ALUULA Composites Inc. Announces Bought Deal Financing

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VICTORIA, British Columbia, June 19, 2023 (GLOBE NEWSWIRE) -- ALUULA Composites Inc. (TSX-V: AUUA) (“ALUULA” or the “Company”) announces that it has entered into an agreement with Haywood Securities Inc. (“Haywood”), pursuant to which Haywood has agreed to purchase itself or via substitute purchasers, on a bought deal private-placement basis, 20 million units of the Company (the “Units”) at a price of C$0.15 per Unit (the “Issue Price”), for total gross proceeds of C$3.0 million (the “Bought Deal Offering”).

Each Unit will consist of one common share and one common share purchase warrant (a “Warrant”). Each Warrant will entitle the holder to purchase an additional common share of the Company at a price of C$0.25 per share for a period of 24 months from the closing of the Bought Deal Offering.

The Company has agreed to grant Haywood an option (the “Underwriter’s Option”) to purchase, or to find substitute purchasers for, up to an additional 10,000,000 Units (the “Additional Units”) at the Issue Price, for total additional gross proceeds of up to C$1.5 million. The Underwriter’s Option, if exercised, is expected to close concurrently with the closing of the Bought Deal Offering (collectively the Bought Deal Offering and the Underwriter’s Option, as applicable, are referred to as the "Offering”).

In connection with the Offering, the Company has agreed to pay Haywood cash commissions of 6% of the gross proceeds of the Offering, and compensation options to acquire Units at the Issue Price equal to 6% of the number of Units issued to investors. The Company will also pay Haywood a corporate finance fee of 5% of the gross proceeds of the Offering, up to a maximum of $200,000, payable in a combination of cash and Units.

The Company expects to use the net proceeds of the Offering to expand production capacity (including a shift to wider industry standard 1.5 meter output widths), to repay outstanding bank debt, to make modest increases to its workforce, and to expand its facilities.

Closing of the Offering is subject to the Company entering into an underwriting agreement with Haywood, as well as customary closing conditions including, but not limited to, the receipt of all necessary regulatory and other approvals, including the approval of the TSX Venture Exchange. The Offering will be made by way of private placement pursuant to the applicable exemptions from the prospectus requirements. The securities issuable pursuant to the Offering will be subject to a four month statutory hold period under Canadian securities laws.