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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.
Kilde
