Mr. Khanjan Desai reports

ALCHEMY ENTERS NRE AGREEMENT TO ADVANCE CRYPSIS FOR CANADIAN DEFENCE TEXTILE APPLICATIONS

Alchemy Labs Inc. has entered into a non-recurring engineering (NRE) agreement with a Canadian textile-based systems manufacturer and supplier to the Canadian Department of National Defence (DND) for the development and integration of Alchemy's proprietary Crypsis thermal signature management technology into textile-based defence applications.

Under the agreement, Alchemy and its partner will collaborate on the development and technical validation of textile-based systems incorporating Crypsis, with the objective of evaluating potential commercial applications in military garments and other textile products for the defence and public safety markets. Alchemy will contribute its proprietary Crypsis technology and subject matter expertise in thermal signature management, while its partner will contribute garment and textile system engineering capabilities, manufacturing know-how, and market and business development knowledge.

The development activities contemplated under the agreement have an estimated total cost of $250,000, with Alchemy being compensated primarily for engineering and technical development services performed under the partnership. The estimate is provided for planning purposes and is not a fixed or guaranteed contract value.

The program is expected to progress through three development phases and progression between phases is subject to technical milestones and mutual agreement between the parties.

Alchemy's Crypsis technology has previously undergone development and field validation on coated textile applications in cooperation with DND, providing a technical foundation for the company's continuing commercialization efforts in textile-based defence applications.

Alchemy's commercialization strategy for Crypsis is focused on collaborating with established defence manufacturers and suppliers through NRE programs to integrate its technology into existing products and platforms. Under this model, the parties combine complementary technical, product engineering, manufacturing, market, and business development capabilities to jointly conduct application-specific engineering, testing and validation. The objective is to advance successful applications toward commercial deployment through partnerships that align technology development with market requirements.

This agreement brings those complementary capabilities together in the Canadian defence market, advancing Crypsis toward potential commercial deployment in textile-based applications.

Under the agreement, Alchemy retains ownership of its Crypsis technology and related intellectual property, including improvements and applications relating to its nanoparticle systems and thermal signature management technology.

Upon successful completion of the development phases, the parties may negotiate a separate commercial agreement for the manufacture of textile products incorporating Crypsis technology for defence and public safety markets. Any commercial arrangement would be subject to the negotiation and execution of a definitive agreement.

Khanjan Desai, chief executive officer of Alchemy, commented: "This agreement represents another important step in the commercialization of Crypsis and reflects the collaborative model we are pursuing within our defence business. Successful commercialization requires more than a strong material technology; it also requires product engineering, manufacturing knowledge and a clear understanding of customer needs. By bringing complementary capabilities together, this represents a major step towards delivering Crypsis enabled textile systems that protect Canadian soldiers."

To support the execution of this agreement and additional opportunities within its Crypsis development pipeline, Alchemy has expanded its engineering team and established dedicated engineering resources within its defence division.

About Alchemy Labs Inc.

Alchemy Labs is a Canadian nanotechnology company that develops and commercializes advanced protective technologies for the automotive and defence industries. Through its ExoShield platform, the company commercializes premium windshield protection films, paint protection films and protective coatings for automotive applications. Through its Crypsis platform, the company is developing thermal signature management technologies for defence and security applications.

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