WKSP

Good afternoon, everyone. Thank you for joining Worksport's first quarter 2026 earnings call. I'm Steven Rossi, Chief Executive Officer of Worksport Limited. With me today is our Chief Financial Officer, Jennifer Kartychak, who many of you will be meeting on earnings calls for the first time. Jennifer officially joined Worksport in January 2026 as our VP of Finance and has recently been promoted to CFO. Jennifer first began providing advisory services for Worksport in August 2023. Her short-term focus is to help strengthen our financial discipline, reporting processes, and our internal control environments as we scale towards profitable operations. We will be reviewing the financial results for the quarterly period ending March 31, 2026. These results were just filed today at 4:00 P.M. Eastern Time in our Form 10-Q and can be downloaded from the link provided in the chat.

At the end of today's call, our prepared remarks and presentation deck will be available for download at www.investors.worksport.com/hashtagreports. Again, www.investors.worksport.com/hashtagreports. Our remarks will follow on a slide presentation. After our prepared remarks, we will open the line for questions. On that, let's begin. First, safe harbor statements. During this call, we will make forward-looking statements, including statements regarding our financial outlook for the full year 2026, our expectations regarding financial and business trends, impacts from the macroeconomic environment and our market position, opportunities, go-to-market initiatives, growth strategy, and business aspirations and product initiatives, and the expected benefits of such initiatives. These statements are only predictions that are based on our current beliefs, expectations, and assumptions.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Actual results or events may differ materially. Therefore, you should not rely on any of these forward-looking statements. These forward-looking statements are subject to risks and other factors that could affect our performance and financial results, which we discuss in detail in our filings with the SEC, including our annual report on Form 10-K and quarterly reports on Form 10-Qs, and other SEC filings. The forward-looking statements made in this earnings call are only made as of today's date. Worksport assumes no obligation to update any forward-looking statements we may make on today's webinar. With that, we have our agenda. On today's call, we'll be covering the following.

First, key highlights from our Q1 2026 that we just filed. Number two, liquidity position and capital strategy. Number three, financial review. Number four, update on Worksport operations. Number five, an update on Terravis Energy and Aetherlux, the exciting product. Number six, the 2026 outlook in general. With that, let's jump to key highlights. Let's dive into it. Q1 2026 was the investment and launch readiness quarter, and we executed it with that objective in mind. In January, the SOLIS and COR started commercial shipping. In March, we unveiled NEXUS to industry buyers at the Keystone BIG Show and initiated pre-order activity on this product offering.

In April 2026, NEXUS launched commercially, COR received the applicable UL and CSA certification package needed to support broader North American retail and commercial distribution. We secured distribution with Tri-State Enterprises, including their placement of initial purchase order. Revenue grew approximately 48% year-over-year to $3.3 million, and gross profit more than doubled, increasing approximately 116% to $854,000. Gross margin was approximately 26% in Q1 compared with approximately 18% in Q1 of last year. These are meaningful year-over-year improvements. Since Q1 2026 was a launch readiness quarter, our current product portfolio has yet to meaningfully contribute to our results, including gross margin contribution. We are at the eve of our broad, broadest product revenue opportunity to date for our tonneau cover business.

During Q1 of 2026, we funded inventory, conducted multiple product launches, refined our marketing strategy, and allocated resources to bolster our distribution network. We can now focus on converting our working capital investments for the balance of the year. We enter Q2 with a stronger product portfolio, continued growth with our distribution relationships, and deeper sales channel opportunity than any prior period in Worksport's history. Our cash position reflects the cost of operational and strategic growth efforts, we will address that directly. The key investor highlight for Q1 of 2026 is this: We built product availability, funded launch activity, and expanded our commercial platform. Q2 2026 and the second half are about conversion, shipment, sales channels, and activation, margin efficiency improvement, and lower operational cash burn.

We're projecting strong growth in both B2B and B2C sales channels, as well as a focus on meaningful efforts towards profitability from the operations in the second half of 2026 and beyond. More on that soon. First, and before we move deeper into the financial review, let's step back for a second and review what Worksport actually is. At its core, Worksport as a business consists of two key elements. First, we are an innovation-focused U.S. manufacturer. Second, we are building a clean energy solution or multiple solutions. These two areas are not separate. They move together. Our manufacturing platform gives us the ability to design, build, and scale physical products. Our clean energy focus gives our products a larger strategic purpose. These are the two core capabilities we believe that can drive the company towards profitability within the near term.

We are a U.S.-based manufacturer with approximately $11.6 million in inventory, $13.3 million in net property and equipment, including approximately $8.3 million of building and land net value and $6.6 million of manufacturing equipment net value. We have more than 500 dealer locations and target more than 1,500 dealer locations by the end of this year. Our global intellectual property portfolio alone includes approximately 26 issued and 57 patent pending utility patents, 51 issued and 25 pending design patents and registrations, and 44 registered and 15 pending trademarks. We're also in the process of preparing and filing several other key utility and design patent applications across various countries and jurisdictions.

We started production of our tonneau covers just in late 2023. Based on internal sales data, we have sold approximately 26,000 tonneau covers through worksport.com and related direct online channels from 2024 through Q1 of 2026, including approximately 8,000 covers in 2024, 16,000 covers in 2025, and 2,000 covers alone just in Q1 of 2026. In 2025 alone, across both B2B and B2C channels, Worksport sold approximately 25,000 tonneau covers and generated $16.1 million in net sales. We're quite proud of these statistics. Worksport started on the foundation of roughly 61 million pickup trucks in the USA on U.S. roads alone. Pickup trucks remain among the top-selling vehicles in the U.S. every single year. People buy pickup trucks regardless of broader economic conditions.

We started by making high-quality tonneau covers at prices that compete and, in many cases, can beat competitors that primarily source raw material and components from foreign markets. We believe we can continue to capture market share in the estimated $4 billion-plus tonneau cover market in 2026 and build the tonneau cover COR business into a nine-figure profitable middle-market company over time. Said plainly, we believe Worksport has the potential to become a $100 million-plus middle-market revenue company profitably from tonneau cover sales alone. That's just our foundation. That's our core of this business. Our vision does not stop at tonneau covers. We imagine a future where pickup trucks evolve from power-consuming utility vehicles into mobile power platforms and nanogrids that support owners at the campsite, work site, emergency site, and on fleet levels.

That is where our newly launched SOLIS and COR product offerings enter the picture. The tonneau cover is the physical platform. SOLIS adds solar generation, and COR adds portable energy storage and usable power wherever you go. Together, SOLIS and COR allow Worksport to move from an aftermarket automotive accessory business into an anticipated $13 billion-plus portable power market. Importantly, COR is not limited to truck owners. COR is a modular portable power system that can function as a standalone product for job site, off-grid, emergency, recreational, and general portable power use cases for anybody, anywhere globally. We are actively targeting OEM, fleet, dealer direct, distributor, and other direct consumer relationships while continuing to build brand and consumer awareness around this new line of product offerings.

Our next steps could be to look at integrating COR battery backup technology for residential and commercial power, a possible first-of-its-kind modular battery system for emergency power or key energy savings and off-peak cost savings for businesses with strong apparent opportunities in industrial applications. Our subsidiary, Terravis Energy, is at the forefront of developing energy savings HVAC technology. The Aetherlux ZeroFrost heat pump has all the elements to become a significant breakthrough in energy saving as a product solution alone. It is expected to be the only heat pump platform capable of operating without traditional defrost cycles. It has been tested to operate smoothly in extreme temperatures rarely seen by conventional systems. In fact, I'll say not seen by conventional systems. Aetherlux can provide heating and cooling highly efficiently. We have a keen focus on home heating.

We're also currently evaluating efficiencies within data center cooling technologies. The breakthrough Aetherlux heat pump is expected to advance towards certification in 2026 and address a $150 billion-plus HVACR market. We have received a strong level of interest through initial inbound inquiries, achieved support through the U.S. Department of Energy, including their National Renewable Energy Laboratory, and are engaged in active government-related and strategic conversations. Aetherlux sits on top of the Core Worksport product platform as an important additional opportunity. In short, Worksport has three related but distinct layers. First, the Core tonneau cover business, what I call our foundational business. Second, the SOLIS and COR power ecosystem. Third, the longer-term, highly efficient Aetherlux HVAC opportunity through Terravis Energy. We'll provide more information and more details on Terravis later in this call. Let's talk about liquidity.

I will now address our liquidity position directly. Our fiscal 2025 Form 10-K included a going concern explanatory disclosure. That disclosure is important, we are addressing it through a clear operating plan. Convert inventory into revenue, grow gross margins in each of our sales channels, reduce operating cash consumption as our product launch spending normalizes, maintain a disciplined approach to working capital and capital market funding resources as needed. Our ability to continue as a going concern remains dependent on generating future cash flows from operations while maintaining access to debt and equity capital markets. The largest use of cash in Q1 was the capital-intensive launch-related investments.

The primary use of cash was working capital to support production of our existing product offerings and the expected growth of additional product offerings launched in 2026, including SOLIS, COR, and the new NEXUS. We received approximately $5.1 million of inventory to support the expanded product lineup, with approximately $1 million of these raw material purchases remaining in accounts payable as of March 31st, 2026. We also used cash to settle prior period working capital obligations. The objective from here is clear: turn that inventory into revenue, continue to improve our gross margin for each sales channel, and reduce operating cash used quarter-over-quarter. Our West Seneca facility also remains a substantial, meaningful asset on the balance sheet, reflected in our $13.3 million of net property and equipment.

We are a manufacturing company with real assets, real inventory, and an expanding order and distribution base. The question is execution velocity. Q2 2026 begins answering that question. Our priority is to reduce our reliance on equity capital and potential additional dilution to existing shareholders as revenue scales and working capital normalizes. Capital strategy. We remain transparent with our use of capital tools. During Q1 of 2026, we raised approximately $2.2 million, including net proceeds through our amended at-the-market offering with H.C. Wainwright. As a result, we issued 1.46 million shares of common stock. We recognize the impact of dilution. We are mindful of our shareholder responsibilities.

Our strategy remains to use the ATM as a tactical tool subject to applicable Form S-3 public float limitations and market conditions, not our primary, and not as our primary capital vehicle. Where capital tools are used, we will continue to evaluate them through one lens, whether the operational return justifies the dilution and improves the long-term shareholder value equation. With that, I will hand the call over to Jennifer to walk through our financial results.

Thank you, Steven. Good afternoon, everyone. It's a pleasure to be speaking with you, and I look forward to continuing these conversations as we progress through fiscal 2026. Net sales for Q1 2026 were $3.3 million, an increase of approximately $1.1 million or 47.9% compared to $2.2 million in Q1 2025. Geographically, the U.S. continues to represent an overwhelming majority of our net sales at 99%, up 48.5% year-over-year. Within our segments, hard tonneau covers generated approximately $3.3 million in net sales, accounting for approximately 99% of total Q1 net sales. Our soft tonneau cover segment contributed approximately $0.04 million. The concentration in net sales in the hard tonneau covers segment reflects our ongoing strategic focus on higher margin American-made product offerings.

From a channel perspective, Q1 also reflects a deliberate transition in how we are building the business. In Q1 2026, B2C or the direct-to-consumer online channel contributed approximately $1.8 million in net sales on approximately 1,700 covers, while B2B generated approximately $1.5 million on approximately 2,300 covers. Direct-to-consumer activity remains an important sales channel to develop, but our growth strategy includes an enhanced concentration in the B2B sales channel, including dealers, distributors, fleets, and potential OEM partnerships. Moving on to gross margin. Gross margin for Q1 2026 was approximately $0.9 million, more than doubling from approximately $0.4 million in Q1 2025, a 115.5% year-over-year improvement.

Our Q1 2026 gross margin was approximately 26% compared to approximately 18% in Q1 2025 and approximately 30% in Q4 2025. The sequential movement from Q4 2025 to Q1 2026 was primarily driven by our sales channel mix. In Q4 2025, our sales mix was weighted more heavily towards the direct-to-consumer sales channel, while in Q1 2026, our mix shifted closer to an even split between B2C and B2B. Importantly, our B2C margin improved sequentially from approximately 30% to approximately 34%, the higher relative concentration from B2B sales channel, which has a lower margin, impacted that blended gross margin. Onto operating expenses.

Total operating expenses for Q1 2026 was approximately $6.6 million, compared to $4.7 million in Q1 2025, an increase of approximately $1.9 million or 41%. Let me walk you through some of the key line items. Research and development expenses decreased by approximately $0.2 million or 44% between Q1 2025 and Q1 2026. This decrease reflects the natural progression of our product development projects. The AL4 and HD3 moved out of active development and into full production during 2025. Our R&D spend is increasingly directed towards next generation innovation rather than ongoing refinement of production-ready products. General and administrative expenses increased by approximately $0.8 million or 24% from $3.4 million in Q1 2025 to $4.3 million in Q1 2026.

This increase is primarily attributable to the timing of costs incurred to support capital market positioning and promotion of our enterprise value amidst a perceived valuation gap in our market value. We continue to manage this expense caption with strategic discipline. Sales and marketing expenses increased by approximately $1.3 million or 148% from $0.9 million in Q1 2025 to $2.1 million in 2026. The increase resulted from the combination of intentional brand awareness and product launch campaigns directly linked to the launch of multiple product offerings in early 2026. We launched three products and initiated large scale digital marketing campaigns to drive awareness for both the COR and SOLIS, as well as to support the overall brand validation.

We are closely monitoring the ROI on each marketing channel and plan to optimize accordingly. Onto cash flows and the balance sheet. Cash and cash equivalents were $566,000, down from $5.9 million approximately at December 31, 2025. As Steven noted, this decline reflects working capital deployed to fund multiple product launches and reduce prior period obligations. Net cash used in operating activities in Q1 2026 was approximately $8.2 million. Let's further discuss the cash used from operations. Our net loss of approximately $5.8 million included approximately $1.1 million of non-cash items, primarily stock-based compensation, depreciation and amortization. That implies a cash-based operating loss of approximately $4.7 million.

Working capital used an additional approximately $3.5 million, driven primarily by inventory build and the settlement of prior period payable obligations. I would like to reinforce that we do not expect the level of working capital use in Q1 2026 to repeat at the same magnitude as inventory begins converting into revenue and prior period obligations normalize. That normalization, combined with a growing revenue base across multiple sales channels, is how we close the gap and achieve cash flow positivity. Inventory increased by $2.1 million to $11.6 million as of March 31, 2026. Of that total, raw goods grew from $3.4 million to $5.3 million, a direct reflection of our investments in COR and SOLIS, as well as the NEXUS product readiness. Raw materials of $5.4 million reflects our near-term production pipeline.

We are not anticipating a significant use of cash for further material purchases until Q3 2026. Working capital as of March 31, 2026 was approximately $6.6 million, compared to $10.1 million at December 31, 2025. This reflects our strategic decision to proactively convert working capital into operational assets to support the launch of multiple product lines in early 2026. Our asset base, anchored by approximately $13.3 million of net property and equipment, represents our investment in our West Seneca manufacturing facility and continues to provide a strong foundation to support our future production growth. I will now turn the mic back to Steven to review our operational milestones. Steven?

Thanks, Jen. On January 13, 2026, we announced the commercial launch of our flagship energy product duo, the SOLIS solar tonneau cover and the COR portable energy system. This was a defining moment for Worksport. Years of R&D, engineering, certification work and manufacturing preparation culminating in real products shipping to real customers from our facilities. SOLIS is the world's only commercially available solar integrated hard folding tonneau cover. COR is a modular portable energy system that integrates with SOLIS or functions as a standalone unit for the job site, off-grid or emergency power needs. Together, they represent Worksport's entry into the multi-billion dollar clean energy and portable power market. Excited about it. With the initial product launches behind us, our 2026 focus is scaling SOLIS and COR revenue.

In April of 2026, COR received the safety and regulatory certifications needed for North American retail and commercial distribution, including all applicable UL and CSA approvals. The certification package is important because it expands the universe of retailers, distributors, fleets, and commercial customers that we can evaluate to carry the product. We also strengthened our commercial sales channels around these products. On February 26, we announced a strategic partnership with Potomac International Partners to help position the SOLIS and COR ecosystem for federal, fleet, and commercial adoption channels. We do not consider these channels as immediate revenue sources, but it is an important awareness channel for products that could serve work site, emergency mobile power, and off-grid applications. SOLIS also carries credibility through our active conversations with OEMs. The point is not that OEM revenue is assumed in our 2026 sales pipeline.

The point is that the product platform has strategic relevance beyond direct-to-consumer sales, and we are building the channel architecture to pursue that opportunity responsibly. The question we are focused on answering is how quickly these products scale through which channels. COR and SOLIS did not represent a meaningful amount of sales in Q1. As emerging products, we're developing marketing assets, product awareness, and sales pipelines to target strong sales towards the rest of the year. We're just getting started. With a focus on certification, channel onboarding, repeatable fulfillment, and measured customer acquisition economics, the path for market adoption is becoming accessible. We note it took approximately one year for our initial Made in the U.S.A. tonneau cover lines to build traction. I will repeat that.

We note it took approximately one year for our initial Made in the USA tonneau covers, the AL3, to build traction, and we believe that we could achieve a similar speed or better with the SOLIS and the COR. The third major commercial milestone of the quarter was the unveiling of our NEXUS tonneau cover. Boy, is it exciting. On March 19, 2026, we presented NEXUS to industry buyers at the Keystone BIG Show. Keystone's one of the biggest aftermarket distributors in North America, one of the premier aftermarket distributors in North America, and this is one of the most premier events in North America. At the Keystone BIG Show, our NEXUS product generated immediate buyer interest and pre-order activity. Following production and commercial launch in April of 2026, early distributor interest is and remains significant.

This supports management's expectation that NEXUS can contribute meaningfully in net sales for this year. NEXUS is a premium tonneau cover featuring a newly engineered operating system designed to improve the ease of use, safety, and speed for truck owners. Unlike conventional folding tonneau covers that often require users to walk around both sides of the truck to secure latches or prop rods, NEXUS is designed to allow full operation from a single side of the truck while maintaining full bed access. This is a practical innovation that's focused on a clear customer pain point, and early distributor demand supports our view that the product can accelerate adoption across both existing and new sales channels. I encourage everyone to check the product out at www.worksport.com. It's astonishing.

In late 2026, we announced that we secured Tri-State Enterprises as a new cross-regional distribution partner and our biggest at the time for our full tonneau cover lineup, inclusive of NEXUS. Tri-State expands our distribution reach across Arkansas, Missouri, Oklahoma, and Texas. Tri-State operates approximately 1 million sq ft of warehouse space and has already placed initial purchase orders and reorders. Management believes Tri-State can become a seven-figure near-term account with recurring multi-million dollar potential. Our distribution strategy remains a central pillar of our 2026 growth plan. We entered in the year with a dealer network that exceeded 500 locations, a nearly six-fold increase from the start of last year. Our target is to reach 1,500 plus locations by the end of this year through a combination of direct dealer onboarding and new distributor partnerships.

Remember, there's 17,000 dealers in America. We're just getting started. The Tri-State Enterprises partnership announced in April of this year is our first major distributor relationship and gives us the broader penetration to new geographic markets. Importantly, this is not just a logo announcement. Tri-State has already placed initial purchase orders. Truck bed covers are among its top-selling categories. That alignment matters because it increases the likelihood that distribution reach can translate into real sell-through. We're also in closing discussions with nationwide dealer network capable of bringing our products to all U.S. continental states. We will update investors as these discussions move from pipeline to signed commercial relationships. Each of these relationships represent a potential step change in distribution reach. Our standard for reporting progress will remain execution, orders, channel activation, repeat purchase behavior. We're strictly focused on execution this year.

Our U.S. manufacturing and quality credentials also matter to the strategy. The West Seneca facility that we built is an ISO 9001:2015 certified facility, which supports our ability to pursue larger dealer, distributor, fleet, and potential OEM relationships. Quality certification does not create revenue by itself, it removes the friction in conversations with larger counterparties that require this for quality systems. Our B2B go-to-market strategy continues to complement our direct-to-consumer e-commerce sales channel. We believe that the combination of strong online presence, an expanding dealer network, and new distributor partnerships is the right model to capture demand across the $4 billion-plus tonneau cover market. The investor's takeaway is straightforward. The channel base is becoming larger, more diversified, increasingly capable of absorbing a broader product lineup. Let's talk Aetherlux.

Terravis Energy, our clean energy subsidiary, continued to make progress in the first quarter of this year. In February 2026, we confirmed that a large government entity is actively monitoring upcoming laboratory performance results for the Aetherlux heat pump as a part of an internal evaluation process. We also announced that the certification work is progressing with AHRI, ENERGY STAR, and other North America certification milestones targeted within 2026. To be clear, no procurement decision has been made, and we are not currently projecting initial Aetherlux revenue within this year. However, we anticipate commercial opportunities within 12 months. What we are saying is that a credible government-related evaluation process is underway and that the technology is advancing towards third-party validation, certification, and potential early commercialization in the $150 billion-plus HVACR market.

We believe that Aetherlux is the only heat pump technology in the world tested to operate at temperatures as low as -57 degrees Fahrenheit without the need for energy-intensive defrost cycles. Our proprietary zero-frost technology eliminates defrosting cycles entirely, opening the doors to markets and applications that have historically been difficult for conventional heat pump technologies to serve. Aetherlux can also be viewed as a strategic upside driver beyond the revenue drivers embedded in our 2026 pipeline. The core 2026 revenue is expected to be driven by the tonneau cover business and early SOLIS and COR contribution. Aetherlux is a separate platform advancing through testing, certification, commercialization work. We intend to update investors as lab results and certification milestones are achieved. 2026 outlook. Let's talk about this for a second.

This is the strongest commercial position Worksport has occupied to start any of the fiscal years in our history. We provided revenue 2026 guidance of $35 million-$42 million in our 2025 Form 10-K. We believe our revenue will increase substantially from 2025 and will actively target operational cash flow positivity this fiscal year. As part of our recent key leadership transition, we reevaluated our strategic priorities. We believe it is in the best interest of all shareholders to construct a high growth and durable business that can compound shareholder value over the long term. Although it's not gonna be a straight line, we are going to get there.

We are relatively young, and we are a dynamic business with consistent growth in design, production, and distribution of quality and innovative products, which offers us a promising future and opportunities. We believe our approach to support this achievement of our strategic priorities includes a more holistic evaluation of our guidance policies. Accordingly, we plan to provide annual financial guidance every calendar year. The primary driver for moving away from quarterly guidance updates is to increase our emphasis on allocation of resources on long-term strategy, including a focus on shareholder value. We believe a change in the frequency of providing guidance updates from a quarterly basis to an annual basis allows us to prioritize long-term vision over short-term metrics, which will allow us to focus and align our near-term priorities to meaningfully contribute to the successful execution of our strategic objectives.

With countless potential operational variables alongside emerging sales and product channel mixtures, we will hold off on specific guidance updates but reaffirm our previous broader guidance. Fiscal 2026 is about achieving cash flow positivity from operations and continued upward revenue trajectory. As I said earlier, we are executing, we're going to continue to grow, we're going to hit cash flow positivity, it is never a straight line. In closing, to our investors and our analysts, I want to close with this. Three years ago, Worksport was generating under $2 million in annual revenue. Last year, we crossed $16 million. This year, we're on the path for achieving operational cash flow positivity just with our foundational product and significant revenue uptake. This is the company we have all built together.

We have done this by manufacturing in America, building products that dealers and consumers want, and expanding our distribution with discipline. I also want to note that I recently purchased shares on the open market, reflecting my personal conviction in the company's long-term direction. Our responsibility now is to turn that conviction into measurable execution. I will purchase shares again if I have to. In Q1 of 2026, it's not a perfect quarter from a cash flow perspective. It was a quarter where we did what we said we were going to do, launch SOLIS, launch COR, unveil NEXUS, added major distribution, and completed COR certifications, expanded gross margin year-over-year, and improved loss per share, all while it was the slowest quarter of the year. Q1 tends to be the slowest quarter seasonally of the year for tonneau cover sales.

Q1 was the investment and launch readiness quarter. Q2 of 2026 and the second half are about proving conversions, turning inventory into revenue, dealer growth into orders, NEXUS demand into shipments, and margin expansion into lower cash burn. We are also building strategic vectors around federal channels, OE targeting for SOLIS and COR, and Aetherlux certification processes progress, none of which are required for making the overall business operationally cash flow positive. We expect the tonneau cover business, our foundational business, to be capable of that on its own. Everything else is accretive to that. We are not managing this business for a single quarter. We are building a durable American-made manufacturing platform with growing channel reach, expanding product breadth, and clean energy optionality. We intend to earn investor confidence quarter by quarter through results, not promises. Thank you for your continued support and interest in Worksport.

Thank you, Steve. We have Tate Sullivan here from Maxim, who has his hand up for some questions.

Thank you, Steve, and thank you for the comments on inventory, as that was one of the first things I saw. With finished goods balance of $5.3 million of the $11.6 million, is most of that NEXUS, I assume, and other tonneau covers or a relatively large amount in SOLIS and COR as well?

COR takes a chunk of it. It's in the millions for COR because we have to manufacture in batches of 1,000 at a time.

The rest is a blend AL3, HD3, AL4, and NEXUS only just started being made at the tail end of the quarter. Jen may have a bit more back of the napkin insight on that, but it's an even blend in my perspective. Am I right, Jen?

Yes. It's an even blend, but there isn't a concentration in our NEXUS. The NEXUS concentration's really in our raw materials at this point.

Okay. Understood. Does that imply first sales of SOLIS and COR in 2Q or not necessarily given the timing of the marketing on those products?

Sorry, ask that again, Tate. Does the sales represent SOLIS and COR?

Do you think you'll have first sales, first revenue from SOLIS and COR in the second quarter, or did you already have some in the first quarter?

We had some. We were building the plane while we were flying it with the SOLIS and COR. Unfortunately, the final production units of both were also at the same time concurrent with initial productions like launch. When we got the first batches of CORs, it was those very CORs that we used to give to influencers, generate media content. It takes probably in a quarter in itself to produce the media content. If you look on our webpage, Facebook, all the social medias, you are just starting to see that content get out there.

We have to do ad spend on it and invigorate the markets as well as the process to get it into distribution and dealers is difficult because there's pricing, there's agreements, there's negotiations. Like I said numerous times during the earnings call in the transcript is it's not a straight line, but at the end of the day, the dots connect one higher than the next, and we've delivered that. To answer the question, we did clip sales, COR and SOLIS, but they just weren't that meaningful. Although we, you look at the AL3, our first product, it took a year to get that to market, and that product is an existing market.

When we're forging a new market, the likes of never, which has never existed, it's to be expected it's gonna take at least this year to get that product off the ground into meaningful revenue, territory.

Okay. Last for me, one more please, you had a slide on the B2C and B2B tonneau covers, then the combined price per cover, I mean, back of the envelope, a little above $800, that's well above from the level of per tonneau cover last year from the Q information. Is that because of the hardcover mix from softcover primarily? Also the margins with B2B, those are lower than B2C, but by a meaningful amount. Is that what you said? Sorry, two questions there.

Yeah. Our costs, the average sell, the average order values has gone up by about 35%, if I'm not wrong, maybe even more. We're just selling more expensive items. Also with domestic inflation, we're 90%, we're over 90% domestically sourced material, so we don't, we don't have any very little foreign content. Domestic inflation is real. The price of aluminum has doubled in the past year. Our cost has also increased and that's eroding margin. As fast as it's eroding margin, which was a real thing last year as well, we're picking up efficiencies as well in how we make the product.

We're improving as fast as domestic inflation might be nibbling away. The good thing that the light at the end of the tunnel is aluminum's not going to stay at an all-time high. When it increases, so will our margin exponentially while we maintain discipline in manufacturing. I think that might answer your question, if it's not a giant run-on sentence. What was the second one, Tate?

You had a 35% gross margin target, not understanding doing the guidance on annual basis. I think you answered that, how you get there with even if you have more B2B sales, lower aluminum prices, that'll help you get to that 35. Is that a fair summary?

Yeah. With any luck. There, there's a few different things that we're doing. Number one is B2B is back in the napkin, lower margin. But there's also a general lower cost to service the account, both in warranty, freight, marketing, CAC costs. CAC is customer acquisition costs of Google, Meta, these types of ads. What we discount them is actually at times less than what we have to spend to sell it directly on our website. At net is very similar, and then we have the economies of scale from them reaching like Tri-State Enterprises. Let's block and tackle this question. Tri-State services Texas same day. There's absolutely no way that Worksport has the infrastructure this year to be able to service that state same day.

Now we have massive economies of scale by having relying on their infrastructure to just sell more covers to more people quicker and better. We in essence, their discount on the product is the equivalent of our CAC cost, our customer acquisition cost on direct to consumer. It almost nets out the same. Again, the upside is economies of scale, so we have overhead absorption over more units. The other thing is, as soon as we have, with any luck, a trade deal specifically on aluminum and some of this craziness that's happening in the broader geopolitical environments, you know, where aluminum starts coming back in, and that's when we're really gonna reap the benefits. We're weathering a storm right now that everybody's weathering.

The last thing I'll say is the most popular vehicle in North America is the F-150. I believe the price tag of the F-150 for the average American's gone up $20,000 in a year. For the base model, maybe if not $20,000, very close. That's because it's an all aluminum truck. Ford feels it, we're gonna feel it, and you can't paint Worksport with a different brush than what Ford Motor Company gets painted with.

Thank you, Steven.

Welcome, Tate. Thank you. Tate, also, now that we're starting to grow as a business, we're starting to see, like, it's insane to think that Q1, that's measurably the slowest quarter of the year for tonneau cover sales. Now that we're growing, we're seeing this, just a lot of the, you know, snow in most of the U.S., cold weathers, truck sales are down. We're, as we're maturing, we're learning this. It's also to note that it's gonna almost be impossible to ever have a Q1 be higher revenue than the previous Q4, with Q4 being Christmas, all the holidays, as well as Black Friday, which is by measure our biggest month in November. There's almost no way.

You know, while we're doing guidance and looking at, you know, following Worksport and to any investor and shareholder listening, it's important to note that Q4 will always be higher. Even if it's a billion-dollar Q4, we're never gonna have a $1.1 billion Q1, at least with the foundational products of tonneau covers, unless there's a massive liquidity event and a new product like the Aetherlux that might be a more winter seasonal product. Does that make sense?

Yep. Understood. Thank you.

Yeah.

All right, Steve, thanks for those replies. We did want to open the floor and give some commentary to the shareholders attending the call today that going forward Worksport will be hosting monthly town halls that will be speaking to commentary on the business, recent press releases, and updates to the day-to-day developments that the business is having. This is to boost transparency, also to show the investors and shareholders all the wonderful things that are currently developing. As part of the town hall sessions, we do open up a Q&A portion to people attending the call, as well as people that have submitted questions before the call.

In this case, we do have a host of questions that are available to us, that people have submitted over the last 10 days. Steve, I will now open the floor with some of those questions. Here we have question number one, which is around our cash position. The question is stating that how we plan to fund the company with the current cash balance we have, as well as commentary on any expected dilution.

It's a good question. You know what? I think that investors have to understand that I'm the biggest shareholder in Worksport recently having bought shares and of course, I don't want dilution. Nobody does. What all shareholders and investors want is exactly the same. We all want Worksport to be $1,000 a share, we all want Worksport to pay dividends, we all want Worksport to be highly successful, and we also don't want any more shares ever to be issued. You could see that over the past six months, we've been very modest in, at the market. At the market, the offering we do at the market is just selling from time to time stock, you know, in, at the market.

It saves us warrants, it saves us discounts to hedge funds. Hedge funds often want discounts. It saves manipulation and shorting. It saves banker fees. It saves investor relation fees, which were significant last year during our Regulation A. To speak to dilution, we don't want it, and we try to sip, not gulp, for almost half a year, since December of last year was our last offering. You know, we're doing our absolute best there. We fund our operations through an operating line. We have a significant book value. The book value of the business is close to $30 million, if I'm not being too forthright in saying that.

That's the financeable assets that we have that we're able to borrow against. You know, when borrowing money is cheaper than, you know, issuing securities at a $10 million market cap, you know, we do that. You know, we are gonna maybe raise some money this year. Last year we were very active in the markets. We raised, I think, $25 million. This year would be a fraction of that if 10% of that, you know, through the markets or through debt instruments.

The minute we're cash flow positive, we'll qualify for lines of credits, like senior lines of credits at regional banks, at KeyBank in Buffalo, and that's what I'm really hoping that, you know, we could qualify for that $10, $20, $30 million line of credit. I'm really thinking that as we land more distribution, I've said numerous times, and I hope that investors are listening, when I say that it's not a straight line, but I think that the ramp this year in revenues is gonna be as close to straight as you could get in real business, which is always pretty. It's ugly, but We're getting there.

Thanks, Steve. Appreciate that. Now we have a question for the CFO regarding a breakdown of G&A, if we could get some more insights there for shareholders.

Sure. In terms of our breakdown of G&A, I'll talk about G&A in its totality and then what gets absorbed up into our margin, if you will. In our G&A pool, about 66% of our G&A costs is with salaries, wages, and benefits, inclusive of equity compensation. About 11% of that is depreciation and amortization. About 10% relates to facility support, and then the remainder relates primarily to professional fees. Professional fees does include non-cash expense related to equity compensation. Of that 66%, it should be noted that about 20% of that actually gets absorbed into our margin.

Fantastic. Thanks, for that insight, Jen. We have a question for Steve regarding the company's view on how Aetherlux should be valued or at least looked at at this current time.

I think that if Aetherlux, if Terravis Energy was private, I feel that it would have significant valuation. I'm gonna disclaim that a disclaimer that I'm not making any representations or warranties by saying this, but I believe that Terravis Energy and just the technology with the Aetherlux is, should be a nine-figure valuation. The significance of interest that we've had from businesses that are global, the likes of which we've never seen before. At its current stage, I feel that it's a nine-figure valuation because I feel that it presents nine and 10-figure revenue opportunities very, very quickly. We're gonna get there.

We've shown that we know how to get a product to market and selling, so this is just the same. I think that the valuation, although is basically nothing right now. We're trading at a third of our book value. I think that Terravis Energy is a significant value, $50 million-$100 million at minimum if it was private.

Thank you, Steve. We have a question here regarding sales and marketing spend. Could you comment on the jump of Q1's sales and marketing expense and what we think is gonna be more likely through this time of the year?

Yeah, absolutely. Because of the increase in cost that we've had as a result of inflation, domestic aluminum prices doubling, we've had to reduce the ability to discount. Before you guys saw, we were doing, AL3s for $799, and now AL3s are almost $1,000. We can't discount our product as much. To that extent, we've had to spend more on marketing to be able to get higher average order value. We think that the marketing, we got it under control now. It took all of this quarter, sorry, Q1 to get it under control with the reduction of discounts. We think that the spend is gonna be probably about 20%-30% of the sales.

It's gonna keep going up. We're gonna spend more because we wanna sell more, but the idea is it's all profitable.

Great. We had a question here about Tri-State. There was a recent distribution partnership with Tri-State. Could you comment on how big that really is, quote-unquote, and if it is likely to lead to other partnerships with other distributors?

Yeah. Tri-State's massive. Tri-State services Texas same day. We can't do that. There's no way we can compete with their service level. They're a big business. They have 1 million sq ft of warehouse space. They sell tens of millions of dollars of tonneau covers a year, and the NEXUS is the best tonneau cover in the market. I can guarantee that. Tri-State could be a seven-figure, maybe even eight-figure account for Worksport. We've heard of distributors buying tens of millions of dollars a month from our competitors, so I don't think that Worksport would not be able to at least aspire towards that as time goes. The Tri-State, there's three distributors in America. Tri-State is one of the more regional. They're not national.

They don't service all of the U.S. There's Meyer Distributing and Keystone Automotive Operations that's owned by LKQ Corporation. Typically, they compete with each other. Whatever Tri-State Enterprises does, Meyer Distributing does, and Keystone Automotive Operations does. The fact that we landed one means that we are very confident that we're gonna land the other two, and the other two are larger in revenue and in size, and they service all of North America, inclusive of Canada, and maybe even Latin America. The answer is whatever Tri-State Enterprises does, typically Keystone Automotive Operations and Meyer Distributing does as well. Keystone Automotive Operations and Meyer Distributing are bigger in terms of top-line revenue. The opportunity becomes exponentially larger while Tri-State Enterprises in itself is still very meaningful for top-line revenue opportunities.

Thank you. We have another question regarding the certification of the COR that has recently passed through in Q1 of 2026. Does that mean that we can expect revenues to start coming in from that product line, or what does that mean in terms of its commercialization?

Yeah. Sorry, we don't need to have certification. There's Chinese units on Amazon right now that aren't certified. We don't sell on Amazon. Amazon is, I think, where products go to die. As we talk to OEMs, governments, and fleets, it's a good qualifier. ISO certification opens the door to commercial B2B. Meanwhile, on direct to consumer B2C, we've got the marketing assets live now. We're just rolling them out now, we're gonna start the marketing engine. The AL3 took a year to get off the ground. We think that within the same year timeframe, so let's say Q1 of this year to the end of Q1 of next year, we think that the core is gonna be significant.

One thing I'll say is EcoFlow, which is Chinese-owned, Chinese-operated. Faron, you got the statistic. I think it was about $1 billion in sales a few years ago.

reported to sell over $1 billion in 2023.

In 2023, EcoFlow, which is a Chinese-owned and operated business with an inferior product, not modular, at least like ours, sold $1 billion three years ago. We know that even if we got 10% of that, over time, that's still $100 million in top-line revenue. The product's done. We've turned off the R&D engine for that product, there's no more spend. It's just a matter of getting it out there and getting it selling. The rest of this year is extremely bright looking for the core.

Thanks, Steve. We have an interesting question here regarding the revenue guidance from 2025, where we initially stated a guidance of $20 million on the north side. The year ended up closing towards $16 million, which was still an improvement by almost 100% year-over-year. The shareholder has a question regarding missing that guidance and why that kind of happened and what that means for the future revenue guidances that we might speak to or issue.

Yeah, good question. You know, revenue guidance, we're a $10 million market cap company. I was saying internally today that we have no business issuing guidance. We're just doing it to be as transparent as possible. We don't have to issue guidance, we're doing it to be able to at least let shareholders participate in the business and see what our aspirations and dreams are. We're just a brand new business. It's not like after 10 or 20 years of operations you could really kind of go based on real metrics. Last year was the first year for us to be in business with two product lines. This year is the first year for us to be in business with seven product lines. We're really just doing educated guesses.

We could spend more and sell more, but then the gross margin goes down. To be able to maintain profitability, it's always a balancing act. We wanna be able to sell more, but yeah, we don't. We have to spend more on Google, or we have to spend more on sales reps and agents and commissions. The profit's very low, and then that looks even worse. We had to call it at the end of the year to say, towards the second half of the year saying, "Let's focus on profit," to be able to finance the operations versus the growth. The growth is gonna be there, it's just a matter of getting there profitably, and that's a very difficult balancing act.

We're gonna get to a middle market business, but we wanna get there profitably, which may take us a little longer, but it's better than getting there fast, but, not profitable.

Thank you, Steve. We have another question regarding evidence that NEXUS could be a meaningful revenue driver. Could you speak about the NEXUS product and where you think it falls in terms of the revenue mix for 2026?

A good friend of mine, Julian Maimin, was the founder of BAK Industries. He's a friend that I do keep in touch with. He exited the business. He had BAK Industries at $80 million in revenues over a decade ago with the BAKFlip G2, which is measurably inferior to the NEXUS. BAK Industries is rumored to be over $200 million in revenues today, and their product, I believe, are measurably inferior. If you see some of the videos I did a year ago online, they have paper-thin aluminum panels, they have rubber seals. You have to drill holes in the bed, you have to walk around and do prop rods up, and they're just not as good of a product. I'm not trying to talk poorly about the company.

I look up to their parent company. I do know that a BAK Industries product, the rumor was about $200 million in sales. Whether that was a high of a few years ago or it's something that they're still doing today, I don't really know because they're private still. That was the rumors from credible sources. The answer is, if BAK Industries is selling an inferior product, albeit longer-standing product, at about, over $100 million, I think that Worksport can be able to get to $50 million or $100 million in top line revenues within an improved, a significantly better product that you don't have to walk around the truck, it doesn't dent as easily, and doesn't require drilling and doesn't fall apart after a year.

Fantastic. Thanks for that insight, Steve. We do have one more question here regarding the sales and marketing's percentage, and I'm gonna direct this to Jen. The percentage of sales and marketing that is variable, B2C, could you comment on how that was in Q4, Q1, and now heading into Q2 2026?

Sure, I'd be happy to do so. In terms of sales and marketing, the variability really rests with a lot of our IR efforts that we've done to promote our brand, combined with a concentration not only in performance marketing but also overall brand awareness. We did complete a multi-month campaign with a vendor to evaluate our overall brand awareness and found that the performance marketing that we have actually been doing so intensely over the past year or so has really contributed towards broader brand awareness in our primary server in the B2C space being those good old truck owners.

We really took that information towards the end of Q1 2026 and said, let's just keep honing in on the awareness that we are doing in terms of our product awareness and refining our strategies there so that we can get closer to a more normal rate, if you will, to achieve growth certainly within the B2C space, but not having to do as much in the way of promotions as we have in the past 12 months.

I mean, speaking specifically to the product margins in B2C, could you comment on how you saw a change of marketing costs as described inside the transcript? We're hoping to ask a little bit more insight on how that played out and what we expect to happen.

Could you repeat the question? I apologize. You were a little bit muffled.

Yeah, you mumbled quite strong.

Sorry about that. Is this a little bit more clear?

Somewhat, yeah.

Okay. The question is related to the product cost of marketing. If you could give some more insight on how the product marketing cost has changed in the last few months and where it is expected to go.

How product marketing costs have changed in the last few months and where it's expected to go.

Well, we've done a lot of work in terms of making sure that we understand the level of effort that's necessary in order to contribute towards a successful campaign. To that end, we've employed some outside consultants to help us assess our existing campaigns, augment those campaigns, and produce more credible reporting for which we are able to use that information in order to build better algorithms, if you will, and achieve our objectives. We very much have been able to use a lot of what we've learned in the AL3, AL4 initiatives to essentially zoom in on our effort in the AL4 space, which is a really great revenue driver for us.

Also use that information as a springboard for the COR and SOLIS, because the COR and SOLIS, honestly, from a marketing standpoint, direct-to-consumer marketing standpoint, is a different approach because it achieves the ability to capture market on a broader scale as opposed to just a niche market. Hopefully that addresses your question.

Yeah.

Fantastic

it does. I'll just chime in real quick, Ron, that marketing is very volatile. For example, one of our competitors has 2 million site visitors a month. That's not very organic, that's paid visitors. Let's say it's $1 per visitor. They're spending $2 million a month in ads, we're competing directly with them and other competitors as well. The space is just highly competitive. I think that the U.S. economy is challenged, the marketing costs are more significant this year because businesses need to continue to find growth and get sales. It's just more competitive and marketing more right now, it's expensive.

To that extent, marketing costs are very volatile and it takes a level of basically geniuses to navigate this on an active almost 24/7 basis.

Thanks, Steve. The last question here is if you had any final remarks for shareholders that are currently listening to this call and have read the Q, what would you want them to know as the key takeaway from this call?

Key takeaway is that growth is ugly, and it's not in a straight line. That in the up-listing era of 2021 when we listed to NASDAQ from OTC, we up-listed with companies, my comrades, that none of which exist, which is a testament to how difficult it is, to grow a business. That as easy as it is to judge us for our losses, our victories are significant and meaningful in this space. While we had COVID, hyperinflation, multiple wars, and a lot of economic challenges.

The point is that we remain steadfast in execution, and we remain steadfast in delivering on our business from $1 million to $6 million. Sorry, from $1 million to $8 million to $16 million, and this year with the $30-plus million in line are in sight. I think the key takeaways are that we're executing, but it's not a straight line, and it's not easy. If it was easy, you know, those that judge easily would be doing it themselves. To that extent, we're focused on this exclusively and working our rear ends off. We're gonna get there. This year is the first year we have seven products with Aetherlux coming down the pipeline as well.

The key takeaways are, as much as we didn't sell as much this quarter than Q4, which is unrealistic and crazy to think that a business would sell more in the middle of winter than Christmas and Black Friday, we also spent less and we came out basically even. If we had stole $5 million, we would have made basically the same amount of profit from having to spend so much in marketing. To that extent, we're being prudent, and we're showing stable, disciplined growth, and we have the best in front of us. Meanwhile, we're focused on delivering shareholder value, which is selfish because I'm a big shareholder in Worksport. I want what everybody on this call wants, which is continued success.

That's in short what it is. It's not a straight line and it's not pretty, but we're grinding.

Thank you very much, Steve. Thank you, Jen, and thank you for everyone attending the call. This does mark the end of the conversation. We do encourage you to send any additional questions or remaining questions to us at [email protected].

We look forward to hosting monthly town halls going forward.

I'll close, Ron, just to say, we're gonna in order to do a following, to increase our following and our appreciation of our hard work and be able to listen to shareholders, we're gonna do monthly town halls. What we're gonna do now is every month we're gonna do major press releases that have to go out will go out. We'll do press releases at the end of the month for smaller town hall-related matters and updates. like a larger press release that outlines smaller important elements that are not as material. Anything material comes out right away, of course, by requirement.

Immediately adjacent to that press release, we're going to schedule, I think about a week later, a town hall where I'm going to be live on video, just answering questions live. Shareholders will be able to go live. They'll ask questions, not typed. We'll welcome them, you know, to voice their questions. They can share video and we're going to have an open and frank conversation, win, lose, or draw on a monthly basis where we'll give updates on sales, revenues, answer questions. You want to know about G&A. I see a question here about salaries and payroll. Jen, actually, you should answer that. The salaries and payroll, if you're still here, on G&A.

Is there a round number you could throw out there on what that looks like?

Yes, I can address that from two different perspectives. From the perspective of what makes up our payroll, meaning the components of payroll, our base wages and overtime is a little bit north of 95%. Our benefits is, I'm sorry, I gave you the wrong number. I apologize. You know what? I'll shift over just briefly, in terms of giving you information as to, who's in that payroll number. As of Q1 2026, about 51% of our salaries and wages was actually from our production wing. Most of that gets absorbed back into our inventory, and about 28% of that is coming from our admin function, and the balance is a smattering between our sales function, as well as our warehousing function and facilities function. Hopefully that addresses your thoughts there.

In terms of our wages and salaries, as I said about I apologise, about 70% of our salaries and wages is base wages and overtime. 17% of that is related to benefits, and then the balance is related to that compensation expense, which is non-cash in nature.

Great. Thanks, Jen.

Thank you.

I see Nachi, asking me questions about, you know, Terravis and with Terravis. You can ask me on. I think we talk on LinkedIn, so you can message me. Obviously, we'll always explore divestiture, sales, mergers, acquisitions, these types of things. I think that we wanna continue to bring value there so that it's accretive to the Worksport shareholder base. Worksport owns about 70% of Terravis and the other 30%'s held by the key executives. Another thing I'll note with respect to Terravis is it's headed by my father, Lorenzo Rossi, who's the primary shareholder of Terravis Energy and Options.

Also Lorenzo to continue to support the business, has reduced his salary. He still works full-time at Terravis Energy. He has no salary, as a CEO of that business. He just has basic compensation as a director that serves on the board since 2014, which is $5,000. To that extent, he's working for Terravis and leading this charge and bringing the brilliance and genius for $60,000 a year. You know, I think that that shows that we're all very committed. You know me with my base salary and compensation, I invested a good chunk of that into buying Worksport stock.

To that extent, about a third of it. To that extent, you know, we're all doing everything we can and working our rear ends off to get there. Like I said, it's not a straight line. You know, we see an $0.85 stock or a $10 million market cap, but every quarter we continue to deliver better book value. Now that's closer to $30 million in asset value for Worksport with all of these great upside opportunities. It's gonna go Eventually, it's going now, but eventually the valuation's gonna be better and we're very, very positive for this year ahead specifically.

Good morning, and thank you for joining Worksport Ltd.'s fiscal year 2025 and Q4 2025 earnings call. I am Steven F. Rossi, Chief Executive Officer of Worksport Ltd. With me is our Chief Financial Officer, Michael D. Johnston. We will be reviewing the financial results for the quarterly period ending December 31, 2025, and our full fiscal 2025. These results were filed today at approximately 4:01 PM in our Form 10-K and can be downloaded from the link provided in the chat. On today's call, alongside our financial performance, we will review our operating execution across the flagship hard tonneau cover offerings, progress on the commercial launch of our SOLIS and CORE offerings, our capital position, and the key strategic priorities we are focused on as we move into 2026. Before we begin, I want to frame this call the right way. 2025 was a year of real top-line growth and significant margin improvement. Full-year net sales nearly doubled to $16,100,000. Gross margins improved 2,800 basis points to 28%, from 11% in 2024. Both are significant, as they were achieved through a combination of expanding our product offerings and increasing our presence in both direct-to-consumer and business-to-business sales channels. Our fiscal 2025 strategy is to expand our presence in multiple sales channels, introduce new products, and increase our market capture, resulting in a net operating loss and increased use of our cash otherwise generated from our growing operations. Our use of cash to support operations did not grow at the same rate as our net sales. To address our need for both operating and investing activities during fiscal 2025, we supplemented our cash flows with external capital. This strategy complements our intentions to capture more meaningful market share from our very large competitors. That is the right context for evaluating our results. That stated, we still have work ahead of us. We are evolving with additional product offerings and recently learned experience of navigating entry and growth in different sales channels. We have all the pieces in place to make the years ahead transformative, with a keen focus on lean operations and generating positive operating cash flows. Our time and investments through the end of fiscal 2025 have set the right foundation for fiscal 2026 and beyond. We successfully transformed the product capitalization to market delivery. We increased our brand and sales channel distribution presence with both direct-to-consumer and business-to-business customers. Most importantly, the lessons we learned along the way now create a clear pathway forward. Our prepared remarks will follow a slide presentation. After our prepared remarks, we will open the line for questions. At the end of today's call, our prepared remarks and presentation deck will be available for download, as always, at investors.worksport.com. And so with that, let's begin. Safe harbor statements. During this call, we will make forward-looking statements, including statements regarding our financial outlook for the full year 2026, our expectations regarding financial and business trends, impact from the macroeconomic environment, our market positions, opportunities, go-to-market and growth strategies, and business aspirations, our product initiatives, and the expected benefit of such initiatives. These statements are only predictions that are based on current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Actual results or events may differ materially. Therefore, you should not rely on any of these forward-looking statements. These forward-looking statements are subject to risks and other factors that could affect our performance and financial results, which we discuss in detail in our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other SEC filings. The forward-looking statements made in the earnings call are made only as of today's date. Worksport Ltd. assumes no obligation to update these statements. We will then address our risk profile, liquidity, and capital strategy to provide clear context on our financial profile. From there, we will walk through a detailed financial review, including full-year and sequential performance, margin expansion, net sales quality, and operating leverage. We will then cover our operational execution, including manufacturing scale-up, distribution expansion, and key product milestones across our tonneau cover product offerings. Next, we will review the commercial launch and positioning of SOLIS and CORE, followed by progress at our subsidiary, TerraVis Energy, and its AetherLux platform. We will also address multi-supply chain dynamics, tariff impacts, and our intellectual property strategy. Finally, we will conclude with our fiscal 2026 financials, including key milestones, our path to cash flow positivity, and the strategic priorities driving the next phase of growth. Let me start with four key takeaways. First, fiscal 2025 was a year of strong net sales expansion. Net sales increased 89.8% year over year to $16,100,000, following fiscal 2024 net sales of $8,500,000. The scale-up of our business over the last two years is clear. Last year's jump from $8,000,000 to $16,000,000 demonstrates a clear demand for our product offerings. Recent and forthcoming product launches provide fresh offerings to market participants. We are still growing and expanding our brand presence in the market across multiple sales channels. Second, our gross margin profile improved materially. Full-year gross margins moved to 28% in fiscal 2025 from 11% in fiscal 2024. On a derived basis, Q4 2025 gross margin was about 30% compared with roughly 11% in Q4 2024. Our margin expansion consistently grew as we enhanced our market presence in 2025. Third, we turned several long-running development programs into commercial activity. Our HD3 cover transitioned into production and began contributing to net sales in 2025. Our SOLIS and CORE product offerings launched commercially in December 2025. These are important developments, but investors should also understand that these launches came late in the year and did not significantly contribute to our fiscal 2025 financial results. Further, these efforts impacted our needs for operating cash flow without complementary liquidity conversion. We expect liquidity conversions from these efforts to otherwise enhance our financial production in 2026. Fourth, Worksport Ltd. has evolved from an emerging brand into a recognized player in the $4,000,000,000 tonneau cover market. Our product offering differentiation and focus on quality have allowed us to increase our market presence in the last two fiscal years. Our dealer network alone expanded sixfold in fiscal 2025, now encompassing over 550 locations across the United States and Canada. But with over 17,000 dealers nationwide, we have only just begun. We are targeting aggressive expansion in fiscal 2026, more on that later. Our brand identity matured. Our brand maturity is supported by our ISO 9001 certification, which we received in April 2025. This certification is not just a badge; it is the prerequisite for Tier 1 OEM relationships. We are actively pursuing those. As we enter fiscal 2026, Worksport Ltd. stands as the only company currently offering a fully integrated solar and energy storage ecosystem for the light-duty truck market. I will now address our risk profile directly. Our fiscal 2025 Form 10-K includes an explanatory paragraph along with management's assessment of the company's ability to continue as a going concern. This is a standard reporting requirement given our history of operating loss and as a growth-stage entity. Importantly, our growth has been outpacing our cost structure, reflecting improving operating leverage as we scale. With the foundational investments of 2025 now largely in place, our focus in 2026 shifts towards disciplined execution, monetization, and efficient capital deployment. Despite continued increases to one of our key raw components, aluminum, our margins continue to expand, and we expect our operating cash burn to normalize as production overhead is further absorbed by growing sales volumes in fiscal 2026. We are targeting and managing initial signals of operating cash flow positivity in 2026, more on that later. We remain transparent regarding our use of the at-the-market offering program, otherwise known as an ATM. In 2025, we raised approximately $500,000 in net proceeds via the ATM. In November 2025, we amended our agreement to permit sales of up to an additional $4,000,000 to ensure tactical flexibility. We recognize the impact of dilution on our shareholders. We all feel it the same. Our strategy is to use the ATM only as a secondary tool. We evaluate and select the capital tools that are most advantageous to operating while being mindful of our shareholder responsibilities. We have historically prioritized the use of certain capital events, such as the high-impact warrant inducement completed in December 2025, which brought in $6,400,000 at a fixed price. Every dollar of capital raised in fiscal 2025 has been tied directly to current and future operational return on investments, specifically doubling our overall production capacity and strategically controlled R&D investments. With that, I will hand it over to Mike.

Thanks, Steve. Let's take a deeper look at the net sales growth. Net sales growth is driven by the rapid scale of our made-in-America hard tonneau covers. In fiscal 2025, our hard tonneau covers segment generated $15,700,000 in net sales, while our soft cover segment contributed net sales of $500,000. The shift toward our hardcover product offerings is intentional. It reinforces our commitment to quality production while supporting higher market price points and better margin profiles. On a sequential basis, Q4 2025 net sales were $4,700,000 compared to $5,000,000 in Q3 2025. In 2025, management responded to continued pricing pressure of our raw material components by implementing a product price increase for both direct-to-consumer and business-to-business customers. The 5.4% sequential decline is attributed to the product price increase and directly impacted our promotional marketing efforts, which in turn both increased our marketing spend and decreased our sales volume. The impact is further amplified by the large contribution of the direct-to-consumer sales channel to net sales. Despite the price increase, our sales channels are stable and are on track to continue growth in fiscal 2026, more on this later. In 2025, our operational KPIs remained strong. We maintained a gross margin of 30.1% in Q4, which is a significant improvement over the 26.4% we recorded earlier in 2025. This sequential stability proves that our manufacturing processes are mature and can handle product mix shifts without significant margin erosion. Gross margin expansion is the most critical metric for our fiscal 2026 outlook. Our fiscal 2025 gross margin was 28%. Our fiscal 2024 gross margin was 10.7%. The expansion to nearly 30% in the latter half of fiscal 2025 was driven by two factors: higher capacity utilization at our New York factory and becoming more efficient with our production efforts. We plan to continue our focus on margin expansion and have set a stable target of 35% gross margin in fiscal 2026. We will continue to employ lean manufacturing principles while adding to our product portfolio and maximizing our production capabilities. Passing it back to Steve to talk about net sales mix and unit economics.

Thanks, Mike. The quality of net sales-generating products also improved in fiscal 2025. Online retailer net sales increased 142% to $11,900,000 from $5,000,000 in 2024. Online retailers represented 74% of total net sales in 2025 compared with just 58% in 2024. Distributor and jobber net sales increased to $4,200,000 from $400,000 the year before. Most notably, there were no private label sales in fiscal 2025, whereas private label represented $3,100,000, or 37% of net sales, in fiscal 2024. Every product that left our factory last year had a Worksport Ltd. label on it. We are proud of that. That strategic shift matters because our decision to focus on proprietary production efforts complemented our resulting margin expansion. We are no longer responding to the same sales channel mix demand that characterized fiscal 2024. The net sales mix in fiscal 2025 can be attributed to demand for our own branded products, especially through e-commerce and growing indirect distribution relationships. A mix within both channels complements our strategy to grow our brand without significant channel concentration or specific customers. We reduce customer concentration risk this way. Geographically, net sales remain overwhelmingly U.S.-based. U.S. net sales were $16,000,000, up 91% from fiscal 2024. That concentration is not surprising given our current sales channel footprint and market strategy. However, it does indicate meaningful room to broaden distribution over time, especially to international markets. Operator, am I still coming through clearly?

Yes, you are. You can continue at geographically net sales.

My apologies, everyone. Geographically, net sales remain overwhelmingly U.S.-based. U.S. net sales were $16,000,000, up 91% from fiscal 2024. That concentration is not surprising given our current sales channel footprint and market strategy. However, it does indicate meaningful room to broaden distribution over time, especially to international markets. Okay. Chime in if I do not. I apologize for the unstable internet connection at times. Let's discuss the hard metrics of our production. Our primary production facility is located in West Seneca, New York, and is currently capable of producing over 125 units within a single eight-hour shift. In August 2025, we announced our strongest four-week production run since domestic operations began. Our unit economics have improved dramatically. In early 2024, our overhead absorption was a headwind due to low volumes. Today, we approach phase one output levels, so fixed costs are being allocated across a much larger base. To reach company-wide cash flow breakeven, we calculate that we need to sustain a quarterly revenue level between $9,000,000 and $11,000,000 at about 35% gross margin. This quarterly revenue target is highly influenced by the underlying sales mix between direct-to-consumer and indirect distribution but is also influenced by our product mix. At our current growth rate, we are aggressively closing that gap and anticipate achieving net sales of $9,000,000 a quarter within the balance of this year. Mike will comment on our OpEx and cash position.

Strategic focus as we enter fiscal 2026 includes diligent monitoring of our cash operating expenses. In fiscal 2025, our general and administrative expenses were $14,800,000. The $3,100,000, or 26%, increase was related to increased employment as we expanded our operations and further developed our product offerings. Excluding non-cash items, our growth in operational expenses is trending below our revenue growth. We have successfully insourced several business processes that were previously handled by high-cost third-party consultants, reducing our professional fees as a percentage of net sales. This is the definition of operating leverage. Our infrastructure is strong, and now every additional dollar of margin contribution has an even greater potential to impact our bottom line. Our net cash used in operating activities for fiscal 2025 is $17,200,000 compared to $10,100,000 in 2024. This increase reflects scaling our inventory resources as we began to offer additional products to the market in Q4 2025, while also supporting our continued growth in multiple sales channels for our legacy tonneau cover offerings. At 12/31/2025, we had approximately $9,500,000 of inventory, 56% of which were raw materials. We are well positioned as we begin fiscal 2026 with diversified product offerings for multiple sales channels and expect higher liquidity to reinvest in our production efforts: $5,950,000 in cash and $3,400,000 available on our revolving line of credit as of 12/31/2025, a total liquidity position of over $9,300,000. Given our projected margin expansion and the expected revenue contribution from SOLIS and CORE in 2026, we believe this provides sufficient runway to reach initial operational cash flow positivity within 2026. Our expectation is to monitor our results and use our existing liquidity resources in a manner that both supports operational goals and decreases the need to seek financing through ongoing capital. I will now turn the call back to Steven to discuss our operational execution and product commercialization.

Thanks, Michael. The financial results Michael just detailed are the output; the input is our operational execution on the factory floor and throughout our distribution network. Fiscal 2025 was about proving that Worksport Ltd. can manufacture in the United States with rigorous quality control. Quality is top of mind for us as we continue to achieve manufacturing milestones. Our initial ISO 9001 certification evidences our commitment to a quality product and demonstrates our ability to scale reliably even with our abbreviated active product production history. Our business-to-business sales channel is still in its infancy. During fiscal 2025, we rapidly expanded our footprint. In the third quarter alone, we grew our national dealer network by 42%. By mid-2025, our partner dealer network exceeded 550 locations across the United States, a nearly sixfold increase from the start of the year. This includes our strategic partnership with Patriot Automotive Technologies, which will support our efforts to accelerate our national penetration. Our tonneau cover business is systematically becoming a moat. By manufacturing high-quality hardcovers in New York, enforcing strict minimum advertised price policies to protect our dealers' margin, and supporting them with aggressive marketing, we are becoming a vendor of choice in the business-to-business sales chain. In November 2025, we announced a major expansion at our R&D facility in Ozarks, Missouri. This facility serves two vital roles. First, it is the primary assembly, testing, and distribution hub for our SOLIS solar-integrated covers and CORE portable energy products. Second, it effectively doubles our R&D footprint. By separating our high-volume tonneau cover production in New York from our complex clean tech assembly in Missouri, we have de-risked the commercial launch of SOLIS and CORE. This geographical diversification also improves our logistics network, allowing us faster shipping to the critical Midwest and Southern markets. Our tonneau cover portfolio has never been stronger. By mid-2025, the premium AL4 achieved an 80% rollout, covering 20 of the 25 targeted vehicle models. In late October, we began production of the HD3 heavy-duty tonneau cover, which entered commercial sales in November. The HD3 is strategically priced for the business-to-business dealer network, protecting dealer margins while strengthening relationships within the jobber community. With a tiered lineup from entry-level SC3 soft-folding tonneau covers to premium AL4 and the professional HD3, we are now positioned to capture demand across the full $4,000,000,000 tonneau cover market. Importantly, with a now mature product lineup, ISO-certified manufacturing, strengthened branding, and the investments made throughout 2025, we believe Worksport Ltd. is entering a new phase. We are operationally ready to scale. As we move into 2026, our focus shifts towards monetization and expansion. Prioritizing the largest revenue opportunities through national distribution, deeper penetration of our dealer network, and initial expansion into international markets such as Europe and Australia. In parallel, we will seek to advance OEM-level relationships with leading automotive manufacturers including Ford, General Motors, and Ram, along with upcoming debutantes like Slate EV. A bonus note: in 2026, we plan to launch a next-generation cover that we believe will help shape the future of Worksport Ltd.'s hardcover product lineup, featuring patented capabilities not currently offered by competitors. Early feedback from select partners and prospective customers has been highly encouraging, with many labeling this new cover as a game changer. We expect this product to see strong adoption within our sales channels and contribute meaningfully to net sales as we scale. Additional details, including product specifications and preorder campaign outcomes, are expected in early 2026. In late Q4 2025, we marked the commercial launch of our SOLIS and CORE product offerings. This is an important milestone for us as it validates our successful development journey of a long-running R&D program. The product positioning is clear: SOLIS is a solar-integrated folding tonneau cover aimed at power generation on-vehicle. CORE is a portable energy storage system for mobile, off-grid, backup, and vocational use, and is designed for both function as a standalone or to integrate with SOLIS. We initially disclosed pricing direction during our Q3 2025 prepared remarks: the CORE starter kit at $949 and the SOLIS beginning at $1,999 and moving to $2,499 depending on fitment. We also described an initial rollout plan for 1,000 CORE units and 900 additional battery packs and a limited SOLIS release, representing about $2,500,000 of near-term initial revenue opportunity. The key 2026 question is not whether these products launched. It is how fast they scale with acceptable margins and working capital discipline. Let's touch on TerraVis Energy. TerraVis Energy continues to deliver breakthrough innovation. In February 2025, we announced that AetherLux can operate in temperatures as low as negative 57 degrees without energy-intensive defrost cycles, the only heat pump in the entire world that has been tested to achieve this feat. Importantly, AetherLux is not limited to extreme climates. Our proprietary ZeroFrost technology has been tested to eliminate frost cycling altogether, a common source of energy loss, system strain, and inconsistent performance in everyday winter conditions, including major markets like Toronto here in Canada or New York. This enables more consistent efficiency, improved comfort, and reduced mechanical wear across a broad range of environments. AetherLux Pro has undergone due diligence and some site visits from multibillion-dollar corporations and U.S. government entities, including the Department of Energy's NREL Alaska laboratory. While tonneau covers drive the current revenue, TerraVis Energy's intellectual property represents a compelling opportunity tied to the global shift towards clean energy products, including high-efficiency HVAC. In late Q1 2026, we selected an established manufacturing partner. The product is expected to achieve certification in 2026 and is currently being evaluated by multiple government entities. Management believes this intellectual property represents a compelling addition to our overall value proposition. Before closing, I want to address the macroeconomic environment, specifically tariffs and supply chain risk, which remain top of mind for many investors. Our soft tonneau covers, along with a small percentage of raw material used for our hard folding tonneau covers, are sourced from China. While we experienced overall increased input costs during fiscal 2025 as a result of tariffs on imported goods, these cost increases did not impact our soft tonneau covers as no additional components were sourced during that time period. Our hardcovers are made in the USA. In fiscal 2025, domestic aluminum prices increased by more than 35% and are up over 50% since the start of fiscal 2024, driven by supply constraints and primarily tariff-related pricing pressures. In response, we implemented a pricing adjustment across our tonneau cover portfolio. While this led to a temporary decline in sales volume in Q4 2025, demand has started to stabilize across each of our sales channels. While also offering higher-margin products, we are regaining momentum heading into 2026, into Q2 2026. Our portable energy products are currently manufactured using foreign lithium-ion supply chains. The current tariff environment has required adjustments to our price and go-to-market strategy. That said, we believe our unique SOLIS plus CORE system will be well received once proper commercialization of the product is achieved across all sales channels. We are also actively evaluating opportunities to transition towards a more domestic supply chain for the CORE over time. We continue to manage these risks proactively and strategically. As of 12/31/2025, we hold 24 issued utility patents and 50 issued design patents and registrations globally, with 95 utility and design applications currently pending. In addition, we have 43 trademark registrations and 15 pending trademark applications in various jurisdictions worldwide. We take a clinical approach to intellectual property enforcement and ensuring that our first-mover status in the solar tonneau space is defended against both domestic and international imitators. We are really excited about our recently submitted patent application for the AetherLux ZeroFrost system. Our intellectual property portfolio continues to serve as our defensible competitive advantage. Now to Mike.

To reiterate the scalability of our product offerings, in fiscal 2025, our net sales grew by nearly 90%. During that same period, our core manufacturing and distribution matured and expanded to complement our customer demand across all sales channels. In fiscal 2026, we do not anticipate the need for major step-ups in each channel. We have the floor space, we have the machinery, and we have the ISO certification. Focus is now exclusively on increasing throughput and optimizing our sales funnel. This is the classic S-curve of growth. The heavy lifting of building the platform is done, and we are now entering the phase of accelerated market capture.

Looking ahead to 2026, we have set clear, measurable milestones. One, initial SOLIS and CORE ramp-up and margin contribution. Two, full rollout of the HD3, AL4, and AL3 lines to all 550-plus dealer locations. Three, launch of the game-changer hard folding tonneau cover, expected to be a best seller. For the second half of the year, we target aggressive dealer network expansion to 1,500 locations through new distribution partnerships expected later this year, operational cash flow positivity, B2B and OEM partnership expansions for the SOLIS and CORE by getting our system to additional customers via synergistic partnerships with other businesses.

Our path to net cash flow positivity is driven by three pillars. First is net sales volume. Reaching a $9,000,000 net sales quarterly threshold that meaningfully produces contributions in excess of operational needs depends on a combination of sales volume mix and product mix. It is also impacted by our production efficiency. We plan to monitor these components regularly and anticipate reaching this target outcome in fiscal 2026. Second is margin mix. Increasing overall production provides margin lift as we use our resources more efficiently to support our sales growth. We also have diversified our product offerings, some of which provide more meaningful margin lift. Both product mix and sales channel mix will directly impact our ability to maximize margin efficiencies. Third is capital efficiency. We plan to concentrate our efforts on performance marketing efforts that reinforce our brand rather than solely focusing on brand impression to drive sales volumes. We also plan to monitor our need to incur additional costs to increase our visibility and impression given our size and the stage of our operations. We enter fiscal 2026 with a stronger cash position and double the availability on our line of credit facility when compared with the start of fiscal 2025, providing us the stability to execute this plan.

We are entering fiscal 2026 with a focused plan to continue our accelerated growth strategy, but with a focus on leveraging our previous investments in brand awareness as well as commercialization of additional product offerings. We believe this approach will continue to generate margin lift and provide additional operating cash flows. For 2026, we expect revenue of $35,000,000 to $42,000,000 with gross margins of approximately 35%. Some highlights. Our guidance includes a full year’s impact of three product offerings launched in late fiscal 2025. Our guidance includes the introduction of our game-changer product offering in early 2026. Our guidance reflects our commitment to driving efficiencies within operations as our company and our product offerings mature in the market. Our guidance assumes continued growth in our business-to-business sales channel, a market which grew during 2025 to be 26% of our sales mix. Some important notes. We remain focused on metrics such as EBITDA and positive operating cash flow within a strategy that includes responsible management of our liquidity. We plan to update investors as we continue to evaluate how the combination of sales mix and product mix impact key performance indicators. Our guidance excludes contributions from AetherLux, which is expected to reach commercial readiness in 2026. Our guidance also does not assume upside from a potentially faster-than-expected ramp-up of SOLIS and CORE. Our guidance excludes potential impacts that may arise from the current geopolitical environment. For example, our guidance assumes that aluminum prices stay stable at the current prices and do not decrease back to a more normal baseline. Why Worksport Ltd.? Why now? To our investors, I encourage you to consider the transformation we have achieved. Just two years ago, Worksport Ltd. was a pre-revenue development-stage company. Today, we have demonstrated our ability to scale and grow, growing net sales from approximately $1,500,000 in 2023 to $8,500,000 in 2024 to $16,100,000 in 2025. Over that same period, gross margins improved from 11% to 28%, exceeding 30% in late 2025. At the same time, we have significantly strengthened the foundation of our operations. We expanded our sales channel positioning, reduced our indebtedness, and brought multiple products to market including HD3, SOLIS, and CORE. We also continue to invest our efforts to develop our AetherLux product, which may serve as a long-term value driver. Our efforts with our intellectual property provide a comfortable competitive advantage. With these milestones achieved, we can now focus on execution, scaling throughput, and driving towards sustained profitability. Thank you. This marks the end of our presentation. Turning the call back to the Operator for Q&A.

Worksport Ltd. is now opening for Q&A. We welcome live questions from analysts attending the call.

Investors attending the call can write their questions within the Q&A section of the Zoom call or email us at [email protected]. We have Scott Buck here. Scott, you can go ahead with your question. Hi. Good afternoon, everyone. Thanks for the time.

Steven, how should we think about the difference between the high end and the low end of the 2026 revenue guide? What needs to go right to end up closer to that high end?

We have considered a lot of different things, bottom-up and top-down. Top-down faces the market and its demand. Fuel prices and purses get tighter, right? We are hoping that the economy stays strong. We are hoping that base fuels and energy stay affordable and do not pinch the pocket. We are hoping that the consumer stays active in the market. Tonneau covers are a must-have, but if people are more budget conscious, premium tonneau covers and CORE-type products might be something that is not purchased as actively. We might feel economic constraints. From the bottom-up, we are very cognizant. Domestic inflation as a result of global tariffs has been significant. A 50% increase on American aluminum because of foreign tariffs is definitely not what I think the intention was with foreign tariffs. If it goes to 55%, 60%, 70%, it erodes margin and leads to price increases that ultimately the average consumer pays, and that $1,000 product turns into an $1,100 product, which might have some dropouts in terms of conversions, if that makes sense. We are hoping that everything stays stable on the bottom-up cost side and supply chain, and that everything stays strong on the consumer side and the economy continues to show signs of strength.

Great. That is very helpful. And then I wanted to ask about the heat pump business. How do you envision the monetization there? Are you going to manufacture and market and sell, or potentially license that technology, or could that even be a potential divestiture down the road?

We have considered and had meaningful conversations about almost all options, from divestitures to licensing. When we released SOLIS, the quality of customer that reached out to us via LinkedIn and emails was huge—various OEMs—and we were so excited. I can say that it shadows the interest in terms of what came from AetherLux. The global billion- and trillion-dollar entities that reached out to Worksport Ltd. and TerraVis Energy—being interested in helping bring the product to market or M&A and these types of things—continues to be significant. We are going to explore all options, but what I think is important for you as an analyst and any investor shareholders to know is we know how to bring something from nothing to market. If nothing were to happen or we chose the path of bringing product to market and you were to say build it, stock it, and sell it, we know how to do that, and we have shown that from our ramp in sales. A product that is something for everybody, like the heat pump, has a much larger—it dwarfs the tonneau cover market. I think it is—

On sales and marketing expense, a nice step up in 2025. Should we continue to see that move higher in 2026, or have you reached kind of a steady state there on the marketing budget?

Steady state. We are going to tighten up. We front-loaded expenses for marketing and branding, and we are going to try to tighten that up for this year.

Okay. Perfect. Well, congrats on all the progress, everyone. Looking forward to 2026. That is all I have.

Thank you, Scott. Steve, we have a question from the audience, Will L. His question is if there are any new relationships with truck lines. I am assuming he means OEM trucks, like a partnership and plan.

OEM discussions are always active. We know all the major automakers, and we think that there is a right time for that. We are mature now, and that is what ISO is for. We do have relationships. As they become material, we will announce them, and I think OEM is definitely in the cards for us this year.

Fantastic.

There is another question about the SOLIS and CORE and if we can comment on the current sales as well as sales forecast.

We have 1,000 CORE products and almost 1,000 additional batteries because it is an unlimited energy system. Sales initially have been pretty strong, but you have to think that when we received the product from contract manufacturing is when we received assets to be able to make marketing. We did not have prototypes. If you are going to make one, you are going to make 1,000, if that makes sense. All the marketing assets have just been released. To that extent, interest and sales were okay for January, February, and March, but we only just released all the right marketing assets to get it to dealers, to get it online, to get it on our website—the videos and these types of things. We have always expected that there would be a 90- to 120-day delay to get the product really cooking. We will have more news in the second half of this year, or at least in Q2 and beyond.

Awesome, Steve. We are going to take one more question here. There are a lot of other questions that are left unanswered. I encourage investors to email me at [email protected]. But we will take this question regarding the strength of intellectual property regarding AetherLux and if we anticipate any competitors in the shadow with the same technology.

So far, we do freedom-to-operate reviews. We do patent checks. We do disclosure checks. We check the market. We are fairly thorough. We have on-staff legal expertise in patents. We think that we have a very strong IP asset in the making with the AetherLux patent. We think it is very defensible. We protect our intellectual property with vigor, and we do not think that anything like this exists that we have been able to find or hear about. There has been nothing close to it, and no other government entity or other business, including other manufacturers that we have spoken to—global manufacturers—none of them have said that they have anything close to this type of technology. We remain very enthusiastic about the opportunity for AetherLux.

Fantastic. Thank you again, Steve and Mike, for the presentation. I have put my email in the chat for any remaining questions, which is [email protected]. If you would like to meet with management one-to-one, feel free to email us; we are happy to get that scheduled. Thank you for being an investor, and have a great day.

Thank you, everyone.

Sports quarter three 2025 earnings call. I am Steven Rossi, chief executive officer and founder of Worksport Ltd. With me today is our chief financial officer, Michael Johnston. Today, we will walk through our financial performance, operating progress, liquidity position, and how these results align with our strategy to build a high-margin, scalable platform in truck accessories and clean tech-enabled power solutions. We will be reviewing the financial results for the quarter ended 09/30/2025, which we filed earlier today in our Form 10-Q and can be accessed on our Investors Relation website at investors.worksport.com/#reports. Once again, investors.worksport.com/#reports. At the end of today's call, both our prepared remarks and the accompanying presentation deck will be available for download as well. After these remarks, we will open the line for questions from attending analysts. So on that, let's begin. First, safe harbor statements. We will make forward-looking statements, including statements regarding our financial outlook for the full year 2025 and 2026, our expectations regarding financial and business trends, impacts from the macroeconomic environment, our market position, opportunities, go-to-market initiatives, growth strategy, and business aspirations, our product initiatives, and the expected benefits of such initiatives. These statements are only predictions that are based on our current belief expectations, and assumptions based on forward look because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that may be difficult to predict and many of which are outside of our control. Actual results or events may differ materially. Therefore, you should not rely on any of these forward-looking statements. These forward-looking statements are subject to risk and other factors that could affect our performance and financial results, which we discuss in detail in our filings with the SEC including included in our annual report on our Form 10-K and quarterly reports on Form 10-Q, and other SEC filings. The forward-looking statements made in this earnings call are made only as of today's date. Worksport assumes no obligation to update any forward-looking statements we may make on today's webinar. So here's today's agenda. On today's call, we will cover Q3 2025 key performance outcomes, production scaling and operational execution, tariff environment and cost management, Solis and Core commercial launch roadmap, R&D next steps, including AetherLux, cash and capital strategy, 2025 to 2026 outlook and path to cash flow positivity, and key takeaways as well as some Q&A. With that, let's move into our numbers. Mike will walk us through the Q3 2025 financial highlights. Thanks, Steve.

Q3 was another solid step forward in Worksport's growth journey, the third consecutive quarter of growth. Net sales reached $5 million representing a 61% growth year over year and 22% sequential growth from Q2's net sales of $4.1 million. Gross margin continued to expand. 31.3% this quarter compared to 7.9% in Q3 of last year, and 26.4% in 2025. Demonstrating the impact of operational efficiencies and a stronger product mix. Our net loss of $4.9 million reflects an ongoing expansion of product offerings and commitment to investing in scaling our manufacturing, ahead of commercialization milestones. While revenues and margins are getting stronger, we continue to invest in growth in brand and corporate awareness. We believe it will position us to reflect operational cash flow positivity and profitability in 2026. Ended the quarter with $3.8 million in cash and an additional $3.3 million available on our line of credit. Total working capital was $6.3 million. Importantly, total indebtedness reduced to $2.9 million down from $5.3 million at year-end 2024. Meaningful strengthening of our financial stability. Overall, Q3 demonstrates that our revenue growth and margin expansion are structural with some future-facing expenditures. In Q4, our expenditure profile is projected to begin transitioning from investment mode toward long-term profitability. Worksport's growth is being led by rapid scale-up of our US-made tonneau cover production. Q3 net sales reached $5 million up from $3.1 million a year ago. Year-to-date sales are $11.4 million, more than double the $5.6 million for the nine months ended 09/30/2024. Our strength this quarter came from strong continued growth from the AL4 hardcover, which launched in 2025, expanded relationships with several national distributors and major retail auto chains, continued growth in our dealer, jobber, and e-commerce channels. Our performance this fiscal year represents a recurring and diversified revenue base not a single channel surge. With new product launches and revenue streams entering the mix in the months ahead, we believe Worksport is on a path toward profitability in 2026. More on the upcoming product lines later. Gross margin is one of the clearest proof points of our strategy. Q3 gross profit was $1.6 million a 31.3% margin, up sharply from 7.9% in 2024 and 26.4% in Q2 this year. Year-to-date gross margin is 26.7% compared to 10.5% in 2024. Key drivers of this include higher production throughput and fixed cost absorption in our US production facility, a higher volume higher value product mix maturing and emerging sales channels, and greater operational efficiency as processes mature. We are now operating solidly in the 30% plus margin range, setting the stage for future operating leverage. We expect margins to approach 35% by year-end, continued improvement targeted for 2026. We remain committed to achieving near-term operational cash flow positivity. In Q3, operating expenses totaled $6.4 million compared with $4.2 million in 2024, and $4.7 million in 2025. The increase mainly reflects growth investments and marketing costs tied to the AL4 product launch and our Regulation A offering. We completed our offering in October 2025. Operationally, we supported 60% revenue growth from 2024 to 2025 while increasing G&A expenses only 20%. This shows improved scalability and cost discipline. And this path includes the following factors. Breakdown of the operating expenses for 2025. R&D spend was $300,000, lower year over year as we move past core tonneau cover development. G&A is $3 million. We're supporting which supported higher volumes, compliance, and facilities. Sales and marketing was $2.4 million. The driver of our gross spending. And this is focused on channel activation, brand marketing, and investor awareness. Professional fees were $700,000. And included advisory compliance and stock-based compensation items. Our operating loss was $4.8 million compared with $3.9 million in Q3 2024. And $3.6 million in Q2 2025. This investment in Q3 will partly carry into Q4 before reaching the tail end of our investment phase as we position the company for stronger leverage going forward. For the first nine months of 2025, our cash position reflects disciplined investment and growth financing activities. Our net cash used in operations was $11.2 million compared to $8 million in the same period last year. Our Q3 operating cash burn was approximately $4.3 million slightly higher than Q2 as we completed major production and marketing initiatives. We also incurred one-time expenses related to the Reg A marketing efforts. Our investing cash outflow is $485,000, It was represented mainly spending on machinery tooling and some intangible assets. Our financing inflows $7.1 million. This is from warrant exercises, the issuance of series C preferred stock and warrants connection with the Reg A units offering, net of repayments on revolving credit facility, the issuance of common stock. With respect to long-term debt, we continue to improve our leverage profile while managing our obligations. As of 09/30/2025, our total indebtedness, current and long-term equal $2.9 million. Which is down from $4.8 million on 12/31/2024. Revolving credit facility had a balance of $1.6 million and our other term debt. Had a balance of $1.3 million. Availability on revolving credit facility. We've got $3.3 million unused, which provides additional liquidity and flexibility to support our strategic priorities. Our path to profitability is becoming clearer each quarter supported by stronger unit economics, and upcoming revenue catalysts. Our gross margin is now consistently above 30%, up from under 10 last year, showing true structural improvement in profitability generated from production activities. Our operating leverage, while year-to-date revenue is up more than 60%, G&A expenses have risen only about 20%. Signaling scalability across our product. Offerings. On a revenue scale, applying our current margins to an annualized sales run rate approaching $20 million, positions us meaningfully closer to breakeven. Importantly, much of R&D investment over the last few years is now at the finish line. With the HD3 Tonneau cover line launching in Q4, and the Solis and Core system set for commercial orders in late 2025. Are not cost centers anymore. They are next revenue engines. As these products enter production and sales channels, we expect sustained gross margins in a 35% plus range. Continued expense efficiency and a clear trajectory towards cash flow positivity in 2026. We are building this profitability bridge step by step, product by product. We anticipate Worksport's need for cash provided by financing activities to decrease in 2026 given our projected path to cash flow positivity. Now back to Steven for key insights into business operations. Thanks, Mike.

In Q3, we built a scalable ISO 9001 certified manufacturer base. Q3's 31.3% gross margin is the financial proof of that operational capability. It is expected to only improve from here. We produced 2,499 tonneau covers by hand in a four-week stretch from early to late July 2025, more than double our March 25 total monthly output. In Q4, we expect to increase production by another 50% compared to Q3. An increase in production will benefit our margins and selling the demand we have meticulously invested in creating the market over the last year. We achieved without proportional headcount increase, validating process efficiency. And Q3 margins confirm better utilization of our US production facility, improved fixed cost absorption, continued focus on quality and throughput sufficient to support national distribution and dealers. Let's talk a bit about our Tonneau Cover business, our profit engine. After years of strategic investment, our hard folding tonneau cover division is now Worksport's near-term economic engine. They're made in The USA with rising brand recognition and multi-distribution. We have proven ability to increase margins with scale, 35% plus gross margins at current volumes with margins projected to grow even further. And as production scales, the tonneau cover division can absorb a significant share of fixed cost overhead. Reduce reliance on external capital, and generate cash to fund clean tech initiatives. The tonneau cover product offering provides the financial backbone on which Core and Solis and Aetherlux are being built, giving Worksport a strong and self-funded foundation for growth. Now let's talk a little bit about tariffs and how we're managing them. Continue to operate in a dynamic tariff trade environment. We all know this. While tariffs remain a headwind they are manageable. And in the tonneau cover market, increasingly service a competitive tailwind for Worksport. First, US manufacturing advantage. The majority of tonneau cover production value is US-based, reducing exposure, compared to our import-heavy competitors. Cost containment. Historical 9.5 to 10% material cost pressure has been offset through efficiency gains, scale-driven overhead absorption, and pricing discipline. This is through domestic pricing inflation. Our competitive position. Tariffs often impact imported competing products more severely. While our domestic footprint brand marketing, and product quality is a clear differentiator, especially if trade frictions continue. Core and Solis considerations. While some components are globally sourced for Core and Solis, tariff exposures modeled into our pricing and margin forecast. With flexibility to adjust and mix pricing as needed further. Further to this, the 11/10/2025 tariff suspension provides near-term relief and validates our proactive planning. The thing everyone's been waiting for, talk a little bit about Solis and Core. From investment to revenue pipeline. As of October 2020 10/21/2025, the Worksport HD3 tonneau cover is now in production with initial sales expected to begin to B2B customers in November 2025, followed by sales to online customers later this year. Sorry. I wanted to talk we're gonna talk about Solis and Core. Let's talk about HD3 first. Which we just did for a second. The HD3 is a heavy-duty tonneau cover designed for commercial and fleet applications. Building on the AL3, it features upgraded materials, seals, and latching for maximum durability. While available through all channels, its primary focus is driving growth in our wholesale and B2B channels. Adding a new revenue stream, and completing our US-made tonneau cover lineup. So we're very, very excited about the HD3 and what it's gonna do for our B2B business channels. Innovation pipeline, our Solis and Core, After years of engineering, tooling, certifications, and partnership investments, Solis and Core are now set to be released for orders later this month. What has pure operating and capital expense is expected to become a visible high-margin revenue stream beginning in late Q4 2025 and scaling through 2026 and beyond. Let's highlight some of our most recent announcements. First, the official for the solar tonneau covered core portable power energy system is now 11/28/2025. Customers will be able to place initial orders with expected delivery in late December or early January 2026. The core starter kit is priced at $949 which includes the core inverter hub, as well as one core battery. The solar system starting price is at $1,999 and will go up as high as $2,499 depending on the model size or bed size of your truck. And our initial rollout plan for the core is 1,000 core units plus 900 additional battery packs with a limited Solis release representing a roughly $2.5 million in near-term revenue opportunity with significant scaling plan through 2026. In terms of strategic positioning, Solis is a margin accretive product leveraging our tonneau cover expertise to enter into the premium solar tonneau cover market. Channel. CORE is a modular portable energy system designed as a recurring revenue platform, driving stable cash flow positive sales across work. Overlanding emergency and industrial markets. Together, these two platforms transform Worksport. From a single product channel manufacturer in a somewhat niche market into a multi-market clean tech company with recurring scalable revenue potential. Let's talk a little bit about R&D and our next steps. In 2026, we aim to transition R&D from heavy foundational build to commercial optimization and platform leverage. What this means is we're gonna switch from all the operational expenses relating to heavy R&D and developing new products to perfecting those new products and being able to increase margin and efficiencies. For Solis and Core, we're planning to finalize launch execution and early customer feedback loop. Optimize bill of material and logistics for margin enhancement post-launch, explore rapid scale cost savings, and expand integrations and form factors based on usage data, expanding the core platform for multiple product lines. For Tonneau Covers, we're gonna grow the HT3 product and launch an HT4 equivalent cover labeled internally as the Worksport B2. We expect this B2 cover to be extremely well received in all markets. More details will come on this will come in later in 2026. Incremental product improvements to maintain quality, compatibility, and margin strength. Aetherlux, gonna advance pilots and partnerships, including evaluations with institutions to validate performance and use cases. Finalize and select manufacturing partners, and focus spend on projects with clear commercialization paths and potential for 2026 impacts and beyond. A little bit about operating leverage and the roadmap there. Bringing it together, our operational model priorities for 2025 and 2026 are as follows. First, we're gonna obtain and sustain 35% gross margins. We're gonna get this we're gonna get this by maintaining manufacturing efficiency and pricing discipline. Gonna slow our operational expense OpEx growth as a percentage of net sales, especially in sales and marketing, and we're gonna treat Q3's elevated spending as a peak investment. Not the new baseline. We're gonna improve working capital turns by monetizing existing inventory and further align production scale with growing demand. And we're gonna layer new products into our existing cost-stabilized offerings. Tonneau, Solis, Core, and we're gonna share the infrastructure that we built and we're spending on. And amplify our leverage. Our priority supports our transition from capital-funded mindset to operations-funded growth. A little bit about risk management and mitigation. We are clear-eyed about key risks. Ongoing net loss and going concern language in 10-Q reflect reliance on external capital and execution risks. Tariff and supply chain volatility, particularly for globally sourced components, and launch risks that we see for Core and Solis, timing, adoption, and margin realization. Equity and warrant overhang impacting shareholder perception This is how we're gonna mitigate We're gonna tighten our spend to initiatives with measurable ROI. We're gonna maintain and selectively use diversified capital sources. And we're gonna stage clean tech production and inventory to complement demand signals. Communicate transparently about milestones. And capital deployment. Given the continued growth and healthy margins in our Tonneau Cover business, we are very confident in our ability to manage tariff-related cost inflations while advancing towards near-term cash flow positivity and maintaining our 2020 profitability target. I'm gonna pass it back to Mike with our updated fiscal year 2025 outlook and guidance.

Thanks, Steve. So as far as our 2025 revenue framework concerned, in 2025, we then ARR of $20.4 million, substantively from $8.5 million in 2024. 2025 is expected to benefit from continued tonneau growth and channel expansion, initial Solis and Core orders, commencing 11/28/2025 with early but measured contribution. We project year-end revenues of $17 to $21 million and that depends on when the revenue recognition for the Core and Solis happens. 2026 revenue growth drivers we believe the base case for our U. Tonneau cover net sales will be $27 to $35 million next year. Further, we believe Solis and Core product lines can lead to an additional net sales in the tens of millions. We will update our shareholders on guidance after this product is rolled out later this year. In 2026, we'll have the full year impact of The US-made tonneau platform cover sale of 35% to 40% target gross margins. And first full year commercialization of the Core portable power system and Solis solar tonneau covers. Selective program on AetherLux is as a complimentary Cleantech platform to align with the defined technical and commercial milestones. And our focused OpEx discipline. OpEx growth below revenue growth to unlock operating leverage. And now our path to cash flow positivity. Our target is at operating cash flow becomes positive during Q1 2026. First half. Sorry. The 2026 driven by the stable 35% gross margins, Increasing sales will lead to higher utilization of existing manufacturing and distribution infrastructure with no major step up in fixed costs. Our tighter control of G&A, sales and marketing, professional fees with the spend tied to measurable ROI. And our launch of HD3 Solis and Core product lines. Our new margin sources. And now back to Steve with our concluding remarks.

Thanks, Mike.

Well,

we built a high-margin US manufacturing platform working with rapid revenue growth. We've established national Core and Atherlux on top of that foundation. Our focus now is precise. Disciplined execution towards sustainable cash flow and profitability. We're seeing here on the charts Worksport's revenue growth, Worksport's margin growth, and Worksport's new products set to improve 2026 profitability.

Thanks, everyone. This concludes our prepared remarks. Operator, please open the line for questions.

Tate, I see you have your hand up and Scott, yeah, thanks for joining us today both. You guys are always great to join in, and I love your questions. So I'm gonna start with you, Tate. And, yeah, go ahead.

Thank you. Thanks, Steven. Can you talk about the tonneau market for tonneau covers in general in The United States? Are you seeing total demand growth in the market versus are you taking share to start, please?

Yeah. So we're seeing you know, we're still seeing or still getting bits of information from the market We're seeing that we're taking we're I don't the market's still very healthy. We're seeing a slight shift into smaller trucks, different SKUs, so we're pivoting, and that's what's really good. As a domestic manufacturer because we could literally make whatever selling the day that we need to sell it, for instance. So in terms of the market, usually, there's difficult times, things start to sell less However, in our market, when we have geopolitical issues and other small issues that are happening or other issues happening within our economy, what we see is we just see a shift of what types of trucks are sold, not the amount of them. So we're still seeing the tonneau cover market in that $3 billion plus range, maybe a bit more. We're just seeing a shift to different applications with that that we make. And in fact, the different applications that are being sold more of are actually higher profit for us. So it's actually quite a benefit. So everything's still healthy as it was. Two or three years ago, and I feel that the market's primed for a strong '26 in terms of growth within the economy in The US specifically. And I think that we're gonna be able to capitalize on

Thank you. And then I saw on your 10-Q a mention about working with on the OEM sales channel, but related to the Core and Solis too, can you leverage your existing distribution, your sales channels for the tonneau covers for Solis and Core, or will it be different type of distribution, maybe starting more online or can you comment on that, Tanya? Yeah. Yeah.

No. Great question. We're gonna start online. We're gonna start direct to consumer. That way, we get that feedback loop. With no you know, no broken telephone, no other way to say it. So we started with our beta testers. Those are individuals that we work with, and now we're gonna open it up to instead of select individuals, the broad consumer market. And then we have a significant amount of interest on the dealer side. We just presented. We just had a booth. At the SEMA show in Las Vegas. Some of it's available on our socials like Facebook and Instagram where Worksport posts. We used Twitter and LinkedIn more for investor stuff. But anyone that goes follow us on Instagram and Facebook, at Worksport Ltd, and you'll see some videos. We had these booths powered by our new energy products, and there was a significant amount of interest So I think that we could leverage We're just gonna be strategic in when we do so. So that it it's accretive to the target.

Okay. Thank you very much.

Thanks, Tate. Scott?

Good morning. Good morning, guys. Thanks for taking my questions.

Steven, I was hoping that you might be able to give us a little bit of insight into your visibility on demand for Solis and Core. The language around the opportunity in '26 is pretty robust. So any kind of color you can give us there, I think, would be very helpful.

So I think that the demand for the Solis is gonna be bigger than what I had otherwise believed. So you know, me as the leader of the company, I'll always have to be a blend of optimism and pessimism. So with that in mind, you know, I think that a new product that the likes of which has never existed is always a difficult path. And I believe that that's going to be true. I think that it's gonna be difficult and challenging to market and to attract customers for the Solis. But I also believe that what we've been able to launch in terms of an offering price at $1,900 is almost a no-brainer. And I think that the average consumer, when they look at something as a you know, two, three, or 4% of the cost of the truck expense while offering such measurable amounts of benefit. I think that it becomes a no-brainer. So I think that the Solis is poised to possibly become a trending item something that becomes a trend, almost like a fashion accessory for your truck. Look what my otherwise analog accessory can do. It could power our battery generator, the core, or any battery generator. And when it's only you know, a little bit more than other tonneau covers, other competing tonneau covers are $1,500 for an extra $400 $499, you get a Solis. So I think the demand as we market it and we message what it does and how meaningful that is for individuals, I think that that's gonna be very, very popular for us. The Core is nebulous because the market is so big. What we've been able to do with the Core is tap in from you know, you gotta think, Scott, that the tonneau cover market is a subset of a subset of a subset. It's an individual that has a license that buys a truck that needs a tonneau cover. And then that wants ours. So it's a very, very niche market. And it's still we're seeing massive growth there. But the Core is literally for anybody, anywhere. You know, any demographic on a global scale. So I think that when you look at that, it becomes nebulous because now it's a much broader market to market to, so it could become expensive there. But I think that as we look at explaining how innovative our Core is and integrating the Core into other products that we plan on speaking about more next year. I think that it we know that one of our competitors, which was a foreign company, foreign produced, foreign owned company, did about a billion dollars. So we think that even a percentage of that market without the massive CAGR we're seeing, I think that the Core market could be highly accretive to the balance sheet. And in fact, I think that our clean energy division as of the business could become bigger than the tonneau cover business within a period of time.

Great. I appreciate all that added color, Steve. That was helpful. Then my second question, just on margins. Clearly, you guys have made a ton of progress there. I'm curious what is just volume driven in that improvement versus actual improvements in the manufacturing and production process.

That's a good question. So we have the best well, Worksport is around people, and everybody working at Worksport is beneficial. Our engineering team is a shout out. And our management team our leadership team in general has a lot to do with being able to find cost efficiencies without the phrase we use in the market is thinning the product out. And thinning means, you know, using a thinner aluminum or cheaper plastic or cheaper corrugated. So we haven't we've in fact increased the robustness of our product, but we've been able to find efficiencies through keen purchasing leveraging demand, and volumes. But the biggest, I would say, 60 to 70% of the cost saving is just overhead absorption. We started making our tonneau covers, our hours per unit how many man hours it took to make one unit, ranged between four and six. Hours per unit. Yesterday or on an average day today, we're kissing below two. And when you look at the cost of domestic labor, in the $20-$30 an hour range, you know, that's significant. And we think that we can get that labor component down even more. And then but what we're fighting against, Scott, is domestic inflation. We're significantly US our paint it comes from the 48 states, our aluminum, everything that in our most of what our product is made out of is sourced domestically. And even though the tariffs are for foreign products, we've been seeing a lot of domestic inflation. And once that eases, which it will eventually, whether it's a week, a month, a year, a decade from now, we're gonna see even better bill of material cost savings.

Great. And are we kind of capped out at around 35% on the current product mix, Or when you know, a year from now, are we talking about pushing 40% into '27?

It's gonna be there there's gonna be two different two different things that so first off, we may reduce discounts as the brand becomes more popular. So, you know, right now, we have a Black Friday sale, you know, and that sale is just us reducing our margin in essence. That's what all sales are, to sell more. So we're finding ways of being able to attract customers or there's marketing costs are gonna decrease while our branding increases, our brand recognition increases. Operational efficiencies, And then as we become a more popular brand, well in the marketplace, we could you know, we'll be more selective on sale price because I think that the value will be driven by the product's quality and our name brand to begin with. So all of those in aggregate, think that we could see higher than and in times But it's gonna take a lot of hard work.

Great. Well, I appreciate the added color, guys, and congratulations on all the progress.

Thank you, Scott.

Steve, we have three more questions from the audience

in the Q&A bubble. The first question is, if someone was to order the Solis and Core, on the November 28 release date, when would they reasonably expect to receive the product?

Great question. So the Solis is made to order. It's made domestically here within our facilities in The US. It'll be, yeah, mostly made to order. We may stock some So it's all handmade white glove service. And we're thinking that it'll be one or two weeks for us to make the product test the product, package it, and then the concierge service respect to having it delivered to you. So it's not we're not just gonna throw it on a USPS truck and wave it away. It's a concierge white glove experience with the Solis. You have your own dedicated team for support and an install and these types of things even though it's very easy. So the Solis should be a couple of weeks depending on our availability for the photovoltaic panels. And that supply chain there. The Core, our first batch of 1,000 batch of Core units is expected to arrive in December. The reason why we're offering them for sale in late November is just because we expect significant demand, so we want to make sure that we have everyone's name in the hat that wants to be a part of it. And the Core is interesting again because you can buy multiple batteries. It's the only of its kind that offers a fully modular system. So the Solis recap should be a two-week lead time. Handmade. And the Core should be shipping sometime in late December mid to late December depending on the receipt of the products through our contract manufacturer.

Thanks, Steve. And then we have another question about sales to the international Are we looking at international markets such as EU or Middle East?

We had recently at the SEMA show in Vegas, the biggest automotive show in North America. We had an unprecedented interest in sales from Latin America. Which we didn't expect. We knew that the market was strong. We didn't know it was that strong. So it looks like we're gonna continue to focus our growth geocentric. What that means is closer to home than further. I think that we're gonna start looking at the Latin American, like Puerto Rican, and Central and South American markets. First, that should be relatively not easy, but it should be quick. Because we know everyone we need to know there. Set up distribution, and then we're gonna look at European Union and The Middle East for mostly the Core products. We feel that portable energy systems and small home power systems are gonna be very, very strong there. And also, we've been looking at over the past years the Australian market, which is big for both all of the product lines we sell. Inclusive of unit of the heat pump. Thank you.

Another question on the heat pump. Specifically. When do we expect it to go into production?

So I want to underline the amount of excitement that we all have about the AetherLux because it's so revolutionary, and it's revolutionary within such a large and growing market. I mean, there's really, like, a trident of amazing things that are happening here. It's revolutionary. The market is existingly large, and it's also growing massively for heat pumps. So we're very excited about that. So we have production intent or pre-production intent prototypes working. We're building additional prototypes for additional testing. So that's what November and December looks like. And then we're working with contract manufacturers to start looking at manufacturing the product. I'm broad in my wording because obviously, we can't disclose nonpublic information. But our intention is to begin manufacturing the product as quickly as possible once we've tooled it. Tested it, and certified it. And we, the company, want exactly what the shareholder wants, which is that date to be as close to today as possible. So the answer to the question is as fast as possible. You know, we want the same things as every shareholder and investor does. But there's the UL certification alone could be three to six months. Tooling and supply chain could be significant time drags, but we're much smarter today than we were a year ago, having done this now, executed on similar initiatives like the Core. So we're gonna keep it as tight as possible.

Thanks, Steve. And I think it's important to mention that we'll continue to deliver transparent updates to investors as we get better alignment on the timeline and the progression on certification. So stay tuned for that. We have one other question regarding the four battery system. How much extra miles it would enable a truck be charged. The truck is out of the electric truck is out of energy. I can take that question, Steve, and I think the answer to that question is just mathematical calculation. So each battery is about one kilowatt hour of energy. So if you're And you can have easily about four batteries in your truck system. let's say, electric truck is 50 kilowatts, that would provide four out of 50. Almost an 11% range boost. Could be 30 miles, 40 miles, depending. On the efficiency of your truck. So the answer is four kilowatt hours.

Yeah. We also want to be clear to state that the Solis itself is not presently configured to recharge or directly integrate into an electric truck. So the Solis will charge battery systems, and the battery systems can be used for level one charging of the trucks. Which is relatively slow, but it'll get you enough power to get out of a difficult situation where you might be out of energy off the side of the road, for instance. We have not yet integrated the Solis directly with an EV manufacturer, although that is a cog in the wheel for us.

Thank you, Steve. There are no other questions in the Q&A box. Any other investor that does want to ask questions about our queue or future progress, please do email us or call us at our line. We thank you very much for attending this call.

Thank you, everyone.