Mr. Spencer Huh reports

NEO BATTERY SECURES EXPANSION SITE TO ESTABLISH INTEGRATED BATTERY MANUFACTURING CAPABILITY

Neo Battery Materials Ltd. has secured an expansion site to establish battery cell manufacturing capabilities and scale-up silicon battery material production and research operations. Located adjacent to the recently announced operational electrode manufacturing facility in South Korea, the site comprises six vacant industrial buildings on 2.5 acres with an additional 0.8 acre designated for future expansion.

The expansion site is a critical component in establishing Neo's new battery innovation platform, which will design and manufacture high-performance, customized battery solutions for drones, robotics and artificial-intelligence-enabled electronics. Cylindrical and prismatic-format battery manufacturing equipment will be installed to produce an expected annual capacity of 20 megawatt-hours (MWh). With existing pouch-format battery equipment in this first facility, Neo will possess full capability across all 3 battery formats, enabling supply to any end-user system and specification.

In parallel, the company will apportion one building to expand its silicon battery material production to 20 tons per year. Along with direct sales, Neo's silicon will be integrated into the first facility's electrode manufacturing lines and then assembled into various battery formats at the expansion site. An enhanced research and development division will be instituted to custom-design solutions for customers, optimize all manufacturing process yields and advance high-performance battery technologies.

Equipment orders have been placed for (i) battery cell assembly and formation process and (ii) silicon battery material synthesis. The company will provide updates upon the completion of the deposit payment, site due diligence and facility preparation. The company further expects the definitive lease agreement of the operational electrode manufacturing facility to be finalized shortly.

Neo Battery targets to design, develop and produce the following silicon-enhanced battery products for various end-user applications:

• High-capacity pouch batteries for drones or unmanned aerial vehicles, consumer electronics and medical devices;

• High-nickel NMC (nickel-manganese-cobalt) cylindrical batteries for autonomous or AI-enabled systems, robotics, power tools and eVTOL or electric aircraft;

• LFP (lithium-iron-phosphate) and high-Ni NMC prismatic batteries for energy storage systems for AI data centers and power grid, industrial and commercial mobility (that is, forklifts, electric boats, e-mobility) and automotive.

Mr. Seok Joung Youn, head of manufacturing and facility operations, commented: "By integrating end-to-end battery value chain capabilities, Neo aims to reduce reliance on outsourced manufacturing, shorten product development timelines and enhance quality control over the materials, electrodes and cells supplied to customers. This vertical integration effort will allow the company to become a reliable, high-quality one-stop shop or a battery foundry in the Western and North American supply chain."

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.

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