ALUULA Composites Inc. Announces Bought Deal Financing

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

VICTORIA, British Columbia, June 19, 2023 (GLOBE NEWSWIRE) -- ALUULA Composites Inc. (TSX-V: AUUA) ("ALUULA" or the "Company") announces that it has entered into an agreement with Haywood Securities Inc. ("Haywood"), pursuant to which Haywood has agreed to purchase itself or via substitute purchasers, on a bought deal private-placement basis, 20 million units of the Company (the "Units") at a price of C$0.15 per Unit (the "Issue Price"), for total gross proceeds of C$3.0 million (the "Bought Deal Offering").

Each Unit will consist of one common share and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder to purchase an additional common share of the Company at a price of C$0.25 per share for a period of 24 months from the closing of the Bought Deal Offering.

The Company has agreed to grant Haywood an option (the "Underwriter's Option") to purchase, or to find substitute purchasers for, up to an additional 10,000,000 Units (the "Additional Units") at the Issue Price, for total additional gross proceeds of up to C$1.5 million. The Underwriter's Option, if exercised, is expected to close concurrently with the closing of the Bought Deal Offering (collectively the Bought Deal Offering and the Underwriter's Option, as applicable, are referred to as the "Offering").

In connection with the Offering, the Company has agreed to pay Haywood cash commissions of 6% of the gross proceeds of the Offering, and compensation options to acquire Units at the Issue Price equal to 6% of the number of Units issued to investors. The Company will also pay Haywood a corporate finance fee of 5% of the gross proceeds of the Offering, up to a maximum of $200,000, payable in a combination of cash and Units.

The Company expects to use the net proceeds of the Offering to expand production capacity (including a shift to wider industry standard 1.5 meter output widths), to repay outstanding bank debt, to make modest increases to its workforce, and to expand its facilities.

Closing of the Offering is subject to the Company entering into an underwriting agreement with Haywood, as well as customary closing conditions including, but not limited to, the receipt of all necessary regulatory and other approvals, including the approval of the TSX Venture Exchange. The Offering will be made by way of private placement pursuant to the applicable exemptions from the prospectus requirements. The securities issuable pursuant to the Offering will be subject to a four month statutory hold period under Canadian securities laws.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the "1933 Act") or any state securities laws, and may not be offered or sold within the United States or to U.S. Persons (as defined in the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration is available.

No securities regulatory authority has either approved or disapproved of the contents of this news release.

About ALUULA

ALUULA is located in Victoria, British Columbia.  ALUULA was created with a vision to find solutions for real world challenges not being met by traditional composite manufacturers. Its goal is to create the next generation of lighter, stronger soft composites for a broad range of large vertical markets. Commercialization within the wind sport markets (Kiteboarding, Wing Foiling and Windsurfing) began in 2020, demonstrating clear benefits in performance, durability, and weight reduction. The initial success in this arena has led to rapid market acceptance in a variety of industry segments over the past two years and earned ALUULA composites a reputation as the leader in new material development within the wind sport sector. In parallel, the company has been co-developing "application specific" composites with well-known industry leaders in Aerospace, Sailing, Outdoor Packs & Tents, and other industrial applications.

Using a patented and proprietary approach to increase fiber strength at the molecular level, ALUULA core weaves and outer facing films are fused without the use of heavy glues. This remarkable process allows ALUULA to achieve strength to weight ratio materials that have been previously unachievable. The Company continues to add patented innovation to its product offerings and specialized core competencies to its growing team.

ALUULA's wholly owned subsidiary, Ocean Rodeo, has been a fixture in the wind sport community for over 20 years. Founded in 2001, Ocean Rodeo holds over 50 patents or patent applications related to the design of watersports equipment, with a well-known history of innovation and market disruption. It was this culture of innovation that led to a partnership with scientist and serial entrepreneur, Peter Berrang, to fundamentally change the way in which material used for kites, wings and sails is manufactured.  This partnership flourished and now ALUULA materials are being incorporated by leading wind sport brands around the world. These brands and their customers are benefitting from the lighter, stronger and stiffer qualities of the ALUULA Goldtm material over traditional dacrons used in the industry. Attending its first trade show, out of over 500 entries, ALULLA Composites won the Textrend Best Product, soft equipment category at the 2020 ISPO trade show in Munich, Germany.

For further information about ALUULA see www.ALUULA.com
For further information on Ocean Rodeo see www.oceanrodeo.ca

ALUULA is proud to have been awarded BEST PRODUCT of the soft equipment category at 2021/22 ISPO for our ALUULA Goldtm composite.

For further information about the Company, please contact:

Mr. Richard Myerscough, CEO & Director
Email: [email protected]

Mr. Peter Dorrius, CFO
Email: [email protected]

Completion of the Offering is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. There can be no assurance that the Offering will be completed as proposed or at all. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Forward looking statements in this news release include, but are not limited to, the closing of the Offering and the anticipated use of funds. Because of these risks and uncertainties and as a result of a variety of factors, including with respect to the closing of the Offering, and the timing and receipt of all applicable regulatory approvals, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statement will prove to be correct. Forward looking statements herein are made as of the date hereof, and except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information.