Financial Data and Key Metrics Changes - Full year net sales nearly doubled to $616.1 million, representing an increase of 89.8% year-over-year from $16.1 million in fiscal 2024 [2][7] - Gross margins improved significantly by 2,800 basis points, rising from 11% in fiscal 2024 to 28% in fiscal 2025 [2][15] - The net operating loss was noted, but cash use for operations did not grow at the same rate as net sales [2][3] Business Line Data and Key Metrics Changes - The hard tonneau covers segment generated $15.7 million in net sales, while the soft cover segment contributed $500,000 [13] - Online retailer net sales increased by 142% to $11.9 million, representing 74% of total net sales in 2025, compared to 58% in 2024 [16] - No private label sales occurred in fiscal 2025, contrasting with $3.1 million or 37% of net sales in fiscal 2024 [16] Market Data and Key Metrics Changes - U.S. net sales were $16 million, up 91% from fiscal 2024, indicating a strong domestic market presence [20] - The dealer network expanded six-fold in fiscal 2025, now encompassing over 550 locations across the U.S. and Canada [9][28] - The company is targeting aggressive expansion into international markets in fiscal 2026 [9][30] Company Strategy and Development Direction - The company aims to capture more market share from large competitors and is focused on lean operations and generating positive operating cash flows [3][10] - Plans for fiscal 2026 include launching a next-generation cover and expanding the dealer network to 1,500 locations [30][40] - The company is pursuing OEM relationships with major automotive manufacturers, including Ford and General Motors [30][59] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving operational cash flow positivity in the second half of 2026, driven by margin expansion and new product contributions [26][41] - The macroeconomic environment, including tariffs and supply chain risks, remains a concern, particularly with rising aluminum prices impacting margins [36][50] - The company is focused on maintaining a strong cash position and managing operational expenses effectively [25][42] Other Important Information - The company raised approximately $0.5 million through an At-The-Market offering in 2025 and amended its agreement to allow for additional sales [11] - The company holds 24 issued utility patents and 50 issued design patents globally, with ongoing efforts to protect its intellectual property [37][38] Q&A Session Questions and Answers Question: How should we think about the difference between the high end and the low end of the revenue guide? - Management indicated that market demand, fuel prices, and consumer behavior will significantly influence revenue outcomes [48][50] Question: How do you envision the monetization of the heat pump business? - Management is exploring various options, including manufacturing, marketing, and potential licensing or divestiture of the technology [51][52] Question: Will sales and marketing expenses continue to rise in 2026? - Management plans to tighten marketing expenses after front-loading costs in 2025 [53] Question: Are there any new relationships with truck lines? - Management confirmed ongoing discussions with major automakers and indicated that material relationships would be announced as they develop [59] Question: Can you comment on the sales forecast for SOLIS and COR? - Initial sales have been strong, but marketing assets were only recently released, leading to a delay in ramping up sales [61][62] Question: What is the strength of the intellectual property regarding AetherLux? - Management believes the intellectual property is defensible and unique, with no known competitors offering similar technology [64]

Financial Data and Key Metrics Changes - Full year net sales nearly doubled to $616.1 million, representing an increase of 89.8% year-over-year from $8.5 million in fiscal 2024 [2][8] - Gross margins improved significantly by 2,800 basis points, rising from 11% in 2024 to 28% in 2025, with fourth quarter gross margin reaching approximately 30% [2][8][17] - Net cash used in operating activities for fiscal 2025 was $17.2 million, compared to $10.1 million in 2024, reflecting increased inventory resources [26] Business Line Data and Key Metrics Changes - The hard tonneau covers segment generated $15.7 million in net sales, while the soft cover segment contributed $500,000 [14] - Online retailer net sales increased by 142% to $11.9 million, representing 74% of total net sales in 2025, compared to 58% in 2024 [18] - The dealer network expanded six-fold in fiscal 2025, now encompassing over 550 locations across the U.S. and Canada [10][30] Market Data and Key Metrics Changes - U.S. net sales were $16 million, up 91% from fiscal 2024, indicating strong domestic demand [22] - The company is targeting aggressive expansion into international markets, particularly Europe and Australia, as part of its growth strategy [33] Company Strategy and Development Direction - The company aims to focus on monetization and expansion in fiscal 2026, prioritizing revenue opportunities through national distribution and deeper penetration of the dealer network [33][45] - Plans to launch a next-generation cover with patented capabilities in 2026, which is expected to significantly impact sales [34] - The company is actively pursuing OEM relationships with major automotive manufacturers, leveraging its ISO 9001 certification [10][61] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving operational cash flow positivity within the second half of 2026, driven by margin expansion and revenue contributions from new products [28][46] - The macroeconomic environment, including tariffs and supply chain risks, remains a concern, particularly regarding aluminum prices which have increased significantly [38][52] Other Important Information - The company raised approximately $0.5 million through its At-The-Market offering program in 2025 and amended its agreement to allow for additional sales [12] - The company holds 24 issued utility patents and 50 issued design patents globally, with ongoing efforts to protect its intellectual property [39][40] Q&A Session Summary Question: How should we think about the difference between the high end and the low end of the revenue guide? - Management indicated that market demand, fuel prices, and consumer spending are critical factors influencing revenue outcomes [51][53] Question: How do you envision the monetization of the heat pump business? - Management is exploring various options, including manufacturing, marketing, licensing, and potential divestiture, with significant interest from OEMs [54][55] Question: Will sales and marketing expenses continue to rise in 2026? - Management plans to tighten marketing expenses after front-loading costs in 2025, aiming for a steady state [56] Question: Are there any new relationships with truck lines? - Management confirmed ongoing discussions with major automakers and indicated that material relationships would be announced as they develop [61] Question: Can you comment on the sales forecast for SOLIS and COR? - Initial sales have been strong, but marketing assets were only recently released, with expectations for increased sales momentum in the coming months [63][65] Question: What is the strength of intellectual property regarding AetherLux? - Management believes their intellectual property is defensible and unique, with no known competitors offering similar technology [67]

1 Introduction Good afternoon, everyone, and thank you for joining Worksport's fiscal year 2025 and Q4 2025 earnings call. I'm Steven Rossi, Chief Executive Officer of Worksport Ltd. With me is our Chief Financial Officer, Michael Johnston. We will be reviewing the financial results for the quarterly period ending December 31st, 2025, and our full fiscal 2025. These results were filed today at 4:01 PM ET in our Form 10-K. On today's call, alongside our financial performance we'll review our operating execut ...

Core Viewpoint - Worksport Ltd. has officially launched its new HD3 Heavy-Duty tonneau cover, aimed at commercial and fleet applications, expanding its product lineup and market reach [2][4][7]. Product Overview - The HD3 is designed for maximum durability, featuring upgraded materials, reinforced seals, and heavy-duty latching systems, representing a significant evolution from the previous AL3 platform [3][7]. - Six models of the HD3 are currently in production, with configurations for popular truck models such as Ford F-150, Chevrolet Silverado/GMC Sierra, and Ram 1500 [6]. Sales and Market Strategy - Initial sales of the HD3 are expected to begin mid-November, strategically timed for year-end sales activity [4]. - Worksport's wholesale and B2B partners are anticipated to play a crucial role in penetrating the commercial and fleet markets, leveraging the HD3's durability as a key selling point [5]. Future Growth Prospects - The company plans to continue expanding its product offerings, with expectations of rolling out 25 or more models by December 2025 [6]. - Upcoming products include the SOLIS solar-integrated tonneau cover and COR portable power system, with further growth and sales updates expected soon [7].

Core Viewpoint - Worksport Ltd. reaffirms its revenue target of at least $20 million for 2025 and highlights a clear path towards achieving operational cash flow positivity in the near term [1][6]. Financial Performance - In Q2 2025, Worksport achieved record net sales of $4.10 million, representing a 114% increase year-over-year and an 83% increase sequentially [2]. - Gross margin improved by 8.7 percentage points to 26.4%, leading to a 173% increase in gross profit to $1.08 million [2]. - Operating loss decreased by 15% quarter-over-quarter to $(3.62) million, while net loss narrowed by approximately 16% to $(3.73) million [2][6]. - Operating cash use improved by 19% to $(3.10) million, with total liquidity at approximately $6.1 million [2][6]. Sales and Dealer Network - The company set three consecutive monthly sales records in Q2, with April at $1.22 million, May at $1.28 million, and June at $1.60 million, leading to an annualized run rate of $19.2 million [3]. - Year-to-date, Worksport has added over 450 new dealer accounts, with a network capable of generating approximately $21.5 million in annual repeatable revenue [3]. Operational Highlights - Q3 2025 output is expected to be significantly stronger than Q2, with July output averaging 115-130 units per day and targeting ~200 units per day by late Q3 [8]. - The innovation pipeline includes the upcoming launches of HD3, SOLIS, and COR products, with SOLIS and COR expected to contribute to revenue in 2026 [8][9]. Management Commentary - CEO Steven Rossi emphasized that the company is executing towards operational cash-flow positivity and preparing for product launches, believing that the tonneau business alone can lead to profitability in 2026 [5]. - CFO Michael Johnston highlighted strong sequential leverage, with expectations for gross margin to approach 30% by year-end and targeting operating cash-flow breakeven by late Q4 2025 or early Q1 2026 [6]. Capital and Liquidity - The company expects to close its current Regulation A offering by the end of August 2025, which, if fully subscribed at $10 million, would provide funding through 2025 and into 2026 [13]. - Outstanding warrants may provide growth capital in 2026, with the company aiming to limit notable equity dilution while pursuing disciplined growth [13].

Core Insights - Worksport Ltd. has achieved a 50% increase in monthly production volume since March 2025 and over 100% improvement in gross margins over the past five months, driven by increasing demand [1][4] - The company set a new monthly production record in May 2025, producing more units than in the entire third quarter of 2024, indicating significant operational efficiency [2] - Worksport's distribution network has expanded nearly six-fold, from 94 dealers in Q4 2024 to over 550, with many small orders evolving into full partnerships [3] Production and Efficiency - The company is evaluating an expanded production schedule due to accelerating demand and orders consistently outpacing supply [3] - The operational efficiency is further supported by a $2.8 million job creation grant awarded in 2024 [3] - Gross margin has increased from 11% in Q4 2024 to over 23% in May 2025, with projections to exceed 30% by year-end [4] Financial Performance - Worksport's revenues were $1.5 million in 2023 and $8.5 million in 2024, with expectations to surpass $20 million in 2025 [5] - The company aims to grow its tonneau cover business to over $100 million annually in the short term, with potential for its upcoming products to exceed that [5] Product Development and Market Strategy - The company is preparing to launch the SOLIS solar-integrated tonneau cover and COR portable nano-grid power system in Fall 2025, targeting a combined $13 billion market [7] - A top 15 U.S. construction company has selected the SOLIS & COR for a paid pilot project, indicating strong market interest [8] Supply Chain and Manufacturing - Worksport's products are predominantly made in America, reducing the impact of tariffs and aligning with domestic manufacturing efforts [6] - The company emphasizes its commitment to supporting brick-and-mortar resellers while maintaining modest margins on dealer sales [4]

Core Insights - Worksport Ltd. has reported a significant increase in revenue and is targeting cash flow positive operations by year-end 2025 [1][3][6] Financial Performance - For Q1 2025, Worksport reported net sales of $2.24 million, a 337% increase from $512,000 in Q1 2024 [6] - Gross margin improved to approximately 18%, up from 7% in Q1 2024 and 11% in Q4 2024, with a target of 25-30% gross margins by year-end 2025 [6][9] - The company recorded a net loss of $4.46 million for Q1 2025, compared to a net loss of $3.71 million in Q1 2024 [9] Revenue Guidance - Worksport is projecting full-year revenue guidance of $20 million to $25 million for 2025, indicating a 2.5x to 3x increase over 2024 results [3][6] - The company anticipates strong sequential growth in Q2 2025, driven by the launch of its high-margin AL4 cover [6] Working Capital and Assets - As of the end of Q1 2025, Worksport reported a working capital balance of $7.94 million, with $5.1 million in cash availability [6][8] - Total assets increased to $26.66 million as of March 31, 2025, compared to $25.74 million at the end of 2024 [8] Future Outlook - The company aims to achieve cash flow breakeven by year-end 2025, supported by a stronger margin profile and operational leverage [6] - Preliminary outlook for 2026 includes sustained double-digit revenue growth and first full-year profitability, driven by expanded product availability and market share [6]

Core Viewpoint - Worksport Ltd. is participating in the D. Boral Capital Inaugural Global Conference on May 14, 2025, in New York City, which is expected to attract investors and feature keynote speaker Kevin O'Leary [1][2]. Company Overview - Worksport Ltd. (NASDAQ: WKSP) designs, develops, manufactures, and owns intellectual property for various products, including tonneau covers, solar integrations, portable power systems, and clean heating & cooling solutions [3]. - The company has a partnership with Hyundai for the SOLIS Solar cover and offers a hard-folding cover compatible with all major truck models, gaining traction in the electric vehicle sector [3]. - Worksport aims to leverage the growing consumer shift towards clean energy with its proprietary solar solutions, mobile energy storage systems, and Cold-Climate Heat Pump technology [3]. D. Boral Capital Overview - D. Boral Capital LLC is an investment bank based in New York, providing advisory and financing solutions to middle market and emerging growth companies [4]. - The firm has a strong track record, having aggregated over $25 billion in capital across approximately 350 transactions [5].

Core Insights - Worksport Ltd. has reported significant growth in its dealer network and B2B sales, indicating strong market adoption of its U.S.-made AL4 tonneau cover [2][4][7] - The company emphasizes the advantages of manufacturing in the U.S., including mitigating tariff risks and supporting American jobs, which resonates well with dealers [7][8] Dealer Network and Sales Growth - The dealer network has expanded by 64%, increasing from 92 dealers at the end of 2024 to 151 active dealers [7] - March 2025 B2B sales grew nearly 70% compared to February, highlighting robust demand for the AL4 cover [7] - Worksport added 35 new dealer accounts in March, following 24 additions in January and February, showcasing a strong growth trajectory [7] Strategic Initiatives - The company plans to further expand its dealer network by partnering with distributors and purchasing groups that prioritize American-made quality [5] - Worksport aims to launch new products, including the SOLIS solar-integrated tonneau cover and COR modular portable energy system, to capture additional revenue streams in sustainable power solutions [12] - Management is focused on achieving cash-flow positivity through B2B growth, direct-to-consumer sales, and disciplined cost control [12]