READ THE FULL WKSP RESEARCH REPORT
Worksport (NASDAQ:WKSP) released 1st quarter 2022 results on May 23rd of this year. Results were somewhat below expectations due to the company's concerted decision to delay production of most of its products until their recently purchased New York manufacturing facility was operational. It didn't make financial or operational sense to produce products at the company's current Mississauga manufacturing facility for several months only to uninstall and move its production machinery to the New York facility shortly thereafter.
Revenue for the quarter was $47,784 and gross profit was $9,807. The company reported a net loss of $2.8 million for the quarter largely to an increase in professional fees which totaled $1.5 million. These professional fees were largely attributed to the company's recent uplisting as well as investor relations efforts.
The company's liquidity position remained strong with cash balances totaling $25.8 million and no material levels of debt. Based on the company's future operating plans, existing cash of $25,808,938 combined with possible warrants and stock options exercises of approximately $41,000,000, the company is believed to have sufficient funds to meet its contractual obligations and working capital requirements for the next 12 months and the foreseeable future.
Despite the delays in production due to the ramp up of the New York facility, we believe the company's marketing efforts will pay off with increased revenues for the year and direct-to-consumer sales for Worksport products will commence in the 2nd half of 2022. These products include both traditional tonneau covers, solar panel tonneau covers and energy storage systems.
Terravis Energy
The company also recently clarified its expected product offerings under its wholly-owned green energy subsidiary, Terravis Energy.
The Terravis Energy NPEV is a patented Non-Parasitic Electric Vehicle hydrogen driven fast-charger that operates completely independently of the electric grid. The Terravis Energy NPEV will produce 120Kwh with two combined charging connectors delivering 60Kwh per connection. An average battery electric vehicle would be able to achieve 80% charge in less than 30 minutes. Each Terravis Energy NPEV fast-charger will have a set of hydrogen tanks that will be filled regularly by a contracted hydrogen supplier. A single tank will be able to charge between 25 to 30 electric vehicles. An NPEV location with six tanks will contain an overall "fuel" footprint of 54 square inches by 58 inches tall with a capacity of up to 180 charges. With each NPEV, consumers can charge up to three vehicles at 30/40 Kwh or one at 120 KWh and another at 40kwh. Final product rollout is expected in the 4th quarter of 2022 with a go-to-market rollout in the 1st and 2nd quarters of 2023.
The company's Solar Energy solutions include combining the latest solar panel technology, Monocrystalline Solar Panels with Worksport's tonneau covers to create a two-component system that encompasses a solar panel tonneau cover and an energy storage system (inverter and battery). This system is designed to provide portable power for pickup trucks and add driving range to next-generation electric vehicle pickup trucks by generating solar charge power The Worksport COR and the Worksport SOLIS presents a solid revenue generating opportunity in a growing market.
As a relatively new product, the company plans to develop and market the Cold Climate Heat Pump (CCHP). This is a compact, 3-in-1 system operating as a standard heat pump & air conditioner unit, or a two-stage CCHP depending on the climate. It can operate at temperatures of -30 degrees celsius or better, with an efficiency of 100% and 300%, respectively. The innovative design is versatile and works well at extreme temperatures, contrary to most heat pumps today. The Terravis Energy CCHP will be installed similar to other air conditioning units and connect to the central HVAC system. The Terravis Energy CCHP is also an integral part of our Nanogrid system.
The company is also developing the Terravis Energy DC Fast Charger, which is an electric grid connected fast charger. The BEV charges will made efficiently and durable, but will be offered for sale at a price point substantially less than current electric charging units. Terravis Energy DC Fast Chargers will generate recurring revenues through company ownership of these charging station points through charging fees to BEV owners. These fast charging stations may also be sold to malls, commercial businesses or the government which will typically incur ongoing maintenance fees.
Direct-to-Consumer Sales
In June 2022, the Worksport announced it had launched eCommerce storefronts on Amazon, eBay, and Walmart Marketplace. The company is seeking to capitalize on the growing shift of consumer preferences towards clean energy with its proprietary solar and green hydrogen-based technologies. This has the potential to accelerate revenue generation in the 2022 fiscal year.
CEO Steven Rossi stated:
"Our teams and I are thrilled to provide our customer base with the energizing experiences it deserves when considering our product offerings, starting with our SC3, SC3 Pro, and SC4 tonneau covers. NA Williams Company has been a great eCommerce partner, we look forward to pushing forward and driving sales together through these new, enhanced direct-to-consumer channels."
New Manufacturing Facility
In May 2022, the Worksport closed on the purchase of a new manufacturing facility in Seneca, New York. The facility is 152,847 square feet and features a 17,229-square foot Automated Storage & Retrieval System, or AS/RS, that is 90 feet in height. This advanced system will allow Worksport to store parts and products vertically, utilizing cubic area of available space, streamlining component and product retrieval during production and order fulfillment, respectively. The facility was purchased for a cost of $8.125 million.
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