NEO Battery Fuels Expansion with $7M Private Placement

TORONTO, ON – January 16, 2026 – NEO Battery Materials Ltd., a Canadian company developing advanced silicon-enhanced batteries, has announced a significant step in its expansion strategy, revealing a non-brokered private placement to raise approximately $7 million CAD. The offering, which was reported as fully subscribed, signals strong investor confidence in the company's mission to power the next generation of high-performance electronics, drones, and electric vehicles.

The funds are earmarked for a critical phase of the company's growth: the installation of additional battery manufacturing equipment at its operational hub in Gimje, South Korea. This capital infusion is set to accelerate NEO's capacity to produce its proprietary silicon anode materials and assemble complete battery cells, positioning the company to meet growing demand in a rapidly evolving market.

Accelerating Production at the Gimje Innovation Hub

The net proceeds from the $7 million offering are designated primarily for scaling up manufacturing capabilities. Specifically, the capital will be used to procure and install equipment for cylindrical and prismatic cell assembly and formation. This move is central to NEO's strategy of creating an integrated "Battery Innovation Platform" at its South Korean site.

Last year, NEO secured an operational, commercial-scale battery electrode manufacturing facility in Gimje through a lease agreement, providing an immediate production capacity at the megawatt-hour (MWh) level. Adjacent to this, the company acquired a 2.5-acre expansion site with six industrial buildings. This latest funding will directly equip these facilities, transforming them into a comprehensive production center.

The expansion will enable NEO to manufacture batteries in all three major formats—pouch, cylindrical, and prismatic—that are essential for a wide range of applications, from consumer electronics to electric vehicles and large-scale energy storage systems. Furthermore, a portion of the new site will be dedicated to increasing the output of NEO's proprietary silicon battery material, NBMSiDE®, to 20 tons per year. This integrated approach, from raw material synthesis to final cell assembly, is designed to optimize production, reduce costs, and accelerate the commercialization of its technology.

Tapping the Multi-Billion Dollar Silicon Anode Market

NEO's expansion comes at a pivotal moment for the battery industry. The market for silicon anode materials is on the cusp of explosive growth, driven by relentless demand for batteries that last longer and charge faster. Market analysts project the global silicon anode battery market to soar from around $357 million in 2024 to over $20 billion by 2034, representing a compound annual growth rate (CAGR) of over 50%.

Silicon anodes are a game-changer because they can theoretically store up to ten times more lithium ions than the graphite anodes used in most conventional lithium-ion batteries. This translates to significantly higher energy density—meaning longer-running drones, more powerful robotics, and electric vehicles with over 20% more range. The technology also enables ultra-fast charging, with some designs capable of reaching an 80% charge in as little as 10 minutes.

While the electric vehicle sector is the primary catalyst for this growth, high-performance applications in defense, unmanned aerial vehicles (UAVs), and energy storage for AI data centers are also creating substantial demand. NEO aims to capture a significant share of this market by leveraging what it claims is a patent-protected, low-cost manufacturing process capable of producing its silicon anode materials for over 70% less than competing methods.

Financial Strategy and Investor Confidence

The market reacted positively to the announcement, with NEO's stock (TSXV: NBM) seeing a more than 10% increase in trading on January 16. The stock has risen nearly 20% over the past month, though it remains below its 52-week high, reflecting a volatile period for the junior technology firm. The company's market capitalization currently stands at approximately $86.5 million CAD.

While the recent investor enthusiasm is palpable, historical financial reports have pointed to challenges, including negative EBITDA and liquidity constraints typical of a pre-revenue technology company in a capital-intensive growth phase. NEO has historically relied on a series of private placements to fund its ambitious research, development, and expansion plans, including financings of $2.057 million in 2021, $3.64 million in 2023, and an upsized $5.5 million placement in September 2025.

That this latest $7 million offering was fully subscribed, reportedly with institutional investor participation, is a crucial vote of confidence. It suggests that sophisticated investors are looking beyond past financial metrics and are focused on the company's technological progress, strategic positioning in a high-growth sector, and the tangible steps it is taking toward commercial-scale production.

Forging Strategic Alliances for a Global Footprint

Beyond its internal expansion, NEO Battery Materials has been aggressively building a network of global partners to validate its technology and secure pathways to market. The company has signed over 60 non-disclosure agreements (NDAs) with what it describes as global-tier battery manufacturers, automotive OEMs, and electronics firms. More than 20 of these have progressed to active material evaluations, a critical step toward potential joint development or offtake agreements.

These efforts have already borne fruit. NEO has achieved official vendor status with two separate Fortune 500 automotive companies and has secured a multi-year offtake agreement with a North American drone battery manufacturer. These milestones provide crucial third-party validation and a clear line of sight to future revenue.

Significantly, the company is also making a strategic push into the lucrative defense sector. It has formed a partnership with LFP startup Nascent Materials Inc. to develop high-performance batteries for defense drones and AI energy storage. Furthering this initiative, NEO has established a joint task force with the Korea Institute for Defense Industry and appointed two retired high-ranking South Korean military officials as strategic advisors to help navigate defense procurement channels. This multi-pronged strategy of technological development, manufacturing scale-up, and strategic partnership-building underscores the company's ambition to become a key player in the global battery supply chain.