Desert Control AS

Share Issue/Capital Change • Sep 28, 2023

Desert Control AS: Contemplated private placement

Desert Control AS: Contemplated private placement

NOT FOR DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN

OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS,

ANY STATE OF THE UNITED STATES OF AMERICA AND THE DISTRICT OF COLUMBIA) (THE

"UNITED STATES"), AUSTRALIA, CANADA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION

OF THE PEOPLE'S REPUBLIC OF CHINA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH

THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Oslo, 28 September 2023. Desert Control AS ("Desert Control" or the "Company")

has engaged Arctic Securities AS and Pareto Securities AS (together jointly

referred to as the "Managers") to advise on and effect a contemplated private

placement of new shares directed towards Norwegian and international investors

after the close of trading on Euronext Growth Oslo today (the "Private

Placement").

In the Private Placement, the Company is offering a number of new shares (the

"Offer Shares") to raise gross proceeds in the range of NOK 60 - 80 million (the

"Offer Size"). The offer price per Offer Share is NOK 6.75 (the "Offer Price").

The total number of Offer Shares to be issued in the Private Placement will be

determined by the Company's Board of Directors (the "Board") in consultation

with the Managers.

The Company intends to use the net proceeds from the Offer Shares to scale up

the commercialization in the US, strengthen the sales focus, operations and

organization in the US, ensure funding to drive the conversion of pipeline to

contracts for large-scale 2025 deployments, fund other organization, marketing

and R&D activities, as well as for general corporate purposes.

Certain primary insiders, existing shareholders and new investors have

collectively indicated an interest to subscribe for Offer Shares for more than

NOK 30 million at the Offer Price in the Private Placement. In addition, US

based Woods End Interests LLC, an investment company wholly owned by James

Thomas and his close associates, has pre-committed to subscribe for, and will be

allocated, Offer Shares for up to NOK 30 million at the Offer Price in the

Private Placement. The Managers have accordingly received indications of

interest and pre-commitments which cover the low end of the Offer Size range

(more than NOK 60 million). Subject to completion of the Private Placement, the

Company's Board of Directors (the "Board") is expected to propose that the

general meeting elects James Thomas as an additional member to the Board.

The application period in the Private Placement will commence today, 28

September 2023 at 16:30 CEST and close on or before 29 September 2023 at 08:00

CEST. The Company, together with the Managers, reserve the right to close or

extend the application period at any time at their sole discretion, or to cancel

the Private Placement in its entirety. If the application period is shortened or

extended, any other dates referred to herein may be amended accordingly.

The Private Placement will be directed towards selected Norwegian and

international investors, in each case subject to and in compliance with

applicable exemptions from relevant prospectus, filing and other registration

requirements. The minimum application and allocation amount has been set to the

NOK equivalent of EUR 100,000. The Company may, at its sole discretion, offer

and allocate an amount below EUR 100,000 in the Private Placement to the extent

exemptions from prospectus requirements, in accordance with applicable

regulations, including the Norwegian Securities Trading Act, Regulation (EU)

2017/1129 on prospectuses for securities and ancillary regulations, are

available, including to its employees or related individuals such as friends and

/ or family members.

Conditional allocation of Offer Shares will be determined by the Board at its

sole discretion, in consultation with the Managers, following the expiry of the

application period, however subject to approval of the Private Placement by an

extraordinary general meeting in the Company ("EGM"). Notifications of

conditional allotment of the Offer Shares and payment instructions are expected

to be distributed to the applicants through a notification from the Managers on

29 September 2023.

Settlement of the Private Placement is expected to take place on a delivery

versus payment (DVP) basis following the EGM, which is expected to be held on or

about 13 October 2023 (X). Registration of the share capital increase pertaining

to the issuance of the Offer Shares in the Norwegian Register of Business

Enterprises (the "NRBE") is expected on or about 17 October 2023 (X+2), subject

to case handling time in the NRBE. The Offer Shares cannot be traded on the Oslo

Stock Exchange before the share capital increase pertaining to the issuance of

the Offer Shares has been registered with the NRBE. The Company will announce

when such registration has taken place, and the Company expects that the first

day of trading on Euronext Growth Oslo will be on or about 17 October 2023

(X+2). Payment and delivery of the Offer Shares is expected on or about 18

October 2023 (X+3), subject to the Conditions (defined below) having been met.

The DVP settlement is facilitated by a pre-payment agreement (the "Pre-Payment

Agreement") between the Company and the Managers.

Completion of the Private Placement is subject to (i) the Board resolving to

consummate the Private Placement and conditionally allocate the Offer Shares,

(ii) the EGM resolving to approve the Private Placement and issue the Offer

Shares, (iii) the Pre-Payment Agreement remaining in full force and effect, and

(iv) the share capital increase pertaining to the issuance of the Offer Shares

being validly registered with the NRBE and the Offer Shares being validly issued

and registered in the Norwegian Central Securities Depository (Euronext

Securities Oslo or the "VPS") (jointly the "Conditions").

The Company reserves the right to, at any time and for any reason, cancel the

Private Placement and/or to modify the terms of the Private Placement prior to

the Conditions having been met. Neither the Company nor the Managers will be

liable for any losses incurred by applicants if the Private Placement is

cancelled, irrespective of the reason for such cancellation.

The Company has undertaken a lock-up on future share issuances and members of

the Board and executive management have undertaken a lock-up on sale of shares

for a period of six months following completion of the Private Placement. The

lock-ups may be waived by the Managers and are subject to customary terms and

conditions.

The Private Placement represents a deviation from the shareholders' pre-emptive

right to subscribe for the Offer Shares. The Board has considered the structure

of the equity raise in light of the equal treatment obligations under the

Norwegian Public Limited Companies Act, the Norwegian Securities Trading Act,

the rules on equal treatment under Oslo Rule Book II for companies listed on

Euronext Growth Oslo and the Oslo Stock Exchange's Guidelines on the rule of

equal treatment.

The Board is of the view that it will be in the common interest of the Company

and its shareholders to raise equity through a private placement, in particular

because the Private Placement enables the Company to secure equity financing to

accommodate the Company's funding requirements. Further, a private placement

will reduce execution and completion risk, as it enables the Company to raise

equity efficiently and in a timely manner, with a lower discount to the current

trading price, at a lower cost and with a significantly reduced completion risk

compared to a rights issue.

The Company may, subject to completion of the Private Placement, consider

conducting a subsequent offering of new shares (the "Subsequent Offering"). Any

Subsequent Offering will be directed towards existing shareholders in the

Company as of 28 September 2023 (as registered in the VPS two trading days

thereafter), who (i) were not included in the wall-crossing phase of the Private

Placement, (ii) were not allocated Offer Shares in the Private Placement, and

(iii) are not resident in a jurisdiction where such offering would be unlawful

or would (in jurisdictions other than Norway) require any prospectus, filing,

registration or similar action.

Advokatfirmaet Selmer AS is acting as legal advisor to Desert Control, while

Advokatfirmaet Thommessen AS is acting as legal advisor to the Managers.

For more information, please contact:

Ole Kristian Sivertsen, CEO Desert Control

Email: oks@desertcontrol.com

Tel: +47 95 77 77 77

About Desert Control:

Desert Control AS is a Norwegian company specializing in combating

desertification. Their flagship technology, Liquid NanoClay (LNC),

revolutionizes arid land management. By mixing clay and water into a

nanoparticle suspension, LNC enhances soil structure, significantly improving

water retention capacity. This breakthrough allows for successful vegetation

growth, supporting agriculture and reforestation. LNC's applications range from

transforming barren landscapes into fertile grounds to promoting sustainable

agricultural practices in water-scarce regions. Desert Control's innovation

marks a critical stride towards a greener and more sustainable future,

mitigating desertification's adverse impacts and fostering climate resilience.

For the latest news, go to www.desertcontrol.com or follow us on LinkedIn.

Important notice:

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation (MAR) and is subject to the disclosure requirements

pursuant to Section 5-12 the Norwegian Securities Trading Act. The stock

exchange announcement was published by Leonard Chaparian, CFO in Desert Control

AS, at the time and date stated above in this announcement.

The information contained in this announcement is for background purposes only

and does not purport to be full or complete. No reliance may be placed for any

purpose on the information contained in this announcement or its accuracy,

fairness or completeness. Neither the Managers nor any of its respective

affiliates or any of their respective directors, officers, employees, advisors

or agents accepts any responsibility or liability whatsoever for, or makes any

representation or warranty, express or implied, as to the truth, accuracy or

completeness of the information in this announcement (or whether any information

has been omitted from the announcement) or any other information relating to the

Company, its subsidiaries or associated companies, whether written, oral or in a

visual or electronic form, and howsoever transmitted or made available, or for

any loss howsoever arising from any use of this announcement or its contents or

otherwise arising in connection therewith. This announcement has been prepared

by and is the sole responsibility of the Company.

Neither this announcement nor the information contained herein is for

publication, distribution or release, in whole or in part, directly or

indirectly, in or into or from the United States, Australia, Canada, Japan, The

Hong Kong Special Administrative Region of the People's Republic of China, South

Africa or any other jurisdiction where to do so would constitute a violation of

the relevant laws of such jurisdiction. The publication, distribution or release

of this announcement may be restricted by law in certain jurisdictions and

persons into whose possession any document or other information referred to

herein should inform themselves about and observe any such restriction. Any

failure to comply with these restrictions may constitute a violation of the

securities laws of any such jurisdiction.

This announcement is not an offer for sale of securities in the United States.

The securities referred to in this announcement have not been and will not be

registered under the U.S. Securities Act of 1933, as amended (the "U.S.

Securities Act"), and may not be offered or sold in the United States absent

registration with the U.S. Securities and Exchange Commission or an exemption

from, or in a transaction not subject to, the registration requirements of the

U.S. Securities Act and in accordance with applicable U.S. state securities

laws. The Company does not intend to register any securities referred to herein

in the United States or to conduct a public offering of securities in the United

States.

Any offering of the securities referred to in this announcement will be made by

means of a set of subscription materials provided to potential investors.

Investors should not subscribe for any securities referred to in this

announcement except on the basis of information contained in the aforementioned

subscription material. In any EEA Member State, this communication is only

addressed to and is only directed at qualified investors in that Member State

within the meaning of the Prospectus Regulation, i.e., only to investors who can

receive the offer without an approved prospectus in such EEA Member State. The

expression "Prospectus Regulation" means regulation (EU) 2017/1129 of the

European Parliament and of the Council, of 14 June 2017, (together with any

applicable implementing measures in any EEA Member State.

This communication is only being distributed to and is only directed at persons

in the United Kingdom that are (i) investment professionals falling within

Article 19(5) of the Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities,

and other persons to whom this announcement may lawfully be communicated,

falling within Article 49(2)(a) to (d) of the Order (all such persons together

being referred to as "relevant persons"). This communication must not be acted

on or relied on by persons who are not relevant persons. Any investment or

investment activity to which this communication relates is available only for

relevant persons and will be engaged in only with relevant persons. Persons

distributing this communication must satisfy themselves that it is lawful to do

so.

This announcement is made by, and is the responsibility of, the Company. The

Managers and their affiliates are acting exclusively for the Company and no-one

else in connection with the Private Placement. They will not regard any other

person as their respective clients in relation to the Private Placement and will

not be responsible to anyone other than the Company, for providing the

protections afforded to their respective clients, nor for providing advice in

relation to the Private Placement, the contents of this announcement or any

transaction, arrangement or other matter referred to herein.

Solely for the purposes of the product governance requirements contained within:

(a) EU Directive 2014/65/EU on markets in financial instruments, as amended

("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU)

2017/593 supplementing MiFID II; and (c) local implementing measures (together,

the "MiFID II Product Governance Requirements"), and disclaiming all and any

liability, which any "manufacturer" (for the purposes of the MiFID II Product

Governance Requirements) may otherwise have with respect thereto, the Offer

Shares in the Private Placement have been subject to a product approval process,

which has determined that they each are: (i) compatible with an end target

market of retail investors and investors who meet the criteria of professional

clients and eligible counterparties, each as defined in MiFID II (the "Positive

Target Market"); and (ii) eligible for distribution through all distribution

channels as are permitted by MiFID II (the "Appropriate Channels for

Distribution"). Distributors should note that: the price of the Offer Shares may

decline and investors could lose all or part of their investment; the Offer

Shares offer no guaranteed income and no capital protection; and an investment

in the Offer Shares is compatible only with investors who do not need a

guaranteed income or capital protection, who (either alone or in conjunction

with an appropriate financial or other adviser) are capable of evaluating the

merits and risks of such an investment and who have sufficient resources to be

able to bear any losses that may result therefrom. Conversely, an investment in

the Offer Shares is not compatible with investors looking for full capital

protection or full repayment of the amount invested or having no risk tolerance,

or investors requiring a fully guaranteed income or fully predictable return

profile (the "Negative Target Market" and, together with the Positive Target

Market, the "Target Market Assessment").

The Target Market Assessment is without prejudice to the requirements of any

contractual, legal or regulatory selling restrictions in relation to the Private

Placement. For the avoidance of doubt, the Target Market Assessment does not

constitute: (a) an assessment of suitability or appropriateness for the purposes

of MiFID II; or (b) a recommendation to any investor or group of investors to

invest in, or purchase, or take any other action whatsoever with respect to the

Offer Shares. Each distributor is responsible for undertaking its own Target

Market Assessment in respect of the Offer Shares in the Private Placement and

determining appropriate distribution channels.

In connection with the Private Placement, the Managers and any of their

affiliates, acting as investors for their own accounts, may subscribe for or

purchase shares and in that capacity may retain, purchase, sell, offer to sell

or otherwise deal for their own accounts in such shares and other securities of

the Company or related investments in connection with the Private Placement or

otherwise. Accordingly, references in any subscription materials to the shares

being issued, offered, subscribed, acquired, placed or otherwise dealt in should

be read as including any issue or offer to, or subscription, acquisition,

placing or dealing by, such Manager and any of their affiliates acting as

investors for their own accounts. The Managers do not intend to disclose the

extent of any such investment or transactions otherwise than in accordance with

any legal or regulatory obligations to do so.

Matters discussed in this announcement may constitute forward-looking

statements. Forward-looking statements are statements that are not historical

facts and may be identified by words such as "believe", "expect", "anticipate",

"strategy", "intends", "estimate", "will", "may", "continue", "should" and

similar expressions. The forward-looking statements in this release are based

upon various assumptions, many of which are based, in turn, upon further

assumptions. Although the Company believe that these assumptions were reasonable

when made, these assumptions are inherently subject to significant known and

unknown risks, uncertainties, contingencies and other important factors which

are difficult or impossible to predict and are beyond their control. Such risks,

uncertainties, contingencies, and other important factors could cause actual

events to differ materially from the expectations expressed or implied in this

release by such forward-looking statements. Forward-looking statements speak

only as of the date they are made and cannot be relied upon as a guide to future

performance. The Company, the Managers and their respective affiliates expressly

disclaims any obligation or undertaking to update, review or revise any forward

-looking statement contained in this announcement whether as a result of new

information, future developments or otherwise. The information, opinions and

forward-looking statements contained in this announcement speak only as at its

date and are subject to change without notice.

The information, opinions and forward-looking statements contained in this

announcement speak only as at its date, and are subject to change without

notice. The Company does not undertake any obligation to review, update,

confirm, or to release publicly any revisions to any forward-looking statements

to reflect events that occur or circumstances that arise in relation to the

content of this announcement.