Ms. Sage Berryman reports

ALUULA ANNOUNCES CLOSING OF UPSIZED $14.1 MILLION BROKERED LIFE OFFERING

Aluula Composites Inc. has completed its previously announced best effort brokered private placement of 4,273,475 units of the company at a price of $3.30 per unit for aggregate gross proceeds of $14,102,467.50, which include the exercise in full of the agent's option to offer for sale additional units. The offering was conducted on a best effort basis by Canaccord Genuity Corp. as sole agent and bookrunner.

Each unit is composed of one common share in the capital of the company and one-half of one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of $4.29 per share at any time on or before that date which is 24 months after the closing date of the offering. The company may accelerate the expiry of the warrants if the common shares trade on the TSX Venture Exchange or any other Canadian stock exchange on which they are then listed, at a volume-weighted average price of $8.25 or more per common share for 30 consecutive trading days, subject to the terms of the warrants. The warrants are non-transferable.

In connection with the offering, the company paid to the agent a cash commission of $730,798.61 and issued 221,454 warrants to the agent, representing a cash commission of 7.0 per cent of the gross proceeds of the offering (reduced to 2.5 per cent of the gross proceeds for units sold to purchasers on the president's list) and agent warrants in an amount equal to 7.0 per cent of the number of units sold (reduced to 2.5 per cent for units sold to purchasers on the president's list). Each agent warrant is exercisable into one common share of the company at the offering price for a period of 30 months from the closing date of the offering.

The company intends to use the net proceeds from the offering for expansion of manufacturing capacity, building a new facility, and general administrative and working capital, including the repayment of principal and interest owing to 0876991 B.C. Ltd. pursuant to the company's $1-million promissory note (previously disclosed on Jan. 12, 2026).

The units were offered: (i) by way of the listed issuer financing exemption under Part 5A of National Instrument 45-106 (Prospectus Exemptions), as amended by Coordinated Blanket Order 45-935 (Exemptions from Certain Conditions of the Listed Issuer Financing Exemption) in all of the provinces and territories of Canada; (ii) in the United States pursuant to available exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended; and (iii) in such other jurisdictions outside of Canada and the United States provided that no prospectus filing or comparable obligation, continuing reporting requirement, or requisite regulatory or governmental approval was required in such other jurisdictions. Pursuant to NI 45-106 and the order, the units issued to Canadian residents under the offering will not be subject to resale restrictions. The company is relying on the LIFE and is qualified to distribute securities in reliance on the exemptions included therein. Securities issued to the agent in connection with the offering are subject to a hold period under applicable Canadian securities laws expiring four months and one day from the closing date of the offering. The offering remains subject to final acceptance of the TSX Venture Exchange.

Concurrently with the closing of the offering, four directors of the company exercised warrants and stock options of the company at exercise prices ranging from 61 cents to $2 per common share, for aggregate proceeds of $500,000, and resulting in the issuance of 278,484 common shares. In addition, 10 directors and officers of the company entered into voluntary 180-day lock-up agreements restricting them from selling during this period.

Pursuant to Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions), the company advises that one subscriber who purchased 18,200 units under the offering is considered to be a related party of the company, and 0876991 B.C. Ltd. is a related party of the company, such that the repayment of the promissory note to 0876991 B.C. and the insider's participation in the offering constitute related-party transactions for the purposes of MI 61-101. The company is relying on the exemptions from the formal valuation requirements contained in Section 5.5(a) of MI 61-101 and from the minority shareholder approval requirements contained in Section 5.7(1)(a) of MI 61-101, as the fair market value of the related-party transactions does not exceed 25 per cent of the company's market capitalization, as determined in accordance with MI 61-101.

About Aluula Composites Inc.

Aluula is an ultralight, high performance and recycle-ready composite material brand that enhances the performance of outdoor gear, as well as commercial and industrial equipment. Proudly owned and manufactured on the Canadian West Coast, Aluula's innovation is driven by a deep understanding that equipment does not need to sacrifice performance for sustainability. Aluula's materials are known for their unique construction capabilities and their ability to make products lighter, stronger and more sustainable.

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