the date of initial application, beginning January 1, 2019.

liability is measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing

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 year ended December 31, 2020 is as follows:

the year ended December 31, 2021 the Company entered into a second lease agreement for warehouse space to commence on June 1, 2021 and

end on May 31, 2024 with monthly lease payments of $ 19,910 .

During the year ended December 31, 2019, the Company signed a lease agreement

for warehouse space to commence on August 1, 2019 and end on July 31, 2022 with monthly lease payments of $ 2,221 .

Company has accounted for its leases upon adoption of ASC 842 whereby it recognizes a lease liability and a right-of-use asset at the

date of initial application, beginning January 1, 2019.

The lease liability is measured at the present value of the remaining lease payments,

discounted using the Company’s incremental borrowing rate of 10 %.

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 years ended December 31, 2021 and 2020 as follows:

Schedule Right-of-use Asset

December 31, 2021

December 31, 2020

Right-of-use asset

2 unchanged sentences

components of lease expense are as follows:

Schedule of Components of Lease Expense

December 31, 2021

3 unchanged sentences

Total lease cost

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

3 unchanged sentences

minimum lease payments as of December 31, 2021,

Schedule of Future Minimum Lease Payments

Total future minimum lease payments

3 unchanged sentences

Long term portion

the year ended December 31, 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.

Subsequent to

the year ended December 31, 2020 the Company agreed to repay the outstanding principal and interest through the issuance of 1,850,000

shares of common stock at $0.09 per share.

the year ended December 31, 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%.

of December 31, 2020, the Company accrued interest of $6,018.

the year ended December 31, 2020 the Company received loans of $ 32,439 ,

and $ 108,000

from a unrelated third party with an interest

per annum with a maturity date of December

22 and August

31, 2021 respectively.

During the year ended December

31, 2021 the Company agreed to repay the outstanding principal and interest through the issuance of 62,006

post-stock split

common shares valued at $ 1.80

During the year ended December 31,

2021, the Company accrued interest expense of $ 1,319

(2020 - $ 6,028 ).

As of the date of the settlement agreement the Company had $ 150,439

principal and $ 7,348

interest outstanding, resulting in the Company

recognizing a gain on settlement of $ 46,176

for the year ended December 31, 2021.

the year ended December 31, 2020 the Company received $ 28,387 ($ 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.

As of December 31, 2021 loan payable outstanding is $ 28,387 ($ 40,000 CDN).

Government Assistance

Government of Canada is currently providing funding through the Canada Emergency Wage Subsidy (“CEWS”) and Canada Emergency

Rent Subsidy (“CERS”) programs in order to provide financial relief to Canadian businesses affected by COVID-19.

program provides a reimbursement of salaries for eligible employers based on a decrease in revenues.

The CERS program provides a reimbursement

of rent expenses paid by eligible parties based on a decrease in revenues.

During the year ended December 31, 2021, the Company recognized

CEWS of $ 125,812

CDN) and CERS of $ 13,628

CDN) as a reduction in general and administrative

expense on the consolidated statements of operations.

Loss per Share

the year ended December 31 2021, loss per share is $( 0.69 ) (basic and diluted) compared to the year ended December 31, 2020 of $( 0.43 )

$0.01 (basic and diluted) using the weighted average number of shares of 54,690,611 (basic and diluted) and 36,824,519 (basic

and diluted) respectively.

are 299,000,000 shares authorized, 76,412,359 and 41,906,790 shares issued and outstanding, as at December 31, 2020 and 2019 respectively.

(basic and diluted) using the weighted average number of shares of 11,504,147 (basic and diluted) and 2,734,531 (basic and diluted) respectively.

are 299,000,000 shares authorized, 16,951,034 and 3,820,619 shares issued and outstanding, as at December 31, 2021 and

2020 respectively.

As of December 31, 2021, the Company has 221,667 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.

As at December 31, 2020 the Company has 12,436,301 warrants convertible to 12,436,301

shares of common stock and convertible promissory note convertible to 3,448,025 shares of common stock for a total underlying

shares of common stock of 15,884,326.

At December 31, 2019 there were no underlying shares of common stock.

the year ended December 31, 2020 the Company issued 900,000 warrants convertible to one common share each with an exercise period

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

refer to note 8.

Refer to notes 25 for subsequent exercise of 790,243 warrants.

The fair value of the warrants was calculated

using the Black-Scholes pricing model and using the following assumptions:

Discount rate

Expected volatility

Expected life (years)

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.

As at December 31, 2021 the Company has 5,658,315 warrants convertible to 6,649,305 common shares,

45,000 restricted stock to be issued and 712,500 stock options exercisable for 712,500 common shares for a total underlying common shares

of 7,406,805 .

As at December 31, 2020 the Company has 12,436,301 warrants convertible to 12,436,301 common shares and convertible promissory

note convertible to 3,448,025 common shares for a total underlying common shares of 15,884,326 .

to the Consolidated Financial Statements

31, 2021 and 2020

the year ended December 31, 2021, a total of 2,488,721

warrants were exercised for 2,287,511

common shares.

warrants were exercised at $ 4.00

per share, 317,000

warrants were exercised at $ 6.05

per share and 494,500

warrants were exercised on a cashless basis for

common shares.

During the same period the

warrants were exercised on a cashless basis related

to a convertible promissory note, please refer to note 9.

As of December 31, 2021 2,287,511

common shares were issued from warrant exercises.

the year ended December 31, 2021, the Company issued 1,502,409 and 2,040,990 warrants convertible to 1 and 2 common shares each exercisable

for a period of 12 and 18 months respectively.

The warrants were issued in connection with the Reg-A public offering and private placement

offering respectively.

The exercise price of the warrants is $ 4.00 per share.

During the same period the Company issued 3,763,636 warrants

convertible to 1 common share at an exercise price of $ 6.05 per share exercisable for a period of 36 months.

3,272,727 warrants were

purchased through the underwritten public offering and 490,909 over-allotment warrants purchased by the underwriter.

The warrants were

issued in connection with the underwritten public offering.

the year ended December 31, 2021 the Company and warrant holder reached an agreement to amend a previous warrant agreement.

will issue an additional 150,000 warrants for a total of 250,000 warrants valued at $ 37,000 .

The exercisable period of the warrants was

also amended to a period of five years beginning on January 14, 2021.

The warrants are convertible to 1 common share each exercisable

at $ 2 per share.

the year ended December 31, 2021 the Company issued 130,909

representative warrants to the Company’s

underwriters.

The representative warrants are not exercisable until January 30, 2022.

The representative warrants are exercisable

common shares at $ 6.05

per share until August 3, 2024.

As of December

31, 2021 the Company has not valued the representative warrants.

the year ended December 31, 2021 26,815 warrants expired

of December 31, 2021, the Company has the following warrants outstanding:

of Warrants Exercise Price

Exercise price

(formerly Franchise Holdings International, Inc.)

Number outstanding

Remaining Contractual Life (Years)

February 24, 2022

October 1, 2022

August 6, 2024

February 25, 2025

March 20, 2025

January 14, 2026

of Warrants Activity

December 31, 2021

December 31, 2020

Number of warrants

Weighted average price

Number of warrants

Weighted average price

Balance, beginning of year

( 2,488,721 )

Balance, end of period

to the Consolidated Financial Statements

31, 2021 and 2020

Warrants (continued)

the year ended December 31, 2020, the Company issued 1,250,000 and 100,000 warrants convertible to one common share each exercisable

until March 30, 2025 and April 29, 2022 respectively.

The warrants were issued in connection with a subscriptions payable and

advisory agreement.

The exercise price of the warrants are $0.12 and $2.00 per share.

Refer to note 25 for subsequent issuance

of an additional 150,000 warrant.

fair value of the 1,250,000 warrants was calculated using the Black-Scholes pricing model and using the following assumptions:

Stock Options

the Company’s Equity Incentive Plan the number of common shares reserved for issuance under the option plan shall not exceed

10% of the issued and outstanding common shares of the Company, have a maximum term of 10 years and vest at the discretion of the Board

of Directors .

equity-settled share-based payments are ultimately recognized as an expense in the statement of operations and comprehensive loss with

a corresponding credit to “Additional Paid in Capital.” If vesting periods or other non-market vesting conditions apply,

the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest.

Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous

Any cumulative adjustment prior to vesting is recognized in the current period.

No adjustment is made to any expense recognized

in prior periods if share options ultimately exercised are different to that estimated on vesting.

On December 29, 2021 the Company granted 400,000

and 300,000 performance stock units (“PSU”) to the Company’s Chief Executive Officer and a director, respectively.

The PSU will vest in 5% increments according to a schedule that correlates with the Company’s stock price.

The first 5% of the

PSUs vest upon the Company’s stock price closing at $3.00.

50% will have vested at a closing price of $16.50 and 100% will have

vested at a closing price of $31.50 .

As of December 31, 2021, no PSUs have been vested and the Company recognized $ 0 to stock based compensation

August 6, 2021, the Company granted 140,000 options to directors, advisors and officers with an exercise price of $ 5.50 and an expiry

date of August 6, 2026 .

The stock options will vest on January 1, 2022.

The fair value of the options on grant date was estimated to

be $ 754,189 .

The Company recognized $ 749,084 to consulting expense during the year ended December 31, 2021.

The fair value

of the options were calculated using the Black-Scholes option pricing model and using the following assumptions:

Schedule of Fair Value of the Black - Scholes

Option Pricing Model

December 31, 2021

Discount rate

1 unchanged sentence

Expected life (years)

Expected dividend yield

Exercise price

fair value of the 100,000 warrants was calculated using the Black-Scholes pricing model and using the following assumptions:

July 23, 2021, the Company granted 15,000 options to a director with an exercise price of $ 5.50 and an expiry date of July 23, 2026 .

The stock options will vest on January 1, 2022.

The fair value of the options on grant date was estimated to be $ 129,480 .

recognized $ 128,681 to consulting expense during year ended December 31, 2021.

The fair value of the options were calculated

using the Black-Scholes option pricing model and using the following assumptions:

Schedule of Fair Value of the Black - Scholes

Option Pricing Model

December 31, 2021

Discount rate

1 unchanged sentence

Expected life (years)

Expected dividend yield

Exercise price

the year ended December 31, 2020 the Company issued 225,000 warrants in connection to a advertising agreement and 9,961,301 warrants

related to the Reg-A public offering.

The warrants are convertible at a rate of 1:1 common share, exercisable until December 1

and 22, 2021 respectively.

The exercise price of the warrants are $0.20 per share.

fair value of the 225,000 warrants was calculated using the Black-Scholes pricing model and using the following assumptions:

September 1, 2021, the Company granted 400,000 options to a consultant with an exercise price of $ 5.32 and an expiry date of September

The options have a vesting period of 6 months from the initial grant date;

100,000 shall vest on March 1, 2022, 100,000 shall

vest on September 1, 2022, 100,000 shall vest on March 1, 2023 and 100,000 shall vest on September 1, 2023 .

The fair value of the options

on grant date was estimated to be $ 2,112,000 .

The Company recognized $ 352,972 to consulting expense during the year ended December

The fair value of the options were calculated using the Black-Scholes option pricing model and using the following

Schedule of Fair Value of the Black - Scholes

Option Pricing Model

December 31, 2021

Discount rate

1 unchanged sentence

Expected life (years)

Expected dividend yield

Exercise price

fair value of the 9,961,301 warrants was calculated using the Black-Scholes pricing model and using the following assumptions:

to the Consolidated Financial Statements

31, 2021 and 2020

October 7 and November 2, 2021, the Company granted 5,000 and 62,500 options respectively, to advisors with an exercise price of $ 5.50

The options will expiry on October 7, 2026 and November 2, 2026 respectively.

The stock options will vest on January 1, 2022.

The fair value of the options on grant date was estimated to be $ 326,498 .

The Company recognized $ 320,374 to consulting

expense during the year ended December 31, 2021.

The fair value of the options were calculated using the Black-Scholes option pricing

model and using the following assumptions for the 5,000 and 62,500 options respectively:

Schedule of Fair Value of the Black - Scholes

Option Pricing Model

December 31, 2021

Discount rate

1 unchanged sentence

Expected life (years)

Exercise price

Expected dividend yield

Exercise price

Number outstanding

Remaining Contractual

December 1, 2021

of Fair Value of the Black - Scholes Option Pricing Model

December 31, 2021

April 29, 2022

February 25, 2025

March 20, 2025

(formerly Franchise Holdings International, Inc.)

to the Consolidated Financial Statements

31, 2020 and 2019

Warrants (continued)

Discount rate

Expected volatility

Expected life (years)

Expected dividend yield

Exercise price

December 29, 2021, the Company granted 30,000 stock options to members of the board for a total of 90,000 options with an exercise price

The options will expiry on December 29, 2026 .

The options have a vesting period of 1 year from the initial grant date;

shall vest on December 29, 2022, 10,000 shall vest on December 29, 2023 and 10,000 shall vest on December 29, 2024 .

The fair value of

the options on grant date was estimated to be $ 224,280 .

The Company recognized $ 0 to consulting expense during the year ended

December 31, 2021.

The fair value of the options were calculated using the Black-Scholes option pricing model and using the

following assumptions:

Schedule of Fair Value of the Black - Scholes

Option Pricing Model

December 31, 2021

Number of warrants

Weighted average price

Number of warrants

Discount rate

Expected volatility

Expected life (years)

Expected dividend yield

Exercise price

of Stock Options Activity

Year ended December 31, 2021

Number of options

Weighted Average Price

Balance, beginning of year

Balance, beginning of period

Balance, end of period

Revision of Prior Period Financial Statements

the audit for the year ended December 31, 2020 an error was discovered relating to share issuances resulting from an anti-dilution

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

The anti-dilution agreement relating to a 2017 share subscription payable agreement was triggered in March 2019 upon the Company’s

Please refer to note 9.

revised certain prior period financial statements for an immaterial error related to the recognition of the deemed dividend related

features along with the associated shares issuance and professional fees (Note 1).

A summary of revisions to our previously reported

financial statements presented herein for comparative purposes.

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

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

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

Additional Paid-in

Share Subscriptions

Share Subscription

Cumulative translation

Stockholders’

Balance at June 30, 2019

$ (10,482,521 )

Balance at June 30, 2019, as revised

$ (11,447,600 )

Balance at September, 2019

$ (10,212,150 )

Balance at September 30, 2019, as revised

$ (11,177,230 )

Balance at December 31, 2019

$ (10,768,906 )

Balance at December 31, 2019, as revised

$ (11,678,413 )

Balance at March 31, 2020

$ (10,961,172 )

Balance at March 31, 2020, as revised

of Share-based Payment Arrangement, Option, Exercise Price Range

Range of Exercise prices

Number outstanding

Weighted average life (years)

Weighted average exercise price

Number exercisable on December 31, 2021

Stock options

$ 2.51 - 5.50

Consolidated Statements of Operations and Comprehensive Loss has been revised to reflect the correction for the year ended December

31, 2019 and three months ended March 31, 2020 as follows:

For the Year Ended December 31, 2019

As previously reported

Professional Fees

Total Operating Expenses

Loss from Operations

Comprehensive Loss

Loss per Share–Basic and Diluted

For the Three Months Ended March 31, 2020

As previously reported

Professional Fees

Total Operating Expenses

Loss from Operations

Comprehensive Loss

Loss per Share–Basic and Diluted

(formerly Franchise Holdings International, Inc.)

of December 31, 2021, no stock options has been vested.

to the Consolidated Financial Statements

31, 2021 and 2020

recent outbreak of the novel coronavirus, specifically identified as “COVID-19,”

has resulted in governments worldwide

enacting emergency measures to combat the spread of the virus.

These measures, which include the implementation of travel bans,

self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an

economic slowdown.

Global equity markets have experienced significant volatility and weakness.

Governments and central banks have

reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

The duration and impact

of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions.

outbreak of the coronavirus, specifically identified as “COVID-19,” has resulted in governments worldwide enacting emergency

measures to combat the spread of the virus.

These measures, which include the implementation of travel bans, self-imposed quarantine

periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown.

Global equity

markets have experienced significant volatility and weakness.

Governments and central banks have reacted with significant monetary and

fiscal interventions designed to stabilize economic conditions.

The duration and impact of the COVID-19 outbreak is unknown at this time,

as is the efficacy of the government and central bank interventions.

Additionally,

while the potential economic impact brought by, and the duration of the COVID-19 pandemic is difficult to assess or predict, the

impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively

impact our short-term and long-term liquidity.

The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to

We do not yet know the full extent of potential delays or impacts on our business, financing or mining production activities

or the ore and mining industry or the global economy as a whole.

However, these effects could have a material impact on our liquidity,

capital resources, operations and business and those of the third parties on which we rely.

The management and Board of the Company

is constantly monitoring this situation to minimize potential losses.

while the potential economic impact brought by, and the duration of the COVID-19 pandemic is difficult to assess or predict, the impact

of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our

short-term and long-term liquidity.

The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change.

yet know the full extent of potential delays or impacts on our business, financing or the global economy as a whole.

However, these effects could have a material impact on our liquidity, capital resources, operations

and business and those of the third parties on which we rely.

The management and board of the Company is constantly monitoring this situation

to minimize potential losses.

Subsequent Events

Company has evaluated subsequent events through April 13, 2021 which is the date the financial statements were available

to be issued and the following events after year end occurred:

January and February 2021 in connection with the Company’s Reg-A public offering the Company issued an additional 30,033,199

shares of common stock at $0.10 per share and warrants exercisable for a period of 12 months at $0.20 per warrant for one

common share.

January 8, 2021 the Company issued 3,000,000 shares of common stock for consulting services valued at $0.10 per share.

January 14, 2021 the Company entered into an amended advisory agreement for the following:

available for the purchase of an additional 150,000 shares of common stock for a total of 250,000 shares of common stock at

of an additional 100,000 warrants for a total of 250,000 warrants exercisable for a period of five years at $0.20 per share.

January 15, 2021 the Company entered into a consulting service agreement for a duration of 18 months for 2,000,000 shares

of common stock at $0.13 per share.

the month of February 2021, 12,284,800 warrants were exercised at $0.20 per warrant for 12,284,800 shares of common stock

at a value of $2,455,960.

February 15, 2021 the Company signed an advertising and promotion agreement for a duration of three months at $10,000 per

month for advertising and promotion services.

February 15, 2021 the Company entered into a service agreement with a consultant to develop and provide Sales CRM system to

the Company for 5,000,000 shares of common stock at $0.23 per share.

March 3, 2021 the Company signed a consulting agreement with a third party to assist the Company in developing manufacturing

processes of new products for 200,000 shares of common stock valued at $20,000.

March 12, 2021 the Company entered into a strategic advisory and digital marketing service agreement for a duration of 12

months for 200,000 shares of common stock.

March 19, 2021 the Company issued to Leonite 790,243 shares of common stock through the exercise of 790,243 of its 900,000

warrants on a cashless exercise.

to year ended, the Company entered into private placement agreements issuing 11,368,800 shares of common stock and warrants

at $0.10 per share with an exercise price of $0.20 per warrant for one shares of common stock over a period of 18 months.

As of the date of this financial statement 9,060,000 shares of common stock have been issued.

to Notes 7, 8, 9 and 20 for additional subsequent events.

Company has evaluated subsequent events through March 31, 2022 which is the date the financial statements were available to be issued

and the following events after year end occurred:

February 17, 2022, Worksport appointed Tom DiNanno to its Board of Advisors for a monthly fee of $ 5,000 USD in addition to a 10,000

common share option grant.

agreed to issue 20,000 shares of common stock to employees/consultants.

Additionally, Worksport has agreed to issue Stock Options

of Terravis Energy, Inc., a Worksport subsidiary, to Lorenzo Rossi and Steven Rossi in the amount of 750,000 and 250,000 options,

respectively.

agreed to issue 10,000 Common Shares to Zenfar Investments Ltd on January 13, 2022 for manufacturing consulting services rendered

per agreement signed on March 3, 2021.

agreed to issue 40,000 Common Shares to Exchange Listing LLC on March 18, 2022 for capital markets and strategic advisory services

rendered per agreement signed on January 26, 2022.

has initiated final steps towards closing on the West Seneca production facility it began looking into in 2021, applying for a mortgage

and initiating a Phase 2 Environmental Assessment.

We are seeking to purchase the property for $ 8.125 M, financing $ 5.3 M via mortgage

with an interest rate of prime rate + 5.5 % while putting down $ 2.825 M on the property.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data