Worksport Ltd (WKSP)

[OTC_MILLIONAIR]

CEO Emails to Dozerman regarding future plans- must read -

PLEASE STICKY - much thanks to Dozerman for taking his time to ask good questions


1) Good evening

Not intrusive at all. Infact, a very refreshing set of questions.

First let's establish our line and "thin our the heard" (in terms of what we expect to generate revenues to the initial 5MM mark)

We presently have:
Tri Fold
Smart Fold - under redevelopment
Quattro
Smart Roll - not proprietary until further developed
Forte - private label only at this time
Alpha - under development
Helios - under development

The covers to get us to the first 5MM in revenues are expected to be:

Tri Fold - good volume seller
Quattro - unique to Truxmart
Smart Roll - good volume seller in certain areas
Forte - good volume seller

Now, speaking of skew of volumes I believe the Forte will be the slower selling, because of the price point and lack of real innovation - but the Alpha and the future Quattro Plus (tentative name for our Quattro hard cover to be developed shortly). I would suggest the soft covers will "get us there" and the innovation to come thereafter will get us moving along to the 50MM in revenues we seek.

Current wholesale (revenue) figures - assuming we will not sell any retail priced covers are:

Tri Fold - 160 (give or take)
Smart Fold - 180 (give or take)
Quattro - 225 (give or take)
Forte - 335 (give or take)

If we take out anticipated cost of goods sold (Freight and handling out from our logistics warehouse) our real semi-net figures tied to revenues are:

Tri Fold - 130
Smart Fold - 150
Quattro - 185
Forte - 285

This is essentially what we'll look to recieve after shipping the products, assuming they go "drop ship".

Now - "scales of economy prevail". In that, as we grow our COGS will also drop as we'll earn discount from shipping, handling, and manufacturing. Also, this is the "drop ship" model, where we stock and ship as our clients sell and need. This is what we'll expect to be working with as we begin to grow BUT we expect to get more "inventory" and "stocking" orders as we grow as well, is it then when we'll see the biggest profitability and reduction to our COGS as Freight in skid-lot sized orders is substantially less than individual ground shipments via FedEx, UPS, or USPS.

Moving on to our medium term objectives:

We plan on further reducing the cost of our Tri Fold upon being fully stocked again in the USA as a promotion". We also plan on bringing out Quattro cover down in price as a promotion and to encourage the market to begin to realize the great and true benefits of that cover. We want our Quattro to really become the next generation Tri Fold cover.


The inventory required to facilitate business from Auto Zone is strictly for their "online" type sales through Auto Anything (.com). The brick and mortar stores of Auto Zone are truly a much larger beast. Amazon being another monstrous revenue force for Truxmart product(s).

Now, keep in mind that we gather that about 1,500 units are sold, daily, in the USA. This is only in the "after market" - OEM sales from dealerships figures are likely larger, in addition - but that data is virtually impossible to get. That is, roughly, six million in revenues per day in the USA from just one of the markets, OEM business being a long term goal of ours, as well.

Assuming we get about 5 percent market share, that is 75 covers per day, which we have done before - without trying. At an average revenue point of 150 dollars (to be conservative) with just over 200 days a year to sell - do the math.

You should now clearly see our targets are extremely conservative.

Now add:
Latin American
Europe
Canada
Australia

Then add OEM manufacturing for:
Toyota
Nissan
Ram (FCA)
GM
Honda (Ridgeline)
Ford

Then add Helio's possibilities for:

WorkHorse
Tesla
(As well as subsequent EV truck manufactures to come)

Lastly, we do not have pricing for the Helios. But, at an estimated $1 per Watt - at 400 watts, the Helios version will be an additional $400 to the Alpha. The Alpha we hope to wholesale for about $450-$550 (cover and rails), the myriad of (revenue generating) accessories and add-on's to be additional.

Be well,

Steven Rossi
Truxmart


2) Good morning -

That's right. $2.3MM in additional revenues.

Now, by no means a figure to be excited about. Please don't get me wrong, I could easily outline figures that would impress much more. But what I was trying to do is outline that with little volumes and two products, increasing present revenues 400-600% is not difficult.

Now the math changes at 6%, 10%, 20%...etc. With more products as well as innovation to penetrate more of the 75% of Truck owners estimated to not have a cover. Scales of economy prevail in gross and net margins should increase as we grow. We run a very lean operation where our overhead will not increase "linear" with our revenues.

Your question was to figure out how we're going to get to $5MM. Hard work, but not hard to do (with funding). The task becomes more challenging to get us to $50MM, which is the real intention.

We expect to be sitting between $5-$12MM within a solid year of funding. Then, through innovations, new products, refinements, and potential synergistic acquisitions - work our way to the larger revenue targets.

Please don't forget, my meeting with a competing company this past week - this company is over $1.5BN in annual revenues. I thought they were 1.2-1.4BN but they corrected me. I was only off by $100MM (remember, my mistake was double our medium term revenue targets). Just to put things into focus.

Be well,

Steven Rossi
Truxmart