Q1 2026 Worksport Ltd Earnings Call and Investor Townhall

May 13, 2026

Speaker #2: Good afternoon, everyone, and thank you for joining Worksport Q4 2026 earnings call. I'm Steven Rossi, Chief Executive Officer of Worksport Limited. With me today is our Chief Financial Officer, Jennifer Kardecek, who many of you will be meeting on earnings calls for the first time.

Steven Rossi: Good afternoon, everyone, and thank you for joining Worksport's Q1 2026 earnings call. I'm Steven Rossi, Chief Executive Officer of Worksport Ltd. 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 31 March 2026. These results were just filed today at 4:00 PM Eastern Time in our Form 10-Q and can be downloaded from the link provided in the chat.

Speaker #2: 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.

Speaker #2: Her short-term focus is to help strengthen our financial discipline and 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.

Speaker #2: 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.

Speaker #2: At the end of today's call, our prepared remarks and presentation deck will be available for download at www.investors.worksport.com/reports. Again, that's www.investors.worksport.com/reports. Our remarks will follow on a slide presentation.

Steven Rossi: 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 the 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 strategies, 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.

Speaker #2: 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, business aspirations, and product initiatives, and the expected benefits of such initiatives.

Speaker #2: 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.

Steven Rossi: 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.

Speaker #2: 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, as well as other SEC filings.

Speaker #2: 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.

Speaker #2: So 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 TerraVise Energy and AetherLux, the exciting product; and number six, the 2026 outlook in general.

Steven Rossi: First, key highlights from our Q1 2026 that we just filed. Number 2, liquidity position and capital strategy. Number 3, financial review. Number 4, update on Worksport operations. Number 5, an update on Terravis Energy and AetherLux, the exciting product. Number 6, 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.

Speaker #2: 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.

Speaker #2: In January, the Solus and Core started commercial shipping. In March, we unveiled Nexus to industry buyers with the Keystone Big Shore and initiated pre-orders—pre-order activity on this product offering.

Speaker #2: In April 2026, Nexus launched commercially. Core received the applicable UL and CSA certification package needed to support broader North American retail and commercial distribution, and we secured distribution with Tri-State Enterprises, including their placement of an initial purchase order.

Steven Rossi: COR received the applicable UL and CSA certification package needed to support broader North American retail and commercial distribution, and 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 most gross margin contribution. We are at the eve of our broadest product revenue opportunity to date for our tonneau cover business.

Speaker #2: 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 to the approximately 18% in Q1 of last year.

Speaker #2: These are meaningful year-over-year improvements. Since Q1 2026 was the launch readiness quarter, our current product portfolio has yet to meaningfully contribute to our results, including gross margin contribution.

Speaker #2: We are at the eve of our broadest product revenue opportunity to date. For our tunnel 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.

Steven Rossi: 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, and 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 H2 are about conversion, shipment, sales channels, and activation, margin efficiency improvement, and lower operational cash burn.

Speaker #2: We can now focus on converting our working capital investments for the balance of the year. We entered 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.

Speaker #2: Our cash position reflects the cost of operational and strategic growth efforts. And we will address that directly. But the key investor highlight for Q1 of 2026 is this: we built product availability, funded launch activity, and expanded our commercial platform.

Speaker #2: Q2 2026, in 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.

Steven Rossi: 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 H2 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 US 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.

Speaker #2: As well as a focus on meaningful efforts towards profitability from the operations in the second half of 2026 and beyond. But more on that soon.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: These are the two core capabilities we believe that can drive the company towards profitability within the near term. We are a US-based manufacturer with approximately 11.6 million dollars in inventory, 13.3 million dollars in net property and equipment, including approximately 8.3 million dollars of building and land net value, and 6.6 million dollars of manufacturing equipment net value.

Steven Rossi: We are a US-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 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.

Speaker #2: 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 56 patent pending utility patents, 51 issued and 25 pending design patents and registrations, and 44 registered and 15 pending trademarks.

Speaker #2: 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 tunnel covers just in late 2023, and based on internal sales data, we have sold approximately 26,000 tunnel 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.

Steven Rossi: We started production of our Tonneau Covers just in late 2023, and 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 US roads alone, and pickup trucks remain among the top-selling vehicles in the US every single year. People buy pickup trucks regardless of broader economic conditions.

Speaker #2: 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.

Speaker #2: Worksport's started on the foundation of roughly 61 million pickup trucks in the USA on US roads alone, and pickup trucks remain among the top selling vehicles in the US every single year.

Speaker #2: People buy pickup trucks regardless of broader economic conditions. We started by making high-quality tunnel covers at prices that compete and, in many cases, can beat competitors that primarily source raw material and components from foreign markets.

Steven Rossi: 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 core 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.

Speaker #2: We believe we can continue to capture market share in the estimated $4 billion-plus tunnel cover market in 2026 and build the tunnel cover core business into a nine-figure profitable middle market company over time.

Speaker #2: Said plainly, we believe Worksport has the potential to become a $100 million-plus middle-market revenue company, profitably, from tonneau cover sales alone. And that's just our foundation.

Speaker #2: That's our core of this business. Our vision does not stop at tunnel covers. We imagine a future where pickup trucks evolve to power consuming utility vehicles into mobile power platforms and nanogrids that support owners at the campsite, worksite, emergency site, and on fleet levels.

Speaker #2: That is where our newly launched soulless and core product offerings enter the picture. The tunnel cover is the physical platform. Soulless adds solar generation and core adds portable energy storage and usable power wherever you go.

Steven Rossi: 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.

Speaker #2: Together, SOULLESS and COR allow Worksport to move from an aftermarket automotive accessory business into a billion-plus portable power market. Importantly, COR is not limited to truck owners.

Speaker #2: Core 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.

Speaker #2: 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.

Speaker #2: Our next steps could be to look at integrating core 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.

Steven Rossi: 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. Now, our subsidiary, Terravis Energy, is at the forefront of developing energy-saving HVAC technology. The AetherLux ZeroFrost defrost 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, and 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, and we have a keen focus on home heating.

Speaker #2: Now, our subsidiary, Teravise Energy, is at the forefront of developing energy savings, HVAC energy saving, and HVAC technology. The Atherlux Zero Plus Frost heat pump has all the elements to become a significant breakthrough in energy saving as a product solution alone.

Speaker #2: It is expected to be the only heat pump platform capable of operating without traditional defrost cycles, and it has been tested to operate smoothly in extreme temperatures rarely seen by conventional systems.

Speaker #2: In fact, I'll say, not seen by conventional systems. Atherlux can provide heating and cooling, highly efficiently, and we have a keen focus on home heating.

Speaker #2: We're also currently evaluating efficiencies within data center cooling technologies. The breakthrough Atherlux heat pump is expected to advance towards certification in 2026 and address a 150 billion dollar-plus HVACR market.

Steven Rossi: 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.

Speaker #2: And we have received a strong level of interest through initial inbound inquiries, achieved support through the US Department of Energy, including their National Renewable Energy Laboratory, and are engaged in active government-related and strategic conversations.

Speaker #2: Atherlux 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 tunnel cover business, what I call our foundational business.

Speaker #2: Second, the soulless and core power ecosystem. And third, the longer-term highly efficient Atherlux HVAC opportunity through Teravise Energy. And we'll provide more information and more details on Teravise later in this call.

Speaker #2: 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 and we are addressing it through clear operating plan.

Steven Rossi: I will now address our liquidity position directly. Our fiscal 2025 Form 10-K included a going concern explanatory disclosure. That disclosure is important, and we are addressing it through a clear operating plan. Convert inventory into revenue, grow gross margins in each of our sales channels, and reduce operating cash consumption as our product launch spending normalizes, and 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.

Speaker #2: Convert inventory into revenue. Grow gross margins in each of our sales channels and reduce operating cash consumption as our product launch spending normalizes. And maintain a disciplined approach to working capital and capital market funding resources as needed.

Speaker #2: 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.

Speaker #2: The largest use of cash in Q1 we were working was the capital-intensive launch-related investments. The primary use of cash was working capital to support production of our existing product offerings.

Steven Rossi: 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 31 March 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.

Speaker #2: And the expected growth of additional product offerings launched in 2026, including soulless, core, and the new Nexus. We received approximately $5.1 million of inventory to support the expanded product lineup, with approximately 1 million dollars of these raw material purchases remaining in accounts payable as of March 31st, 2026.

Speaker #2: We also use 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.

Speaker #2: 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.

Steven Rossi: 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 capital, on equity capital and potential additive dilution or 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 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.

Speaker #2: The question is execution velocity, and Q2 2026 begins answering that question. Our priority is to reduce our reliance on capital on equity capital and potential additive dilution or additional dilution to existing shareholders as revenue scales and working capital normalizes.

Speaker #2: 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 HC Wainwright.

Speaker #2: As a result, we issued $1.46 million shares of Common Stock. We recognize the impact of dilution and we are mindful of our shareholder responsibilities.

Speaker #2: Our strategy remains to use the ATM as a tactical tool, subject to applicable Form S3 public float limitations and market conditions, not our primary and not as our primary capital vehicle.

Steven Rossi: 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.

Speaker #2: For 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.

Speaker #2: With that, I'll hand the call over to Jennifer to walk through our financial results.

Speaker #1: 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.

Jennifer Kartychak: 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 US 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.

Speaker #1: 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 US continues to represent an overwhelming majority of our net sales at 99%, up 48.5% year over year.

Speaker #1: Within our segments, hard tunnel covers generated approximately $3.3 million in net sales, accounting for approximately 99% of total Q1 net sales. Our soft tunnel cover segment contributed approximately $40,000.

Speaker #1: The concentration in net sales in the hard tunnel 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.

Jennifer Kartychak: 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. 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.

Speaker #1: In Q1 2026, B2C, or 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: 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 Q2025 Q4 2025 to Q1 2026 was primarily driven by our sales channel mix.

Jennifer Kartychak: 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. On to 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%.

Speaker #1: 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.

Speaker #1: Importantly, our B2C margin improved sequentially from approximately 30% to approximately 34%, but the higher relative concentration from B2B sales channel which has a lower margin impacted that blended gross margin.

Speaker #1: 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%.

Speaker #1: 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.

Jennifer Kartychak: 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: 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.

Jennifer Kartychak: 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. Sorry. 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 elevation. We are closely monitoring the ROI on each marketing channel and plan to optimize accordingly. On to cash flows and the balance sheet. Cash and cash equivalents were $566,000, down from $5.9 million approximately at 31 December 2025.

Speaker #1: The increase reflected from—sorry, 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.

Speaker #1: We launched three products and initiated large-scale digital marketing campaigns to drive awareness for both the core and solace as well as to support the overall brand validation.

Speaker #1: 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.

Speaker #1: 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.

Jennifer Kartychak: 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.

Speaker #1: 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.

Speaker #1: That implies a cash-based operating loss of approximately $4.7 million. Working capital used in additional approximately $3.5 million driven primarily by inventory build and the settlement of prior period payable obligations.

Speaker #1: 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.

Speaker #1: 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.

Jennifer Kartychak: 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 31 March 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 31 March 2026 was approximately $6.6 million compared to $10.1 million at 31 December 2025.

Speaker #1: Of that total, raw goods grew from $3.4 million to $5.3 million, a direct reflection of our investments in core and solace as well as the nexus product readiness.

Speaker #1: 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.

Speaker #1: 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.

Jennifer Kartychak: 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?

Speaker #1: 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.

Speaker #1: I will now turn the mic back to Steven to review our operational milestones. Steven?

Speaker #2: Thanks, Jen. On January 13, 2026, we announced the commercial launch of our flagship energy product deal, the Solar Solar Tunnel covering the core portable energy system.

Steven Rossi: Thanks, Jen. On 13 January 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. We're so excited about it. With the initial product launches behind us, our 2026 focus is scaling SOLIS and COR revenue.

Speaker #2: 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.

Speaker #2: Solace is the world's only commercially available solar-integrated hard-folding tonneau cover. Core is a modular portable energy system that integrates with Solace or functions as a standalone unit for the job site, off-grid, or emergency power needs.

Speaker #2: Together, they represent Worksport's entry into the multi-billion dollar clean energy and portable power market. We're so excited about it. With the initial product launches behind us, our 2026 focus is scaling Solace and core revenue, and on April 26, Core received the safety and regulatory certifications needed for North American retail and commercial distribution, including all applicable UL and CSA approvals.

Steven Rossi: 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. This 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. In February of 2026, 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 can serve worksite, emergency, mobile power, and off-grid applications. SOLIS also carries credibility to our active conversations with OEMs. The point is not that OEM revenue is assumed in our 2026 sales pipeline.

Speaker #2: 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.

Speaker #2: We also strengthen our commercial sales channels around these products. In February 26, we announced a strategic partnership with ProtoMac International Partners to help position the Solace and Core ecosystem for federal fleet and commercial adoption channels.

Speaker #2: We do not consider these channels as immediate revenue sources, but it is an important awareness channel for products that can serve worksite emergency mobile power and off-grid applications.

Speaker #2: Solace 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.

Steven Rossi: 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 ful-fulfillment, and measured customer acquisition economics, the path to market adoption is becoming accessible. We note it took approximately 1 year for our initial Made in the USA tonneau cover lines to build traction. I will repeat that.

Steven Rossi: 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 ful-fulfillment, and measured customer acquisition economics, the path to market adoption is becoming accessible. We note it took approximately 1 year for our initial Made in the USA tonneau cover lines to build traction. I will repeat that.

Speaker #2: The question we are focused on answering is how quickly these products scale through which channels: core and Solace did not represent a meaningful amount of sales in Q1.

Speaker #2: As emerging products, we're re-developing marketing assets, product awareness, and sales pipelines to target strong sales towards the rest of the year. We're just getting started.

Speaker #2: 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 USA tunnel cover lines to build traction.

Speaker #2: I will repeat that. We note it took approximately one year for our initial Made in the USA tunnel covers, the AL3, to build traction.

Steven Rossi: We note it took approximately 1 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 19 March 2026, we presented Nexus to industry buyers at the Keystone BIG Show. Keystone is 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.

Speaker #2: And we believe that it can achieve that we can achieve a similar speed or better with the Solace and the Core. The third major commercial milestone of the quarter was the unveiling of our nexus tunnel cover.

Speaker #2: Boy, is it exciting. On March 19, 2026, we presented Nexus to industry buyers at the Keystone Big Show. Keystone is one of the biggest aftermarket distributors in North America.

Speaker #2: 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.

Speaker #2: Following production and commercial launch in April of '26, early distributor interest is and remains significant. This supports management's expectation that Nexus can contribute meaningfully in next sales and net sales for this year.

Steven Rossi: 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.

Speaker #2: Nexus is a premium tunnel cover featuring a newly engineered operating system designed to improve the ease of use, safety, and speed for truck owners. Unlike conventional folding tunnel 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.

Speaker #2: 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.

Speaker #2: 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.

Steven Rossi: 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 7-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, nearly 6-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.

Speaker #2: For our full tunnel cover lineup, inclusive of Nexus, Tri-State expands our distribution reach across Arkansas, Missouri, Oklahoma, and Texas. Tri-State operates approximately 1 million square feet of warehouse space and has already placed initial purchase orders and reorders.

Speaker #2: 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.

Speaker #2: We entered the year with a dealer network that exceeded 500 locations and 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.

Speaker #2: Remember, there's 17,000 dealers in America, so we're just getting started. The Tri-State Enterprise Partnership announced in April of this year is our first major distributor relationship and gives us the broader penetration to new geographic markets.

Steven Rossi: 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, and 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 US 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.

Speaker #2: Importantly, this is not just a logo announcement. Tri-State has already placed initial purchase orders, and 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.

Speaker #2: We're also enclosing discussions with nationwide dealer network capable of bringing our products to all US continental states. We will update investors as these discussions move from pipeline to signed commercial relationships.

Speaker #2: Each of these relationships represent a potential step change in distribution reach. But our standard for reporting progress will remain execution. Orders, channel activation, repeat purchase behavior.

Speaker #2: 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.

Steven Rossi: We're strictly focused on execution this year. Our US 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, 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, and increasingly capable of absorbing a broader product lineup. Let's talk AetherLux.

Steven Rossi: Our US 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, 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, and increasingly capable of absorbing a broader product lineup. Let's talk AetherLux.

Speaker #2: Quality certification does not create revenue by itself, but 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.

Speaker #2: We believe that the combination of strong online presence, expanding dealer network, and new distributor partnerships is the right model to capture demand across the $4 billion-plus tonneau cover market.

Speaker #2: The investors' takeaway is straightforward. The channel base is becoming larger, more diversified, increasingly capable of absorbing a broader product lineup. Let's talk AetherLux. TerraBeast Energy, our clean energy subsidiary, continued to make progress in the first quarter of this year.

Steven Rossi: 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. 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.

Speaker #2: 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.

Speaker #2: 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, but we are not currently projecting initial AetherLux revenue within this year.

Speaker #2: 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 dollar HVACR market.

Speaker #2: 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.

Steven Rossi: 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 ZeroFrost 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 contributions. 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.

Speaker #2: 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.

Speaker #2: 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 tunnel cover business and early solar core contribution.

Speaker #2: AetherLux is a separate platform advancing through testing, certification, and commercialization work. We intend to update investors as lab results and certification milestones are achieved. Twenty-six outlooks.

Speaker #2: Let's talk about this for a second. This is the strongest commercial work position Worksport has occupied to start any of the fiscal years in our history.

Steven Rossi: This is the strongest commercial work position Worksport has occupied at the start of any of the fiscal years in our history. We provided revenue 2026 guidance of $35 to 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 conduct 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.

Speaker #2: We've provided revenue 2026 guidance of 35 to 42 million dollars 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.

Speaker #2: 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 conduct a high-growth and construct, sorry, a high-growth and durable business that can compound shareholder value over the long term.

Speaker #2: Although it's not going to be a straight line, we are going to get there. And we are relatively young, and we are a dynamic business with consistent growth in design, production, and distribution of quality and innovative products.

Steven Rossi: We are a relatively young, 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Steven Rossi: 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, and we're gonna continue to grow, and 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 cash flow positivity just with our foundational products and significant revenue uptake. This is the company we have all built together.

Speaker #2: As I said earlier, we are executing, and we are going to continue to grow, and we're going to hit cash flow positivity, but it is never a straight line.

Speaker #2: So 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.

Speaker #2: Last year, we crossed $16 million. This year, we're on the path to achieving operational cash flow positivity just with our foundational product and significant revenue uptake.

Speaker #2: 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.

Steven Rossi: 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, and 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, launched SOLIS, launched COR, unveiled 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.

Speaker #2: I also want to know 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, and I will purchase shares again if I have to.

Speaker #2: In Q1 of '26, it's not a perfect quarter from a cash flow perspective. It will be a quarter it was a quarter where we did what we said we were going to do: launch solars, launch core, unveil Nexus, added major distribution, and completed core certifications, expanded gross margin year over year, and improved loss per share.

Speaker #2: All while it was the slowest quarter of the year. Q1 tends to be the slowest quarter seasonally of the year for tunnel cover sales.

Steven Rossi: 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 H2 are about proving conversions, turning inventory into revenue, dealer growth into orders, Nexus demand into shipments, and margin expansion into lower cash burn. We're 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, and everything else is accreted 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.

Speaker #2: Q1 was the investment in launch readiness quarter. Q2 of 2026 and the second half are about proving conversions, turning inventory into revenue, dealer growth into orders.

Steven Rossi: Q1 was the investment and launch readiness quarter. Q2 of 2026 and H2 are about proving conversions, turning inventory into revenue, dealer growth into orders, Nexus demand into shipments, and margin expansion into lower cash burn. We're 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, and everything else is accreted 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.

Speaker #2: Nexus demand into shipments, and margin expansion into lower cash flow. We're also building strategic vectors around federal channels, OE targeting for solars and core, AetherLux certification processes, progress.

Speaker #2: None of which are required for making the overall business operationally cash flow positive. We expect the tunnel cover business, our foundational business, to be capable of that on its own and everything else is accretive to that.

Speaker #2: 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.

Speaker #2: We intend to earn investor confidence quarter by quarter through results, not promises. Thank you for your continued support and interest in Worksport.

Steven Rossi: We intend to earn investor confidence quarter by quarter through results, not promises. Thank you for your continued support and interest in Worksport.

Steven Rossi: Thank you for your continued support and interest in Worksport.

Speaker #1: Thank you, Steve. We have Tate Sullivan here from Maxim, who has his hand up for some questions.

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

[Company Representative] (Worksport): Thank you, Steve. We have Tate Sullivan here from Maxim who has his hand up for some questions.

Tate Sullivan: Thank you, Steve, and thank you for the comments on inventory. 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?

Speaker #3: Thank you, Steve, and thank you for the comments on inventory. That was the first thing one of the first things I saw. And then with finished goods balance of 5.3 million of the 11.6, it is most of that covers or relatively large amount in solars and core.

Steven Rossi: 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. 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?

Speaker #4: Core takes a chunk of it. It's in the millions for core because we have to manufacture in batches of 1,000 at a time. And then the rest is a bland AL3, HD3, AL4.

Speaker #4: And Nexus only just started being made at the tail end of the quarter. So Jen may have a bit more back of the napkin insight on that, but it's an even blend in my perspective.

Speaker #4: Am I right, Jen?

Speaker #5: Yes, it's an even blend, but there isn't a concentration in our Nexus to Nexus concentrations really in our raw materials at this point.

Jennifer Kartychak: 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.

Speaker #1: Okay. Understood. And were there does that imply first sales of solars and core in Q2 or not necessarily given the timing of the marketing on those products?

Tate Sullivan: Okay, understood. Does that imply first sales of SOLIS and COR in Q2 or not necessarily given the timing of the marketing on those products?

Steven Rossi: Sorry, ask that again, Tate. Does the sales represent Solis and COR?

Speaker #4: Sorry, ask that again, Kate. Does the sales represent solars and core?

Steven Rossi: Sorry, ask that again, Tate. Does the sales represent Solis and COR?

Tate Sullivan: Do you think you'll have first sales, first revenue from SOLIS and COR in Q2, or did you already have some in Q1?

Speaker #1: Oh, do you think you'll have first sales first revenue from solars and core in the second quarter, or did you already have some in the first quarter?

Tate Sullivan: Do you think you'll have first sales, first revenue from SOLIS and COR in Q2, or did you already have some in Q1?

Speaker #4: We had some. We were building the plane while we were flying it with the solars and core. Unfortunately, the final production units of both were also at the same time concurrent with initial productions, like launch.

Steven Rossi: We had some. You know, 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. You know, 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're just starting to see that content get out there.

Speaker #4: So when we get when we got the first batches of cores, it was those very cores that we used to give to influencers, generate media content.

Speaker #4: And it takes probably in a quarter in itself to produce the media content. And if you look in our webpage, Facebook, all the social medias, you're just starting to see that content get out there.

Speaker #4: And then 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.

Steven Rossi: We have to, you know, do ad spend on it and, and invigorate the markets as well as, you know, 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 and 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.

Speaker #4: So like I said, numerous times during the earnings call and 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.

Speaker #4: So, to answer the question, we did clip sales of Core and Solars, but they just weren't that meaningful. Although, when you look at the AL3, our first product, it took a year to get that to market.

Speaker #4: And that product is an existing market. When we're forging a new market, the likes have never which has never existed, it's to be expected it's going to take at least this year to get that product off the ground into meaningful revenue territory.

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

Speaker #1: Okay. And last for me, one more, please, is you had a slide on the B2C and B2B tunnel covers and then the combined price per cover I mean, back of the envelope, a little above 800, that's well above from the level per tunnel cover last year.

Tate Sullivan: Okay. Last for me, one more please, is, you had a slide on the B2C and B2B tonneau covers and then the combined price per cover. I mean, back of the envelope, a little above $800, that's well above from the level per tonneau cover last year from the Q information. Is that because of the hardcover mix from softcover primarily? Then also the margins with B2B, those are lower than B2C, but by a meaningful amount. Is that what you said? Sorry, 2 questions there.

Speaker #1: From the Q information, is that because of the hard cover mix from soft cover primarily? And then also the margins with B2B, those are lower than B2C.

Speaker #1: But by meaningful amount, is that what you said? Sorry, two questions there.

Speaker #4: Yeah. So our cost the average sell the average order value has gone up, but both 35%, if I'm not wrong, maybe even more. So we're just selling more expensive items.

Steven Rossi: Our costs, the average sell, the average order value 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 of our. We're over 90% domestically sourced material, so 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.

Speaker #4: And then also with domestic inflation of our we're 90% over 90% domestically sourced material. So we don't have any very little foreign content. But domestic inflation is real.

Speaker #4: The price of aluminum has doubled. In the past year, so our cost has also increased. And that's eroding margin, but as it 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.

Steven Rossi: So 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 gonna 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?

Speaker #4: So we're improving as fast as domestic inflation might be nibbling away. But the good thing—the light at the end of the tunnel—is aluminum is not going to stay at an all-time high.

Speaker #4: And when it increases, so will our margin exponentially while we maintain discipline in manufacturing. So I think that might answer your question. If it's not a giant run-on sentence, and what was the second one, Tate?

Tate Sullivan: You had a 35% gross margin target. Not understanding doing the guidance on an 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

Speaker #1: And then you had a 35% gross margin target, understanding you're doing the guidance on an annual basis. And I think you answered that—how you get there, even if you have more B2B sales, lower aluminum prices—that'll help you get to that 35%.

Speaker #1: Is that a fair?

Speaker #4: Yeah. With any luck, so there's a few different things that we're doing. Number one is B2B is back of 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 cost of Google, Meta, these types of ads.

Steven Rossi: Yeah. With any luck. There's a few different things that we're doing. Number 1 is B2B is back in the napkin, lower margin. There's also a general lower cost to service the account, both in warranty, freight, marketing, you know, 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. 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.

Speaker #4: So what we discount them is actually at times less than what we have to spend to sell it directly on our website. So at net-net is very similar.

Speaker #4: 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.

Speaker #4: There's absolutely no way that Worksport has the infrastructure this year to be able to service that state same day. So now we have massive economies of scale by having relying on their infrastructure to just sell more covers to more people quicker and better.

Steven Rossi: Now we have massive economies of scale relying on their infrastructure to just sell more covers to more people quicker and better. And then 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. The upside is economies of scale. 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, that's when we're really gonna reap the benefits. We're weathering a storm right now that everybody's weathering.

Speaker #4: And then, in essence, their discount on the product is the equivalent of our CAC, our customer acquisition cost, on direct-to-consumer. So it almost nets out the same.

Speaker #4: And then again, and then the upside is economies of scale. So we have overhead absorption over more units, but then 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, where aluminum starts coming back down, that's when we're really going to reap the benefits.

Speaker #4: So 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.

Steven Rossi: The last thing I'll say is the most popular vehicle in North America is the F-150, and 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. We can't paint Worksport with a different brush than what Ford Motor Company gets painted with.

Speaker #4: And I believe the price tag of the F-150 for the average American has gone up $20,000 in a year. For the base model, maybe, if not $20,000, very close.

Speaker #4: That's because it's an all-aluminum truck. So Ford feels it. We're going to feel it. And you can't paint Worksport with a different brush than what Ford Motor Company gets painted with.

Speaker #1: Thank you, Steven.

Tate Sullivan: Thank you, Steven.

Speaker #4: Welcome, Tate. Thank you. Tate, also, now that we're starting to grow as a business, we're starting to see—it’s insane to think that Q1, that's measurably the slowest quarter of the year for tunnel cover sales.

Steven Rossi: You're welcome, Tate. Thank you. Tate, also, you know, 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 US, cold weathers, truck sales are down. 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.

Speaker #4: Now that we're growing, we're seeing this. Just a lot of snow in most of the US, cold weathers, truck sales are down. So as we're maturing, we're learning this.

Speaker #4: But it's also to note that it's going to 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.

Speaker #4: So while we're doing guidance and looking at 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 going to 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.

Steven Rossi: 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 $1 billion 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?

Speaker #4: Does that make sense?

Speaker #1: Yep. Understood. Thank you.

Tate Sullivan: Yep. Under-understood. Thank you.

Speaker #4: Yeah.

Steven Rossi: Yeah.

Speaker #1: All right, Steve. Thanks for those replies. We did want to open the floor and give some commentaries at the shareholders attending the call today.

Ron: All right, Steven, 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 these 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 ten days.

[Company Representative] (Worksport): All right, Steven, 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 these 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 ten days.

Speaker #1: 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 at the business is happening.

Speaker #1: This is to boost transparency, but 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.

Speaker #1: 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.

Speaker #1: And Steve, I will now open the floor with some of those questions. Here, we have question number one, which is around our cash position.

Ron: 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 forecast balance we have, as well as commentary on any expected dilution.

[Company Representative] (Worksport): 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 forecast balance we have, as well as commentary on any expected dilution.

Speaker #1: 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.

Steven Rossi: It's a good question. You know, I think that investors, you know, 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 6 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 in at the market.

Speaker #4: It's a good question. 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.

Speaker #4: Nobody does. So 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.

Speaker #4: We all want Worksport to be highly successful. And we also don't want any more shares ever to be issued. So you could see that over the past six months, we've been very modest at the market.

Speaker #4: So at the market, the offering we do at the market is just selling from time to time stock. At the market. It saves us warrants.

Steven Rossi: It, 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, we don't want it. We tried to sip, not gulp, you know, 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.

Speaker #4: 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 are significant last year during our reggae.

Speaker #4: So, 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.

Speaker #4: So, we’re doing our absolute best there. We’re going to fund our operations through an operating line. We have a significant book value. The book value of the business is close to $30 million.

Speaker #4: If I'm not being too forthright in saying that, so that's a financeable assets that we have that we're able to borrow against. So when borrowing money is cheaper than issuing securities at a $10 million market cap, we do that.

Steven Rossi: That, that's a financiable 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.

Speaker #4: But we are going to maybe raise some money this year. Last year, we were very active in the markets. We raised, I think, $25 million.

Speaker #4: This year would be a fraction of that if 10% of that. Through the markets or through debt instruments. The minute we're cash flow positive, we'll qualify for lines of credit to senior lines of credits at regional banks, the Key Bank in Buffalo.

Speaker #4: And that's what I'm really hoping that we could qualify for that 10, 20, $30 million line of credit and I'm really thinking that as we land more distribution, that's going to be a pretty quick I said numerous times and I hope that investors are listening.

Steven Rossi: That's what I'm really hoping that we can qualify for that $10, 20, 30 million dollar line of credit. I'm really thinking that as we land more distribution, that's gonna be a pretty quick. I 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.

Speaker #4: When I say that it's not a straight line, but I think that the ramp this year in revenues is going to be as close to straight as you could get in real business, which is always pretty.

Speaker #4: It's ugly, but it's we're getting there.

Speaker #1: 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, some shareholder.

Ron: 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.

[Company Representative] (Worksport): 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.

Speaker #5: Sure. So 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.

Jennifer Kartychak: 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 cost 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.

Speaker #5: So 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.

Speaker #5: About 10% relates to facility support, and then the remainder relates primarily to professional fees. Professional fees do include non-cash expense related to equity compensation.

Speaker #5: But of that 66%, it should be noted that about 20% of that actually gets absorbed into our margin.

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

[Company Representative] (Worksport): Fantastic. Thanks for that insight, Jen. We had a question for Steve regarding the company's view on how AetherLux should be valued or at least looked at this current time.

Speaker #1: Fantastic. Thanks for that insight, Jen. And we had a question for Steve regarding the company's view on how a direct should be valued or at least looked at at this current time.

Steven Rossi: 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 has, 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.

Speaker #4: I think that if AetherLux, if TerraVue's energy was private, I feel that it would have significant valuation. I'm going to disclaim that disclaimer that I'm not making any representations or warranties by saying this, but I believe that TerraVue's energy and just the technology that the AetherLux should be a nine-figure valuation.

Speaker #4: The significance of interest that we've had from businesses that are global has the likes of which we've never seen before. So at its current stage, I feel that it's a nine-figure valuation because I feel that it presents 9 and 10-figure revenue opportunities very, very quickly.

Speaker #4: And we're going to get there. I mean, we've shown that we know how to get a product to market and selling. So this is just the same, so I think that the valuation, although it's basically nothing right now, we're trading at a third of our book value.

Steven Rossi: I mean, 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 to 100 million at minimum if it was private.

Speaker #4: I think that TerraVue's energy is a significant value 50 to $100 million at minimum if it was private.

Speaker #1: 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 going to be more likely to go spend for the rest of the year?

Ron: 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 for the spend of the year?

[Company Representative] (Worksport): 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 for the spend of the year?

Speaker #4: Yeah, absolutely. So because of the increase in cost that we've had as a result of inflation, domestic aluminum price is doubling. We've had to reduce the ability to discount.

Steven Rossi: Yeah, absolutely. Because of the increase in costs that we've had as a result of inflation, domestic aluminum prices doubling, we've had to reduce the ability to discount. Before we were If you guys saw, we were doing, you know, 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% to 30% of the sales.

Speaker #4: So before, if you guys saw, we were doing AL3s for $7.99, and now AL3s are almost $1,000. So we can't discount our product as much.

Speaker #4: So to that extent, we've had to spend more on marketing to be able to get higher average order value. So we think that the marketing we got it under control now.

Speaker #4: It took a little it took all of this quarter, sorry, Q1 to get it under control. With the reduction of discounts and we think that the spend is going to be probably about 20% to 30% of the sales.

Speaker #4: So it's going to keep going up. We're going to spend more because we want to sell more. But the idea is it's all profitable.

Steven Rossi: It's going to keep going up. We're going to spend more because we want to sell more, but the idea is it's all profitable.

Speaker #1: 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?

Ron: 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 in the future?

[Company Representative] (Worksport): 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 in the future?

Speaker #4: Yeah. So 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.

Steven Rossi: Yeah. Tri-State is massive. Tri-State services Texas same day. We can't do that. There's no way we can compete with their service level. They are a big business. They have 1 million square feet of warehouse space, and they sell tens of millions of dollars of tonneau covers a year. 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. Tri-State, there is three distributors in America. Tri-State is more regional. They are not national.

Speaker #4: They have a million square feet. Of warehouse space. And they sell tens of millions of dollars of tunnel covers a year. And the Nexus is the best tunnel cover in the market.

Speaker #4: I can guarantee that. So Tri-State could be a seven-figure, maybe even eight-figure account for Worksport. And we've heard of distributors buying tens of millions of dollars a month from our competitors.

Speaker #4: So I don't think that Worksport would not be able to at least aspire towards that as time goes. And the Tri-State, there's three distributors in America.

Speaker #4: Tri-State, is more regional. They're not national. They don't service all of the US. And there's Meyer in Keystone that's owned by LKQ Corporation. Typically, they compete with each other.

Steven Rossi: They don't service all of the US. There's Meyer and Keystone that's owned by LKQ Corporation. Typically, they compete with each other. Whatever Tri-State does, Meyer does, and then Keystone does. The fact that we landed one means 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 does, typically Keystone and Meyer does as well. Keystone and Meyer are bigger in terms of top-line revenue. The opportunity becomes exponentially larger while Tri-State in itself is still very meaningful for top-line revenue opportunities.

Speaker #4: So whatever Tri-State does, Meyer does, and then Keystone does. So the fact that we landed one means that we are very confident that we're going to land the other two.

Speaker #4: And the other two are larger in revenue and in size. And they service all of North America, inclusive of Canada—maybe even Latin America.

Speaker #4: So the answer is whatever Tri-State does typically Keystone and Meyer's does as well. And Keystone and Meyer's are bigger in terms of top-line revenues.

Speaker #4: So the opportunity becomes exponentially larger while Tri-State in itself is still very meaningful for top-line revenue opportunities.

Speaker #1: Thank you. We had another question regarding the certification of the core 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 commercialization?

Ron: 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 commercialization?

[Company Representative] (Worksport): 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 commercialization?

Speaker #4: Yeah. So we don't need to ISO 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.

Steven Rossi: 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, and we're gonna start the marketing engine. The AL3 took a year to get off the ground, and 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 COR is gonna be significant.

Speaker #4: Amazon is, I think, where products go to die. But as we talk to OEMs, governments, and fleets, it's a good qualifier. So ISO certification opens the door to commercial B2B.

Speaker #4: Meanwhile, on direct-to-consumer B2C, we've got the marketing assets live now. We're just rolling them out now. And we're going to start the marketing engine.

Speaker #4: The AL3 took a year to get off the ground. And 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 going to be significant.

Speaker #4: One thing I'll say is EcoFlow, which is Chinese-owned, Chinese-operated. Fran, you got the statistic. I think it was about a billion dollars in sales.

Steven Rossi: 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.

Speaker #4: A few years ago.

Ron: reported to sell over $1 billion in 2023.

Speaker #1: Reported to sell over a billion dollars in 2023.

[Company Representative] (Worksport): reported to sell over $1 billion in 2023.

Speaker #4: Yeah. So in 2023, EcoFlow, which is a Chinese-owned and operated business, was an inferior product. It's not modular, at least like ours. Sold a billion dollars three years ago.

Steven Rossi: In 2023, EcoFlow, which is a Chinese-owned and operated business with an inferior product, it's not modular, at least like ours, sold $1 billion, 3 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, so 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 COR.

Speaker #4: So we know that even if we got 10% of that over time, that's still $100 million in top-line revenue. And the product's done. We're not we've turned off the R&D engine for that product.

Speaker #4: So there's no more spend. It's just a matter of getting it out there and getting it selling. So the rest of this year is extremely bright looking for the core.

Speaker #1: Thanks, Steve. And 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.

Ron: 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 somewhere at $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.

[Company Representative] (Worksport): 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 somewhere at $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.

Speaker #1: And 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.

Speaker #4: Yeah, good question. 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.

Steven Rossi: Yeah, good question. you know, revenue guidance, we're a $10 million market cap company. you know, 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 2 product lines. This year is the first year for us to be in business with 7 product lines. We're really just doing educated guesses.

Speaker #4: So 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.

Speaker #4: But we don't have 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.

Speaker #4: 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.

Speaker #4: So we're really just doing educated guesses. And we could spend more and sell more. But then the gross margin goes down. So to be able to maintain profitability, it's always a balancing act.

Steven Rossi: 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 want to be able to sell more, but yeah, we have to spend more on Google, we have to spend more on sales reps and agents and commissions. The profit is very low, and then that looks even worse. We had to call it at the end of the year to say towards H2 of the year saying, Let's focus on profit, to be able to finance the operations versus the growth. The growth is going to be there, it's just a matter of getting there profitably, and that's a very difficult balancing act.

Speaker #4: We want to be able to sell more. But yeah, we don't we have to spend more on Google. We have to spend more on sales reps and agents and commissions.

Speaker #4: And then the profits very low. And then that looks even worse. So 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.

Speaker #4: The growth is going to be there. It's just a matter of getting their profitably. And that's a very difficult balancing act. So we're going to get to a middle-market business.

Steven Rossi: 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.

Speaker #4: But we want to get their profitably, which may take us a little longer. But it's better than getting there fast. But not profitable.

Speaker #1: 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?

Ron: Thanks, 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?

[Company Representative] (Worksport): Thanks, 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?

Speaker #4: A good friend of mine, Julian Maiman, was the founder of Back Industries. He's a friend that I do keep in touch with. He exited the business.

Steven Rossi: 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, 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. They're just not as good of a product. I'm not trying to talk poorly about the company.

Speaker #4: He had Back Industries at $80 million in revenues over a decade ago. With the backflip G2, which is measurably inferior to the Nexus. Back Industries is rumored to be over $200 million in revenues today.

Speaker #4: And their product, I believe, is measurably inferior if you see some of the videos I did a year ago online. They have paper-thin aluminum panels.

Speaker #4: 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.

Speaker #4: And I'm sure I'm not even I'm not trying to talk clearly about the company. I look up to their parent company. But I do know that of Back Industries' product, the rumor was about $200 million in sales.

Steven Rossi: I look up to their parent company. I do know that of Bak Industries' product, the rumor was about $200 million in sales. Whether that was a high 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, you know, over $100 million, I think that Worksport can be able to get to $50 or $100 million in top-line revenues with an improved, a significantly better product that you don't have to walk around the truck. It doesn't bend as easily, doesn't require drilling and doesn't fall apart after a year.

Speaker #4: Whether that was a high a few years ago or it's something that they're still doing today, I don't really know because they're private still.

Speaker #4: But that was the rumors from credible sources. So the answer is if Back Industries is selling an inferior product, I'll be longer-standing product. And about over $100 million I think that works for it can be able to get to $50 or $100 million in top-line revenues within an improved a significantly better product that you don't have to walk around the truck doesn't dent as easily and doesn't require drilling and doesn't fall apart after a year.

Speaker #1: Fantastic. Thanks for that insight, Steve. We do have one more question here regarding the sales and marketing percentage. And we're going to direct this to Jen.

Ron: Fantastic. Thanks for that insight, Steve. We do have one more question here regarding the sales and marketing percentage, and I'm gonna direct this to Gem. 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?

[Company Representative] (Worksport): Fantastic. Thanks for that insight, Steve. We do have one more question here regarding the sales and marketing percentage, and I'm gonna direct this to Gem. 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?

Speaker #1: The percentage of sales and marketing that is variable on B2C—could you comment on how that was in Q4, Q1, and now heading into Q2 2026?

Speaker #5: Sure. I'd be happy to do so. 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.

Jennifer Kartychak: 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.

Speaker #5: 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 and our primary server in the B2C space being those good old truck owners.

Speaker #5: So 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 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.'

Jennifer Kartychak: We really took that information towards the end of Q1 2026 and said, you know, let's just hone 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.

Speaker #1: Thanks, John. And 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 that we're hoping to ask you a little bit more insight on how that played out and what we expect to happen?

Ron: 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? If we hope to get a little bit more insight on how that played out and what we expect to happen.

[Company Representative] (Worksport): 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? If we hope to get a little bit more insight on how that played out and what we expect to happen.

Speaker #5: Could you repeat the question? I apologize. You were a little bit muffled.

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

Speaker #1: Yeah, you were mumbled wrong. Sorry about that. It's just a little bit more clear.

Steven Rossi: Yeah, you're muffled, Ron.

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

[Company Representative] (Worksport): Sorry about that. Is this a little bit more clear?

Speaker #4: Somewhat.

Steven Rossi: Somewhat, yeah.

Speaker #1: Okay. The question is related to the product costs 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's expected to go.

Ron: 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's expected to go.

[Company Representative] (Worksport): 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's expected to go.

Speaker #4: Product marketing costs have changed in the last few months, and where it's expected to go?

Steven Rossi: How product marketing costs have changed in the last few months and where it's expected to go?

Speaker #5: 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.

Jennifer Kartychak: 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.

Speaker #5: And to that end, we've employed some outside consultants to help us assess our existing campaign's 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.

Speaker #5: So 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 and the AL4 space, which is a really great revenue driver for us.

Speaker #5: And then also use that information as a springboard for the core and solis because the core and solis, honestly, from a marketing standpoint, direct-to-consumer marketing standpoint, is a different approach because it achieves the ability to capture market at a broader on a broader scale as opposed to just a niche market.

Jennifer Kartychak: 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.

Speaker #5: Hopefully, that addresses your question.

Steven Rossi: Yeah.

Speaker #1: Fantastic.

Speaker #4: It does also. I'll just chime in real quick for on that. Marketing is very volatile. So for example, one of our competitors has 2 million site visitors a month.

Ron: It does.

[Company Representative] (Worksport): It does.

Steven Rossi: It does. Also, 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, and we're competing directly with them and other competitors as well. The space is just highly competitive. I think that the US 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 in marketing world right now and it's just expensive.

Speaker #4: So they're—and that's not very organic. That's paid visitors. Let's say it's a dollar per visitor. They're spending $2 million a month in ads.

Speaker #4: And we're competing directly with them and other competitors as well. So the space is just highly competitive. I think that the U.S. economy is challenged.

Speaker #4: So the marketing costs are more significant this year because businesses need to continue to find growth and get sales. So it's just more competitive in the marketing world right now.

Speaker #4: And it's expensive. So, 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.

Steven Rossi: 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.

Speaker #1: Thanks, Steve. And 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?

Ron: Thanks, Steve. The last question here is if you have 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?

[Company Representative] (Worksport): Thanks, Steve. The last question here is if you have 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?

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

Speaker #4: Key takeaway is that growth is ugly and it's not in a straight line. That in the uplifting era of 2021, when we listed to the NASDAQ and OTC, we uplifted with companies my comrades.

Speaker #4: That none of which exists which is a testament to how difficult it is. To grow a business. And 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.

Speaker #4: But the point is that we remain steadfast in execution, and we remain steadfast in delivering on our business. From a million to six—sorry, from a million to eight to sixteen, and this year, with the thirty-plus in line, our insight—I think the key takeaways are that we're executing, but it's not a straight line.

Steven Rossi: The point is that we remain steadfast in execution, and we remain steadfast in delivering on our business, you know, from $1 million to $6 million. Sorry, from $1 million to $8 million to $16 million, and this year with the $30+ 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 just 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.

Speaker #4: And it's not easy. And if it was easy, those that judge easily would be doing it themselves. So to that extent, we're just we're focused on this exclusively and working our rear ends off.

Speaker #4: And we're going to get there. This year is the first year we have seven products with AetherLux coming down the pipeline as well. So the key takeaways are, as much as we didn't sell as much this quarter as in Q4—which is unrealistic and crazy to think that a business would sell more in the middle of winter than at Christmas and Black Friday—we also spent less.

Steven Rossi: 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 sold $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, so I want what everybody on this call wants, which is continued success.

Speaker #4: And we came out basically even. So, if we had sold $5 million, we would have made basically the same amount of profit, having to spend so much in marketing.

Speaker #4: So, 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.

Speaker #4: So I want what everybody on this call wants, which is continued success. So that's in short what it is. It's not a straight line, and it's not pretty, but we're grinding.

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

Speaker #1: Thank you very much, Steve. Thank you, Chen, 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 investors@worksport.com.

Ron: 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 investors@worksport.com.

[Company Representative] (Worksport): 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 investors@worksport.com.

Steven Rossi: Okay.

Speaker #1: And we look forward to hosting monthly town halls going forward.

Ron: We look forward to hosting monthly town halls going forward.

[Company Representative] (Worksport): We look forward to hosting monthly town halls going forward.

Speaker #4: Yeah, I'll close, Ron, just to say, yeah, we're going to 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 going to do monthly town halls.

Steven Rossi: Yeah. I'll close, Ron, just to say, yeah, 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 so a larger press release that outlines smaller, important elements that are not as material. Anything material comes out right away, of course, by requirement.

Speaker #4: So what we're going to do now is, every month, we're going to do major press releases that have to go out. We'll go out.

Speaker #4: We'll do press releases at the end of the month for smaller town hall-related matters and updates. So a larger press release that outlines smaller important elements that are not as material.

Speaker #4: And so anything material comes out right away, of course, by requirement. And then 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. Today, I'm everywhere, but we're going to be live on video, just answering questions live.

Steven Rossi: Immediately adjacent to that press release, we're gonna schedule, I think about a week later, a town hall where I'm gonna be on, live on. Like today I'm everywhere, but we're gonna be live on video just, you know, 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. We're gonna 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 wanna 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.

Speaker #4: Shareholders will be able to go live. They'll ask questions, not typed. We'll welcome them to voice their questions. They can share video. And we're just 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.

Speaker #4: You want to know about GNA? I see a question here about salaries and payroll. Jen, actually, you should answer that. Salaries and payroll, if you're still here, on GNA.

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

Speaker #4: Is there a round number you could throw out there on what that looks like?

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

Jennifer Kartychak: 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%, and then 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, and 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.

Speaker #5: Yes, I can address that from two different perspectives. So from the perspective of what makes up our payroll, meaning the components of payroll, are base wages and overtime, is a little bit north of 95%.

Speaker #5: And then our benefits is I'm sorry. I gave you the wrong number. I apologize. And you know what? I'll shift over just briefly in terms of giving you information as to who's in that payroll number.

Speaker #5: So is of Q1, 2026, about 51% of our salaries and wages was actually from our production wing. And most of that gets absorbed back into our inventory.

Speaker #5: And about 28% of that is coming from our admin function. The balance is a smattering between our sales function, as well as our warehousing function and facilities function.

Speaker #5: So hopefully, that addresses your thoughts there. And then in terms of our wages and salaries, as I said above—I apologize—about 70% of our salaries and wages is base wages and overtime.

Jennifer Kartychak: In terms of our wages and salaries, as I said about, I apologize, about 70% of our salaries and wages is base wages and overtime. About 30% of that is relating to, or 17% of that is related to benefits, the balance is related to that compensation expense, which is non-cash in nature.

Speaker #5: About 30% of that is relating to, or 17% of that is related to, benefits. And then the balance is related to that compensation expense, which is non-cash in nature.

Speaker #4: Great, thanks, Jen. And then I see, Nachi, you're asking me questions about Tara Veese and what Tara Veese—you can ask me on, I think we talk on LinkedIn.

Steven Rossi: Great. Thanks, Jen.

Jennifer Kartychak: Thank you.

Steven Rossi: Then I see, Nachi, you're 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.

Speaker #4: So you can message me. But obviously, we'll always explore to best assure sales, mergers, acquisitions, these types of things. But I think that we want to 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% is held by the key executives.

Speaker #4: Another thing I'll note with respect to Tara Veese is it's headed by my father, Lorenzo Rossi, the primary shareholder of Tara Veese Energy and Options.

Steven Rossi: Also Lorenzo to continue to support the business, has reduced his salary to be able to. 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 shows that we're all very committed. You know, 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.

Speaker #4: But also Lorenzo, to continue to support the business, has reduced his salary to be able to he still works full-time at Tara Veese Energy.

Speaker #4: And 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.

Speaker #4: So to that extent, he's working for Tara Veese and leading this charge and bringing the brilliance and genius for $60,000 a year, and I think that that shows that we're all very committed—me with my base salary and compensation.

Speaker #4: I invested a good chunk of that into buying Workforce stock. So to that extent, about a third of it. So to that extent, we're all doing everything we can and working our rear ends off to get there.

Steven Rossi: to that extent, 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. We see an $0.85 stock or a $10 million market cap, 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.

Speaker #4: Like I said, it's not a straight line. We see an 85% stock or $10 million market cap. But every quarter, we continue to deliver better book value.

Speaker #4: Now that's closer to $30 million in asset value. For Workport with all of these great upside opportunities. So it's going to go eventually it's going now, but eventually, the valuation is going to be better and we're very, very positive for this year ahead specifically.

Speaker #1: Fantastic. Thank you very much, Steven. And thank you for everyone attending the call. This does now mark the end of the earnings call. And we look forward to meeting again in our next periodic town hall.

Ron: Fantastic. Thank you very much, Steven, and thank you for everyone attending the call. This does now mark the end of the earnings call, and we look forward to meeting again in our next periodic town hall. Thank you very much.

[Company Representative] (Worksport): Fantastic. Thank you very much, Steven, and thank you for everyone attending the call. This does now mark the end of the earnings call, and we look forward to meeting again in our next periodic town hall. Thank you very much.

Speaker #1: Thank you very much.

Speaker #4: Thanks, everyone.

Steven Rossi: Thanks, everyone.

Jennifer Kartychak: Thank. Goodbye.