Deveron Announces Third Quarter 2024 Financial Results

Toronto, Ontario–(Newsfile Corp. – May 28, 2024) – Deveron Corp. (TSXV: FARM) (“Deveron” or the “Company”), a leading North American agricultural services and data company, is pleased to announce its financial results for the three and nine months ended March 31st.^st2024. Complete financial results can be found at www.sedarplus.ca.

Third Quarter 2024 Financial Highlights

• Non-IFRS EBITDA for the quarter improved 57% to a loss of $1,449,703 compared to a loss of $3,378,030 in the same period last year. Non-IFRS Adjusted EBITDA for the nine months ended March 31, 2024 increased 674% to $3,273,198 compared to $423,158 in the same period last year.

• Total revenue for the quarter increased 2% to $5,453,028 compared to $5,358,540 in the same period last year. Total revenue for the nine months ended March 31, 2024 increased 3% to $28,480,027 compared to $27,691,334.

• Operating expenses for the third quarter of 2024 decreased 15% year over year from $6,134,379 to $4,277,906 as the Company realized its previously announced cost optimization results.

Although the third quarter of fiscal 2024 is a seasonally weaker period, revenues for the quarter increased 2% as warmer temperatures in March provided an early spring testing period before growers planted seeds for the season.

The company's gross margin and Adjusted EBITDA margin profile improved significantly year over year due to the realization of its previously announced cost optimization program, which is expected to result in $2.4 million in annualized cost savings. The company made a decision to de-prioritize gathering services within its Carbon business segment based on actual and forecasted customer volumes, resulting in significant reductions in operating costs at the end of 2023.

“Deveron significantly improved profitability in the third quarter of 2024. This quarter we began to see the benefits of recent cost changes as we further focus on profitability and our core fertilizer business segments,” said David McMillan, Deveron's president and CEO. “Due to the nature of our business, the third quarter of 2024 will be our slowest period. We feel we have gained footing on the cost side with improving EBITDA, operating expenses and margins. The company has experienced great success and recently signed two enterprise agreements with major U.S. agricultural companies, which are expected to generate US$2.5 million in new revenue in calendar year 2024. These agreements demonstrate strong demand for Deveron's soil analysis solutions to help farmers optimize inputs, increase yields and reduce environmental impact. As all of our services revenue is related to testing, with 60% related to the fertility segment and 40% related to total organic carbon testing, we expect revenues to be highly profitable. Based on sales performance to date and the company's high customer retention and low customer churn rates, total U.S. revenues are expected to show significant growth in 2024 compared to 2023 revenues.”

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Financial Results Overview

*Non-IFRS measure. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA should not be construed as a substitute for comprehensive loss or profit determined in accordance with IFRS. Adjusted EBITDA does not have a standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. The Company defines Adjusted EBITDA as IFRS net loss excluding interest expense, depreciation and amortization, share-based payments, income tax expense, integration costs, one-time acquisition costs, goodwill, property, plant and equipment, and right-of-use asset (ROU) impairments. The Company believes Adjusted EBITDA is a meaningful financial measure because it measures cash generated from operations that is available to fund working capital requirements, future interest and principal debt payments, and fund future growth initiatives.

^Calculation of non-cash expenditures

Third Quarter 2023 Business Highlights

February 7^NumberThe company announced that it has signed a new corporate agreement with a prominent company in the field of PFAS removal from water, a group of synthetic chemicals that have attracted significant attention due to their widespread use and potential environmental and health concerns.

After the end of the quarter

April 25^NumberThe Company announced that it has issued 575 unsecured convertible notes at a price of $1,000 per note in an insider-led, non-brokered private offering for aggregate proceeds of $575,000. The Company intends to use the net proceeds from the offering for general working capital purposes.

The Company announced on May 27 that it had received a letter (the “Demand Letter”) from two unsecured creditors demanding repayment of an unsecured loan pursuant to a promissory note dated May 20, 2022 (collectively, the “Loans”) issued by Deveron in connection with its acquisition of a 67% interest in A&L Laboratories Canada East, Inc. (“A&L”).

Following the press release on May 10th^NumberMay 18, 2022^NumberIn 2022, the Company is offering 7.0% unsecured convertible notes (each a “Note”) for gross proceeds of $10.0 million. Pursuant to the Notes, the Company has elected to issue accrued interest in the second year of the Notes into the capital stock of the Company 6,146,373 shares of its common stock (each a “Common Share”) at a price of $0.11406 per Common Share.

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

Management's analysis for the current period and the accompanying financial statements and notes are available under the Company's profile on SEDAR+ at www.sedar.plusThis news release is not a substitute for reading these financial statements, including the notes to those financial statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Deveron: Deveron is an agricultural technology company that leverages data and insights to help farmers and large agricultural companies increase yields, reduce costs, and improve farm outcomes. The company employs digital processes that leverage data collected on farms across North America to drive unbiased interpretation of production decisions and ultimately recommend how to optimize input use. Our team of agronomists and data scientists develop products that recommend how to better manage fertilizer, seeds, fungicides, and other farm inputs. In addition, we have a national network of data technicians that are deployed to collect various types of farm data, from soil to drones, building the foundation for our best-in-class data layer. Our focus is the United States and Canada. One billion acres of agricultural land are actively cultivated each year.

For more information or to join the community, visit www.deveron.com/investors or connect with us on Twitter @Deveron..

Philip Linton
Vice President of Corporate Development
inquiry
Phone: 647-622-0076

This press release contains “forward-looking statements” within the meaning of Canadian securities legislation. Statements regarding our future plans and objectives are forward-looking statements that involve various risks, including, but not limited to, our ability to predict future events and circumstances. Forward-looking statements reflect management's current views with respect to possible future events and circumstances and, by their nature, are based on management's beliefs and assumptions and are subject to known and unknown risks and uncertainties, both general and specific to the Company. Although the Company believes that the expectations expressed in such forward-looking statements are reasonable, such statements are not guarantees of future performance and actual results or developments may differ materially from our forward-looking statements. Important factors that could cause the Company's actual results to differ materially from those expressed or implied in such forward-looking statements include: fluctuations in world prices for agricultural commodities, general market conditions, risks inherent in agriculture, uncertainty of future profitability and uncertainty of access to additional capital. Additional information regarding the important factors and assumptions applied in preparing these forward-looking statements, as well as various risks and uncertainties faced by the Company, is more fully described in the “Risk Factors” section of Management's Discussion and Analysis of the Company's annual and interim financial results, and in the Company's other continuous disclosure documents and financial statements filed with Canadian securities regulators, which are available at: Click here for details. The Company assumes no obligation to update this forward-looking information, except as required by applicable law. The Company relies on litigation protections with respect to its forward-looking statements.

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