Ms. Irina Kuznetsova reports

NEO PROVIDES UPDATE RE IP LITIGATION

The Regional Court of Mannheim, Germany, issued a judgment with respect to the damages proceedings against Neo Performance Materials Inc. related to European patent No. 1435338 B1 (EP'338") case. As previously disclosed, in July, 2022, Rhodia Operations SAS (now Solvay) initiated an action in the Regional Court of Mannheim against Neo Chemicals & Oxides (Europe) Ltd., a wholly owned subsidiary of the company, and two of its employees, requesting damages due to the infringement of EP'338 in Germany. The oral hearing of the proceedings took place in November, 2024. The judgment provides that Neo C&O Europe is liable for damages in the amount of approximately 10.3 million euros plus procedural interest of approximately 1.3 million euros (as of current date). The damages award is significantly lower than the amount originally claimed by Rhodia.

The judgment may be appealed by both parties within one month and is therefore not yet final.

The damage award is less than the amount the company has previously accrued in its financial statements, and, consequently, Neo does not expect the quantum of the judgment to affect earnings in first quarter 2025.

EP'338 has since expired, and has no impact on the company's current products and earning.

For a summary of the case, please see "Legal proceedings and regulatory actions" in the company's annual information form dated March 14, 2024, for the year ended Dec. 31, 2023, and "Legal contingencies" in the company's management's discussion and analysis for the period ended Sept. 30, 2024.

About Neo Performance Materials Inc.

Neo manufactures the building blocks of many modern technologies that enhance efficiency and sustainability. Neo's advanced industrial materials -- magnetic powders, rare earth magnets, magnetic assemblies, specialty chemicals, metals and alloys -- are critical to the performance of many everyday products and emerging technologies. Neo's products fast-forward technologies for the net-zero transition. The business of Neo is organized along three segments: Magnequench, chemicals and oxides, and rare metals. Neo is headquartered in Toronto, Ont., Canada, with corporate offices in Greenwood Village, Colo., United States; Singapore; and Beijing, China. Neo has a global platform that includes manufacturing facilities located in China, Germany, Canada, Estonia, Thailand and the United Kingdom, as well as a dedicated research and development centre in Singapore.

We seek Safe Harbor.