Worksport (NASDAQ:WKSP) reported higher first-quarter revenue and gross profit as management characterized the period as an “investment and launch readiness quarter” tied to new product introductions and distribution expansion.
Chief Executive Officer Steven Rossi said the company used the quarter ended March 31, 2026, to fund inventory, support product launches, refine marketing and expand distribution. He said the company’s focus for the second quarter and second half of the year is converting those investments into shipments, sales channel activation, margin improvement and lower operating cash burn.
Revenue and Gross Profit Improve From Prior Year
Chief Financial Officer Jennifer Kartychak said net sales rose to $3.3 million in the first quarter, up approximately 47.9% from $2.2 million in the prior-year period. The U.S. accounted for 99% of net sales.
Hard tonneau covers generated approximately $3.3 million, or about 99% of total first-quarter sales, while soft tonneau covers contributed approximately $0.04 million. Kartychak said the concentration reflects Worksport’s focus on higher-margin American-made products.
By channel, direct-to-consumer sales contributed approximately $1.8 million on about 1,700 covers, while business-to-business sales generated approximately $1.5 million on about 2,300 covers. Kartychak said the company continues to develop its direct online channel while increasing emphasis on dealers, distributors, fleets and potential OEM partnerships.
Gross profit more than doubled to approximately $854,000, or about $0.9 million, compared with about $0.4 million a year earlier. Gross margin improved to approximately 26% from approximately 18% in the first quarter of 2025, though it declined from approximately 30% in the fourth quarter of 2025. Kartychak attributed the sequential decline to channel mix, noting that the first quarter shifted closer to an even split between B2C and B2B, with B2B carrying lower margins. She said B2C margin improved sequentially to approximately 34%.
Operating Expenses Rise as Product Launches Drive Spending
Total operating expenses increased to approximately $6.6 million from $4.7 million a year earlier. Research and development expense declined by about $0.2 million, or 44%, as certain products moved from development into production during 2025.
General and administrative expense increased to approximately $4.3 million from $3.4 million, which Kartychak said was primarily attributable to costs supporting capital market positioning and promotion of the company’s enterprise value amid what management views as a market valuation gap.
Sales and marketing expense rose 148% to approximately $2.1 million from $0.9 million. Kartychak said the increase reflected brand awareness and launch campaigns tied to multiple product offerings, including COR and SOLIS.
The company reported a net loss of approximately $5.8 million, including about $1.1 million in non-cash items such as stock-based compensation, depreciation and amortization. Kartychak said that implied a cash-based operating loss of approximately $4.7 million.
Cash Position and Inventory in Focus
Worksport ended the quarter with $566,000 in cash and cash equivalents, down from approximately $5.9 million at Dec. 31, 2025. Net cash used in operating activities was approximately $8.2 million.
Rossi addressed the company’s liquidity position directly, noting that Worksport’s 2025 Form 10-K included a going concern explanatory disclosure. He said the company’s plan is to convert inventory into revenue, grow gross margins, reduce operating cash consumption as launch spending normalizes and maintain a disciplined approach to working capital and capital market resources.
Kartychak said working capital used an additional approximately $3.5 million during the quarter, primarily due to inventory build and settlement of prior-period payable obligations. She said the company does not expect the same level of working capital use to repeat as inventory begins converting into revenue and prior obligations normalize.
Inventory rose by $2.1 million to $11.6 million as of March 31. Raw goods increased to $5.3 million, reflecting investments in COR, SOLIS and NEXUS readiness. Kartychak said the company is not anticipating a significant use of cash for additional material purchases until the third quarter of 2026.
Rossi said Worksport raised approximately $2.2 million during the quarter, including net proceeds through its amended at-the-market offering with H.C. Wainwright, issuing 1.46 million shares of common stock. He said the company recognizes the impact of dilution and intends to use the ATM as a tactical tool, not as its primary capital vehicle.
New Products and Distribution Expansion
Rossi said the company began commercial shipping of its SOLIS solar tonneau cover and COR portable energy system in January. COR received applicable UL and CSA certifications in April, which Rossi said supports broader North American retail and commercial distribution.
SOLIS is described by the company as a solar-integrated hard folding tonneau cover, while COR is a modular portable energy system that can integrate with SOLIS or operate as a standalone unit. Rossi said the products did not meaningfully contribute to first-quarter sales, adding that the company is building marketing assets, awareness and sales pipelines for the remainder of the year.
The company also unveiled its NEXUS tonneau cover at the Keystone BIG Show in March and launched it commercially in April. Rossi said the product generated immediate buyer interest and pre-order activity. NEXUS is designed to allow full operation from one side of the truck while maintaining full bed access.
Worksport also highlighted a new distribution relationship with Tri-State Enterprises, which Rossi said has placed initial purchase orders and reorders. He said Tri-State expands the company’s reach across Arkansas, Missouri, Oklahoma and Texas and operates approximately 1 million square feet of warehouse space. Rossi said management believes Tri-State can become a seven-figure near-term account with recurring multi-million dollar potential.
The company said it has more than 500 dealer locations and is targeting more than 1,500 by year-end. Rossi also said Worksport is in closing discussions with a nationwide dealer network, but said the company would update investors if those discussions become signed commercial relationships.
2026 Outlook Reaffirmed
Rossi reaffirmed the company’s previously stated 2026 revenue guidance of $35 million to $42 million, first provided in its 2025 Form 10-K. He said Worksport expects revenue to increase substantially from 2025 and is actively targeting operational cash flow positivity this fiscal year.
Management said it plans to provide annual financial guidance going forward rather than quarterly updates, citing a desire to emphasize long-term strategy and shareholder value over short-term metrics.
Rossi also discussed Terravis Energy, Worksport’s clean energy subsidiary, and its Aetherlux ZeroFrost heat pump technology. He said certification work is progressing with AHRI, ENERGY STAR and other North American milestones targeted in 2026. He said no procurement decision has been made and the company is not projecting initial Aetherlux revenue this year, though it anticipates commercial opportunities within 12 months.
In the question-and-answer portion of the call, Rossi said the first quarter included some SOLIS and COR sales, but they were not meaningful. He also said aluminum price increases and domestic inflation have pressured margins, while efficiencies in manufacturing are helping offset some of the impact.
Rossi closed by emphasizing execution, saying first-quarter results reflected product launches, distribution gains, certification progress and year-over-year margin improvement, while acknowledging the company’s cash flow challenges.
“We intend to earn investor confidence quarter by quarter through results, not promises,” Rossi said.
About Worksport (NASDAQ:WKSP)
Worksport Ltd. is an Israeli-based designer, developer and global supplier of innovative automotive accessories, with a primary focus on pickup truck bed covers. The company’s core offerings include a range of hard and soft tonneau covers under brands such as ROLL, FLEXIT and SOLAR, engineered to provide truck owners with enhanced utility, security and weather protection. Worksport leverages advanced polymer materials and patented folding mechanisms to deliver lightweight, durable solutions that are easy to install and operate.
In recent years, Worksport has expanded its product portfolio to incorporate solar technology, introducing integrated solar tonneau covers capable of generating power for auxiliary truck systems or charging batteries for recreational and off-grid applications.
