Desert Control Announces Finalization of Strategic Review Process for the Middle East

ISSUER

DESERT CONTROL AS

Sandnes, Norway, 3 July 2023 – Desert Control (DSRT) (the "Company") announces
the conclusion of the strategic review process to change its business model for
the Middle East as announced on 27 April 2023. The strategic review was
initiated with the aim of optimizing long-term shareholder value and securing
sustainable funding to strengthen the foundation to drive the Company's growth
strategy. Today, the Company provides an update on the milestones achieved.

- 13 June 2023, the Company published an update on having received incoming
interest from multiple parties related a potential change of the Company’s
business model to a royalty based licensing structure with local operators
taking on the complete responsibility for production, sales, distribution, and
implementation of LNC for the Middle East region. The Company further announced
having signed non-binding letters of intent with selected parties with the
intention to reach final agreements by around mid-year.

- 22 June 2023, the Company announced an agreement where Mawarid Holding
Investment (MHI) acquires Desert Control’s LNC production company in the UAE
along with LNC production assets and Desert Control’s shareholding in the Abu
Dhabi based JV Mawarid Desert Control for $1,8 million. MHI becomes Desert
Control’s exclusive licensed operator for the UAE with ambitions to expand
across the Middle East region.

- 3 July 2023, the Company announced an agreement with Heart SA to become a
licensed operator for Desert Control in the Kingdom of Saudi Arabia (KSA). Heart
SA will acquire one LNC production cluster (4 mobile LNC production units) for
$1 million and an anchor the strategic partnership by becoming a shareholder in
Desert Control AS with an investment of $1 million in a directed share issue at
NOK 10,- per share.

Key results of the Strategic Review include:

1. Strengthened Liquidity through Partnership Agreements in the Middle East:
The Company successfully expanded its strategic partnership with Mawarid Holding
Investment in the United Arab Emirates (UAE), and further signed a new agreement
with Heart SA to produce, sell, distribute, and implement Desert Control's
Liquid Natural Clay (LNC) in the Kingdom of Saudi Arabia (KSA). This milestone
results in an addition of approximately NOK 40 million in increased liquidity
for Desert Control.

2. Operational Cost Reduction from Transition to Royalty-Based Licensed Operator
Model:
The Company's shift to a licensed operator model, targeted for completion during
H2 2023, aims to reduce monthly operational costs by approximately NOK 1.5
million. The transition also introduces a royalty-based revenue stream from
Middle Eastern partners, providing a consistent source of income throughout the
term of the licensing agreements.

3. Stronger Foundation for Growth in the Middle East by New Partnership Model:
The Company is confident that leveraging the local knowledge, networks, and
capacity of dedicated operator partnerships will spur growth and momentum in the
Middle East, facilitating enhanced commercialization and adoption of Desert
Control's LNC technology.

4. Enabling Accelerated Commercialization and Growth in the United States:
The transition to a licensed operator model strengthens the Company's
foundation, allowing for increased focus on innovation and global expansion. By
unlocking cash and reducing operational costs in the Middle East, the Company
can continue developing the region while shifting resources to accelerate
commercialization in the United States and other markets.

5. U.S. Update – Continued Progress and Steadfast Execution:
The Company continues to make strides in the United States. With ten new pilot
projects signed year to date, Desert Control is on track to reach its target of
20 pilot projects in the U.S. by year's end. The Company targets a >50%
conversion rate to larger projects and aims for the first contract for
full-scale deployment to be signed by the end of the year. The recent OMRI
approval of Liquid Natural Clay (LNC) for use in compliance with the USDA
National Organic Program also broadens the Company's market opportunities in the
U.S.

In conclusion, the strategic review process has strengthened Desert Control's
financial position, enabling the Company to minimize short-term dilutive capital
raises while extending the financial runway. The Board of Directors are pleased
with the outcome of the strategic review. A stronger financial position combined
with an improved foundation to drive LNC adoption in the Middle East will allow
the Company to accelerate its United States business, poising the Company for
continued growth and creation of long-term shareholder value.
For further inquiries, please contact:
Ole Kristian Sivertsen
President and Group CEO, Desert Control
oks@desertcontrol.com

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

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 Marianne Vika Bøe, Chief Financial
Officer of Desert Control AS, at the time and date stated above in this
announcement.

Disclaimer related to forward-looking statements
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. Actual
events may differ significantly from any anticipated development due to a number
of factors, including without limitation, changes in public sector investment
levels, changes in the general economic, political and market conditions in the
markets in which the Company operates, the Company's ability to attract, retain
and motivate qualified personnel, changes in the Company's ability to engage in
commercially acceptable acquisitions and strategic investments, and changes in
laws and regulation and the potential impact of legal proceedings and actions.
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 Company does not make any
guarantee that the assumptions underlying the forward-looking statements in this
announcement are free from errors nor does it accept any responsibility for the
future accuracy of the opinions expressed in this announcement or any obligation
to update or revise the statements in this announcement to reflect subsequent
events. You should not place undue reliance on the forward-looking statements in
this announcement.

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.

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.