Aluula closes $14.1-million private placement

Executive Summary

• Aluula Composites Inc. closed an upsized best-effort brokered private placement of 4,273,475 units at $3.30 per unit, raising $14.1 million in gross proceeds.
• Net proceeds will be allocated to manufacturing capacity expansion, construction of a new facility, working capital, and repayment of a $1 million promissory note.
• The offering includes warrants exercisable at $4.29 per share for 24 months, alongside concurrent insider exercises totaling $500,000 and 180-day lock-up agreements for directors and officers.

Key Details

• Offering Size & Price: 4,273,475 units sold at $3.30 per unit for aggregate gross proceeds of $14,102,467.50, including full exercise of the agent's over-allotment option.
• Agent & Commission: Canaccord Genuity Corp. served as sole agent/bookrunner; received a 7.0% cash commission ($730,798.61) and 7.0% agent warrants (reduced to 2.5% for president's list purchases). Agent warrants are exercisable at $3.30/share for 30 months.
• Warrant Terms: Each unit includes one-half of a warrant exercisable at $4.29/share, expiring 24 months post-closing. Warrants are non-transferable and subject to acceleration if the common shares trade at a VWAP of $8.25+ for 30 consecutive days.
• Use of Proceeds: Expansion of manufacturing capacity, construction of a new facility, general administrative and working capital, and repayment of principal/interest on a $1M promissory note to 0876991 B.C. Ltd.
• Concurrent Insider Activity: Four directors exercised warrants/options at prices ranging from $0.61 to $2.00 per share, generating $500,000 in proceeds and resulting in 278,484 newly issued common shares.
• Lock-up Agreements: Ten directors and officers entered into voluntary 180-day lock-up agreements restricting sales.
• Regulatory & Exemptions: Relied on the Listed Issuer Financing Exemption (LIFE) under NI 45-106 and US Securities Act exemptions. Units to Canadian residents carry no resale restrictions; agent securities subject to a 4-month-1-day hold period. Pending final TSX Venture Exchange acceptance.
• Related-Party Transactions: One subscriber (18,200 units) and 0876991 B.C. Ltd. are classified as related parties. The company utilized exemptions from MI 61-101 formal valuation and minority shareholder approval requirements, as transaction values remain below 25% of market capitalization.