Desert Control enters into strategic agreement for Middle East operations

ISSUER

DESERT CONTROL AS

Sandnes, Norway, 22 June 2023

Desert Control AS (DSRT) ("Company") today announces that it, pursuant to the
ongoing strategic review, has entered into agreements with Mawarid Holding
Investment LLC and Mawarid International Investment LLC (jointly referred to as
"Mawarid") to change its go-to-market and business model for the Middle East
region by transitioning to a royalty-based licensed operator structure. The
change of business model aims to unlock cash and reduce operating costs for
Desert Control. The pivot towards a licensing model will leverage the capacity
and reach of local operators in the Middle East while allowing Desert Control to
dedicate additional resources to core business activities and driving
accelerated commercialization in the United States and other markets.

"The transition to a licensed operator model with Mawarid allows us to focus our
efforts on innovating our Liquid Natural Clay technology while enhancing our
global reach. We believe that focusing on our core business and leveraging the
reach of Mawarid will strengthen our position in the Middle East and accelerate
commercialization in the United States and other markets," said Ole Kristian
Sivertsen, President and Group CEO of Desert Control.

Desert Control's production of Liquid Natural Clay ("LNC") for the Middle East
region is currently managed and operated by its wholly owned subsidiaries Desert
Control Middle East LLC and Desert Control Liquid Natural Clay Manufacturing
(Sole Proprietorship) LLC. Further, Desert Control holds a 49% shareholding of
Mawarid Desert Control LLC. The majority 51% of Mawarid Desert Control LLC, is
owned by Mawarid.

The Company has now entered into agreements pursuant to which Mawarid will
acquire Desert Control's 49% ownership in Mawarid Desert Control LLC. Further,
Mawarid will acquire Desert Control Liquid Natural Clay Manufacturing (Sole
Proprietorship) LLC. In connection with the contemplated transaction, Mawarid
will also acquire mobile LNC production units currently operated by Desert
Control and enter into an exclusive royalty-based licensing agreement for the
production, sales, and distribution of LNC in the United Arabic Emirates ("UAE")
and a general license to operate in additional countries in the Middle East and
North Africa region (MENA).

"We are excited to accelerate the implementation of climate-smart practices and
foster sustainable innovation in the region. Our investment as Desert Control's
licensed operator for production, sales, and distribution of the LNC technology
aligns with the UAE's national priorities and the upcoming COP28 agenda,
tackling critical issues such as food security, water security, and climate
change," said Kashif Shamsi, Group Chief Executive Officer at Mawarid Holding
Investment.

Completion of the agreements is subject to customary terms and conditions,
including certain public authorizations, all of which are expected to be met.
Desert Control will, through the agreements, have taken an important leap
towards restructuring its operations in the Middle East. The board of directors
of Desert Control (the "Board") believes that it will be possible to implement
the Company's vision in the Middle East more efficiently with the support and
resources of its partners in the new structure. At the same time, shareholders
of Desert Control will benefit from the value creation generated from
royalty-based licensing. For the initial implementation of the agreements, a
consideration of USD 1,800,000 will be payable to Desert Control in two tranches
in relation to the transfer of the 49% ownership in Mawarid Desert Control LLC
and the 100% ownership in Desert Control Liquid Natural Clay Manufacturing (Sole
Proprietorship) LLC to Mawarid. During the term of the license period, Desert
Control will receive a customary royalty payment calculated as a percentage of
revenues.

The Board is pleased to have reached this stage in the strategic review. The
review process continues as previously announced, aiming to optimize shareholder
value and to support funding of the Company's long-term strategies as announced
when Desert Control appointed Arctic Securities and Pareto Securities to explore
strategic options available to the Company as reported on 27 April 2023.


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.