Worksport (WKSP) Status update summary

Operating results and growth trajectory

• Q2 revenue increased nearly 58% from Q1, with gross profit up 93% and OpEx down 17%.

• July marked the seventh consecutive month of revenue growth, with $2.2 million in sales and $2.52 million in orders, indicating a healthy backlog.

• Annualized run rate is approaching $30 million, with expectations to reach $35–$40 million, at which point the business is expected to be self-sufficient and cash flow positive.

• Gross margin has remained above 30% for three consecutive months, despite significant inflation in raw materials.

• Sales are growing at an average of 10% per month, with a projected path to operational cash flow positivity within the year.

Financial health and capital management

• Net loss for the quarter was approximately $3.9 million, but improvements in sales and reduced burn are noted.

• Cash flow positivity is projected at $9 million in quarterly sales with a 35% gross margin and a 17% OpEx reduction, or at $12 million per quarter without OpEx cuts.

• Inventory stood at $12 million at Q2 end, with a focus on converting raw materials to sales and managing just-in-time procurement.

• Recent financing agreement provided $2.3 million in growth capital to support large orders and expansion.

• Management is focused on execution, reducing uncertainty, and improving financial position, with dilution considered a real cost.

Shareholder meeting and compliance updates

• Received a Nasdaq minimum bid price deficiency notice; compliance period extends to February 9, 2027, with potential for an additional six months.

• Options to regain compliance include a reverse stock split, though management prefers organic improvement.

• Board approved an advisory measure for a special dividend in the event of a business unit or asset sale, though no sale is planned.

• Management believes intrinsic asset value exceeds current market cap, and any sale would be strategic, not planned.