Desert Control AS

Share Issue/Capital Change • Aug 21, 2025

Desert Control AS - Announcement of a fully underwritten rights issue

Desert Control AS - Announcement of a fully underwritten rights issue

NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED

STATES, CANADA, AUSTRALIA, 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. OTHER RESTRICTIONS ARE APPLICABLE.

PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT

Sandnes, Norway, 21 August 2025: Desert Control AS (the "Company") hereby

announces a fully underwritten rights issue with preferential subscription

rights (the "Subscription Rights") for the Company's existing shareholders as at

the close of trading on the day of the EGM (as defined below) to raise gross

proceeds of NOK 75 million, which pursuant to certain Underwriting Agreements

(as defined below) will be fully underwritten by a consortium of underwriters

comprising of certain larger existing shareholders in the Company and new

investors (the "Underwriters") (the "Rights Issue").

The net proceeds from the Rights Issue will be used to extend cash run-way

through approx.12 - 16 months following completion of the Rights Issue, covering

core operations, working capital and further investments in production units and

sales teams, as well as other general corporate purposes.

The proposed Rights Issue is subject to, inter alia, approval by the Company's

shareholders at an extraordinary general meeting in the Company (the "EGM"),

expected to be held on 5 September 2025. The notice of the extraordinary general

meeting is expected to be sent to shareholders on 22 August 2025 and will be

published in a separate stock exchange announcement.

Arctic Securities AS has been engaged as manager and bookrunner (the "Manager")

for the Rights Issue.

The Rights Issue is subject to the following conditions (together, the

"Conditions"): (i) the EGM approving the Rights Issue, (ii) the Company having

published a national prospectus (the "Prospectus") as registered in the

Norwegian Register of Business Enterprises ("NRBE") and (iii) that the

Underwriting Agreements (as defined below) remaining in full force and effect.

The record date for the Rights Issue will be the second trading date after the

EGM, expected to be on 9 September 2025 (the "Record Date").

Each shareholder will be granted Subscription Rights in proportion to the number

of existing shares registered in the Company's shareholder register as at the

Record Date, cf. section 10-4 of the Norwegian Private Limited Liability

Companies Act. Each Subscription Right will, subject to applicable securities

laws, give the right to subscribe for and be allocated one new share in the

Company (the "Offer Shares"). Provided that a purchase of shares is made with

ordinary T+2 settlement, shares purchased up to and including 5 September 2025

will give the right to receive subscription rights, whereas shares purchased

from and including 8 September 2025, will not give the right to receive

subscription rights. The subscription rights will be tradable and sought listed

on the Euronext Growth Oslo ("EGO") from and including the first day of the

subscription period and until 16:30 (Oslo time) four trading days prior to the

expiry of the subscription period. Oversubscription with subscription rights and

subscriptions by the Underwriters will be allowed. Other subscription without

Subscription Rights will not be permitted.

The subscription price for the new shares to be issued in the Rights Issue, and

thus the exact number of Offer Shares and the exact amount of the share capital

increase, will be proposed by the board of directors, based on a recommendation

from the Manager, the day prior to the EGM. The subscription price in the Rights

Issue (the "Subscription Price") shall pursuant to the Underwriting Agreements

(as defined below) be the theoretical share price exclusive of the subscription

rights (TERP) based on the volume-weighted average price (VWAP) of the Company's

shares on EGO on the three last trading days prior to the date of the EGM less a

discount of at least 32.5%. The board of directors' resolution in this respect

will be announced through a stock exchange announcement on the day prior to the

EGM and be reflected in the final proposed resolution to the EGM.

It is contemplated that the Rights Issue will be conducted with a two-weeks

subscription period, commencing on the first or second trading date after the

Record Date, subject to satisfaction of the Conditions for the Rights Issue.

All dates and other figures with respect to the Rights Issue included herein

remain tentative and subject to change.

Any changes will be announced at the EGM or through stock exchange

announcements.

Underwriting

Pursuant to, and subject to the terms and conditions of the underwriting

agreements between the Company and the Underwriters (the "Underwriting

Agreements"), the Underwriters have undertaken on a pro-rata basis (not jointly)

to underwrite an aggregate subscription amount in the Rights Issue of NOK 75

million (the "Total Underwriting Obligation"). Any New Shares subscribed in the

Rights Issue will reduce the underwriting commitment of the Underwriters.

Each of the Underwriters are entitled to an underwriting fee of either (i) 10%

of the underwriting obligation if received as a payment in cash or (ii) 12% of

the underwriting obligation if received as new shares in the Company issued at

the same Subscription Price as in the Rights Issue, which is payable upon

completion of the Rights Issue (i.e. upon registration of the share capital

increase pertaining to the Rights Issue with the NRBE).

Each Underwriter has undertaken to vote in favor of the resolutions required to

complete the Rights Issue, provided that it is a shareholder in the Company at

the date of the EGM.

Among the Underwriters is Woods End Interests LLC, the Company's largest

shareholder and a closely associated company with the Company's CEO, which has

committed to underwrite for NOK 15 million. Furthermore, the Underwriters

include the existing shareholders:

· Handelsbanken Fonder AB, which have committed to underwrite for NOK

5,497,500

· LIN AS, which have committed to underwrite for NOK 2,100,000

· Glomar AS, which have committed to underwrite for NOK 3,825,000

· Olesen Consult Hvac AS, which have committed to underwrite for NOK 100,000

· Sancta Capital, which have committed to underwrite for NOK 7,500,000

· Jacob Hatteland Holding AS, which have committed to underwrite for NOK

1,700,000

· Sortun Invest AS, which have committed to underwrite for NOK 2,010,000

· OKS Consulting AS, which have committed to underwrite for NOK 100,000

New investors have committed to underwrite for a total of NOK 37,167,500

million.

Allocation

The allocation principles for the Offer Shares in the Rights Issue will be set

out in the EGM resolution and in the Prospectus, but are expected to be as set

out below

a)           Firstly, allocation of Offer Shares to subscribers will be made in

accordance with granted and acquired Subscription Rights which have been validly

exercised during the Subscription Period. Each Subscription Right will give the

right to subscribe and be allocated one Offer Share in the Rights Issue.

b)           Secondly, if not all Subscription Rights are validly exercised

during the Subscription Period and there are remaining unallocated Offer Shares

following the allocation pursuant to paragraph a) above, subscribers who have

exercised their Subscription Rights and over-subscribed, will be allocated

additional Offer Shares on a pro rata basis based on the number of Subscription

Rights exercised by each subscriber. To the extent that pro rata allocation is

not possible, the Company will determine the allocation by drawing of lots.

c)            Thirdly, Offer Shares not allocated pursuant to a) -b) above, will

be allocated to Underwriters who have subscribed for Offer Shares in excess of

their respective underwriting obligation. Allocation will be sought made on a

pro rata basis based on such Underwriters' oversubscription.

d)           Finally, Offer Shares not allocated pursuant to paragraph a) - c)

above, will be allocated to and subscribed by the Underwriters pursuant to, and

in accordance with, each Underwriter's underwriting obligation pursuant to the

terms and conditions of Underwriting Agreements.

The final allocation principles resolved by the EGM and set out in the

Prospectus may deviate from those set out above.

Indicative timeline

According to the current tentative timetable, and subject to all of the

Conditions being met, it is expected that the Rights Issue will take place

according to the following tentative timeline:

On or around 5 September 2025: EGM

On or around 5 September 2025: Last day including subscription rights

On or around 8 September 2025: Publication of the Prospectus

On or around 8 2025: First day of trading in the shares excluding subscription

rights

On or around 9 September 2025: Record date for determination of the right to

receive subscription rights

On or around 10 September 2025: Commencement of the subscription period and

first day of trading in the subscription rights

On or around 18 September 2025: Last day of trading in the subscription rights

On or around 24 September 2025: Last day of the subscription period

On or around 25 September 2025: Allocation of the Offer Shares

On or around 30 September 2025: Payment of the Offer Shares

On or around 6 October 2025: Registration of the share capital increase with the

Norwegian Register of Business

All dates and other figures with respect to the Rights Issue included herein

remain tentative and subject to change. Any changes will be announced at the EGM

or through stock exchange announcements.

Advokatfirmaet Selmer AS is acting as legal advisor to the Company, while

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

For more information, please contact:

James Thomas

Chief Executive Officer

Email: james.thomas@desertcontrol.com

Mobile: +1 203 984-7658

Leonard Chaparian

Chief Financial Officer

Email: leonard.chaparian@desertcontrol.com

Mobile: +47 90 66 55 40

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

Market Abuse Regulation and is subject to the disclosure requirements pursuant

to section 5-12 of the Norwegian Securities Trading Act. This stock exchange

announcement was published by Leonard Chaparian, on 21 August 2025 at

19:00 hours (CEST).

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.

Important notice

This announcement does not constitute an offer of securities for sale or a

solicitation of an offer to purchase securities of the Company in the United

States or any other jurisdiction. Copies of this document may not be sent to

jurisdictions, or distributed in or sent from jurisdictions, in which this is

barred or prohibited by law. The securities of the Company may not be offered or

sold in the United States absent registration or an exemption from registration

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

The securities of the Company have not been, and will not be, registered under

the U.S. Securities Act. Any sale in the United States of the securities

mentioned in this communication will be made solely to "qualified institutional

buyers" as defined in Rule 144A under the U.S. Securities Act. No public

offering of the securities will be made in the United States.

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

means of the Prospectus.

This announcement is an advertisement and is not a prospectus for the purposes

of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14

June 2017 on prospectuses to be published when securities are offered to the

public or admitted to trading on a regulated market, and repealing Directive

2003/71/EC (as amended) as implemented in any EEA Member State (the "Prospectus

Regulation"). Investors should not subscribe for any securities referred to in

this announcement except on the basis of information contained in the

Prospectus. Copies of the Prospectus will, following publication, be available

from the Company's registered office and, subject to certain exceptions, on the

website of the Manager. 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.

In the United Kingdom, this communication is only addressed to and is only

directed at Qualified Investors who (i) are 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) are persons falling

within Article 49(2)(a) to (d) of the Order (high net worth companies,

unincorporated associations, etc.) (all such persons together being referred to

as "Relevant Persons"). These materials are directed only at Relevant Persons

and must not be acted on or relied on by persons who are not Relevant Persons.

Any investment or investment activity to which this announcement relates is

available only to 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 document is not for publication or distribution in,

directly or indirectly, Australia, Canada, Japan, the United States or any other

jurisdiction in which such release, publication or distribution would be

unlawful, and it does not constitute an offer or invitation to subscribe for or

purchase any securities in such countries or in any other jurisdiction. In

particular, the document and the information contained herein should not be

distributed or otherwise transmitted into the United States or to publications

with a general circulation in the United States of America.

The Manager is acting for the Company in connection with the Rights Issue and no

one else and will not be responsible to anyone other than the Company for

providing the protections afforded to their respective clients or for providing

advice in relation to the Rights Issue or any transaction or arrangement

referred to in this announcement.

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 "anticipate", "believe",

"continue", "estimate", "expect", "intends", "may", "should", "will" 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 its 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. The information, opinions and forward-looking

statements contained in this announcement speak only as at its date and are

subject to change without notice. This announcement is made by and is the

responsibility of, the Company.

Neither the Manager nor any of their affiliates makes any representation as to

the accuracy or completeness of this announcement and none of them accepts any

responsibility for the contents of this announcement or any matters referred to

herein. This announcement is for information purposes only and is not to be

relied upon in substitution for the exercise of independent judgment. It is not

intended as investment advice and under no circumstances is it to be used or

considered as an offer to sell, or a solicitation of an offer to buy any

securities or a recommendation to buy or sell any securities of the Company. No

reliance may be placed for any purpose on the information contained in this

announcement or its accuracy, fairness or completeness.

Neither the Manager nor any of their respective affiliates accepts any liability

arising from the use of this announcement.