Mr. Spencer Huh reports

NEO BATTERY SIGNS MULTI-YEAR OFFTAKE AGREEMENT FOR SILICON BATTERY MATERIALS WITH NORTH AMERICAN DRONE & UAS BATTERY COMPANY

Neo Battery Materials Ltd. has signed a multiyear offtake agreement and a joint development agreement (JDA) with a North American lithium-ion battery company specializing in performance-intensive, specialty applications, including unmanned aerial systems (UAS), drones and defence-related mobile systems.

Under the offtake, the customer has committed to a total purchase volume of 50 tons of Neo's silicon anode materials, NBMSiDE P-200 and P-300N, over an initial four-year term. Neo anticipates supplying the initial P-200 and P-300N materials starting in 2026. Annual volumes are subject to production capacity and availability, qualification milestones, and operating deployment needs of the customer's products. The price for the silicon anode materials will be determined through a mutually agreed-upon pricing structure based on prevailing raw material and processing costs at the time of each supply.

To reinforce the offtake supply commitments, the JDA further establishes a collaborative framework in which Neo will supply its P-200 and P-300N silicon anodes for evaluation and validation within the customer's lithium-ion and lithium-polymer battery cells. Both parties will jointly develop and optimize battery performance through system-integrated field tests in UAS and drones. The customer will manufacture battery cells with various chemistries and cell formats, and Neo will iteratively adjust its silicon battery technology based on feedback data. Energy density (watt-hours per kilogram), safe charging/discharging rate capability and power output are key performance metrics to be enhanced for the indicated high-demand electronics.

Neo Battery Materials is progressing with its initiative to expand silicon anode production to 20 tons per year, following the positive validation of recent prototypes and direct demand for high-performance materials from end-users. Following 20-ton mass producibility tests and material quality/performance validation, the company will scale up production to 240 tons per year to meet downstream demand and to support the company's in-house battery manufacturing business. As announced, Neo is conducting due diligence to lease an operational, revenue-generating commercial facility to produce high-performance, customized batteries for its drone, UAS, robotics and automotive pipelines.

"This offtake and JDA represent another critical milestone in the commercialization of Neo's silicon battery technology as we expand into synergistic, revenue-potential verticals of battery design and manufacturing. By partnering with a North American battery company, we are advancing our mission to establish a robust and high-quality North American battery supply chain. For the Western world, our company aims to become the go-to alternative for high-performance battery materials and components to any end-use application," expressed Spencer Huh, president and chief executive officer of Neo.

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 (UAVs), robotics, unmanned systems, electronics, electric vehicles and energy storage systems for AI (artificial intelligence) data centres. 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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