NEO Battery Wins Korean Army, Fortune 500 Orders as Pipeline Passes 50 Leads

Financial results for the quarter

For the three months ended August 31, 2026, NEO reported revenue of $203,566. Revenue for the six months ended the same date was $382,530. All amounts are in Canadian dollars unless otherwise specified.

The company posted a gross loss of $807,492 for the quarter and $1,450,753 for the six months. NEO says the margins reflect early-stage commercial production and the scale-up phase of its cell manufacturing expansion facility, where volumes have not yet reached the level needed to absorb the fixed cost base. The company expects the gap to narrow as production volume increases.

Cash stood at $2,062,498 as at August 31, 2026. The balance reflects the closing of a non-brokered LIFE Offering on August 14, 2026, which raised gross proceeds of $4,000,000 through 20,000,000 units at $0.20 per unit. Each unit includes one common share and one warrant exercisable at $0.30 for 36 months. According to NEO, cash was deployed mainly on equipment and infrastructure for the expansion facility and on operations.

New contracts and customers

President and CEO Spencer Huh said the company is now "converting the pipeline into active customers." Since reporting the first quarter, NEO received its first direct order from the Republic of Korea Army, its largest foundry contract to date from a Fortune 500 automotive OEM, and a development contract from a South Korean defense prime.

• South Korean defense prime and tier-1 pack manufacturer: a contract to develop and manufacture custom-built batteries for an undisclosed defense project. It begins with the A-sample phase, with a defined path to B-sample pilot orders and volume production upon successful evaluation.
• North American Fortune 500 automotive OEM: recurring foundry orders led to a purchase order agreement valued at approximately $392,000 (US$280,000), following several months of validation of NEO's manufacturing quality, efficiency and cost competitiveness.
• Republic of Korea Army: a first direct purchase order for military-grade drone battery packs from a division of the army, for field validation and use, without a traditional procurement intermediary. The products are used in the army's TIGER program.
• Preneu: an initial order for a custom-developed 6Ah battery for a strike drone line, which became a formal strategic partnership.
• Liberaware (TYO: 218A): a letter of intent to jointly optimize the Japanese drone maker's platforms with NEO batteries and to evaluate a joint venture or special-purpose vehicle for drone battery manufacturing in Japan.

Pipeline, Ukraine and U.S. demand

NEO says its qualified pipeline now exceeds 50 leads across drones, robotics, defense, automotive, energy storage and next-generation batteries. More than 10 leads have become active customers, and more than 20 product units and samples have been confirmed for production or delivered for evaluation. The company cautions there is no assurance qualified leads will result in definitive orders.

NEO is in discussions for high-volume contract manufacturing of NDAA-compliant defense drone batteries with U.S. companies. The contemplated volumes would occupy most of the capacity of the expansion facility, according to the company, though there is no assurance the talks will become contracts.

The company has also begun direct engagement with Ukrainian drone and battery companies and frontline divisions. Requests include cells for loitering munitions, ISR drones, heavy-duty cargo drones and pouch packs that must replace China-based supply. NEO expects to ship first samples to Ukraine for evaluation within the next month.

In the U.S., NEO says it is serving venture capital-backed battery developers, with program work in high-to-100% silicon anode, lithium-metal, specialty electrolyte and sodium-ion chemistries. It is opening 21700 cylindrical capacity for foundry services to U.S. and NATO-aligned companies requiring NDAA compliance, noting that 21700 procurement has been constrained by heavy consumption from drone warfare.

Expansion facility and what it means

The expansion facility sits on a 3.2-acre site next to NEO's first factory in South Korea and is being completed in phases. On the pouch side, electrical upgrades and dry room construction are underway, and de-gassing and end-of-line inspection equipment has been installed and tested. For cylindrical cells, pilot equipment for tabless 21700 cells has been delivered and installed in part. All equipment is expected by mid-November, with full commissioning by the end of calendar 2026, and an initial target capacity of approximately 10,000 to 18,000 cells per month.

Phase 1 of pouch cell manufacturing targets approximately 50 to over 75MWh, equal to 1 to 2 million cells per year depending on format and capacity.

For the market, the results show a small company with limited revenue and continuing losses, but a growing set of defense and automotive customers. Huh said customers come for performance their current suppliers cannot deliver and for a secure, non-Chinese supply source. Whether that demand turns into volume depends on the factory ramp-up and on the unconfirmed contracts the company describes as under discussion.