NEO Battery Materials achieves first revenue in FY2026

NEO Battery Materials Ltd. achieved its first commercial revenues of $267,722 in Q4 FY2026, marking the company's transition from a research-focused developer to an integrated, high-performance battery solutions provider. The company reported a gross loss of $769,304 for the fiscal year ended February 28, 2026, attributing the loss to the scale-up phase of commercial production and plant utilization levels below the threshold to fully absorb fixed costs. NEO Battery Materials concluded FY2026 with $5,496,557 in cash, strengthened by a $7,000,000 non-brokered private placement in Q4 2026 to accelerate production expansion.

Financial and Operational Highlights

The company secured a long-term lease for the Gimje Battery Manufacturing Factory in November 2025 for MWh-scale electrode production and closed the acquisition of a 3.2-acre expansion site in February 2026 to house a mass-volume cell assembly line for drone and robotics applications. NEO Battery Materials has fulfilled recurring contract manufacturing orders from Fortune 500 automotive original equipment manufacturers (OEMs) and added 8 additional customers for battery foundry services. The company also initiated deliveries of drone battery cells and packs to Korean defense drone companies for testing and field validation.

Strategic Partnerships and Expansion

NEO Battery Materials has established a strong pipeline for defense applications through partnerships with the Korea Institute for Defense Industry (KOIDI), multiple Republic of Korea (ROK) Army divisions, and Zio Robot Co. for AI-driven logistics robotics. The company entered into multi-year purchase orders and Joint Development Agreements (JDAs), including agreements with an Asian mission-flight control manufacturer ($4.5M), a North American UAS specialist, and a South Korean robotics firm (KRW 2.5B). To serve the Baltic and Ukrainian defense drone markets, the company intends to establish a go-to-market presence in Estonia.

Recent Defense Milestones

The company announced several defense partnerships in early 2026, including a Memorandum of Understanding with the Association of the Republic of Korea Army in March and partnerships with the ROK Army's 12th Infantry Division and Capital Mechanized Infantry Division in April. In May, NEO Battery Materials entered a defense technology partnership with the Capital Defense Command (CDC) and a non-binding supply intent letter to deliver 7,584 high-performance drone battery packs to a Korean drone manufacturer. In June, the company launched a high-power & energy FPV strike drone battery product, delivering an 82% increase in energy density and a 103% increase in flight range compared to Chinese incumbents.

FY2026 Key Metrics

Metric	Value
First Commercial Revenues (Q4 FY2026)	$267,722
Gross Loss	$769,304
Cash Position (FY2026 End)	$5,496,557
Private Placement Proceeds	$7,000,000
Additional Customers Secured	8
Drone Battery Packs (Supply Intent)	7,584

Spencer Huh, President and CEO of NEO Battery Materials, stated that Fiscal 2026 was a transformative year as the company bridged the gap between R&D and commercial-scale execution. He emphasized the focus on penetrating the defense ecosystem and scaling production capacity to fulfill mass-volume orders. The company's audited Consolidated Financial Statements and Management Discussion and Analysis for the year ended February 28, 2026, are available on SEDAR+.

NEO Battery Materials Ltd. has agreed to acquire an additional 10% interest in its operating subsidiary, NEO Battery Korea Co., Ltd., for KRW 715,542,466. The transaction, executed through a Stock Purchase Agreement dated June 26, 2026, will increase NEO's ownership to approximately 90% upon closing. This strategic move strengthens NEO's control over a key operating asset ahead of a full production ramp at its Gimje battery manufacturing facility.

Transaction Details

NEO acquired 120,786 common shares of NBM Korea from Automobile & PCB Inc. (A&P) for an aggregate purchase price of KRW 715,542,466. Upon closing, NEO will directly own 1,156,102 common shares of NBM Korea, representing approximately 90% of the issued and outstanding common shares. The transaction remains subject to customary closing conditions, including acceptance by the TSX Venture Exchange (TSXV).

Transaction Component	Details
Shares Acquired	120,786 common shares
Purchase Price	KRW 715,542,466
Post-Transaction Ownership	~90% (1,156,102 shares)
Seller	Automobile & PCB Inc.

Strategic Rationale

NBM Korea services Fortune 500 automotive and international drone and battery value chain companies through its Gimje facility. Management stated that consolidating ownership reduces due diligence complexity for defense and government customers, who scrutinize supplier control during qualification. A simplified capital structure will also provide greater flexibility for future financings at the subsidiary level, potentially involving strategic partners and government-linked investors.

Regulatory and Party Details

Pursuant to TSXV Policy 1.1, A&P is considered a Non-Arm's Length Party due to a board member's position in NBM Korea. Prior to the transaction, A&P held 258,828 common shares of NBM Korea. The transaction does not require disinterested shareholder approval, and no finder's fees were issued in shares, warrants, or other securities.