On 9 October 2026, Li-S Energy Limited (ASX:LIS) announced that it has signed an agreement with Safesky Systems Pty Ltd at Land Forces 2026 in Perth. The agreement targets the Supply of Australian-made lithium sulfur batteries for Safesky’s fleet of tactical drones.

What the agreement covers

The agreement establishes a framework for the two companies to jointly evaluate, test and integrate Li-S Energy cells and battery packs into Safesky platforms, progressing to commercial supply subject to the results. The release states that commercial outcomes depend on the results of this work and on the procurement decisions of Safesky’s customers.

Safesky is a Melbourne-headquartered company that designs and manufactures uncrewed aerial systems for defence and security customers, with operations in Australia and the United States. Its platforms are described as National Defense Authorization Act (NDAA) compliant.

The battery claims in the release

Li-S Energy states that the energy density of its GEN3 cells is approaching 500 Wh/kg, close to twice that of conventional lithium-ion, and that its cells can deliver almost twice the range, operating time and payload capacity. The cells are made in Geelong, Victoria, and contain no graphite, nickel, cobalt or manganese. The company’s high-power Power Cell extends these benefits to multi-rotor platforms.

Pathway to supply

Under the agreement, the companies will evaluate cells against the power and energy requirements of Safesky platforms, build battery packs for integration and carry out ground and flight testing. Initial design evaluation is expected to begin in the current quarter, with pack integration and flight testing to follow. The release states that Safesky adds to Li-S Energy’s list of Australian defence partners.

Sector backdrop

Lithium sulfur is a battery chemistry that offers higher gravimetric energy density than lithium-ion in laboratory and early commercial settings, but it has historically faced challenges around cycle life. For drones, weight is a primary constraint, so energy density is a key metric.

Defence procurement typically involves multi-stage evaluation, testing and qualification before supply contracts are awarded, and supply chain provenance is a procurement consideration, as the release notes.

Risks shareholders should weigh

The agreement is a collaboration framework and not a supply contract. Progression to commercial supply is contingent on test results and on Safesky’s customers’ procurement decisions, and the release states no volumes, prices or timelines for supply.

Performance figures such as energy density approaching 500 Wh/kg and almost twice the range are company statements, and results in a specific platform may differ. Cycle life, safety and Manufacturing scale are not addressed in the release.

Li-S Energy remains a developer of battery technology, and moving from evaluation to production requires manufacturing capacity and funding that the announcement does not discuss.

What’s next

Initial design evaluation is expected to begin in the current quarter, followed by battery pack integration and flight testing. Li-S Energy said it will keep the market informed of material developments. Shareholders may wish to watch for test results and any supply agreement.