Mr. David MacMillan reports

DEVERON REPORTS FISCAL Q3/2024 FINANCIAL RESULTS

Deveron Corp. has released results for the three and nine months ended March 31, 2024. Full financial results are available at SEDAR+.

Third quarter 2024 financial highlights:

• Non-international financial reporting standard EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter improved 57 per cent year over year to a loss of $1,449,703 from a loss of $3,378,030. Non-IFRS adjusted EBITDA grew 674 per cent year over year for the nine-month period ended March 31, 2024, to $3,273,198 from $423,158.
• Gross revenue for the quarter grew 2 per cent year over year to $5,453,028 from $5,358,540. Gross revenue grew 3 per cent for the nine-month period ended March 31, 2024, to $28,480,027 from $27,691,334.
• Fiscal Q3 2024 operating expenses decreased 15 per cent year over year to $4,277,906 from $6,134,379 as the company realized results from the cost optimizations previously announced.

While FY Q3 2024 is typically seasonally weak, revenue grew 2 per cent for the quarter. This was due to warmer conditions in March, allowing for an early spring testing window before growers planted their seeds for the season.

The company's gross profit margin and adjusted EBITDA margin profiles made substantial improvements year over year due to the realization of previously announced cost optimization programs, which are expected to yield cost savings of $2.4-million on an annual basis. The company significantly reduced operating costs at the end of 2023, due to its decision to deprioritize collection services within its carbon business unit, based on actual and expected client volumes.

"Deveron made substantial strides to improving profitability in FY Q3 2024. This quarter, we began to see the benefits of our recent cost changes as we focus more on profitability and our core fertility business unit," said David MacMillan, president and chief executive officer of Deveron. "Due to the nature of our business, FY Q3 2024 is the slowest season for the company. With positive improvements to EBITDA, operating expenses and profit margin, we feel we have found our footing from a cost perspective. The company has seen some great success, recently closing two enterprise contracts with large U.S. agribusinesses, with expected new sales of $2.5-million (U.S.) in calendar 2024. These contracts demonstrate the strong demand for Deveron's soil analysis solutions, which help farmers optimize their inputs, increase yields and reduce environmental impact. The company expects revenue to be high margin, as all the service revenue is tied to testing, with 60 per cent in the fertility segment and 40 per cent related to total organic carbon testing. Based on sales success to date and the company's high customer retention rates and low churn, total U.S. sales for 2024 are expected to demonstrate meaningful growth compared to 2023 sales."

Third quarter 2023 operational highlights

On Feb. 7, the company announced the on-boarding of a new enterprise contract with a prominent player in PFAS remediation in water. PFAS are synthetic chemicals that have garnered significant attention due to their widespread use and potential environmental and health concerns.

Subsequent to quarter-end

On April 25, the company announced the closing of an insider-led, non-brokered private placement through the issuance of 575 unsecured convertible debentures at a price of $1,000 per debenture for gross proceeds of $575,000. The company intends to use the net proceeds from the offering for general working capital.

On May 27, the company announced that it has received a letter from two unsecured creditors demanding repayment of the unsecured loans evidenced by promissory notes dated May 20, 2022, issued by Deveron in connection with the acquisition of a 67-per-cent interest in A&L Laboratories Canada East Inc.

Further to the press releases of May 10, 2022, and May 18, 2022, whereby the company issued 7.0 per cent unsecured convertible debentures for aggregate gross proceeds of $10-million, pursuant to the debentures, the company has elected to pay the accrued interest for the second year through the proposed issuance of 6,146,373 common shares in the capital of the company at a price of 11.406 cents per common share.

The issuance of the common shares remains subject to receipt of all necessary corporate and regulatory approvals, including the approval of the TSX Venture Exchange. All common shares issued are subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation.

Management's discussion and analysis for the period and the accompanying financial statements and notes are available under the company's profile on SEDAR+. This news release is not in any way a substitute for reading those financial statements, including the notes to the financial statements.

About Deveron Corp.

Deveron is an agriculture technology company that uses data and insights to help farmers and large agriculture enterprises increase yields, reduce costs and improve farm outcomes. The company employs a digital process that leverages data collected on farms across North America to drive unbiased interpretation of production decisions, ultimately recommending how to optimize input use. Its team of agronomists and data scientists build products that recommend ways to better manage fertilizer, seed, fungicide and other farm inputs. Additionally, it has a national network of data technicians who are deployed to collect various types of farm data, from soil to drones, that build a basis of its best-in-class data layers. Its focus is the United States and Canada, where one billion acres of farmland are actively farmed annually.

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