Thank you everyone for joining at the end of a busy day. I hope some of the meetings and presentations that you've been at have been great. It's nice to have a chance to share the Aluula story. Still pretty unknown, hopefully this is new for a few people around the room and feel free to ask questions at the end. I'll probably move through pretty quickly. I'm sure everybody can read that, and that's the most exciting slide of the deck. I always say that's the most expensive slide in the deck. It really is. I'm going to give you a little bit of background about who Aluula is and where we're going. Obviously, I'm a little biased, but it's a pretty exciting time for a company that's trying to push a revolution in an industry that hasn't had a real revolution in about 30 years.
As we go through, I'll hit on some of these performance metrics, but even as a very early young company, we're seeing some solid performance and I'll explain a little bit more where that's coming from. We're Canadian. We went public through an RTO in 2023. The first time we were selling commercial materials to someone that wasn't an insider customer was about that 2023 timeframe. Still very young, as I said. I joined in early 2024. Really brought in to help bring some operational rigor to the business and refocused strategically as well. That led us to reallocating towards a more performance outdoor brand, we speak about being an ingredient brand, which I'll go through a little bit.
That brought us up to hitting peak capacity, so we're demand currently from our customers past our current capacity and to a recent fundraise that we completed in February to help us address this. We play in the composites market space. Globally, the composites market space is about a CAD 6 billion a year business. One thing that's really attractive about it as well is that it's showing about a 9% CAGR. A lot of the driver of that CAGR is people who are looking for higher performing materials that are also sustainable. When you're in industries where you're using things like Kevlar or Lycra, where you have these very high-quality brands that are mostly polymer based, honestly, as we are. They've been around for more than 30 years, most of them. They're not sustainable in a lot of circumstances.
Can you combine high performance with sustainability? That's really the core differentiator for Aluula. Our products are currently focused, the first market that we came into is wind sports and then technical outdoor with bags and packs. I have an early sample of the Arc'teryx pack with me if anybody wants to see it. Then we're just moving into commercial and industrial and defense applications, which I'll talk a little bit more about. What is it? What is the Aluula product? We create a material, it's sold in rolled goods. What makes our material really differentiated is that it's very light and it's very strong, and it's able to be light and strong by the fact that our core is made from ultra-high molecular weight polyethylene. Not a chemist, we don't have to get into too much detail, but it's a well-known material.
It's been around for about 30 years, used a lot in ballistics. Honeywell has a brand named Spectra. Dyneema has an ultra-high molecular weight product. The benefit of ultra-high, again, is that it's light and strong, but nothing sticks to it. This has been a problem in the industry for ages. If you want it to be waterproof or if you want it to be abrasion resistant on top of that lightness and strength, you would put an adhesive to apply that extra layer on the outside. Aluula has really unique IP that we can, through our patented process, remove that adhesive. That adhesive is the point of failure. That's what will degrade over time. For Aluula, we can be used in extreme environments. We are UV resistant, waterproof, ultra-light and durable.
A really big differentiator with our product as well is that we can do no-sew construction. Where a seam used to be a weak point in most of these applications, it then becomes a position of strength. I'll talk about that a little bit more as we look at some of the applications where our product is being used in. As I spoke about, you see that center woven piece? That's the ultra-high molecular weight core, then we take custom films based on what our customer is requiring, and we apply those on the outside layer. Think of it like a sandwich. The most expensive part of the sandwich is the meat, which is the ultra-high molecular weight core, then you can customize it. Do you want it open face? Do you want whole wheat?
What type of bread do you want, depending on the application? Our IP is around that process to create that product as a composite, again, without the use of any adhesives. You end up with a very differentiated product that is fully recyclable because it becomes a mono material, right? We're not putting that adhesive in altering the chemical composition of the product. Currently, we've greatly reduced our SKUs from 500 to a core 10. That's a proud moment for us as a company. Our product weights go from the 25 GSM on the left-hand side, which is our current lightest that we're selling commercially, up to the 220 GSM on the right-hand side. Depending on where our customer wants to use a product, they will pick a product within that category.
You can see on the left-hand side, it's more of the ultra-light focused areas, then as we move more towards the right, you get more abrasion resistance and more durable. If you want something more burly for a life raft or something, you're going to end up on the far right-hand side. All of these photos are from current customers of Aluula's with current products that are built with Aluula. There's a couple key things that really differentiate Aluula. One is the financial metrics of the business, which we'll talk about in the financial section. The other is the brand, which we'll talk about when we talk about our partners that we work with. Then the third is our technology and our IP portfolio. I spoke a little bit about the process that we use to manufacture.
That gives us a very high-performing product that is higher performing than any other player in the category right now, but it also creates a product that's sustainable. No one else right now has that combination of high performance and sustainability. When you look in that upper right quadrant, we are currently alone in that upper right quadrant, which I would like to keep that way for as long as possible. We're not resting on our laurels, right? Our current IP is solid, but we're building out a portfolio around that. From an IP perspective, we look at trade secrets and patents. We look at products that we can patent. We look at the process, the manufacturing process, which I spoke about for our current main patent estate.
We also look at construction techniques, because as I spoke about earlier, the fact that you can weld or no-sew construction, you can thermoform, you can do some really unique construction with Aluula's material that's not possible with anyone else's material. This means that our partners can find really great manufacturing efficiencies when they bring it into the production floor as well. Our responsibility on the asset building side is to keep ensuring that we're building out that technology portfolio. Who do we sell it to and how do we make money? Aluula is used as a core ingredient in a lot of the products that we're selling into. We are an ingredient brand. We work with fantastic brand partners. We sell them rolled goods. They build the end product. Our responsibility is to deliver material that meets the specs that we've promised them.
Their responsibility is to develop and sell amazing products, which they do. As you can see, we're not a small component of most of the products that we're sold into, so it becomes a very large component, and it becomes very mutually beneficial because that customer is dependent on us for their product success as well. This means that our customers are sticky. When they come in and they adopt Aluula, we are seeing very little attrition. I don't know that I've seen any, honestly, in the two years that I've been there. It also means that we've been able to still grow our customer base, even while we didn't have the capacity to service it. I spoke about it a little bit earlier. We've been ramping quite quickly. We did about CAD 8 million in revenue last year.
As the number of uses of Aluula continue to grow, that is putting demand on our capacity, which is what we went out to raise for to satisfy. As we continue to bring new brand partners in, we also learn about new applications that we wouldn't have thought of on our own. Most of the interest that's coming into Aluula currently is inbound interest, which we're quite fortunate to have. We're currently dividing our markets by two key areas. One is the performance outdoor category. That's wind sports, which was the first market we entered, including sailing. Bags and packs was the second market that we entered. We are now starting to move into apparel and footwear. The other area that we're really excited about is the commercial and industrial applications.
A little bit less price sensitive, more of a higher value on the high performance in the commercial and industrial applications. When you start to look at things like defense, our material performs better in the cold. It doesn't get brittle into that glass transition state until -100 degrees Celsius. When it's way lighter and way stronger than the competition, you've got a real ability to replace some of these materials that have been around, as I said, for 30 years. These are just a couple examples, and the links are on our website as well. These are products that are being sold in the market by current customers. The Arc'teryx pack is a great example. It really shows the value of the Aluula material in that it is truly differentiated from a performance perspective.
Arc'teryx was working with us for about two years before they did their release. It is the most expensive pack they sold, and they sold out in two days. That performance drives that uptake, and that helps us create that brand value, right? I want Aluula to be associated with the highest performing, highest value products in the categories. Hopefully, again, that performance justifies that price point. You'll see that across the categories that we're looking at. The one at the end is an interesting example. They are using Aluula material on the front of cargo ships to decarbonize shipping. They're driving towards a 20% fuel savings. That example, they've built a 600 square meter kite that's going on front. Airseas is owned by K Line, it's a very big cargo shipping company.
Again, in that one kite, there's about 5,000 meters of Aluula material. Reminder, we sell rolled goods, a customer like that is a very attractive prospect for us. They're still in R&D, and they require us to have the wider width capacity, which is being built into the new facility for them to commercialize. Because we work in brand partnership, we can only speak about the brands that we work with once they've spoken about it publicly. We are under NDA with the customers when they come into our pipeline. These are an example of brands that have released Aluula products and that have spoken about it to the public. You'll see a large number of very well-known brands out there. Osprey's pack similarly sold out very quickly. Mountain Hardwear has just released their pack. It's getting very strong reviews.
We're starting to see some of our early customers, like Db Journey, release their second line. We're just starting to see that ramp up. Others, as I noted, someone like Mountain Hardwear has just released their first pack. We're just still in that early uptake phase. Similarly on the commercial and industrial, Michelin Inflatable Solutions is building large structures with Aluula's material that you can inflate and hold to a very strong pressure for load bearing. The decarbonization of shipping, just as a couple examples of companies that have spoken about Aluula. As I said, we have a very active pipeline. All of our interest right now is inbound interest. Usually we have an advanced concepts engineer, a material scientist at a firm that's been looking for a solution for something. They find us.
As I spoke about the ultra-high molecular weight pros and cons have been well known for a while, people have been waiting for a material like this. We're quite fortunate to have that inbound interest coming in. In that stage one or two, they're getting small samples and they're testing it, right? They want to validate that it works for them, they move towards commercialization as they get through that R&D pipeline. One of the constraints that we've had in expediting revenue growth has been the fact that right now it's a nine-month wait list to get our material. If a new customer calls, we say, "Really great, happy that you're interested." We validate whether they're a brand fit, they sit and they wait for nine months. That delays the sales pipeline.
We get to the point where our capacity increases by having a new facility, we can start to expedite that. The other thing that we're also doing is starting a novel idea to stock some finished goods. What a wonderful thing some cash flow is to help with that. The raise is helping us do that as well. We'll start to see that evolution of our sales pipeline being able to progress more quickly through. How are we going to get there? I've spoken a little bit around the capacity constraint that we were under. As of last year at the end of 2025, we were, as I said, about nine months booked out from a volume perspective, we did CAD 3 million that quarter, that was pushing our current facility to the peak of what it was able to do.
I've often said if anybody called in sick, we wouldn't have been able to hit that number, and it's true. What we did, we did that very consciously because we wanted to see what peak capacity per employee at that level was. That gave us comfort that even at that level, we were seeing a 40%-45% gross margin in suboptimal conditions, right? This is our first facility that we've built out. To put it in context, we're doing one meter wide, we're doing one meter wide because we don't have space or youth for a forklift, an individual can pick it up. We are manufacturing each roll by hand, quite literally. Even at that, we're able to see this growth. We're able to see a 40%-45% margin. In Q4, we saw a break even to the bottom line.
That gives us comfort going into the next fiscal year when we went out to do our raise, that, yes, investing in the future growth would give us a good return. We went out to raise CAD 10 million. We ended up oversubscribing at just over a CAD 14 million raise. The key aspect of that is about half of it going to the new facility. This is a very capital-efficient business. That investment's going to get us to a 10x capacity in the new facility. This is a really important time for Aluula's inflection point. We signed a lease. We'll be building out that facility shortly and hope to have it online by the end of this fiscal year.
That gives us the ability to come after new markets that we've not been able to go into, because 1.5 meter is the standard width in this industry, and a number of the different applications can't commercialize until we're at that 1.5 meter. What's the growth strategy within this? We spoke about scaling the production and that being a key constraint that we're working through. The other is, of course, going after new verticals. As I talked about, this is a new material that's enabling new uses that we haven't thought of before. People sometimes ask me where I think the most revenue is going to be coming from in three or five years. I honestly don't think we know yet.
We get customers with inbound interest coming in and exposing us to uses, whether it's in space or in air, or on the ground, or on the sea, that we hadn't contemplated, which our material enables. We're a small team, we're a very tight team, and we need to make sure that we're focused. But having that inbound means that there are pre-qualified interests coming in as well. That diversifies our customer base too, which is great. Deepening our existing relationships, as I spoke about, still very early. Some of our customers are just commercializing their first product. Some haven't yet commercialized their first product. Then a couple of them are now moving on to the second or their third and growing that. We have very sticky relationships, as I spoke about.
Once we're embedded into the manufacturing floor, they don't want to swap out, and there's no other material that performs in the same way. We get good comfort that once we have them as a customer, we can grow that customer relationship over time. Then growing the product platform. A good example, we spoke in Q3 last year about the fact that we were working on a waterproof breathable. The big aspect of Aluula's current products, they are not breathable. They're very waterproof, but definitely not breathable. This has been something asked for from our customers because imagine you can have a jacket where you can have welded seams, where it can be way lighter than anything else in the market, completely PFAS-free, DWR-free, one layer, right? And recyclable at the end of life. This is not an incremental change in waterproof breathables.
This is a massive change potential in waterproof breathable. I've got the first prototype quietly in my bag if someone wants to try it on after. It is still in R&D. We are still lab scale with it. One of our gentlemen on our team built this in the lab. But it's showing very strong performance. I use that as an example. We have a platform. Our IP is around a platform, and we're not going to sit still. We're going to keep growing that product platform to sell good products and premium-priced products into the customers that we're currently selling into. Operating leverage. I spoke about a little bit that there's a solid business here.
Even in that early stage manufacturing, being able to show good, strong growth year-over-year without any proactive sales or marketing, to be able to show a 40%-45% gross margin in a really suboptimal manufacturing setup, keep our OpEx flat, and be able to put to bottom line a couple of years into operations for a manufacturing company is fairly unheard of. That's only going to get better, right? As we go to 10x our capacity, we're not going to make that type of investment in capital equipment if we're not gaining efficiencies. As we go in with higher volume, we're doing larger batches, and it gives us the ability to be much more efficient in our production, and we can keep our OpEx flat.
When we look outside of this investment year, because this is an investment year, and we look beyond that, the financial metrics look pretty good from top line all the way through to bottom line as well. Not giving formal guidance, but I think if you look at historical performance, and even are pretty conservative as you forecast out to that 10x capacity growth, there's a lot of runway in this business. We spoke about this a little bit. We have been seeing good, strong growth over time and maintaining of that gross margin even in flux. As I said, I started in Q1 2024, and really trying to see whether there was seasonality in the business.
Because we're distributed through our customer base, we don't see a lot of seasonality, but what we've been able to see over time is a continual increase in growth in that demand. We're also seeing a contractually booked order. We do binding purchase orders, which we confirm with a sales order, which gives us a good degree of comfort to what that short-term pipeline looks like as well. When you look at that growth quarter-over-quarter, with the maintaining of the gross margin, as I said, we expect longer term that that will continue and improve with more aggressive growth and then also see better efficiencies from a gross margin perspective. All of this is dependent on diversifying the customer base, right? First market we went into, performance outdoor, was wind sports, and we are fully penetrated in that market.
It's a great base for us, and it was a first market entry point, but what we really want to see internally is that we want to see that we're increasing the penetration in those other markets. Bags and packs was the next market. As I said, we're seeing more conversion to customers, more repeat orders, and more growth of those customers. Commercial and industrial is the most recent, so we're early in that, and again, we're starting to see an increase in revenue from those industries as well. I spoke a little bit about the tight management of OpEx. I think in the day and age that we're in, I want us to be both a value company and a growth-based company. This is growth, right?
All of our management team is here because we see the potential in what this business is capable of doing, but we're not going to be able to do it in a sustainable way unless we're putting bottom line in as well. We have a lot of room to be able to grow that top line with minimal impact on OpEx. There will be some scaling, right? We need to build out our commercial team a little bit as we ramp revenue up, but we have a very tight focus on maintaining control of OpEx, even while that revenue rate ramps. Our C-suite team, Tyler, polymer chemist, four post-docs, very entrepreneurial. Zhe, who's recently joined us last week. Happy to have her.
She's been in public company at KITS Eyecare, where they went from a CAD 20 million to CAD 200 million in a short timeframe, and manufacturing business scaling at that time, so it's great to have her part of the team. Sven was very early with MIPS, which is a great example of an ingredient brand. He was actually core to pivoting MIPS to be an ingredient brand versus producing their own helmets and selling. Myself, I've got a lot of experience in the life sciences and technology side and been in the C-suite for a long time now. Board of directors. Board of directors is similarly to what the management team was doing in that we had to evolve as the business evolved. The board is evolving as well. We've recently put Christophe Dardel in.
He was the CEO of Dyneema for 10 years during its major growth phase, so we're really happy to have him on our board. Most of the rest of the board members came in at that RTO stage, and we'll be looking at evolving with a different skill and expertise as we push for aggressive growth. Cap table. Pretty clean. This is, again, as of was updated Q1, this will be updated when we put out our Q2 numbers next week. Sitting in that like CAD 90 million-CAD 100 million Canadian market cap, it's cheap for Americans. Insider ownership, we're still pretty tightly held from an insider perspective, but a clean balance sheet as well. When we did our offering, we paid off CAD 1 million of related party debt and cleaned up the balance sheet.
After the raise, of course, cash on hand now will be closer to 13 after costs. In summary, a really exciting time for Aluula. Really strong traction for an early young company. Now that we have some cash, we're able to make longer-term benefiting business decisions. Really remember those three key pillars, right? It's a solid growing business with good margins, even in its current state. We're building and growing that technology and IP portfolio, which really grows that asset value. Building a premium brand in the highest priced products in the categories that are justified by their performance is really key for us as we move into these new markets. Happy to take any questions. Yeah.
All right. You mentioned on the last slide the Patents expire somewhere in 2037?
Yeah.
Have you had any patent infringement from overseas manufacturers? If so, how have you dealt with it?
We haven't yet. I expect competition. We have to plan for that. I think the first-mover advantage is really key for us, and building that brand equity is really key. We haven't seen it. We monitor pretty aggressively. We know that people are trying to do it, right? People have been trying to do this for 20 years, I fully expect that someone will keep pushing and get there eventually. We have to push that first-mover advantage. We have to continue to build out that IP estate because we have running knowledge more than anyone else does. My hope is by the time they're there, we're already 10 steps ahead of them. I think any good business has to expect competition, we haven't seen it yet. One more question? I got a minute left, I've been told. All right. Thank you, everybody. Appreciate it.