Executive Summary

Q1 2024 revenue surged 1,506% year over year to $0.513M, driven primarily by private-label soft cover sales; gross profit was $0.037M and net loss was $3.715M, or $(0.18) per share .
U.S. revenue rose 1,766% YoY to $0.493M, while Canada was $0.020M; private-label accounted for 91% of revenue, with online retailers at 5% and distributors at 0% .
Gross margin was compressed by mix (private label soft covers) and high overhead during ramp-up; management expects margins to improve as domestic production scales and costs normalize .
Cash was $3.537M and inventory increased to $6.540M, positioning for B2C and distributor rollouts; the mortgage maturity was extended to August 10, 2024 under a loan amendment/forbearance framework .
Forward guidance was not provided with Q1 results; the company said it would issue 2024 outlook on May 23, 2024—an upcoming catalyst tied to scaling SOLIS/COR and expanded distribution .

What Went Well and What Went Wrong

What Went Well

Explosive top-line growth: revenue jumped 1,506% YoY to $0.513M, with U.S. sales up 1,766% on private-label demand for soft covers .
CEO confidence and product pipeline: “Next week we will give forward-looking guidance. 2024 is Worksport’s year,” highlighting momentum in SOLIS solar tonneau cover and COR portable energy system .
Strategic positioning: receipt of solar panels to begin SOLIS production, Infineon collaboration on GaN power semiconductors for COR, and distribution arrangement with Dix Performance North in Canada to broaden access .

What Went Wrong

Margin pressure: gross margin and net margin compressed by mix (private label) and elevated overhead during the ramp; COGS rose to 93% of sales vs. 62% in Q1 2023, reflecting lower-priced private-label contracts and ramp-related inefficiencies .
Continued losses and cash burn: net loss was $3.715M and net cash used in operations was $2.795M despite revenue growth, underscoring the need for scale and margin improvement .
Financing and covenant risks: DSCR covenant violation triggered a forbearance agreement; loan maturity extended to Aug 10, 2024 with potential extension/exit fees if not repaid, highlighting near-term balance sheet risk .

Financial Results

Headline P&L and Margins (Quarterly)

Metric	Q1 2023	Q3 2023	Q1 2024
Revenue ($USD)	$31,925	$458,483	$512,637
Gross Profit ($USD)	$12,168	$89,687	$37,456
Gross Margin (%)	38.1% (calc)	19.6% (calc)	7.3% (calc)
Net Income ($USD)	$(3,523,270)	$(3,949,298)	$(3,714,657)
Net Margin (%)	(11,030.5%) (calc)	(861.5%) (calc)	(724.8%) (calc)
Diluted EPS ($USD)	$(0.21)	$(0.23)	$(0.18)

Note: Margins calculated from reported Revenue, Gross Profit, and Net Loss (cited).

Revenue Breakdown – Geography and Channel (Q1 comparison)

Breakdown	Q1 2023	Q1 2024
U.S. Revenue ($USD)	$26,403	$492,630
Canada Revenue ($USD)	$5,522	$20,007
Online Retailers ($USD)	$26,434	$45,886
Distributors ($USD)	$5,491	$0
Private Label ($USD)	$0	$466,751

KPIs and Balance Sheet (Q1 2024)

KPI	Q1 2023	Q1 2024
Cash and Cash Equivalents ($USD)	$10,489,214	$3,536,980
Inventory ($USD)	$3,631,492	$6,539,846 (Finished goods $5,984,977)
Accounts Receivable, net ($USD)	$463,122	$156,344
Working Capital ($USD)	$1,956,894	$2,901,401
Net Cash Used in Operations ($USD)	$(2,934,410)	$(2,794,604)
Shares Outstanding (end of period)	17,159,376	24,100,201
Warrants Outstanding (units)	3,939,924	20,118,080

Cash Flow (Q1 2024)

Category	Q1 2023	Q1 2024
Operating Cash Flow ($USD)	$(2,934,410)	$(2,794,604)
Investing Cash Flow ($USD)	$(1,153,229)	$(212,969)
Financing Cash Flow ($USD)	$(43,904)	$3,178,775

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue (Company Outlook)	CY 2024	Not provided	Guidance to be provided May 23, 2024 (press release before market open)	n/a
E-commerce Sales Projections	CY 2024	Not provided	Update to be provided May 23, 2024	n/a
Margins/OpEx/Tax/Segments	CY 2024	Not provided	Not provided with Q1 materials	n/a

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was found in the document catalog; Q2 and Q3 2024 transcripts exist, but none for Q1 2024. We therefore reference MD&A and press releases for thematic continuity .

Topic	Previous Mentions (Q3 2023)	Current Period (Q1 2024)	Trend
Technology initiatives (SOLIS/COR)	Identified supplier for solar panels; positioning SOLIS with auto OEM interest; COR development ongoing	Received solar panels to commence SOLIS production; Infineon GaN partnership to improve COR converters	Advancing toward production; strengthening tech stack
Supply chain	COVID-era power electronics constraints; diversification and domestic manufacturing to mitigate freight inflation	Mix-driven private label supply; initial domestic production began Jan 2024; margins expected to improve as overhead normalizes	Improving capability; margin recovery targeted
Macro/tariffs & inflation	Elevated freight/oil costs; inflation impacting components; transitioning to domestic sourcing	Overhead elevated during ramp; expecting efficiencies and margin improvement over 2024	Neutral to improving as scale builds
Product performance	Private label soft covers drove revenue in Q3; hard covers initial shipments	Private label soft covers 91% of Q1 revenue; B2C launch Mar 18; distributor network setup in U.S./Canada	Strong private label; building B2C/B2B
Regional trends	U.S. dominated revenue growth	U.S. up 1,766% YoY; Canada modest growth	U.S. share expanding
Regulatory/legal	None material	NY State Excelsior Jobs grant up to $2.8M; low-cost NYPA power award; forbearance agreement and loan amendment extending maturity to Aug 10, 2024	Mixed: support from grant; financing risk managed
R&D execution	R&D facility opened; hard cover manufacturing line installed	COR manufacturing arrangement with NeuronicWorks; continued SOLIS/COR readiness	Execution progressing

Management Commentary

CEO Steven Rossi: “In under three years… we have launched our new factory, developed groundbreaking products, and have set the foundation for rapid growth… Next week we will give forward-looking guidance. 2024 is Worksport’s year.” .
Strategic focus: Full-scale U.S. production began January 2024, with preparations for leading distributors and mass merchandisers; B2C e-commerce launched March 18, 2024 to accelerate growth .
Inventory positioning: $2.9MM invested in higher-margin inventory; total inventory $6.5MM to support anticipated demand and swift turnover .

Q&A Highlights

No Q1 2024 earnings call transcript was available; therefore, analyst Q&A themes, guidance clarifications, and tone shifts are not present for this quarter in the document catalog .

Estimates Context

S&P Global consensus EPS and revenue estimates for Q1 2024 were unavailable due to data request limits at the time of retrieval; as a result, we cannot benchmark reported results vs. Street estimates in this recap (Values retrieved from S&P Global unavailable).
Implication: Given the micro-cap profile and evolving coverage, estimate frameworks may lag operational inflections; updates after May 23 guidance could prompt revisions by any covering analysts .

Key Takeaways for Investors

Revenue inflection is real but currently mix-driven; private-label dominance and ramp overhead depress margins—watch for evidence of margin recovery as domestic hard-cover output scales and overhead per unit declines .
Liquidity cushion exists but losses persist; monitor cash burn vs. growth execution, especially ahead of the Aug 10, 2024 loan maturity and potential extension/exit fees if not repaid .
Upcoming guidance (May 23) is a key catalyst; clarity on revenue trajectory, margin path, and B2C/B2B channel maturation can drive sentiment and potential coverage expansion .
Product pipeline (SOLIS/COR) is nearing commercialization milestones; Infineon GaN integration could enhance COR efficiency and differentiation—track launch timing and early adoption .
Inventory build positions for H2 acceleration; the ability to convert $6.5M inventory into revenue with improving unit economics will be central to validating scale-up .
Distribution leverage (U.S./Canada) and B2C launch underpin broader channel strategy; execution quality will determine repeatability and margin structure vs. private label .
Risk framework: macro and supply chain improving, but financing covenants and micro-cap volatility remain—position sizing and catalyst timing (guidance, product launch) are key .

Additional References:

Q1 2024 10-Q financials and MD&A for detailed operational insight .
Q3 2023 10-Q for historical context and earlier operational ramp details .
Q1 2024 8-K press release for highlights and guidance timing .

Worksport Ltd (WKSP)·Q1 2024 Earnings Summary