Worksport Ltd Debt Disclosure

9. Promissory Notes

 

The following tables shows the balance of the notes payable as of December 31, 2022 and 2021:

Schedule of Notes Payable

Balance as at December 31, 2020		$	367,058
Settlement			(103,847	)
Balance as at December 31, 2021		$	263,211
Settlement			(263,211	)
Balance as at December 31, 2022		$	-

 

During the year ended December 31, 2022, the Company and promissory note holder reached an agreement to settle all outstanding promissory notes and interest for $100,000. As a result of the settlement, the Company recognized a gain on settlement of debt of $163,211. Additionally, as a part of this settlement, there was accrued interest on these promissory notes included in accounts payable on the accompanying consolidated balance sheets totaling $139,121 that was also settled; accordingly, the Company recognized a gain on settlement of debt for this amount.

 

 

Worksport Ltd.

Notes to the Consolidated Financial Statements

December 31, 2022 and 2021

 

9. Promissory Notes (continued)

 

During the year ended December 31, 2019, the promissory note holder advanced $88,120 to the Company. As of the date the amount was advanced, the terms of the note were under negotiation and, as a result, the note was due on demand. During the year ended December 31, 2022, the Company and promissory note holder reached an agreement to settle all outstanding promissory notes and interest, noted above.

 

During the year ended December 31, 2016, the Company issued a secured promissory note in the principal amount of $73,452 ($123,231 CAD). During the year ended December 31, 2018, the Company issued two additions to the original unsecured promissory note of July 2016, totaling $22,639 ($30,884 CAD). The secured promissory note bore interest at a rate of 18% per annum. The payment terms of the original note including these additions were due “upon completion of going public on the Canadian Securities Exchange, with no change in interest rate.” The secured promissory note was 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, 2021. During the year ended December 31, 2022, the Company and promissory note holder reached an agreement to settle all outstanding promissory notes and interest, noted above. As of December 31, 2022, principal balance owing was $nil (2021 - $96,091 ($123,231 CAD)). As of December 31, 2022, the accrued interest on this note payable, $nil (2021 - $66,380 ($86,284 CAD)), was included in accounts payable and accrued liabilities.

 

During the year ended December 31, 2016, the Company issued secured promissory notes in the aggregate principal amount of $79,000. The secured promissory notes bore interest at a rate of 18% per annum, payable monthly. The secured promissory notes were 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 all secured promissory notes to be due on April 1, 2021. During the year ended December 31, 2022, the Company and promissory note holder reached an agreement to settle all outstanding promissory notes and interest, noted above. As of December 31, 2022, the principal balance owing was $nil (2021 - $79,000). As of December 31, 2022, the accrued interest on this note payable, $nil (2021 – $45,181), was included in accounts payable and accrued liabilities.

 

During the year ended December 31, 2017, the Company issued secured promissory notes in the aggregate principal amount of $53,848 ($67,700 CAD). The secured promissory notes were due in October and November 2018 and bore an interest rate of 12% per annum. The secured promissory notes were 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 ($80,108 CAD), for the outstanding principal of $53,848 and accrued interest of $14,740. As a result, the Company recognized a gain on settlement of debt of $5,682. As of December 31, 2022 and 2021, the secured promissory notes have been repaid in full.

 

During the years ended December 31, 2017, the Company issued secured promissory notes in the aggregate principal amount of $60,000. The secured promissory notes were due in August and November 2018 and bore interest at a rate of 12% per annum. The secured promissory notes were 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 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 common shares valued at $1.80 per share. As of December 31, 2021, the Company had recorded principal and interest of $73,886 and, as a result of the share repayment, the Company recognized a gain on settlement of $8,997. As of December 31, 2022 and 2021 the secured promissory notes have been repaid in full.

 

 

Worksport Ltd.

Notes to the Consolidated Financial Statements

December 31, 2022 and 2021

 

9. Promissory Notes (continued)

 

The amounts repayable under promissory notes and secured promissory notes at December 31, 2022 and 2021 are as follows:

Schedule of Secured Notes Payable

		2022				2021
Balance owing		$	-			$	263,211
Less amounts due within one year			-				(263,211	)
Long-term portion		$	-			$	-