Mr. Spencer Huh reports

NEO BATTERY ACHIEVES NEAR-DOUBLE FLIGHT TIME IN LIVE DRONE FIELD TEST, ADVANCING COMMERCIAL READINESS OF NON-CHINESE BATTERY PLATFORM

Neo Battery Materials Ltd. has successfully completed a live surveillance drone field demonstration of its newly developed high performance drone battery cells (the NBM drone cell), confirming the previously disclosed cell-level performance improvements translate directly into real-world operational gains.

• Demonstrated 98-per-cent increase in average flight time versus mass-produced Chinese battery benchmark via live drone field test;
• Achieved 50-per-cent-faster charging rates from silicon anode integration and improved flight power efficiency at reasonable costs;
• Exceeded drone customer's internal expectations and metrics on performance enhancements from customization;
• Advancing to commercial readiness through pack and system-level optimization.

In a live flight test conducted using a Korean original equipment manufacturer (OEM) customer's commercial surveillance drone product, the NBM drone cell delivered a 98-per-cent increase in average flight time compared with the mass-produced Chinese drone battery benchmark. After multiple demonstrations, flight duration extended on average from 29.9 minutes to 59.2 minutes under equivalent operating parameters. The test was conducted at an altitude of approximately 70 feet under cold-weather conditions of negative three to negative five degrees Celsius (23 to 26 degrees Fahrenheit).

The prolonged flight time was driven by NBM drone cell's high performance specifications of 755 watt hours (Wh) and 260 Wh/kg (kilogram) at the pack level, representing energy capacity and density enhancements of 55 per cent and 29 per cent, respectively, compared with the Chinese benchmark. In addition, Neo's high-quality manufacturing produced a more stable voltage profile, enabling low-voltage operations while ensuring safety against power loss and operational failure (crash). Importantly, to maintain equivalent thrust/lift and power characteristics during flight, NBM drone cell packs successfully matched the discharge rate (measured in C-rate) and current (measured in ampere) performance of the benchmark battery.

A spokesperson of the South Korean drone manufacturer stated: "This live field test exceeded our internal expectations and metrics on what high performance customization could bring for drone products. At reasonable costs, NBM drone cells initially proves that high-capacity, high-stability voltage batteries can significantly enhance drone flight time and mission endurance, while maintaining high safety standards. This overall demonstration can raise the competitive edge within the industrial, emergency response, precision agriculture and defence drone markets where extended operational durability is critical. "

"Chinese manufacturers currently dominate the supply of global drone batteries. This demonstration advances Neo's objective of establishing a competitive, non-Chinese battery solution for drones and unmanned systems (UAS), where supply chain and performance constraints remain key procurement considerations for OEMs, governments and the military," expressed General (Ret.) C.J. Ko, director of Neo. "This field validation of the NBM drone cells establishes a robust business case for defence acquisition as Neo's technology materially extends mission capabilities without requiring drone redesigns, allowing for rapid integration into military systems."

Beyond absolute flight duration, the field test showcased improvements in efficiency metrics. Flight time per capacity (measured in minutes per Ah (ampere hours)) increased by approximately 28 per cent, and flight time per weight improved by approximately 80 per cent, indicating more effective energy utilization at the system level. Moreover, silicon anode integration enabled a 50-per-cent increase in charging rate from 0.2 Ah/minute to 0.31 Ah/minute under standard conditions, with further gains of up to 150 per cent (0.5 Ah/min) achievable under ultrafast charging protocols.

With initial field validation completed, Neo is advancing toward NBM drone cell prototype-to-commercial readiness by integrating battery management system (BMS) software and optimizing pack-level casing materials to further enhance energy density and thermal performance. The company will expedite structured customer and government evaluations for commercial integration and expand engagement with drone and UAS manufacturers in the United States and North Atlantic Treaty Organization countries.

Drone and UAS applications represent a key catalyst segment within the global lithium-ion battery market, which was estimated at approximately $9.1-billion (U.S.) in 2025 and is projected to exceed $29-billion (U.S.) by 2032. As defence, industrial and consumer UAV (unmanned aerial vehicle) usage scales, battery technology must evolve to meet rigorous performance requirements. Concurrently, advances in faster-charging architecture and complex BMS are broadening the drone/UAS market, enabling longer, safer operations and more efficient energy utilization. As a result, the synergy between drone platform advancement and battery innovation will be a major driver of sustained growth across both markets.

Appointment of Nancy Zhao as chief financial officer

The company is pleased to welcome Ms. Zhao back as chief financial officer. The company would like to further thank Daniel Lim for fulfilling this role for the past two years.

Ms. Zhao is a seasoned accounting and business executive with a CPA, with over 10 years of experience in both public and private companies. She has extensive coverage and expertise in various industries, covering manufacturing, mining, technology, sports entertainment, marketing and real estate. As part of compensation to Ms. Zhao, the company has granted incentive stock options to acquire an aggregate of 120,000 common shares and has issued 150,000 restricted stock units (the RSUs) in accordance with the company's omnibus equity incentive plan. Subject to the terms of the option agreement and vesting provisions, all options were granted at an exercise price of 59 cents with an expiry date on Feb. 17, 2031. Subject to the RSU agreement, all RSUs will vest after a 12-month period.

About Neo Battery Materials Ltd .

Neo Battery Materials is a Canadian battery technology company focused on developing and producing silicon-enhanced lithium-ion batteries in drones, unmanned aerial vehicles (UAV), robotics, unmanned systems, electronics, electric vehicles and energy storage systems for AI (artificial intelligence) data centeres. With a patent-protected, low-cost manufacturing process, Neo Battery enables longer-running and ultrafast charging batteries and provides end-to-end battery solutions from materials selection, cell architecture and process optimization. The company aims to be a globally leading producer of high performance lithium-ion battery components and materials, building a secure, robust battery supply chain in North America.

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