Worksport Ltd Stock Compensation Disclosure
Under the Company’s 2015, 2021 and 2022 Equity Incentive Plans,
Worksport Ltd.
Notes to the Consolidated Financial Statements
December 31, 2025 and 2024
15. Equity Compensation (continued)
All equity-settled, share-based payments are ultimately recognized as an expense in the statement of operations 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 estimates. 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 than that estimated on vesting.
Performance Share Units
On May 1, 2023, the Company and Steven Rossi reached an agreement to modify restricted stock units and performance stock units (“PSUs”) issued on November 11, 2022, and December 29, 2021, respectively, and replace them with stock options, as described below.
On November 11, 2022, and PSUs granted on December 29, 2021, as described below, were modified to include new terms pertaining to the PSU vesting schedule. as measured using the volume weighted average of the Company’s common stock for ten (10) consecutive trading days, with over $ of trading volume on each of those days. The fair value of the PSUs was estimated to be $. As of December 31, 2025, PSUs of the remaining PSUs had vested, and the Company recognized $ (2024 - $) in consulting expenses.
On December 29, 2021, the Company granted and PSUs to the Company’s Chief Executive Officer and a director, respectively. The fair value of the PSUs was estimated to be $.
Stock Options
The Company uses the Black-Scholes option pricing model to determine fair value of stock options on the grant date.
During the year ended December 31, 2025, the Company issued the following stock options to various directors:
| - | stock options vesting ratably over two years, with an exercise price of $ and an expiration date of | |
| - | stock options vesting ratably over two years, with an exercise price of $ and an expiration date of | |
| - | stock options vesting ratably over two years, with an exercise price of $ and an expiration date of | |
| - | stock options vesting pursuant to a performance milestone and an expiration date of |
During the year ended December 31, 2025, the Company issued the following stock options to various employees and consultants:
| - | stock options vesting based on various service periods, with an exercise price of $ and an expiration date of | |
| - | stock options vesting based on various service periods, with an exercise price of $ and an expiration date of | |
| - | stock options vesting pursuant to performance milestones and an expiration date of |
During the year ended December 31, 2025, the Company issued the following stock options to Steven Rossi:
| - | stock options vesting 50% at the end of the first two anniversaries of the grant date, with an exercise price of $ and an expiration date of | |
| - | stock options vesting 50% at the end of the first two anniversaries of the grant date, with an exercise price of $, and an expiration date of . |
On July 23, 2024, the Company engaged in stock option repricing for certain employees, executive officers, and members of the Board of Directors of the Company. stock options’ exercise prices were repriced to $7.042, and all other criteria were unchanged. As a result of the modification in exercise prices, the Company recognized additional expense of $ on the date of modification.
During the year ended December 31, 2024, the Company issued stock options to employees and directors with exercise prices ranging from $ to $ and expiration dates ranging from February 1, 2029 to November 19, 2034. Of these stock options, were subsequently cancelled.
Worksport Ltd.
Notes to the Consolidated Financial Statements
December 31, 2025 and 2024
15. Equity Compensation (continued)
| December 31, 2025 | December 31, 2024 | |||||||||||||||
| Number of stock options | Weighted average price | Number of stock options | Weighted average price | |||||||||||||
| Balance, beginning of fiscal year | 579,936 | $ | 7.14 | 506,386 | $ | 19.62 | ||||||||||
| Granted | 596,040 | $ | 3.68 | 84,860 | $ | 7.70 | ||||||||||
| Forfeited | (4,270 | ) | $ | 9.52 | (11,310 | ) | $ | (29.30 | ) | |||||||
| Balance, end of fiscal year | 1,171,706 | $ | 5.37 | 579,936 | $ | 7.14 | ||||||||||
| Range
of Exercise prices | Outstanding | Weighted average life (years) | Weighted average exercise price | Exercisable
on December 31, 2025 | ||||||||||||||||
| Stock options | $ | – | 1,171,706 | $ | 5.37 | 298,609 | ||||||||||||||
| December 31, 2025 | December 31, 2024 | |||||||||||||||
| Number of stock options | Weighted average price | Number of stock options | Weighted average price | |||||||||||||
| Balance, beginning of fiscal year | 1,350,000 | $ | 0.01 | 1,350,000 | $ | 0.01 | ||||||||||
| Granted | $ | $ | ||||||||||||||
| Balance, end of fiscal year | 1,350,000 | $ | 0.01 | 1,350,000 | $ | 0.01 | ||||||||||
| Range of Exercise prices | Outstanding | Weighted average life (years) | Weighted average exercise price | Exercisable on December 31, 2025 | ||||||||||||||||
| Stock options | $ | 1,350,000 | $ | 0.01 | 1,350,000 | |||||||||||||||
Worksport Ltd.
Notes to the Consolidated Financial Statements
December 31, 2025 and 2024
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 26, 2026 | Showing above |
| 2024 | Mar 27, 2025 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 31, 2022 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.