WKSP: Worksport entering a new growth phase in its core business while transforming into a clean energy solutions provider.
NASDAQ:WKSP
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Founded in 2011, Worksport (NASDAQ:WKSP) sells pickup truck bed covers (a tonneau cover) and related accessories to both private label end customers and through a direct-to-consumer model. Worksport has been developing a cleantech and energy storage solution system that encompasses solar panels on top of a tonneau cover that will charge electric vehicles as well as a portable power station located in the pickup bed. This system is close to commercial production and will be available for purchase starting in Q2 2022.
The company is in early development stage for a third line of business which involves electric vehicle charging stations that generates electricity from Hydrogen Powered Fuel Cells. The direct-to-consumer model (website driven) for tonneau covers will be rolled out by the end of January 2022 and is expected to generate a material increase in high-margin revenues.
Worksport has raised substantial amounts of capital through three separate share issuance events in 2020 and 2021. The company has approximately $29 million in cash on the balance sheet with a relatively low burn rate. Worksport currently holds 23 patents in various stages and 20 trademarks and continues to invest in research & development to meet the demands of its diverse customer base.
Worksport is a manufacturer of tonneau covers for pickup trucks as well as a clean energy solutions provider. The company was founded in 2011 and based in Ontario, Canada. Currently Worksport employs approximately 10 people at its Mississauga location in Canada.
The Company designs and distributes pickup truck covers called tonneau covers throughout the United States and Canada through both private label and direct-to-consumer distribution methods. Tonneau covers are popular and useful aftermarket accessories that provide security and protection for cargo to personal and commercial pickup truck owners. The company manufactures and markets a variety of tonneau covers in its product line in various stages of production or pre-production (described below).
Having been conceptualized since 2015, on August 31, 2021, Worksport created a new subsidiary to execute on its mission to become a leader in the clean energy creation and storage markets. TerraVis Energy Inc. is a new wholly-owned subsidiary that will focus on advancing renewable, green energy-based technologies and maximize on opportunities uncovered in solar and energy storage system (ESS) initiatives. The Terravis System is 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. After successful fundraising in 2020 and 2021, product prototypes were developed and will be brought to market in 2022.
Electric vehicle charging stations powered by Hydrogen Fuel Cells is a third line of business and is currently in the research and development stage. The potential to reduce reliance on the electric grid (still mostly driven by fossil fuels) for EV charging has the potential to be an enormously disruptive technology. Commercial production is not expected to occur until 2023 if the technology and systems are proven to be viable.
2021 was a building and strategic planning year for Worksport as the company focused on raising capital to execute on its growth plans as well as build out critical infrastructure. The company raised approximately $30 million through three separate offerings. This level of capital ($29 million as of 9/30/21) is expected to be sufficient to fund company operations until free cash flow can be generated. This may occur during 2022 depending on the level of sales achieved by the company.
Worksport’s current intellectual portfolio consists of 23 patents including issued U.S. utility and divisional patents, completed international Patent Cooperation Treaty patents, and issued Canadian utility and pending divisional patents. They are also in the process of preparing five U.S. provisional patent applications and one U.S. design patent application. These patents and applications are generally related to storage bag use for a tonneau covers, Tonneau systems for use with a pickup truck, latches and rails for use in tonneau truck covers, solar panel tonneau covers, and portable power systems.
The company expects 2022 to be a breakthrough year in terms of revenue generation across both operating segments. Worksport’s new direct-to-consumer eCommerce website is expected to be operational in January 2022. If they obtain only a 1% to 5% market share in premium tonneau covers, this new distribution outlet may generate $1 million to $5 million in sales. The Terravis System is expected to be commercially available in Q2 2022. The company has been taking pre-orders on the system and have generated approximately $500,000 in orders to date, with an increase expected when marketing campaigns are in full swing following optimization.
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