Worksport Ltd.

Q2 2026 net sales were approximately $5.2 million, versus $4.1 million in Q2 2025 and $3.3 million in Q1 2026, up 27% year over year and 58% sequentially. Gross profit was approximately $1.6 million, versus $1.1 million a year ago and about $850,000 in Q1 2026, up 52% year over year and 93% sequentially; gross margin was approximately 32% versus 26% in Q2 2025 and 26% in Q1 2026. Operating expenses were approximately $5.5 million, down 17% sequentially; net loss was $3.97 million, versus $3.73 million in Q2 2025 and $5.83 million in Q1 2026, and loss per share improved to $0.33 from $0.71 in the prior-year quarter. Net cash used in operating activities was approximately $3.4 million, improving from $8.2 million in Q1 2026 and about $3.1 million in Q2 2025. For the first half of 2026, net sales were $8.5 million, operating cash use was $11.7 million, cash and cash equivalents were $1.2 million at June 30, and inventory was $12.1 million. Management did not provide formal quarterly or full-year revenue guidance, but said it may hit momentary operating cash flow positivity within Q3 2026 and remains focused on sustainable operating cash flow breakeven in 2026.

Steve Rossi framed the quarter as evidence that the business is starting to scale more efficiently, saying revenue, margins, expenses and cash usage all moved in the right direction at once. He highlighted NEXUS, distributor onboarding, SOLIS/COR commercialization and AetherLux certification as key strategic growth drivers, while stressing operational discipline and a just-in-time inventory approach. His tone was notably confident and promotional, though he repeatedly said the company still has work ahead and no guarantees on divestitures, financing or timing.

Jennifer Kartychak focused on the financial mechanics behind the improvement. She said gross margin rose to approximately 32% despite tariff and input-cost pressure, helped by higher volume, overhead absorption and product mix, and noted that operating expenses fell about $1.1 million, or 17%, from Q1 2026. She also said working capital used only about $555,000 in Q2, versus roughly $3.6 million in Q1, and that cash was $1.2 million at June 30, up from $567,000 at March 31, while inventory was $12.1 million, including about $6.6 million of raw materials and $4.6 million of finished goods. On capital allocation, management said it wants to reduce reliance on dilutive capital, convert inventory into cash, and stand on its own two feet for the balance of the year.

Analysts and investors focused heavily on inventory monetization, sales and marketing spend, tariffs, NEXUS ramp, AetherLux timing and whether the company will need new funding. Management said the 6,800 finished-goods covers will be sold through a mix of promotions on reseller and direct-to-consumer channels, with a just-in-time model to avoid overbuilding inventory, and Jennifer said the company expects finished goods and raw materials to decline in Q3. On tariffs and aluminum, Steve said the company is mostly dealing with inflation driven by tariffs rather than direct tariff reimbursement, though it may seek some credits on Section 301 duties it actually paid; he also said higher aluminum costs have reduced product margin flexibility. On AetherLux, Steve said a large heat-pump manufacturer is lined up, certification could finish around October, and product could follow 45 to 60 days later, while Jennifer said the company would like to avoid raising more money unless an attractive opportunity appears.