Q4 2025 Worksport Ltd Earnings Call

March 26, 2026

Steven Rossi: Earnings call. I'm Steven Rossi, Chief Executive Officer of Worksport. With me is our Chief Financial Officer, Michael Johnston. We will be reviewing the financial results for the quarterly period ending December 31, 2025, and our full fiscal 2025. These results filed today at 4:01 PM or thereabouts 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'll review our operating execution across the flagship hard tonneau cover offerings, progress on the commercial launch of our SOLIS and COR offerings, our capital position, the key strategic priorities we're focused on as we move into 2026. Before we begin, I wanted to frame this call the right way. Twenty twenty-five was a year of real top-line growth and significant margin improvement.

Steven Rossi: Full year net sales nearly doubled to $16.1 million, and gross margins improved 2,800 basis points from 11% in 2024. Both are significant milestones as we achieve and 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 strategies to expand our presence in multiple sales channels, introduce new products, and increase our market capture result 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 needs for both operating and investing activities during fiscal 2025, we supplemented our cash flows with external capital.

um and we're 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 2020 5 strategies to expand our presence in multiple sales channels. Introduce new products and increase our Market captured result in a net operating loss and increase use of our cash, otherwise generated from our growing operations.

Steven Rossi: This strategy complements our intentions to capture a 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're evolving with additional product offerings and recent 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 both with direct-to-consumer and business-to-business customers. Most importantly, the lessons we learned along the way now create a clear pathway forward. Our recent remarks will follow a slide presentation.

Compliments. 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're evolving with additional product offerings and recent learnings.

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.

Steven Rossi: After our prepared remarks, we'll 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 www.worksport.com. 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 the financial and business trends, impact from the macroeconomic environments, our market positions, opportunities, go-to-market initiatives, 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.

Our time and investments through the end of fiscal '25 have set the right foundation for fiscal '26 and beyond. We successfully transformed the product capitalization to market delivery. We increased our brand and sales channel distribution presence, both with direct-to-consumer business and business-to-business customers. Most importantly, the lessons we learned along the way are now creating a clear pathway forward. Our recent 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 www.

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 and our expectations regarding the fin—

Financial and business Trends impacting, the macroeconomic environments, our Market positions opportunities, go to market initiatives, growth, strategies and business aspirations. Our product initiatives, in 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 in

Steven Rossi: 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-Q, and other SEC filings. The forward-looking statements made in the earnings call are made only as of today's date. Worksport assumes no obligation. Across multiple product lines. We will then address our risk profile, liquidity position, and capital strategy to provide clear context on our financial profile. From there, we'll 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.

Steven Rossi: 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-Q, and other SEC filings. The forward-looking statements made in the earnings call are made only as of today's date. Worksport assumes no obligation... across multiple product lines. We will then address our risk profile, liquidity position, and capital strategy to provide clear context on our financial profile. From there, we'll 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.

Risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Actual results are 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 discussed in details in our filings, with the SEC, including our annual report on form, 10K, and quarterly reports on form 10 cubed and other SEC filings.

The forward-looking statements made in the earnings call are made only as of today's date works for assumes. No obligation to

Across multiple product lines, we will then address our risk profile, liquidity position, and capital strategy to provide clear context on our financial profile. From there, we'll walk through a detailed financial review, including full-year and sequential performance, margin expansion, net sales quality, and operating leverage. We will then cover

Steven Rossi: Next, we will review the commercial launch and positioning of SOLIS and COR, followed by progress at our subsidiary, TerraVesta Energy, and its AetherLux platform. We will also address 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 $16.1 million, following fiscal 2024 net sales of $8.5 million. The scale of our business over the last two years is clear.

Our operational execution including manufacturing. Scale up distribution expansion and key product Milestones across our tunnel cover product offerings. Next we will review the commercial launch and positioning of soulless and core followed by progress. That our subsidiary Tara Beast energy and its ather Luxe platform. We will also address multiple uh supply chain Dynamics, Tarif, tariff impacts and our intellectual property strategy. Finally we will conclude with our fiscal 26 2026 financials including

Key milestones are a path to cash flow positivity, and the strategies prioritize the strategic priorities driving the next phase of growth.

Steven Rossi: Last year's jump from $8 million to $16 million demonstrates a clear demand for our product offering. Recent and forthcoming product launches provide fresh offerings to market participants. We're still growing and expanding our brand presence in the markets across multiple sales channels. Second, our gross margin profile improved materially. First 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.

Let me start with 4 key. Takeaways, first fiscal 2025 was a year of Strong. Net sales expansion, net sales increased 89.8% year-over-year to 16.1 million following fiscal 24, net sales of 8.5 million, the scale of our business. Over the last 2 years is clear. Last year's jumped from 8 million to 16 million demonstrates a clear demand for our product offering the recent and forthcoming product launches, provide fresh offerings to make to Market, participants, we're still growing and expanding our brand presence in the markets across multiple sales channels. Second our gross margin profile. Improved materially first year gross. Margins moved to 20 moved to 28% in fiscal. 25 from 11 percentile 2024 on a derived basis, fourth quarter, 2025 gross margin was about 30% compared with rough.

The 11% in the fourth quarter of the year before 2024, our margin expansion. Consistently grew, as we enhanced our Market presentation, in 2020, our Market presence in 2025.

Steven Rossi: Our HD3 cover transitioned into production and began contributing to net sales in late Q4 of 2025. Our SOLIS and COR 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 do 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 has evolved from an emerging brand into a recognized player in the $4 billion 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.

Third, we turned several long-running development programs into commercial activity. Our HD3-covered transition into production began contributing to net sales in late fourth quarter of 2025.

Steven Rossi: Our dealer network alone expanded 6-fold in fiscal 2025, now encompassing over 550 locations across the United States and Canada. With over 17,000 dealers nationwide, we've only just begun. We're targeting aggressive expansion in fiscal 2026. More on that later. Our brand maturity is supported by our ISO 9001 certification, which we received in April 2025. This certification is not just a badge, it's the prerequisite for tier one OEM relationships, and we are actively pursuing those. As we enter fiscal 2026, Worksport 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.

Commercially in December of 2025. These are important developments, but investors should also understand that these launches came late in the year and do 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 project. Uh, uh, production in 2026 forth works for it. Has evolved from an emerging brand into a recognized player in the $4 billion tunnel 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 six-fold,

In fiscal 2025, now encompassing over 550 locations across the United States and Canada. But with over 17,000 dealers nationwide, we've only just begun. We're targeting aggressive expansion for fiscal 2026—more on that later.

Our brand identity matured.

Our brand, our brand maturity is supported by our ISO, 90001 certification, which we received in April 2025, this certification is not just a badge. It's the prerequisite for Tier 1 OEM relationships and we are actively pursuing those as we enter fiscal 2026 works for it. Stands as the only company currently offering a fully integrated solar and energy storage ecosystem for the light duty truck Market.

Steven Rossi: Our fiscal 2025 Form 10-K includes an explanatory paragraph outlining 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.

I will now address our risk profile directly. Our fiscal 2025 Form 10-K includes an explanatory paragraph outlining 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 a path to operating cash flow positivity in 2026. More on that later.

Steven Rossi: We remain transparent regarding our use of the at-the-market offering program, otherwise known as an ATM. In 2025, we raised approximately $0.5 million, half a million dollars in net proceeds via the ATM. In November 2025, we amended our agreement to permit sales of up to an additional $4 million 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 $6.4 million at a fixed price.

We remain transparent regarding our use of the at the market offering program, otherwise known as an ATM in 2025, we raised approximately 0.5 million, half a million dollars in. Net proceeds, via the ATM in November 2025, we amended our agreement to permit sales of up to an additional 4 million dollars, to ensure tactical flexibility. We recognize the impact of dilution on our shareholders. We all

We feel the same. Our strategy is to use the ATM only as a secondary tool.

Steven Rossi: Every dollar of capital raised in fiscal 2025 has been tied directly to current and future operational return on investment, specifically doubling our overall production capacity and strategically controlled R&D investments. With that, I'll hand it over to Mike.

Michael Johnston: Thanks, Steve. Let's take a deeper look at the net sales growth. The net sales growth is driven by the rapid scale of our Made in America hard tonneau covers. In fiscal 2025, our hard tonneau cover segment generated $15.7 million in net sales, while our soft cover segment contributed net sales of $500,000. The shift toward our hardcover product offerings is intentional as it reinforces our commitment to quality production while supporting higher market price points and better margin profiles. On a sequential basis, Q4 of 2025 net sales were $4.7 million, compared to $5 million in Q3 2025. In late Q3 of 2025, management responded to continued pricing pressure of our raw material components by implementing a product price increase to both direct-to-consumer and business-to-business customers.

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 of 2025, which brought in $6.4 million 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'll hand it over to Mike.

Thanks, Steve. Let's take a deeper look at the net sales growth, and that sales growth is driven by the rapid scale of our Made in America hard tonneau covers. For fiscal 2025, our hard tonneau cover segment generated $15.7 million in net sales, while our soft cover segment contributed net sales of $500,000.

The shift toward our hard cover product offerings is intentional, as it reinforces our commitment to quality production while supporting higher market price points and better margin profiles.

On a sequential basis Q4 of 2025, net sales of 4.7 million compared to 5 million Q3 2025.

Michael Johnston: The 5.4% sequential decline is attributed to the product price increase and directly impact 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 Q4 of 2025, our operational KPIs remained strong. We maintain a gross margin of 30.1% in Q4, which is a significant improvement over the 26.4% we recorded in Q2 of 2025. This sequential stability proves that our manufacturing processes are maturing, can handle product mix shifts without significant margin erosion.

In Lake, Q3 of 2025 manager, responded to continuing continued pricing. Pressure of our raw material components by implementing a product price increase to both direct consumer and business. To business. Customers the 5.4 sequential. Sequential decline is attributed to the product price, increase and directly impact our promotional marketing efforts. Which in turn both, increase our marketing, spend and decrease our sales volume.

More on this later.

Q4 of 2025, our operational. Kpis are made strong. We maintain a gross margin of 30.1% in Q4 which is significant improvement. Over the 26.4%, we recorded in Q2 of 2025.

This sequential stability proves that our manufacturing processes are maturing and can help product mix shifts without significant margin erosion.

Michael Johnston: 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 H2 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 for 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.

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 2 factors higher capacity. Utilization on our New York Factory and becoming more efficient with our production efforts, we plan to continue our focus on margin expansion and have a set of s stable Target 35% gross margins. Fiscal 2026. We will continue to employ lean manufacturing principles.

while adding to our product portfolio and maximizing our production capabilities,

Steven Rossi: Thanks, Mike. The quality of net sales generating products also improved in fiscal 2025. Online retailer net sales increased 142% to $11.9 million from $5 million 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 $4.2 million from $400,000 the year before. Most notably, there were no private label sales in fiscal 2025, whereas private label revenue represented $3.1 million or 37% of net sales in fiscal 2024. Every product that left our warehouse, our factory last year had a Worksport label on it. We're proud of that. That strategic shift matters because our decisions to focus on proprietary production efforts complement our resulting margin expansion.

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 $11.9 million from $5 million in 2024. Online retailers represented 74% of total net sales in 2025.

Steven Rossi: We are no longer responding to the same sales channels 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 specificity of specific customers. We reduce customer concentration risk this way. Geographically, net sales remain over-

Compared with just 58% in 2024 distributor and jobber net sales, increased to 4.2 million from 400,000 the year. Before most notably, there were no private label sales and fiscal 2025 whereas private label representative represented 3.1 million or 37% of net sales and fiscal. 2024, every product that left our warehouse, our Factory last year, had a workport label on it and we're proud of it that strategic shift matters because our decisions to focus on proprietary production efforts complement. Our resulting margin expansion. We are no longer responding to same to the same sales channels.

Mixed demand. The 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 of specific customers. We reduce customer concentration risk this way geographically. Net sales remain.

this is,

Operator 2: Steven, this is Operator. Just confirming that, audience can hear you.

Operator: Steven, this is Operator. Just confirming that, audience can hear you.

Steven Rossi: Am I coming through clearly?

Steve, this is Operator. Just confirming that, uh, the audience can hear you.

Operator 2: Yes, you are. You can continue at geographically net sales.

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

Am I coming through clearly?

Steven Rossi: My apologies, guys. Geographically, net sales remain overwhelmingly US-based. US net sales were $16 million, 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 'G', geographically. Net sales.

Operator 2: Yes, you are.

Operator: Yes, you are.

My apologies, guys. Um, geographically, net sales remain overwhelmingly U.S.-based. U.S. net sales were $16 million, up from $8 million, up 91% from fiscal 2024. That concentration is not surprising given our current sales channels, 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?

Steven Rossi: Okay. Just chime in if I don't. 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, as we approach phase one output levels, fixed costs are being allocated across a much larger base. To reach company-wide cash flow break even, we calculate that we need to sustain a quarterly revenue level between $9 million and $11 million at about 35% gross margin.

Yes, you are. Okay, just chime in if I don't. I apologize for the unstable internet connection at times.

let's discuss the hard metrics of our

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 8-hour shift. In August 2025, we announced our strongest 4-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, as we approach Phase 1 output levels,

Steven Rossi: 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 million a quarter within the balance of this year. Mike will comment on our OpEx and cash position.

Fixed costs are being allocated across a much larger base to reach companywide, cash flow Break. Even we calculate that we need to sustain a quarterly Revenue level between 9 million, and 11 million 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 influent influenced by our product, our product mix.

Michael Johnston: The strategic focus as we enter fiscal 2026 includes diligent monitoring of our cash operating expenses. Fiscal 2025, our general administrative expenses were $14.8 million. The $3.1 million 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 in-sourced 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 margin contribution has an even greater potential to impact our bottom line. Our net cash used in operating activities for fiscal 2025 is $17.2 million, compared to $10.1 million in 2024.

At our current growth rate, we are aggressively closing that Gap and anticipating net sales of 9 million a quarter within the balance of this year. Mike Will comment on our Opex and cash position.

The 3.1 million 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 and operational expenses.

Is trending below our revenue growth. We have successfully ensured 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.

Michael Johnston: This increase reflects scaling our inventory resources as we begin 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. On 31 December 2025, we had approximately $9.5 million of inventory, of which 56% were raw materials. We're well-positioned as we begin fiscal 2026 with diversified product offerings for multiple sales channels and expect higher liquidity to them, to reinvest in our production efforts. With $5.95 million in cash and $3.4 million available on our revolving line of credit as of 31 December 2025, with total liquidity position of over $9.3 million.

Our net cash used in operating activities for fiscal 2025 is $17.2 million, compared to $10.1 million in 2024.

This increase reflects scaling or inventory resources as we begin 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.

On December 31, 2025, we had approximately $9.5 million of inventory, of which 56% were raw materials. We're well positioned as we begin fiscal 2026 with diversified product offerings for multiple sales channels and expect higher liquidity to them.

To reinvest in our production efforts.

Michael Johnston: Given our projected margin expansion and the expected revenue contributions from SOLIS and COR in 2026, we believe this provides sufficient runway to reach initial operational cash flow positivity within H2 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 efforts. I will now turn the call back to Steven to discuss our operational execution and product commercialization.

5.95 million in cash and 3.4 million available on our revolving line of credit as of December. 31st 2025, we total liquidity, position of over 9.3 million, given our projected, Mar margin expansion and the expected Revenue contribution from sole lease and core in 2026. We believe this provides sufficient Runway to reach initial operational cost flow positivity within the second half of 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 efforts.

I will now turn the call back to Stevens to discuss our operational execution and product commercialization.

Steven Rossi: Thanks, Michael. The financial results Michael just detailed are the output, the input in our operational execution on the factory, on the factory floor and throughout our distribution network. Fiscal 2025 was about proving that Worksport can manufacture at scale 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 quality, 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 Q3 alone, we grew our national dealer partnerships by 42%.

Thanks, Michael the financial results. Michael just detailed are the output, the input in our operational, execution, on the factory on the factory floor and throughout our distribution Network. Fiscal. 2025 was about proving that Workforce could manufacture at scale 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 Quality to a quality product, and demonstrates, our ability to scale, reliably even with our abbreviated active product production history.

Steven Rossi: By mid-2025, our partner dealer network exceeded 550 locations across the United States, a nearly 6-fold 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 hard covers in New York, enforcing strict minimum advertised price policies to protect our dealers' margin and supporting them with aggressive marketing, we are becoming a preferred vendor in the business-to-business sales channel. 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 COR portable energy products. Second, it effectively doubles our R&D footprint.

Our business-to-business sales channel is still in its infancy. During fiscal 2025, we rapidly expanded our footprint, and in the third quarter alone, we grew our national dealer partnerships by 42%. By mid-2025, our partner dealer network exceeded 550 locations in 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 tunnel-covered business is systematically becoming a moat by manufacturing high-quality hard covers in New York and enforcing strict minimum advertised price policies to protect our dealers' margin and supporting them with aggressive marketing. We are becoming a preferred vendor in the business-to-business sales channel.

In November 2025.

We announced the 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 Solstice solar-integrated covers and core portable energy products.

Steven Rossi: 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 COR. 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 strong. 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 our business-to-business dealer network, protecting dealer margins while strengthening relationships within the jobber community.

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 COR. This geographical diversification also improves our logistics network, allowing us faster shipping to the critical Midwest and Southern markets.

Steven Rossi: With the 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 billion tonneau cover market. Importantly, with a now mature product lineup, ISO certified manufacturer, strengthened branding, and the investments made throughout 2025, we believe Worksport 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'll seek to advance OEM-level relationships with leading automotive manufacturers, including Ford, General Motors, and Ram, along with upcoming debutants like Slate Auto. A bonus note.

Our tunnel cover portfolio has never been stronger by mid 2025. The premium al4 achieved an 80% burrow. Covering 20 of the 25 targeted vehicle models in late October, began production of the HD3 heavy duty tunnel cover which entered commercial sales. In November, the HD3 is strategically priced for our business to business dealer. Number protecting dealer margins while strengthening relationships within the jobber community.

With the T with the tiered lineup from entry levels, ST3 soft folding tonneau covers, the premium AL4, and the professional HD3, we are now positioned to capture demand across the full $4 billion tonneau cover market.

Product lineup. ISO certified manufacturer

Strength and branding, and the investments made through 2025, we believe, Worksport 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'll seek to advance OEM-level relationships with leading automotive manufacturers, including Ford, General Motors, and RAM, along with upcoming debutants like Slate EV.

Steven Rossi: In 2026, we plan to launch a next-generation cover that we believe will help shape the future of Worksport's hard cover product lineup, featuring patented capabilities not currently offered by competitors. Early feedback from select partners and prospective customers has been highly encouraging, 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 pre-order campaign outcomes, are expected in early 2026. In late Q4 2025, we marked the commercial launch of our SOLIS and COR 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.

A bonus note in 2026. We plan to launch a Next Generation cover that we believe will help shape the future of work supports hard. Cover product lineup. Featuring patented capabilities not currently offered by competitors. Early feedback, from select partners and prospective customers has been highly encouraging 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 pre-order campaign outcomes, are expected in early 2026.

In late Q4 2025, we Mark the commercial launch of our soulless and core product offerings. This is an important milestone for us as it validates. Our successful deploy development journey of a long running R&D program.

Steven Rossi: COR is a portable energy storage system for mobile, off-grid, backup, and vocational use, and is designed for both function and as a standalone or to integrate with SOLIS. We initially disclosed pricing direction during our Q3 2025 prepared remarks. The COR starter kit at $949, and the SOLIS beginning at $1,999 and moving up to $2,499, depending on fitment. We also described an initial rollout plan for 1,000 COR units and 900 additional battery packs, and a limited SOLIS release representing about $2.5 million of near-term initial revenue opportunity. The key 2026 question is not whether these products launched. It's how fast they scale with acceptable margins and working capital discipline. Let's touch on Terravis Energy. Terravis Energy continues to deliver breakthrough innovation.

The product positioning is clear. Soulless is a solar integrated folding tunnel cover aimed at power generation on vehicle. Core is a portable energy storage system for mobile off-grid, backup, and vocational use in the design for both function. And as a standalone, uh, as a standalone or to integrate with solar. We initially disclosed pricing direction.

During our Q3 2025 prepared remarks, the core starter kit is at $949. And the SOLIS, beginning at $1,999, and moving up 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 solar system release, representing about $2.5 million of near-term, initial revenue opportunities.

The key 2026 question is not, whether these products launched its how fast they scale with acceptable margins and working capital discipline.

Steven Rossi: In February 2025, we announced that AetherLux can operate in temperatures as low as -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 multi-billion dollar corporations and US government entities, including the Department of Energy's NREL Alaska Laboratory.

Let's touch on Terry's energy. Terry's energy continues to deliver breakthrough innovation in February 2025, we announced that aerux, can operate in temperatures as low as negative 57° without energy intensive, defrost Cycles, the only heat pump in the entire world that has been tested to achieve. This beat importantly, aerux is not limited to extreme climates, our proprietary zero. Frost technology has been tested to eliminate, Frost cycling altogether. A common source of energy, loss systems train 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.

Steven Rossi: While tonneau covers drive the current revenue, Terravis 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 Worksport's overall value proposition. Before closing, I wanted to address the macroeconomic environment, specifically tariffs and supply chain risks, 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.

A Deluxe Pro has undergone due diligence and some site visits from multi-billion dollar corporations and U.S. government entities, including the Department of Energy's Penn Reel Alaska Laboratory. While tunnel covers drive the current revenue, TerraVisa intellectual property represents a compelling opportunity tied to the global shift towards clean energy products, including high-efficiency HVAC.

In Lake, q1 2026. We selected an established manufacturing partner. The product is, is expected to achieve certification in 2026 is currently, and is currently being evaluated by multiple government entities management believes this intellectual property represents a compelling addition to work, force over overall value proposition,

Steven Rossi: While we experienced overall increased input costs during fiscal 2025 as a result of tariffs on imported goods, these cost increase did not impact our soft tonneau covers, as no additional components were sourced during that time period. Our hard covers 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 product channels, sales channels, while also offering higher margin products. We are regaining momentum heading into 2026, into Q2 2026.

Before closing I wanted to address the macroeconomic environment specifically tariffs and supply chain risks, which remain top of my mind for many investors. Our soft tunnel covers along with a small percentage of raw material use for a heart folding tunnel covers are sourced from China. While we experience overall increased input costs during fiscal 2025, as a result of terrorists on tariffs, on imported goods. These costs increase did not impact our soft tunnel covers

Has no additional components for source during that time period.

Steven Rossi: Our portable energy products are currently manufactured using foreign lithium-ion supply chains. The current tariff environment has required adjustment to our pricing and go-to-market strategy. That said, we believe our unique SOLIS plus COR system will be well received once the 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 COR over time. We continue to manage these risks proactively and strategically. As of December 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, ensuring that our first-mover status in the solar tonneau space is defended against both domestic and international imitators.

While this led to a temporary decline in sales, volume in Q4 2025, the man has started to stabilize across each of our product channels, our sales channels while also offering higher margin products and we are uh, regaining momentum heading into 2026 into this into Q2 2026.

Our portable Energy Products are currently manufactured, using foreign lithium ion Supply chains. The current tariff environment has required adjustment to our pricing and go to market strategy. That said, we believe our unique soul is plus core system, will be well, received once the 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 December 31, 2025, we hold 24 issued utility patents and 50 issued design patents, as well as 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.

Steven Rossi: We are really excited about our recent submitted patent application for the AetherLux ZeroFrost system. Our intellectual property portfolio continues to serve as our defensible competitive advantage. Now to Mike.

We take a clinical approach to intellectual property enforcement and ensuring that our first-mover status in the solar tunnel space is defended against both domestic and international imitators. We are really excited about our recently submitted patent application for the A-through Lux Zero Frost System. Our intellectual property portfolio continues to serve as our defense.

Michael Johnston: 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 infrastructure matured and expanded to complement our customer demand across all sales channels. 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. Our 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 margin capture.

Principal competitive advantage. Now to Mike.

To reiterate, the scalability of our product offerings and fiscal 2025 net sales grew by nearly 90%. During that same period, our core manufacturing and distribution infrastructure matured and expanded to complement our customer demand across all sales channels.

Fiscal 2026. We do not anticipate the need for major steps in each channel. We have the floor space, we have the machinery, and we have the ISO certification. Our 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.

Steven Rossi: Looking ahead to the H1 of fiscal 2026, we have set clear measurable milestones. One, initial SOLIS and COR ramp up and margin contribution. Two, full rollout of the HD3, AL4, and AL3 lines to all 550+ dealer locations. Three, launch of the game-changer hard folding tonneau cover, expected to be a best-seller. For the H2 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 COR by getting our system across to additional customers via synergistic partnerships with other businesses. To Mike.

Looking ahead to the first half of fiscal 2026, we have set clear, measurable milestones: 1, initial soulless and core ramp-up in margin contribution; 2, roll full relative of the HD3, AL4, and AL3 lines to all 550-plus dealer locations.

3, launch of the game-changer Hard Folding Tunnel 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 COR battery, by getting our system across to additional customers to be synergistic.

Partnerships with other businesses.

Michael Johnston: Our path to net cash flow positivity is driven by three pillars. First is net sales volume. Reaching the $9 million 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's also impacted by our production efficiency. We plan to monitor these components regularly, 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.

To Mike.

Our path in that cash flow, positivity is driven by 3 pillars. First is not sales volume, reaching the 9 million. Net sales quarterly threshold that meaningfully produces contributions and access of operational. Needs depends on a combination of sales, volume mix and product. Mix this. Also, impacted by our production efficiency, we plan to monitor these components regularly anticipate, reaching this target, outcome and fiscal 2026.

Second is margin next. 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.

Michael Johnston: 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.

Thursday's 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 and

I need to incur additional costs to increase our visibility and impression, given our size and the stage of our operations.

Steven Rossi: We are entering fiscal 2026 with a focused plan to continue our accelerating 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 to 42 million with gross margins of approximately 35%. Some highlights. Our guidance includes a full year's impact of 3 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 with operations as our company and our product offerings mature in the market.

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 25, providing us the stability to execute this plan.

We are entering fiscal 2026 with a focus plan to continue our accelerator 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.

Steven Rossi: 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 the 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 H2 2026. Our guidance also does not assume upside from a potentially faster than expected ramp-up of SOLIS and COR. Our guidance excludes potential impacts that may arise from the current geopolitical environment.

Our guidance includes the introduction of our game-changer product offering in the early 2026, our guidance, reflects our commitment to driving efficiencies with with 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 20%. 26% of our sales, mix some important notes.

Steven Rossi: 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? Why now? To our investors, I encourage you to consider the transformation we have achieved. Just two years ago, Worksport was a pre-revenue development stage company. Today, we have demonstrated our ability to scale and grow, growing net sales from approximately $1.5 million in 2023, to $8.5 million in 2024, to $16.1 million in 2025. Over that same period, gross margins improved from 11% to 28%, exceeding 30% later in late 2025. At the same time, we have significantly strengthened the foundation of our operations.

We remain focused on metrics, such as ibida and positive operating cash flow within the 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 athletes, which is expected to reach commercial, Readiness in the second half of the 2026. Our guidance also does not assume upside from a potentially faster and expense expected ramp up of soulless 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 more to a more normal Baseline.

Why Worksport, and why now? To our investors, I encourage you to consider the transformation we have achieved. Just 2 years ago, Worksport was a pre-revenue development-stage company. Today, we have demonstrated our ability to scale and grow. Net sales increased from approximately $1.5 million in 2023 to $8.5 million in 2024.

Steven Rossi: We expanded our sales channels positioning, reducing our indebtedness, and brought multiple products to market, including HD3, SOLIS, and COR. 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.

16.1 million in 2025, over that same period. Gross margins improved from 11% to 28%. Exceeding 30%. Later in in late 2025, at the same time, we have significantly, strengthened the foundation of our operations, we expanded our sales channels positioning reducing our independence, and, and brought multiple products to Market, including HD3 soulless and core. We also continue to invest our efforts to develop our ather Lux 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 toward sustained profitability. Thank you. This marks the end of our presentation; turning the call back to the operator for Q&A.

Operator 2: Worksport's now opening the floor 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 are able to email us at investors@worksport.com. We have Scott Buck here. Scott, you can go ahead with your question.

Operator: Worksport's now opening the floor 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 are able to email us at investors@worksport.com. We have Scott Buck here. Scott, you can go ahead with your question.

Works for now opening the floor for Q&A we welcome live questions from analysts attending the call investors intending to call Kent Wright your questions within the Q&A section of the zoom call, or are able to email us at investors at worksport cam.

Scott Buck: Hi, good afternoon, guys. Thanks for the time. Steven, I'm curious, 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 Scott Buck here. Scott, you can go ahead with your question.

Hi. Good afternoon, guys. Thanks for the uh the time Stephen. I'm I'm curious.

Steven Rossi: Well, there's a lot of different things, bottom up, top down. Top down faces the market and its demand, fuel prices, purses get tighter, right? To that extent, you know, we're hoping that the economy stays strong. We're hoping that, you know, base fuels and energy stays affordable and doesn't pinch at the pocket. We're hoping that the consumer stays active in the market. Tonneau covers are a must-have, but I mean, if people are more budget conscious, of course, premium tonneau covers and SOLIS and COR type products might be something that's not purchased as actively. We might feel economic constraints. From the bottom up, we're obviously very cognizant. Domestic inflation as a result of global tariffs has been significant.

How should we think about the difference between the high-end and the low end of the 26, uh, Revenue guide? What, what needs to go, right? To to end up towards closer to that high end?

Steven Rossi: 50% increase on American aluminum because of foreign tariffs. Definitely not what I think the intention was with foreign tariffs. You know, if it goes to 55%, 60%, and 70%, it erodes margin, leads to price increases that ultimately the average consumer pays, and that $1,000 product turns into a $1,100 product which might have some dropouts in terms of conversions, if that makes sense. We're hoping that just everything stays stable on the bottom up, cost up, supply chain, and then everything stays strong on the consumer side and the economy continues to show signs of strength.

Well, we we we've there's a lot of different things bottom up, top down. Um, top down faces the market and its demand, uh, fuel prices, uh, Persons get tighter, right? Um, so to that extent, um, you know, we're hoping that the economy stays strong. We're hoping that, um, you know, base fuels and energy stays affordable and doesn't Pinch at the pocket. Um, and we're hoping that the consumer stays active in the market. Um, tunnel covers are a must-have but, uh, but I mean, it, it, it it, if, if, if people are more budget conscious, of course, uh, premium tunnel covers and soulless and core type products might be, uh, might be something that's not purchased as actively. So we might feel economic constraints. Um, from the bottom up, um, we're obviously very, very cognizant, uh, domestic inflation. As a result of, uh, Global tariffs has been significant, uh, 50% increase on American aluminum because of foreign tariffs, definitely. Uh, not what I think the intention was with foreign tariffs. Um, so our, uh, you know, if we if we if it

Goes to 55 and 60 and 70%. It erodes margin leads the price increases that uh, ultimately, uh, the average consumer pays. And and uh, and and that thousand dollar product turns into an 1100 product which, uh, which, which might have some dropouts in terms of conversions, if that makes sense. So we're hoping that just everything stays stable on the bottom up cost.

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

Losses up in the supply chain, and then everything stays strong on the consumer side, and the economy continues to show signs of strength.

Great. That that's very helpful. And then I want to ask about the the heat pump business.

Uh, how do you envision the monetization? There, are you going to manufacture, market, and sell, or potentially license that technology? Or could that even be a potential?

Steven Rossi: We've considered and had meaningful conversations about almost all options, from divestitures to licensing. When we released the SOLIS, the quality of customer that reached out to us, you know, via LinkedIn, emails, these types of things, was huge. I mean, various OEMs, and we were so excited. I could 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, you know, Terravis on that, you know, being interested in helping bring the product to market or M&A and these types of things continues to be significant.

Divested your down the road.

Reached out to us, uh, you know, via LinkedIn emails, these types of things was huge. I mean, uh, uh, various oems and we were so excited. I could say that uh, it's Shadows. Um, the the the the interest in terms of of of what came from Aether Lux uh the the the the global

Steven Rossi: We're gonna 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. Like if nothing were to happen, or we chose the path of bringing a product to market and you were to say, build it, stock it, and sell it, we know how to do that. We've shown that from our rampant sales. A product that is something for everybody, like the heat pump, has a much larger, I mean, it dwarfs the tonneau cover market. I think it's

Scott Buck: Steven, on sales and marketing expense, you know, 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?

Billion and trillion dollar entities, that reached out to work for, uh, you know, Tara Vis on that, you know, being interested on on, on helping bring the product to Market or or m&a and these types of things continues to be significant. Um, so we're 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. Like if, if if if nothing were to happen or we chose the path of bringing a product to Market, and you were to say, build it, stock it and sell it, we know how to do that. And we've shown that from our from our ramp and sales, uh, and a product that is is something for everybody. Um, like the heat pump has a much larger. I mean, it it it, it dwarfs the tunnel cover Market. I think even on sales and marketing expense, you know, a nice step up in 25.

Steven Rossi: Steady state. We're gonna tighten up. We front-loaded expenses for marketing and branding, and we're going to try to tighten that up for this year.

Scott Buck: Okay, perfect. Well, congrats on all the progress, guys. Looking forward to 2026. That's all I have.

Should we can continue to see that move higher in in 26 or have you reached kind of a, a steady state there on the the marketing budget steady state. It's uh, we're going to we're going to tighten up, but we we front-loaded expenses for marketing and branding and and we're going to try to tighten that up for this year.

Operator 2: Thank you, Scott. Steve, we have a question from the audience, Dub Will L. His question is if there's any new relationships with truck lines, I'm assuming he means OEM trucks, like a partnership in place.

Operator: Thank you, Scott. Steve, we have a question from the audience, Dub Will L. His question is if there's any new relationships with truck lines, I'm assuming he means OEM trucks, like a partnership in place.

Okay, perfect. Well, uh, congrats on all the progress, guys. Looking forward to 26. Uh that that's all I have.

Thank you, Scott.

Steven Rossi: Yeah. Obviously OEM discussions are always a conversation. We know all the major automakers, and we think that there's a right time for that. I think that we're mature now, and that's what ISO is for. We do have relationships. As they become material, we'll announce them. I think OEM is definitely in the cards for us this year.

See if we have a question from the audience, uh, that will tell his question is if there's any new relationships with truck lines, I'm assuming he means OEM trucks like a partnership and plans.

Yeah, so, um, obviously OEM discussions are always, uh, a conversation. Um, we know all the major automakers, and we think that there's a right time for that. Um, so I think that we're mature now, and that's what ISO is for. Um, so we do have relationships—as they become material, we'll announce them. Um, and, uh, I think OEM is definitely in the cards for us this year.

Operator 2: Fantastic. There is another question about the SOLIS and COR and if we could comment on the sales, current sales as well as sales forecast.

Operator: Fantastic. There is another question about the SOLIS and COR and if we could comment on the sales, current sales as well as sales forecast.

Steven Rossi: Yeah. We have 1,000 core products and almost 1,000 batteries because it's an unlimited energy system. Sales initially have been pretty strong, but you got to think that when we received the product from contract manufacturing is when we received assets to be able to make marketing. We didn't have prototypes. If you're gonna make one, you're gonna make 1,000, if that makes sense. All the marketing assets have just become released. To that extent, interest and sales were okay for January, February, and March.

Fantastic. Um, there is another question about the SOLUS and Cores, and if we can comment on the sales—current sales as well as sales forecasts.

Yeah, so, uh, we have a 10000 core products and, uh, almost 1,000 batteries because it's a, it's an unlimited energy system. Um, sales initially have been pretty strong. Um, but you got to think that when we receive the product, uh, from contract manufacturing is, is when we received assets to be able to make marketing, we didn't have prototypes, we just, if you're going to make 1, you're going to make a thousand if that makes sense. Um, so all the marketing, um, has just all the marketing assets have just, uh, become released, um, uh, so so, to that extent sales were interested in sales.

Steven Rossi: 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've always expected that there'd be a 90 to 120-day delay to get the product really cooking. We'll have more news in H2 of this year or at least in Q2 and beyond.

Operator 2: Awesome, Steve. We're gonna take one more question here. There is a lot of other questions that are left unanswered. I encourage investors to email me at fali@worksport.com. 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.

Operator: Awesome, Steve. We're gonna take one more question here. There is a lot of other questions that are left unanswered. I encourage investors to email me at fali@worksport.com. 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.

Were. Okay, uh, for, for January, February and March. Um, 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, um, the videos and these types of things. So, uh, we continue. We've always expected that, uh, there'd be a 90 to 120 delay. 120 day, delay to get the product Really Cooking. Um, so we'll have more news in the second half of this year or at least in Q2 Beyond.

Steven Rossi: So far, we do freedom to operate, we do patent checks, we do disclosure checks, we check the market. We're fairly thorough. We have on staff legal expertise in patents. To that extent, we think that we have a very strong IP asset in the making with AetherLux patent. We think it's defensible, very defensible. We protect our intellectual property with vigor, and we don't think that anything like this exists, that we've been able to find, hear about or there's been nothing close to it. No other government entity or other business, including other manufacturers that we've 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.

Awesome Stephen. And we're going to take 1 more question here. There is a lot of other questions that are left on answered. I encourage investors to email me at f a l, i works for.com but uh we will take this question regarding the strength of intellectual property regarding Aether Lux and if we anticipate any competitors in the Shadow with the same technology.

So far, we do, we do freedom to operate. Uh, we do patent checks, we do disclosure checks, uh, we check the market, we're fairly thorough we have on staff, uh, legal expertise, and patents. Um, so to that extent, um, we've we, we think that we have a very strong IP asset in the making with Aether Lux patent. We think it's defensible. Uh, very defensible. We, we protect our intellectual property with bigger. Um, and we don't think that anything like this exists, um, that we've been able to find here about or there's been nothing close to it. Um, and no other government entity or other business. Including other manufacturers that we've spoken to Global manufacturers. Um, none of them have said that they have anything close to this type of Technology.

Operator 2: Fantastic. Well, thank you again, Steve and Mike, for doing the presentation. I have put my email in the chat to any remaining questions, which is fali@worksport.com. If you would like to meet with management one-to-one, feel free to email us, and we're happy to get that scheduled. Thank you for being an investor, and have a great day.

Operator: Fantastic. Well, thank you again, Steve and Mike, for doing the presentation. I have put my email in the chat to any remaining questions, which is fali@worksport.com. If you would like to meet with management one-to-one, feel free to email us, and we're happy to get that scheduled. Thank you for being an investor, and have a great day.

So we remain very, very enthusiastic about the opportunity for AER looks.

Steven Rossi: Thank you, everyone.

Fantastic. Well, thank you again, Steve. And uh, Mike for doing the presentation. I have put my email in the chat to any remaining questions which is f a l, i at works forth.com and if you would like to meet with management 1 to 1, feel free to email us and we're happy to get that scheduled. Thank you for being an investor and have a great day.

Thank you, everyone.

Michael Johnston: Goodbye.

Goodbye.

Q4 2025 Worksport Ltd Earnings Call

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