Peter Reid is a professional engineer who brings extensive experience in composites and materials engineering. Having worked in leadership roles at a number of companies including Mustang Survival and Arc’teryx, he and his team will work closely with the Company’s research and development team with a focus on the continuous improvement of ALUULA’s products and processes.

Key Q1 2025 Highlights

• Sales: the Company progressed against its customer diversification goals by:

  • Reducing sales concentration with the windsport vertical market from 89% in Q1 2024 to 80% in Q1 2025.

  • Increasing the number of customers ordering material in prototype size batches by 10% in Q1 2025 compared to Q1 2025 with 95% of these orders came from non-windsport customers in Q1 2025 vs. 61% in Q1 2024.

  • The importance of the Company’s initiative to diversify its customer base was highlighted in Q1 2025 as sales decreased by 37% to $1,261,529 from $1,997,279 in Q1 2024. This decrease was primarily due to the windsport vertical market which continues to recover from post pandemic overstocking issues that has altered customer ordering patterns.

• Gross Margins: the Company reported gross margins of 45% in Q1 2025, which is at the top end of its expected range. Q1 2025 gross margins were consistent with Q1 2024.

• Operating expenses were $819,530 in Q1 2025 compared to $683,032 in Q1 2024 representing a quarter over quarter increase of $136,498. The increase is primarily due to higher salaries and research & development costs as the Company invests in recruiting key hires and expanding manufacturing capabilities to a wider width, both of which are key to achieving its growth objectives.

• Net and comprehensive loss from Ocean Rodeo’s discontinued operations was $5,395 in Q1 2025 compared to a net and comprehensive loss of $346,557 in Q1 2024 representing a quarter over quarter decrease of $341,162. This decrease is a direct result of cost cutting measures implemented in April 2024 after the decision was made to discontinue Ocean Rodeo’s operations.

• Increase in cash and cash equivalents: the Company reported an increase in cash and cash equivalents of $2,061,967 in Q1 2025 compared to $412,459 in Q1 2024. The increase in cash and cash equivalents is due to the Company’s successful completion of an oversubscribed rights offering and sale of non-core assets which will provide sufficient working capital to execute on the fiscal 2025 plan.

Outlook

The Company continues to work with its growing list of brand partners, developing products that are lighter, stronger, and recycle-ready. These partnerships are built on the mutual understanding that performance and circularity can be synonymous in the outdoor industry and beyond. The products that are born from these partnerships work to change the industry for the better.

The windsports and performance outdoor categories are still the core drivers of ALUULA’s growth as more new companies move from concept into commercialization launching new ALUULA enabled products in these areas. Collaborative research and development programs with other industrial partners, such as Michelin Inflatable Solutions and AirSeas, continue to advance the materials’ development as these opportunities move closer to commercial viability.

Product innovation, strength, weight, and circularity are key areas of focus for ALUULA and its brand partners. Focusing on these areas, as well as continued improvements to the patented manufacturing process, will continue to improve efficiencies and profitability. The Company continues to focus on stabilizing the corporate foundation to enable a strong base for future sales pipeline, revenue and gross margin growth.

Financial Statements and Management’s Discussion and Analysis

This earnings press release should be read in conjunction with ALUULA’s unaudited interim condensed consolidated financial statements for the three months ended January 31, 2025 and the related management discussion and analysis, which can be found on ALUULA’s website and its issuer profile on the System for Electronic Document Analysis and Retrieval Plus at www.sedarplus.ca.

About ALUULA Composites

ALUULA is an ultra-light, high performance and recycle-ready composite materials brand that enhances the performance of outdoor gear. 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.

aluula.com | (TSXV: AUUA)

On behalf of the Board of Directors,
Sage Berryman
Chief Executive Officer
1-888-724-2470

For ALUULA investor inquiries, please contact:

1-888-724-2470, ext. 4
IR@aluula.com

For ALUULA media relations, please contact:

media@aluula.com

ALUULA’s Brand Partners

The term “brand partners” does not refer to formal partnerships with our customers. The term refers to marketing relationships with our customers who use ALUULA’s technology as a brand ingredient in their products.

TSX Venture Exchange

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.

Forward-Looking Statements

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, including, but not limited to: use of proceeds from the rights offering; the Company’s list of brand partners growing; the Company’s advancement of its materials development; and improved efficiencies and profitability. These statements are based on assumptions subject to significant risks and uncertainties as described in the Company’s management discussion and analysis. Because of these risks and uncertainties and as a result of a variety of factors, including the timing and receipt of all applicable regulatory, corporate third-party 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. 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.

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