Mr. Spencer Huh reports

NEO BATTERY SECURES NEW $3M PURCHASE ORDER FROM UCAV MANUFACTURER & PROVIDES UPDATE ON OPERATIONAL FACILITY LEASE

Neo Battery Materials Ltd. has received a three billion South Korean won ($3-million) purchase order and execute a joint product development agreement (JPDA) with a South Korea-based drone and unmanned combat aerial vehicle (UCAV) manufacturer. Under a project named Project David, Neo will provide end-to-end battery solutions for the customer's multidrone platform to strategically parallel the performance of gasoline-powered medium-altitude long-endurance (MALE) UCAVs.

• New $3-million purchase order and joint product development agreement with South Korean unmanned combat aerial vehicle manufacturer:
  • To provide end-to-end battery solutions for Swarm UCAV, Medium VTOL & Balloon System drones;
  • Project to enhance energy density, flight time, weight, power efficiency and cost-effectiveness.
• Expected to close definitive lease agreement for operational, revenue-generating battery components manufacturing facility by end of the week of Nov. 10:
  • All customary due diligence conducted and satisfied for operational facility.

The scope of Project David encompasses the design, prototype development and commercial integration of distinct high performance, lightweight lithium-ion battery products to enhance the customer's drone platforms across three form factors: swarm UCAV, medium vertical takeoff and landing (VTOL), and balloon systems. For Project David prototypes, the company will provide silicon-enhanced batteries that enhance flight time by 25 per cent to more than 50 per cent compared with current lithium-polymer batteries and increase the energy density to 333 watt-hours per kilogram (Wh/kg) from 200 to 250 Wh/kg, effectively decreasing system weight for improved payload flexibility.

Additionally, both parties will be committed to iterative optimization via extensive field testing, with an emphasis on delivering maximum power efficiency and cost-effectiveness. The JPDA is structured in development phases to prepare for commercial deployment in defence, industrial and surveillance operations. Neo aims to support the customer in competing with high-cost, fuel-based MULE UCAVs, such as Baykar's Bayraktar TB2.

For total battery design and architecture solutions, prototype batteries developed under JPDA, and commercially-validated products, the customer has committed to an initial purchase order of three billion South Korean won ($3-million) over 24 months, subject to performance achievements, prototype and commercial integration validation, certification outcomes, and production capacity and readiness.

Operational battery components manufacturing facility update

Following the letter of intent (LOI) with a South Korean battery company to lease an operational, revenue-generating battery components manufacturing facility on Sept. 22, 2025, the company expects to finalize and close the definitive lease agreement by the end of the week of Nov. 10. Neo has conducted due diligence on the operational status of the production equipment and machinery, facility safety and structural conditions, environmental assessments, and legal/regulatory compliance.

Upon completion of the definitive agreement, Neo will have immediate access to and rights over all equipment and facilities. The company will promptly restart production of battery electrodes to service existing major automotive manufacturers and downstream clients. Neo will further supply silicon-enhanced batteries from this manufacturing facility and the adjacent 3.2-acre expansion site for its new drone, robotics, and electronics pipeline and partnerships.

About Neo Battery Materials Ltd.

Neo Battery Materials is a Canadian battery materials technology company focused on developing silicon anode materials for lithium-ion batteries in electric vehicles, electronics and energy storage systems. With a patent-protected, low-cost manufacturing process, Neo Battery enables longer-running and ultrafast-charging batteries compared with existing state-of-the-art technologies. The company aims to be a globally leading producer of silicon anode materials for the electric vehicle and energy storage industries.

We seek Safe Harbor.