管理層發言
Good afternoon, everyone, and thank you for joining Worksport's Second Quarter 2026 Earnings Call. I'm Steve Rossi, Founder and Chief Executive Officer. With me is Jennifer Kartychak, our Chief Financial Officer. Jennifer was appointed CFO effective May 1, following Michael Johnston's resignation at the end of April. She has served as our Vice President of Finance since January and started working with the company in 2023. So, this is a continuation rather than a transition. This is our second earnings call in the role, and I'm glad to have her here today with me. Our quarterly report on Form 10-Q for the period ended June 30, 2026, was filed today and will be available on the SEC's website and on our Investor Relations website, along with these remarks and accompanying presentation. Our remarks will follow the slides. We will open the line for questions. Let me start with some safe harbor statements. During this call, we'll make forward-looking statements, including statements regarding our expectations for financial and business trends, our market position, our go-to-market growth initiatives and our product programs and their expected benefits. These statements are predictions based on current beliefs, expectations and assumptions. Because they relate to the future, they are inherently subject to uncertainties, risks and change in circumstances that are difficult to predict and many of which are outside of our control. Actual results may differ materially, and you should not place undue reliance on them. These statements are subject to risks discussed in our SEC filings included in our annual report Form 10-K and our quarterly report 10-Qs. They speak only as of today's date. We assume no obligation to update them, except as required by law. Any supplemental operating metrics discussed today should be considered together with and not as a substitute for the underlying GAAP results. With that, let's kick off the agenda. So today, we're going to review our 2026 scorecard in this quarter, Q2 or last quarter, the Worksport platform, liquidity and capital resources, financial review, inventory strategy, commercial execution and 2026 outlook and cash flow framework. So a lot to go through, stay buckled in. We're going to go quick, and we're going to take questions at the end. We are entering a phase where scale efficiencies are becoming evident. In Q2 2026, quarter-to-date revenue grew sequentially by 58%, while total operating expenses declined by 17% and cash used in operations also declined by 58%. Our results reflected improved operating leverage and a more efficient cost structure. We are beginning to generate revenue more efficiently and with a greater proportion of sales converting our operating cash flow. The following Q2 2026 results support our positive scaling dynamics. Point number one, net sales were approximately $5.2 million for the quarter. This is the strongest quarterly result we've had in Worksport history, up 27% year-over-year and 58% sequentially. Gross profit was approximately $1.6 million, up approximately 52% year-over-year and 93% sequentially with gross margins expanding to approximately 32% from approximately 26% in the same quarter last year, or sorry, in Q1 of this year. Operating expenses were approximately $5.5 million, down approximately 17% from Q1 2026. Operating expenses as a percentage of net sales declined from 128% to just 68% during the same time period. And net cash used in operating activities was approximately $3.4 million, an improvement of 58% from $8.2 million in Q1 of this year. The quarter also strengthened as it progressed. June was our strongest revenue month on record at approximately $2.1 million in sales, with monthly gross profit rising during the quarter to 35% in June alone. We believe June is a strong indicator of our ability to scale the business as it continues to expand both in the consumer direct and commercial reseller sales channels. This quarter, we focused on improving our operating cash burn, and we made good traction. Jennifer will provide more insights on factors contributing to our improvements. We will also speak to how we intend to convert our strong operational progress into sustainable operating cash flow breakeven, while Q2 2026 established is that the cost base and the revenue line can move in opposite directions in the same quarter. Moving forward, we intend to continue targeting increased revenue with efficient cost basis. We continue to evolve into a diversified platform with multiple products serving multiple channels and generating multiple revenue streams. As we scale, we are mindful of prioritizing our organizational strengths. Our core economic engine is the hard-folding Tonneau Covers we proudly make in our ISO 9001:2015 certified facility in West Seneca, New York. We launched our newest tonneau cover NEXUS in last quarter, Q2 of 2026. Our near-term growth levers include distribution onboarding, distribution reorders, expanding e-commerce and conversion of inventory into working capital. We will continue making new product innovations for our products, and we're going to continue to pursue larger partnerships on our energy products. Our SOLIS Solar Tonneau Cover and COR portable energy system are an emerging commercial option that extends the truck bed from a covered platform into a mobile power system. And really excitingly, our AetherLux heat pump system through our subsidiary, Terravis Energy, is a very exciting strategic opportunity that is expected to be certified within the second half of this year. We prioritize and emphasize operational excellence ahead of additional growth vectors. Our core business strategy must be executed with discipline, and our results in Q2 2026 support our commitment to the success of our platform. I will address liquidity directly, and then I will go through our recent business updates. At June 30, 2026, we held approximately $1.2 million in cash and cash equivalents. Separately, we had about $820,000 of remaining availability on our revolving line of credit, which is borrowing capacity, not cash. We reported an inventory balance of $12 million, which we expect to be a strong source for additional liquidity, and we'll discuss this further below. Our Q2 Form 10-Q continues to disclose substantial doubt about our ability to continue as a going concern. While this disclosure reflects uncertainties associated with our current liquidity and capital resources, management has implemented a clear plan forward on revenue growth, margin expansion, disciplined cost management and active analysis of additional financing opportunities. We remain focused on executing our strategy and strengthening our financial position. Our plan for closing the gap in the same period we are executing operationally is to convert inventory into sales and cash, grow gross profit faster than recurring costs, reduce cash costs and improve marketing productivity. Our objective during the first half of this year was to strategically support growth initiatives that we believe will create value over time. Our strategy included funding working capital and operations to support scaling, and we are now well positioned to convert inventory into working capital efficiently in the second half of this year. We continue to prioritize a reduction in our reliance on dilutive capital as our gross profit expands and operating cash flow improves. Our greatest source of liquidity, inventory, is being managed during the balance of this year. We are strategically producing our products to function in a just-in-time environment such that we maximize our use of raw materials while minimizing our concentration risk of inventory buildup. More on the subject to come. To align my incentives further with the stock, I elected to receive previously accrued and unpaid bonus compensation of $125,000 in stock at the market's closing prices. I continue to believe in the future of the company that reflects the strong values we continue to actively target cash flow positivity. With that, I will hand the call to Jennifer.
Thank you, Steven, and good afternoon, everyone. Net sales for Q2 2026 was $5.2 million compared to $4.1 million in Q2 2025 and $3.3 million in Q1 2026, growth of approximately 27% year-over-year and 58% sequentially. First half net sales were $8.5 million or about 11,574 units. The shape of the most recently completed quarter matters as much as the total. Monthly net sales during Q2 2026 were approximately $1.4 million in April, $1.7 million in May and $2.1 million in June, each month larger than the one before it. June 2026 was the strongest revenue month in our company's history. That progression reflected stronger production output, broader product availability and channel execution rather than any single order. We sold 7,010 units: 2,957 through B2B and 4,053 units through B2C, generating approximately $2.3 million and $2.9 million of net sales, respectively. Our mix between sales channels was consistent between Q1 and Q2 2026. The mix matters because B2B carries a lower gross margin, but a materially lower marketing cost per unit. And the balance between the two is what determines both blended margin and cost efficiency. Having both channels gives us direct customer insight and wholesale reach at the same time. Gross profit was $1.6 million compared with $1.1 million in Q2 2025 and approximately $850,000 in Q1 2026, an increase of approximately 52% year-over-year and approximately 93% sequentially. Gross margin was approximately 32% compared with 26% in Q2 2025 and approximately 26% in Q1 2026. Gross profit rose from approximately 26% in March 2026 to 35% in June 2026. The improvement was driven by higher sales volume, efficiencies and overhead absorption and product mix. These gains offset higher input and landed costs, including tariff pressure. That is worth emphasizing. We expanded margin more than five points against a rising cost base. Sustaining gross margin at its current run rate as volume increases and sales mix shifts is a principal objective for the back half of 2026. On to operating expenses and our net loss. Total operating expenses were about $5.5 million, up approximately 16% year-over-year. However, operating expense as a percentage of sales decreased nine percentage points year-over-year. In addition, operating expense decreased approximately $1.1 million or 17% from Q1 2026. Research and Development expense was $214,000. A4 and NEXUS have moved out of development and into production, which is why this expense caption fell $91,000 or approximately 30% year-over-year. Spend converted into product we are now selling. General and Administrative expense was about $3.5 million, up approximately 15% year-over-year. As a percentage of net sales, G&A decreased by approximately seven percentage points year-over-year. Further, this expense caption declined by approximately $690,000 or 16% from Q1 2026. Sales and Marketing expense was $1.7 million, up approximately 31% year-over-year. However, Sales and Marketing expense as a percentage of net sales only increased 1% compared with net sales increase of 27%. Further, this expense caption decreased approximately $449,000 or 21% from Q1 of 2026, the first evidence of a marketing discipline we committed to during our Q1 2026 earnings call. Net loss was $3.97 million compared with $3.73 million in Q2 2025 and $5.83 million in Q1 2026. That is a 32% sequential improvement and a 6% reduction in net loss year-over-year. Loss per share improved from $0.71 for the prior year quarter to $0.33. This year-over-year comparison is the one that keeps our attention. Revenue growth alone has not yet outrun our recurring cost base. The sequential comparison is the one that shows the mechanism working. Our objective for the second half is straightforward: focus on gross margin expanding at a faster rate than operating cash requirements, creating a path to positive operating cash flow. Speaking of cash flow, net cash used in operating activities in Q2 2026 was $3.4 million compared with $8.2 million in Q1 of 2026 and approximately $3.1 million in Q2 2025, a 58% sequential reduction. For the first half of 2026, operating cash use was $11.7 million compared with $6.9 million in the prior year period, an increase of approximately 68%. The Q2 2026 bridge is straightforward. We begin with a net loss of $3.97 million; approximately $1.1 million is related to noncash items, principally share-based compensation and depreciation and amortization, leaving a loss before working capital movements of approximately $2.74 million. Working capital used approximately $555,000, a substantial normalization from the roughly $3.6 million consumed in Q1 2026 and the clearest sign that the balance sheet build phase is believed to be behind us. Cash and cash equivalents was $1.2 million at June 30, 2026, compared with $567,000 at March 31, 2026, and $5.9 million at December 31, 2025. On to inventory. Inventory consists of raw materials that have already been purchased, work in progress and finished goods. Converting this inventory into sales represents the largest internal source of working capital available to the company without the need to raise external financing. Net inventory was $12.1 million at June 30, 2026, up $2.5 million from year-end. Inventory included approximately $6.6 million of raw materials, $4.6 million of finished goods and $845,000 of work-in-progress. We are actively optimizing new production against growing sales channels and expect our raw materials and finished goods components to meaningfully reduce during Q3 2026. We are optimizing our inventory in the following initiatives: Number one, procurement. We are actively managing procurement requirements for our raw materials against our forecasted projections. First half 2026 procurement of approximately $8.1 million was front-loaded to support production requirements for expanding sales channels, with approximately $1 million of those purchases still in accounts payable at June 30, 2026. That spend, including the amounts outstanding at the end of Q2 2026, are now behind us. Number two, production. The process to manufacture our Hard-Folding Tonneau Covers is managed against demonstrated sell-through and distribution reorder cadence rather than launch forecasts. Number three, fulfillment. Finished goods of approximately $4.6 million or 6,800 covers is the balance most directly convertible in the near term. We manage fulfillment by product family and sales channel with the goal to sell more than what is produced in a given month. Working capital conversion is the measure we will report against. For insight, in July, we sold about 30% more covers than we made, and that continues to be the goal for the balance of Q3. We are prepared to take questions on inventory aging and the split between inventory supporting confirmed orders versus forecasted demand. Back to you, Steven.
Thank you, Jennifer. NEXUS entered commercial production on April 13, 2026, with sales shortly thereafter, making Q2 2026 its first quarter in our product portfolio. Its proprietary single-sided operation allows a person to secure and release the NEXUS tonneau cover without making laps around the pickup truck, a practical solution to a real complaint about the real-world utility of tonneau covers. NEXUS creates a differentiated premium product for our customers. The product launch followed the shape you want to see. Following its introduction, NEXUS achieved $1 million in cumulative sales across all sales channels in just about ten weeks. Margin contribution increased across both sales channels during Q2 of 2026. A product went from its first unit to contributing meaningful margin inside of a single quarter. The focus is now to maximize margin capture through manufacturing efficiencies and channel expansion, including established sales cadence. Into July, NEXUS sales continued to grow with NEXUS-related sales orders commanding nearly $1.5 million. Two distribution partners were added in Q2 of this year, one at the end of April and the other in June. Both distribution partners had orders fulfilled during the quarter. Meyer Distributing joined in June of 2026 as our first multinational distribution partner, bringing a substantially larger North American wholesale network serving dealers, installers and aftermarket resellers. That is the widest wholesale access the company has ever had. However, Tri-State Enterprises began carrying our product, including NEXUS, and broadened our reach across four U.S. states. This matters because distributor-driven sales in our commercial channel, including repeat orders, expands our reach while reducing our blended market burden per unit. We plan to focus on creating distributor programs during the second half of this year that emphasize active order frequency. Our filing also describes conversations with three additional major distributors. We remain focused on achieving successful contractual arrangements to maximize our distribution network of nationwide U.S. dealers. I want to characterize those accurately. There are opportunities at present, and we will announce updates as they become available. Let's talk SOLIS. SOLIS integrates solar generation directly into a tonneau cover platform, the first of its kind. COR is a modular portable energy system that pairs with SOLIS to operate on its own, or operates on its own rather. Together, they extend the truck bed from storage into a power source. Both entered Q2 2026 with launch and certification work substantially complete. COR's UL and CSA certification package removes a real commercialization barrier and expands the set of distributors, retail, fleets and commercial customers that can evaluate the system. SOLIS and COR did not represent a material share of Q2 2026 revenue. Our near-term objective is product-market fit and acquisition economics that do not require customer acquisition costs to rise in step with gross profit. We continue to develop federal fleet and OEM-oriented opportunities, and we assume no material revenue from them in our near-term plan. However, I can confirm that we believe we have made notable progress on that front. Let me repeat: I believe, and I can confirm, that we have made notable progress on this front in commercializing both SOLIS and COR. Moving aside into Terravis Energy, we received U.S. patent #12624872 during the quarter, covering heat pump systems architecture related to ZeroFrost and designed to reduce or eliminate conventional defrost cycles. Certification work is expected to continue in the second half, subject to testing and customary certification time. AetherLux remains pre-commercial; no procurement decision has been made, and we do not rely on AetherLux revenue to achieve our 2026 operating plan. The next step is third-party validation and certification. We will allocate capital to it against measurable milestones and nothing else. We believe we may hit momentary operational cash flow positivity within Q3 2026. This is huge. At this time, we are not providing guidance of specific calendar targets for sustained operating cash flow positivity, though we remain focused on reaching sustainable operating cash flow breakeven in 2026. Our priority is disciplined cash generation rather than optimizing around a single quarter. Rather than focus on a projected date, we believe investors should focus on the underlying drivers of operating cash flow. Our path to positive operating cash flow is straightforward: grow revenue, expand gross profit, maintain disciplined control over recurring costs and convert working capital more efficiently, all of which we've shown that we can do in this past quarter. During Q2 of this year, we made progress across all four areas simultaneously. Gross profit totaled approximately $1.7 million compared to $4.5 million of cash operating needs before working capital, resulting in an operating cash flow gap of roughly $2.9 million before working capital movements. Working capital usage accounted for an additional $0.6 million during the quarter. Viewed differently, gross profit covered approximately 32% of our recurring cash operating requirements during the quarter. Closing the remaining gap can be achieved through some combination of higher revenue, sustained or improved gross margins, disciplined recurring expenditures and improved inventory conversion. At a 35% gross margin and using our most recent run rate of $2.1 million of sales, quarterly revenue of approximately $12 million to $12.9 million would fully cover the current pre-working capital cost structure. Alternatively, if we expand our margin contribution by just 300 basis points and recognize approximately $9.3 million of quarterly net sales, recurring costs would need to decline by approximately $1.2 million per quarter for us to fully cover our recurring expenditures, assuming relatively neutral working capital. We offer these figures as a sensitivity guidepost rather than revenue guidance. The key takeaway is that the gap continues to narrow, and we believe the progress achieved during these quarters demonstrates a clear trajectory towards a self-sustaining cash flow positive operating business. Q2 of this year showed that Worksport can generate stronger revenues, expand margin, reduce operating expenses and materially improve cash efficiency in the same quarter against a rising input cost basis. The combination results in a business which we believe is on its way to scaling successfully. We are aware that there is still work ahead of us. We must convert our inventory, expand our commercial distribution reach while maintaining gross profits that meaningfully contribute to our operations. This is a question of execution, and it's the right question to be judged on. So we are committing to three things: convert inventory into cash, turn distributor access into repeat large orders and grow sales volumes faster than operational cash requirements. On that, thank you very much for your continued interest in Worksport. This concludes our prepared remarks. Operator, please open the line for analyst questions and our investor town hall call will follow.
分析師問答
Operator Instructions: We welcome live questions from any analysts on the call and investors may submit questions through the Q&A feature or by e-mail to investors@worksport.com. Selected investor questions may be answered live during the town hall that immediately follows the end of this call.
Thank you for having the town hall. And first question on the inventory management. One of your slides showed in finished goods inventory, you have about 6,800 covers. Can you talk about how the pricing in the current tonneau cover market will work to get those 6,800 covers out the door? Maybe might pricing improve quarter-over-quarter? And if so, in what channel?
Sure, yes. So most of the inventory that we have on hand was AL3, AL4. We've been finding good success in running small promotions on AL3. June was a small trial run on direct-to-consumer website sales, and we ran a small promo and liquidated a significant amount of inventory, which is great. So we're going to offer incentives on reseller channels and online channels that make sure we satisfy both sides of our business, reseller and direct-to-consumer. Then as we burn through that inventory, we're going to, as we said in the call, focus on just-in-time to mitigate keeping too much inventory.
And second for me is in the quarter, sales and marketing expenses were about $1.7 million. Can you break that down going forward? Will you have more or less sales and marketing expenses on SOLIS and COR initiatives? Or now that you have more distributor relationships, will that number decline? Can you talk about that mix and outlook, please, for sales and marketing expenses?
It's a difficult question because of the volatility of the underlying platforms. The biggest platforms are really two: Meta, which includes Instagram, and Google. Those two networks are very volatile. They tend to get a little bit more expensive for us to remain competitive, particularly during peak periods like November and Black Friday. We're going to try to keep marketing spend as flat as possible; we outlined in this call that we were able to raise sales while sales and marketing increased much less. I may not have each number committed to memory at this moment, but we think that sales and marketing will remain as flat as possible while sales continues to increase because we're more efficient at how we market and we're becoming more recognized as a brand. However, we're prepared to invest more in sales and marketing to continue to grow sales if that's what we need to do. So the answer is we will try to keep it sideways so that our sales increase while sales and marketing does not. However, if increased investment will get us to cash flow breakeven and sustained positivity, we will invest.
Steve, we have some questions here from investors on the call. One of the first questions is from Robert A., speaking to tariffs and aluminum raw prices. Could you comment on how that is currently impacting Worksport?
Yes. Yes. I read that question. So Robert, great question and one that when I look at my wrist watch, I can see my heart rate raising, not because of you, but because of the underlying frustrations I have. Look, the #1 selling vehicle in America is the F-150. The average individual buying that is our farmer, our veteran, our serving members, the average American. That vehicle in the past two or three years has gone from the mid-$30,000s to the high $40,000s. Why? Because that vehicle is made primarily with aluminum. I think the frame is steel, the body is completely aluminum. That's significant inflation that the American individual is paying for. So the cost of aluminum has risen from approximately $1.30 a pound to double over the past few years, directly correlated to the tariffs that have been imposed. It's not speculative. It's something anyone could see through the open markets. The rise in aluminum cost is not because demand is higher. In fact, demand for aluminum is quite weak and soft, at least within this continent. How it's affected things is it has reduced the NEXUS and AL4 margins we expected. They were engineered to be very profitable. Making 35% margin is still healthy, but these products should have been making higher margins. It hasn't held us back on the sales side, but it has impacted our ability to offer better pricing programs to our distribution partners and deeper discounts during Black Friday months for dealers and distributors. The AL4 is something we're less keen to sell through distribution because the margin isn't there due to rising cost. We don't want to raise our price and pass more cost to customers. So how it's impacted things is margin pressure, although NEXUS demand is taking some of that demand anyway. We're seeing similar volume through different channels, if that makes sense.
Thanks, Steve. We do have a question here from an investor that submitted it via e-mail. They were asking for specific clarity on Item #3 of the upcoming Worksport Annual General Meeting, AGM. To specify for all people listening, Item #3 was to approve on an advisory basis a proposal expressing shareholder support to the Board of Directors to consider declaring special dividends in connection with the sale of any business unit or material asset of the company, subject to applicable law and the Board's fiduciary duties. Steve, could you provide some insight on why the company decided to include this for the upcoming AGM?
We're working really hard to build a business. There has not been a business like ours that has done what we're able to do in as quick a time as we were able to do it. Growing Worksport from zero to $1 million to $8 million to $16 million to a run rate in the $20s and hopefully $30s before the end of the year in the short period of time that we've been able to do it has not been done before. As we grow, there will be interest in potential divestitures. Terravis Energy, as a subsidiary to Worksport the public company, is developing heat pump technology for a large market. Once again, we're achieving on that business unit what hasn't been done before. So as we grow, there may be an opportunity for divesting a business unit — whether that's Worksport, Terravis or something we haven't developed yet. If that opportunity arises, it could be significant and could generate proceeds that the Board could consider returning to shareholders as a special dividend, subject to applicable law and fiduciary duties. I would emphasize there are no guarantees. As a reference, a competitor about 1.5 decades ago sold their business with top-line revenues in the mid-$50s million and sold privately for about $120 million. Worksport is trending towards similar revenues with healthy margins. If we see a chance to capture value through a divestiture, there's an opportunity for a special dividend, but no guarantees.
Thanks, Steve. I have a question here from an investor who said they are a big fan of the SOLIS and COR combination for trucking. What are your plans to extend this to more general use and increase the potential market purposes?
Good question. For SOLIS, we're looking at systems to be able to remove it from the truck and mount it anywhere in a field or job site. We're still focused on OEM integrations, more to come on that. We're also focused on broader vehicle applications. For SOLIS, we will look at universal mounting solutions, which would be straightforward for us. For COR, we will look at more use cases for our battery blocks so people can integrate our batteries into other devices that consume electricity at 36 and 48 volts.
Thanks, Steve. You spoke about tariff costs and the fact that tariffs were declared illegal in some contexts. In this context, the investor is asking, will Worksport receive any money back like some other companies may have received?
Good question. On the aluminum side, it's inflation rather than a direct tariff payment issue. We didn't pay a specific tariff on our aluminum in many cases; we paid higher market prices driven by tariff-related inflation. There's not a mechanism for people to get that inflation back. For tariffs we did pay on imports from tariffed countries, such as Section 301 tariffs, there may be avenues to recover some amounts, but the process is unclear and not immediate. We're working with a consultant to pursue any recoverable tariffs we paid. Because much of our material is sourced domestically, our larger issue has been broad inflation in aluminum pricing rather than reclaimable tariff payments, so it's unlikely we'll see meaningful returns this year from tariff recoveries.
Thanks, Steve. And we have a question here from Shane C. I'm going to direct this towards Jennifer. Jennifer, the question is, as you sell down inventory for cash, do you foresee any inventory shortfalls? Or is that baked into the plan?
Great question. In terms of our plan, we are forecasting a reduction in our finished goods inventory while we move closer to a just-in-time format for the balance of the year. So we are well positioned to be able to meet demand as well as distribute as we receive orders and commitments from our customers.
Thank you, Jen. Steve, we have here two questions related to AetherLux. I am going to combine them because they're very similar. The questions ask if there is any way to accelerate AetherLux revenues. They believe that it might be far into the future and are asking if Worksport found a way to manufacture AetherLux products to get to the market faster. Are we working with a partner on that front?
Yes. Worksport has partnered with a very large manufacturer of heat pumps to manufacture our design and the immediacy in which we could receive finished AetherLux products post certification is about 45 to 60 days. So I'm not worried about manufacturing lead time. The certification process is necessary and includes AHRI, ENERGY STAR, UL and other customary certifications. That process should conclude in the fall months, likely September or October. After certification, 45 to 60 days is the earliest we could see product. We are also working on initial orders from various public and private sector businesses, so there is potential demand. We feel optimistic about the product's performance and believe demand will be there. You should judge us on execution: we said we'd do SOLIS and COR and we executed; AL3, AL4, HD3 and NEXUS execution as well. It's a question of when, not if; our intention is to expedite for Q4 to get product contributing to the balance sheet.
Thank you, Steve. We have a question here from Fred T. Could you walk us through the NEXUS ramp-up in any more detail, specifically perhaps an ASP by channel, margin profile relative to AL4, number of active SKUs, or a July versus August sell-through run rate and whether NEXUS is expanding the market or cannibalizing AL4 demand? I'm going to point this to Jen because some of that is sensitive.
I would prefer if you repeat, please.
Okay. So the question is about the NEXUS ramp-up, specifically if we could comment about any of the following: ASP by channel, margin profile relative to AL4, number of active SKUs for NEXUS, current July/August sell-through run rate and/or whether NEXUS is expanding the market or cannibalizing the AL4 demand.
Okay. So our margin is moderately more healthy on our NEXUS versus our AL4. With the introduction of the NEXUS, we achieved our first $1 million in sales on NEXUS within a single quarter. It took about ten weeks from initial production to secure that first $1 million, which is the best ramp-up rate we've had to date on any product introduction. That is a great testament to the product and its value to end customers. The mix between NEXUS and AL4 depends on customer preferences. I do not believe NEXUS will cannibalize overall demand for AL4. We continue to see healthy contribution to margin in both B2C and B2B. NEXUS is a product that doesn't have many natural competitors, and its introduction has been additive rather than cannibalistic.
Jen answered that well. On ASPs and channel pricing, those are confidential for competitive reasons, but we maintain uniform pricing by channel — distributor pricing for distributors, jobber pricing for jobbers. Regarding SKUs, we expect to add coverage for 8-foot bed applications, increasing SKU coverage this year by about six more SKUs, putting us in the 40s for NEXUS SKUs. We still sell thousands of AL4 covers and the demand remains. The NEXUS offers features customers want, and if some sales move from prop-rod type covers to NEXUS, that's a net positive because NEXUS is more profitable and a better product. The prop-rod AL4 market will continue to be healthy for the foreseeable future, so we expect them to coexist.
Thanks, Steve. One aspect we can highlight for investors: in ten weeks, NEXUS generated about $1 million in sales, and then in July NEXUS-related orders were nearly $1.5 million, which may give an idea for Q3 projections and continued growth for NEXUS.
What is the avenue towards making this a $1 million a week company in sales?
Over $50 million a year in sales for us is not impossible. We need to continue to bring COR and SOLIS deeper into the market without overspending on marketing and continue to mature distributor relationships. There are tens of thousands of dealers in America that could sell our product; it takes time to get them acclimated, displayed and selling. We are working to expand distribution, and as those relationships mature, we can scale. Hitting a run rate in the $30-plus million range this year is our hope, and continued execution could put us on a path toward substantially higher revenue next year.
Thanks, Steve. I'm going to sneak in one more final question from Ramesh B. Ramesh is asking if you see any reason to raise new funds for the rest of the year or if you can give any profile on the amount of funds that might need to be raised. Jen, do you want to answer this?
So in terms of our overall outlook for the remainder of the year, we are challenging ourselves to see that we can get to cash flow positivity. If there are external opportunities to raise capital that make strategic sense, we will explore them with potential investors. But for the balance of the year, we would prefer to stand on our own two feet and achieve operating improvements without raising new dilutive capital.
Last year, we raised significant cash to fund growth, and much of it went into inventory. This year, we've raised significantly less and our reliance on outside investor capital is already much lower than it was this time last year. We plan to continue reducing that reliance and stand on our own two feet, which would put Worksport in a stronger position compared to many small public companies.
That does mark the end of this call. We ask any investors that have any further questions to e-mail us at investors@worksport.com. We look forward to keeping you updated on our journey as well as sharing more news and information as it happens. Thank you very much for your time and attention today.