Desert Control releases its Q4 2022 report and Year-to-Date Company Update

ISSUER

DESERT CONTROL AS

Sandnes, Norway, 28 February 2023 – Desert Control AS (DSRT) announces its
fourth-quarter report and interim financial results for the fiscal period ending
31 December 2022.

Desert Control completes its first revenue-generating project and grows sales in
the United States, continues streamlining the UAE operation for optimized cost
efficiency, and deployed more LNC in the last three months than over previous
years combined. The company closes the fourth quarter with a positive cash
balance of NOK 78,2 Million and has no interest-bearing debt.

After successfully completing the first revenue-generating project with
Limoneira Company in December 2022, Desert Control started 2023 by signing three
new agreements for commercial pilots with; Five Rivers Cattle Feeding in Wellton
Mohawk, Arizona, Lemonica Citrus in Calipatria, California, and the golf course
Fortuna De Oro in Yuma, Arizona. The company is negotiating several additional
agreements for similar projects, expected to be signed during Q1-2023.

Q4 and Year-to-Date Highlights

Completion of the first revenue-generating project and growing sales in the
United States:
- Successful completion of the first commercial pre-project with Limoneira in
Cadiz, California, for 2,000 citrus trees. Application for 20 acres in Yuma,
Arizona, confirmed for January 2023.
- The first U.S. salesperson joined in December 2022, and the sales pipeline is
growing.
- Romain harvest from field-trial with the University of Arizona demonstrated
increased yield for LNC-treated plots of 21% to 53% compared to control.

Continues streamlining the UAE operation for optimized cost efficiency:
- Continued streamlining the UAE operation with the transition to the Joint
Venture partnership structure with Mawarid Desert Control (MDC).
- Restructuring reduces operational costs for Desert Control Middle East by more
than 50%.
- MDC completed its first commercial pre-project with a strategic UAE food
security company.

Deployed more LNC in the last three months than over previous years combined:
- First-ever LNC deployment for a single area larger than 1 hectare was
successfully achieved in December 2022.
- LNC was deployed to more acreage from December 2022 – February 2023 than over
the foregoing five years combined.
- Gained improved speed and efficiency of LNC application to support larger
projects.

Q1-2023 Updates

The three newly signed agreements are with customers that represent significant
potential; Five Rivers is the world's largest "cattle feeder," with farms in
Colorado, Kansas, Oklahoma, Texas, Idaho, and Arizona. The commercial LNC pilot
will be carried out on the McElhaney farm in Wellton Mohawk, which has 1,100
acres of irrigated fields and alfalfa as the main crop for animal feed. Lemonica
Citrus has a 1200-acre citrus farming operation in Calipatria, California, and
Fortuna De Oro is a 47 acres golf course in Yuma, Arizona, located in a desert
region with very little rainfall. Based on positive pilot results, the
objectives are to expand LNC deployments for larger-scale rollouts.

The company's sales pipeline keeps growing, and Desert Control is negotiating
several similar projects, expected to be signed in Q1-2023. In preparation for
increased activity, two additional LNC production units are being sent to the
U.S. The units are expected to arrive at the newly established operational base
in Yuma, Arizona, during April 2023 and will double production capacity in the
United States. The long-term objective is to establish local fabrication of LNC
production units for the U.S. market to support scale-up.

Financial Highlights

The company closes the fourth quarter with a positive cash balance of NOK 78,2
Million and has no interest-bearing debt. The sales pipeline is growing, and
streamlining of the UAE operation for optimized cost efficiency further
contributes to reducing operational costs for Desert Control Middle East by more
than 50%, aligning the cash runway with anticipated contracts for large-scale
LNC deployment.

Fourth Quarter 2022
[fourth quarter 2021 in brackets]

Revenue NOK 1M [NOK 0.8M]
EBITDA NOK -24.8M [NOK -10.6M]
Net Income NOK -34.5M [NOK -10.5M]
Gross R&D expenses NOK 1.4 [NOK 11M]

Full-Year 2022
[full-year 2021 in brackets]

Revenue NOK 2.2M [NOK 3.1M*]
EBITDA NOK -89.5M [NOK -31M]
Net Income NOK -89.5M [NOK –31.7M]
Gross R&D expenses NOK 3.9M [NOK 14,4M]
Innovation Norway / Skattefunn grants NOK 2.3M [NOK 8.7M]

* 2021 revenue relates to the pilot evaluation with Mawarid Holding Investment
in conjunction with the partnership negotiations that led to the Joint Venture
with the establishment of Mawarid Desert Control (MDC).

Total cash balance 31.12.22 (incl. other current financial assets) NOK 78.2M
[NOK 179.2M]
Equity 31.12.2022 NOK 107.7M (equity ratio 90%) [NOK 194.1M(95%)]

The experience gained during 2022 strengthens the foundation for achieving
efficiency levels to ensure profitable project execution for the company's
scale-up. Future CAPEX investments can be planned based on signed contracts, and
global mobility of assets provides agility to respond quickly to local market
demand.

Outlook

Desert Control's sales strategy for 2023 focuses on generating revenue and
developing a pipeline of opportunities through commercial pilots and
pre-projects similar to Limoneira, with the objective to start converting
pre-projects into contracts for large-scale deployment by the end of the year.

Three new agreements for commercial pilots were signed by 28 February 2023, and
the company anticipates the signing of several additional agreements for similar
projects during Q1-2023. The company will provide guidance and quarterly
reporting on the number of commercial pilots and pre-projects with anticipated
conversion rates going forward.


The Q4 report and presentation will be made available at
https://www.desertcontrol.com/investors


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

Marianne Vika Bøe
Chief Financial Officer

Email: marianne.boe@desertcontrol.com
Mobile: +47 406 36 356


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%.

Agriculture and food production consumes more than 70% of all available
freshwater. Desertification and soil degradation further increase the pressure
on water and natural resources in a negative spiral. Feeding the global
population requires growing more food in the next 40 years than was produced
over the last 500 years; this can only be achieved by improving resource
efficiency and regenerating nature.

According to the United Nations, twelve million hectares of fertile land perish
annually to desertification, representing an annual $490 billion loss to the
global economy. Desert Control's vision is making earth green again to foster
the prosperity of life.

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


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 2022

The information enclosed is subject to the disclosure requirements pursuant to
sections 5-12 in the Norwegian Securities Trading Act.