Desert Control AS

Earnings Release • Nov 15, 2024

Desert Control Releases Q3 2024 Report and Year-to-Date Company Update

Desert Control Releases Q3 2024 Report and Year-to-Date Company Update

Sandnes, Norway, 15 November 2024 - Desert Control AS (DSRT) announces its third

-quarter report and interim financial results for the fiscal period ending 30

September 2024.

Desert Control continued its positive momentum in the third quarter of 2024,

achieving milestones in market expansion, pilot progress, and initiation of

licensing revenues in the Middle East. The quarter saw strong results from

pilots in agriculture and landscaping, supporting negotiations for larger

commercial projects in the United States. Growing traction in the Middle East

further strengthens the foundation for sustainable growth under the company's

royalty-based licensed operator model.

Operational Highlights:

Solid Pilot Results Strengthen Validation and Support Negotiations for Larger

Contracts in the United States

. Landscaping Success in the U.S.: Landscaping pilots in California achieved

over 25% irrigation savings, with some clients reporting water reductions

exceeding 50%. These results drive negotiations for larger contracts as high

water costs continue to rise.

. First Contract for a Complete Golf Course: On November 8th, Desert Control

signed an agreement with Berkeley Country Club with potential value exceeding

NOK 6 million, marking the first commitment for full-course LNC deployment in

the U.S.

. Agricultural Gains: Harvest data from an LNC-treated date farm in Arizona

showed nearly double the yield, underscoring LNC's economic impact on high-value

permanent crops and supporting Desert Control's agricultural market expansion.

First Licensing Royalties from the Middle East

. Revenue Milestone: Desert Control recorded its first licensing royalties from

the Middle East. While modest, this revenue marks the beginning of a scalable

revenue stream following the strategic shift to a royalty-based licensed

operator model for the region.

. New Contracts and Expanding Pilots: A new contract for 1.8 million liters of

LNC was secured for a UAE real estate project. Landscape nursery pilots in the

UAE and Saudi Arabia demonstrate LNC's effectiveness in the growing sustainable

landscape management sector.

R&D and Technology Advancements Strengthen Delivery Capabilities for Current and

Future Pipeline

. Syngenta Partnership Accelerates R&D: Collaboration with Syngenta has shown

promising lab results of synergies with LNC. Field trials in the Middle East,

set for Q4 2024, aim to further validate the impact on soil health, crop yields,

and water efficiency.

. Next-Gen Production System Progress: Development of the next-generation LNC

production system is on track, with capacity nearing 120,000 liters per hour.

Achieving this targeted capacity will unlock large-scale opportunities that

require high volumes within short time windows, enabling projects previously out

of reach.

Financial Highlights:

In the first nine months of 2024, Desert Control reached a record number of

installations, increased LNC deployment volumes, and more than doubled LNC

revenue compared to the previous year. These achievements highlight enhanced

operational efficiency driven by the new prototype LNC production system,

streamlined integration with irrigation systems, and insights gained from pilots

and prior projects.

. Revenue Increase: Year-to-date LNC revenue totaled NOK 1.88 million, more than

doubling from the same period in 2023. Total revenue and other income for Q3

2024 was NOK 0.18 million, up from NOK 0.01 million in Q3 2023.

. EBITDA Improvement: For the first nine months of 2024, EBITDA improved to NOK

-44.95 million from NOK -60.81 million in the same period last year. Q3 2024

EBITDA was NOK -14.16 million, an improvement from NOK -17.9 million in Q3 2023,

driven by efficiencies from transitioning to the licensed operator model.

. Cash Position: The company ended the quarter with a cash balance of NOK 75

million, compared to NOK 35 million at the same time last year. The company

continues to operate with no interest-bearing debt.

The growth in project volume and LNC deployment, combined with improved EBITDA

figures, underscores the enhanced efficiency of operations. The ability to

handle larger volumes at a reduced cost base positions Desert Control to

maintain healthy margins as the company scales up.

Outlook:

With solid progress in the U.S. and Middle East, Desert Control is positioned to

transition pilot projects into larger contracts and expand LNC adoption. The

upcoming readiness of the next-generation LNC production system and strengthened

R&D partnerships underscore the company's commitment to scalable, sustainable

solutions for soil health and water conservation globally.

Key Figures (in MNOK):

First nine months 2024 [first nine months 2023 in brackets]

. LNC Revenue: 1.88 [0.85]

. Licensing Royalties 0.07 [0.00]

. Total Revenue and Other Income: 1.95 [1.38]

. EBITDA: -44.95 [-60.81]

Third quarter 2024 [third quarter 2023 in brackets]

. LNC Revenue: 0.11 [0.00]

. Licensing Royalties 0.07 [0.00]

. Total Revenue and Other Income: 0.18 [0.01]

. EBITDA: -14.16 [-17.90]

Total cash balance 30.09.24 (bank deposits and funds): 75 [35]

Equity 30.09.24: 86.3 (equity ratio 95.4%) [52.5 (60.0%)]

Q3 Report 2024:

. The information enclosed is subject to the disclosure requirements pursuant to

sections 5-12 of the Norwegian Securities Trading Act.

. The report can be downloaded from the company webpage:

https://desertcontrol.com/investors/

. A webcast presentation for Desert Control Q3 2024 Report and Company Update is

hosted on 15 November 2024 at 10.00 AM, Central European Time (CET). Register:

https://go.desertcontrol.com/Q3-2024 (https://go.desertcontrol.com/Q3-2024  )

Cautionary Note:

Disclaimer related to forward-looking statements. This release contains forward

-looking information and statements relating to the business, performance, and

items that may be interpreted to impact the results of Desert Control and/or the

industry and markets in which Desert Control operates.

Forward-looking statements are statements that are not historical facts and may

be identified by words such as "aims," "anticipates," "believes," "estimates,"

"expects," "foresees," "intends," "plans," "predicts," "projects," "targets,"

and similar expressions. Such forward-looking statements are based on current

expectations, estimates, and projections, reflect current views concerning

future events, and are subject to risks, uncertainties, and assumptions, and may

be subject to change without notice. Forward-looking statements are not

guarantees of any future performance, and risks, uncertainties, and other

important factors could cause the actual business, performance, results, or the

industry and markets in which Desert Control operates to differ materially from

the statements expressed or implied in this release by such forward-looking

statements.

No representation is made that any of these forward-looking statements or

forecasts will come to pass or that any forecasted performance, capacities, or

results will be achieved, and you are cautioned not to place any undue reliance

on any forward-looking statements.

For more information, please contact:

Ole Kristian Sivertsen

President and Group CEO

Email: oks@desertcontrol.com

Mobile (NOR): +47 957 77 777

Mobile (USA): +1 650 643 6136

Leonard Chaparian

Chief Financial Officer

Email: leonard.chaparian@desertcontrol.com

Mobile (NOR): +47 90 66 55 40

About Desert Control:

Desert Control develops innovative solutions to enhance soil health, conserve

water, and promote ecosystem resilience. The company's mission is to combat

desertification, soil degradation, and water scarcity. Our patented Liquid

Natural Clay (LNC) transforms sandy, fast-draining soils to retain water and

nutrients, improving soil health, crop yields, and ecosystem vitality while

conserving water. Desert Control provides customized solutions to strengthen

sustainability, profitability, and prosperity for agriculture, forests, and

green landscapes. In collaboration with partners and clients, we aim to preserve

natural resources, restore biodiversity, enhance food security, and ensure a

climate-resilient future.