Desert Control AS

Report Publication Announcement • Feb 22, 2024

Desert Control releases its Q4 2023 Report and Year-to-date Company Update

Desert Control releases its Q4 2023 Report and Year-to-date Company Update

2023 was marked by operational milestones and strategic restructuring,

increasing the balance sheet by more than NOK 100M of added liquidity. The start

of 2024 marks the launch of the first commercial LNC roll-out in the United

States with Limoneira, and the licensed operator model has secured the first

partner-driven commercial project in the Middle East.

Q4 2023 and Year-to-Date 2024 Highlights

Corporate

· Finalized private placement subsequent issue of NOK 8M on 17 November 2023,

culminating in over NOK 100M of added liquidity during the year.

· Ended the fiscal year with a cash and financial asset balance of NOK 120M,

which, combined with cost efficiency gains, extends the company's financial

runway into H2-2025 (excluding revenue).

· Completed the transition to the licensed operator model in the Middle East,

leading to streamlined operations, significant reduction in annual operating

costs, and strengthened regional partnerships.

· Doubled LNC production capacity per unit throughout 2023. Continued

development targets further improvement in capacity, scalability, and unit

economics for 2024 and beyond.

· The ongoing 5-year LNC research program with the University of Arizona is

nearing its mid-term report and inaugural publication.

United States

· Achieved the target of securing five new technical pilot projects per

quarter in 2023, maintaining consistent pilot acquisition throughout the year.

· Continuing to see pilot results with a growing variety of crops and

application scenarios.

· Realized operational improvements significantly increasing scalability,

enhancing LNC application rate from 500 trees per day in Q1 2023, with

projections to exceed 1000 trees per day in Q1 2024 with less labor and asset

requirements for project execution.

· Limoneira's pilot testing of LNC since 2022 concluded in Q4- 2023 with the

positive decision to move forward with LNC deployment. The first commercial

order for 60 acres of the Yuma ranch for the upcoming season was received on 31

January 2024.

Middle East

· Executed the final phase of the transition of Desert Control's operation in

the Middle East, fully implementing the licensed operator model.

· Key technical personnel moved from Desert Control Middle East to partner

entities in the United Arab Emirates and Saudi Arabia, ensuring regional

retention of expertise.

· The inaugural LNC production units arrived in Saudi Arabia, and as of

January 2024, Saudi Desert Control is ready for operations.

· The first LNC application in Saudi soil was performed in December 2023, and

the first partner-driven commercial agreement in the UAE has been secured,

signaling growing momentum in the region following the transition to the new

business model.

Financial Highlights Fourth Quarter 2023

[fourth quarter 2022 in brackets]

· Revenue NOK 15,5 M [NOK 3,0 M]

· EBITDA NOK 0,8 M [NOK -25,5 M]

· Net Income NOK -5,2 M [NOK -35,2 M]

Financial Highlights Full Year 2023

[full year 2022 in brackets]

· Revenue NOK 18,1 M [NOK 4,2 M]

· EBITDA NOK - 60,0 M [NOK - 90,2 M]

· Net Income NOK -65,3 M [NOK -90 5 M]

· Total cash balance 31.12.23 (bank deposits and funds) NOK 119,6 M  [NOK 78,2

M]

· Equity 31.12.2023 NOK 129 M (equity ratio 96,7%) [NOK 107 M (89,7%)]

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

guaranteeing 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 in, 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.

Q4 Report 2023

The information enclosed is subject to the disclosure requirements pursuant to

sections 5-12 in the Norwegian Securities Trading Act.

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

Mobile (UAE): +971 52 521 7049

Leonard Chaparian

Chief Financial Officer

Email: leonard.chaparian@desertcontrol.com

Mobile (NOR): +47 90 66 55 40

About Desert Control:

Desert Control specializes in climate-smart AgTech solutions to combat

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

Natural Clay (LNC) restores and enhances soil ecosystems to reduce water usage

and improve the efficiency of fertilizers and natural resources for agriculture,

forests, and green landscapes. LNC enables sandy and arid soil to retain water

and nutrients, thus increasing crop yields, plant health, and ecosystem

resilience while preserving water and natural resources by up to 50%.

For more about Desert Control, visit https://www.desertcontrol.com