Victoria, British Columbia--(Newsfile Corp. - June 24, 2026) - ALUULA Composites Inc. (TSXV: AUUA) (OTCQB: AUUAF) ("ALUULA" or the "Company") today reported its financial results for the three- and six-month periods ended April 30, 2026 ("Q2 2026" and "YTD Q2 2026," respectively). All currency amounts noted are in Canadian dollars.

"I am pleased to report another record quarter for ALUULA, with Q2 2026 sales exceeding $3.0 million for the first time in the Company's history and gross margins of 44%, within our previously noted range of 40-45%," said Sage Berryman, CEO and President of ALUULA.

"Performance Outdoor continued to account for the majority of sales in the quarter, while Commercial Industrial represented a larger share than in the prior year period. This shift reflects the early traction we are seeing as ALUULA broadens its revenue base across new and developing applications."

"Subsequent to quarter end, we signed a lease for our new Vancouver manufacturing facility, which will support our planned capacity expansion and broader production capability. As we advance this build-out, these investments are intended to support future revenue growth and position ALUULA for the next phase of scalable growth."

Key Q2 2026 Highlights

• Q2 2026 Sales were $3,056,473, compared to $1,573,677 in Q2 2025, representing a 94% increase.

• Sales increased across both channels, with Performance Outdoor representing 87% of Q2 2026 sales and Commercial Industrial representing approximately 13% of Q2 2026 sales. Pack and bag applications represented 19% of Q2 2026 sales, compared to 3% in Q2 2025.

• Gross margin for Q2 2026 was 44%, compared to 42% in Q2 2025, and remained within the Company's expected range of 40%-45%.

• Net loss from continuing operations for Q2 2026 was $475,493, compared to $343,381 in Q2 2025, primarily reflecting higher operating expenses related to growth and commercialization initiatives.

• Operating expenses for Q2 2026 doubled compared to Q2 2025, driven mainly by higher salaries and benefits, general and administrative costs, and marketing expenditures to support trade show participation, customer engagement, public relations, and business development.

• R&D and product innovation initiatives advanced during Q2 2026, including waterproof breathable material development, improved quality assurance processes, and customer-led application development to support broader applications across performance outdoor and commercial industrial markets.

• Customer commercialization advanced during Q2 2026, with materials delivered to 12 new customers during the quarter, reflecting continued organic, inbound customer demand across target markets and expansion of the sales pipeline. The Company also supported multiple brand partner product launches incorporating ALUULA materials, including products from Hyperlite Mountain Gear, Mountain Hardwear, MAAP, and Db Journey.

Key YTD Q2 2026 Highlights

• YTD Q2 2026 Sales were $5,387,399, compared to $2,835,206 in YTD Q2 2025, representing a 90% increase.

• Sales increased across both channels, with Performance Outdoor representing 90% of YTD Q2 2026 sales and Commercial Industrial representing approximately 10% of YTD Q2 2026 sales. Pack and bag applications represented 27% of YTD Q2 2026 sales, compared to 6% in YTD Q2 2025.

• Gross margin for YTD Q2 2026 was 43%, consistent with YTD Q2 2025.

• Net loss from continuing operations for YTD Q2 2026 was $825,698, compared to $695,059 in YTD Q2 2025, primarily reflecting higher operating expenses related to growth and commercialization initiatives.

• Operating expenses for YTD Q2 2026 increased by 76% compared to YTD Q2 2025, driven mainly by higher salaries and benefits, general and administrative costs, marketing expenditures, and continued investment in research and development to support product innovation and commercialization.

Balance Sheet and Capital Deployment

As at April 30, 2026, the Company had cash and cash equivalents of $13,656,881, compared to $2,051,791 as at October 31, 2025. The increase was primarily attributable to net proceeds of $12,966,286 received from the brokered private placement completed in February 2026.

The strengthened balance sheet provides additional flexibility to execute on ALUULA's planned capacity expansion, including the Vancouver facility build-out, equipment purchases, product development, working capital, and inventory commitments to support anticipated growth. During the six months ended April 30, 2026, the Company also repaid its related party loan in full.

Outlook

ALUULA enters the second half of fiscal 2026 with record quarterly sales, gross margins within management's expected range, and a strengthened balance sheet following the completion of its February 2026 financing. ALUULA remains focused on three long-term value drivers: building a scalable operating business with disciplined execution, continuing to invest in its technology portfolio, and strengthening its position as a premium ingredient brand. Management views fiscal 2026 as an investment year focused on building the production capacity required to support scalable growth in fiscal 2027 and beyond.

Subsequent to quarter end, ALUULA entered into a lease for its planned Vancouver manufacturing facility, for October 2026 possession, providing a foundation for the Company's planned capacity expansion to approximately ten times current production capacity and broader production capability. As the Company advances the facility build-out and related investments in equipment, working capital, inventory, and personnel, operating expenses and near-term financial results may be impacted during this investment phase. The timing and pace of capacity expansion and any related production ramp will depend on the successful execution of the facility build-out, equipment availability, customer order timing, and the Company's ability to scale operations efficiently. These investments are intended to support future production capacity as commercialization continues across target vertical markets, while management remains focused on gross margin discipline and exercising discipline over controllable operating expenses.

ALUULA continues to invest in its technology portfolio through product, process and construction innovations, including PFAS-free waterproof breathable material development, material testing, circularity initiatives, and improvements to its patented manufacturing process, with core patents extending to 2037. These efforts are intended to support broader adoption of the Company's lightweight, strong, and recycle-ready composite materials across Performance Outdoor and Commercial Industrial markets, including customer-led application development and technical industrial opportunities where ALUULA materials may provide performance advantages relative to incumbent materials. Commercial Industrial applications include commercial, industrial, aerospace, defence, wind power, inflatable structures, and other non-outdoor applications.

ALUULA also remains focused on strengthening its position as a premium ingredient brand. Through customer commercialization and ongoing work with its brand partners, the Company continues to seek broader adoption of ALUULA materials in high-performance products where lightweight performance, durability, construction capability, and recycle-ready attributes are valued. Performance Outdoor remains the Company's largest revenue channel, while pack and bag applications and Commercial Industrial opportunities continue to support revenue diversification as ALUULA broadens its addressable market.

Stock Options Granted to Executive Team and Directors

The Company announces that pursuant to its 2024 Stock Option Plan, it has granted 308,919 options to the CFO. Each option is exercisable into one common share at a price of $3.17 per share until June 23, 2031.

The Company also announces that it has granted an aggregate of 18,199 stock options to certain directors. Each option vested immediately upon grant and is exercisable into one common share at a price of $3.17 per share until June 23, 2031.

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 six months ended April 30, 2026, and the related management's 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 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.

aluula.com | TSXV: AUUA | OTCQB: AUUAF

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 Information

Certain statements in this news release contain forward-looking information within the meaning of applicable securities laws in Canada ("forward-looking information"). The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Forward-looking information in this news release includes, but is not limited to, statements regarding the Company's planned Vancouver facility build-out, expected production capacity expansion, anticipated H2 2026 production ramp, future revenue growth, sales pipeline expansion, commercialization opportunities, use of proceeds from financing activities, product development initiatives, , continuing investments in technology portfolio, strengthening of its position as a premium ingredient brand, potential operating efficiencies, and future updates regarding the Company's business plans. The forward-looking information is based on assumptions that include, but are not limited to, the potential future direction and activities of the business, the timing and success of capacity expansion initiatives, customer demand, availability of equipment and materials, and that the risks and uncertainties described in the Company's Management's Discussion and Analysis for the year ended October 31, 2025, do not occur. The forward-looking information is subject to risks, uncertainties, and other factors that could cause actual results to differ materially from current expectations. These factors include, but are not limited to, timing of potential changes in the business, future operating results, future performance, and the risks, uncertainties, and other factors described in the Company's Management's Discussion and Analysis for the year ended October 31, 2025. All forward-looking information in this news release is qualified in its entirety by this cautionary statement and, except as may be required by law, the Company undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.

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