NEO Battery Secures New $3M Purchase Order from UCAV Manufacturer & Provides Update on Operational Facility Lease

Executive Summary

• NEO Battery Materials Ltd. secured a CAD 3 million purchase order and entered into a Joint Product Development Agreement (JPDA) with a South Korean UCAV manufacturer for “Project David,” targeting silicon‑enhanced batteries for swarm drones, VTOLs, and balloon systems.
• The agreement includes design, prototype development, and commercial integration phases, with the customer committing to the CAD 3 million order over 24 months, contingent on performance milestones.
• NEO expects to close a definitive lease for an operational battery‑components manufacturing facility in South Korea by the week of November 10, enabling immediate production restart for automotive and drone/robotics customers.

Key Details

• Purchase Order & JPDA
• Amount: KRW 3 billion (≈ CAD 3 million) payable over 24 months.
• Scope: End‑to‑end battery solutions for three drone form factors – swarm UCAV, medium VTOL, and balloon systems.
• Performance targets: Flight time increase of 25‑50%; energy density up to 333 Wh/kg (vs. current 200‑250 Wh/kg).

• Development phases include design, prototype fabrication, field testing, certification, and commercial rollout.

• Project David Highlights

• Silicon‑enhanced lithium‑ion batteries aimed at replacing gasoline‑powered MALE UCAVs.
• Expected weight reduction to improve payload flexibility.

• Emphasis on power efficiency and cost‑effectiveness for defense, industrial, and surveillance markets.

• Operational Facility Lease

• Prior LOI signed September 22, 2025 with a South Korean battery company for an existing production site.
• Definitive lease expected to close by the week of November 10, 2025 after due‑diligence on equipment, safety, environmental and regulatory compliance.

• Facility will be used to restart electrode production for major automotive OEMs and to supply silicon‑enhanced batteries for NEO’s drone/robotics pipeline.

• Strategic Impact

• Provides NEO with a secured revenue stream and a clear pathway to commercialize its silicon‑anode technology in the defense drone market.
• The leased facility expands manufacturing capacity, supporting both existing automotive customers and new aerospace/defense partnerships.

Notable Quotes

“Project David positions NEO at the forefront of high‑performance battery solutions for next‑generation unmanned aerial systems, delivering significant gains in energy density and flight endurance.” – Spencer Huh, Director, President & CEO

All forward‑looking statements are subject to risks and uncertainties detailed in the release.