Desert Control enters strategic agreement for the Kingdom of Saudi Arabia
Sandnes, Norway, 3 July 2023 – Desert Control AS (DSRT) (the "Company") today announces that it, pursuant to the strategic review, has entered into an agreement with Holistic Earth Advanced Regeneration Technologies SA (H-EART) to become a licensed operator for production, sales, distribution, and implementation of Liquid Natural Clay (LNC) in the Kingdom of Saudi Arabia (KSA).
The agreement marks a significant milestone in Desert Control's transition to a royalty-based licensed operator structure for the Middle East. The change in business model unlocks cash, reduces operating costs, and allows Desert Control to leverage the capacity and reach of local partners while dedicating additional resources to core business activities and accelerating development in the United States and other markets.
"The strategic partnership with H-EART drives expansion of LNC offerings in KSA while strengthening the core innovation of the Liquid Natural Clay technology and enhancing global reach. By leveraging the capabilities of H-EART, we can grow our impact in the Middle East and accelerate efforts in other key markets," said Ole Kristian Sivertsen, President and Group CEO of Desert Control.
H-EART will acquire one LNC production cluster, consisting of 4 LNC production units, for USD 1 million. In addition, H-EART will anchor the strategic partnership by becoming a shareholder in Desert Control AS with an investment of $1 million at NOK 10,- per share in a directed share issue, along with entering into a non-exclusive agreement for the production, sales, distribution, and implementation of LNC in KSA.
"We are honored to partner with Desert Control to tackle critical issues in the Kingdom of Saudi Arabia. The impact of technologies such as LNC is crucial for KSA as we strive towards achieving strategic national objectives and priorities outlined in the Saudi Vision 2030 and the Saudi Green Initiative. Emphasizing food security, water security, and climate action leadership, this agreement allows us to step up our efforts to tackle desertification and water scarcity," said Constandinos Felder, CEO of H-EART.
The strategic partnership with H-EART marks another milestone in Desert Control's strategy to enhance its business model for the Middle East. The Board of Directors believes the partnership model will enable Desert Control to implement its vision more effectively across the Middle East region with the support of its local partners. Meanwhile, shareholders will benefit from the value creation generated from royalty-based licensing, revenue from asset purchases, and equity infusion.
For the initial implementation of the agreement, a total consideration for the combined transactions of USD 2 million will be payable to Desert Control. During the license period, Desert Control will receive a customary royalty payment calculated as a percentage of revenues from the business of H-EART in KSA. Completion of these agreements is subject to customary terms and conditions.
The Board is pleased to have reached important milestones in the strategic review.
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