Verde achieves C$11.1 million revenue, 76% gross margin and C$2.0 million EBITDA in the first quarter of 2023

SINGAPORE, May 16, 2023 - Verde AgriTech Ltd. (TSX: "NPK") ("Verde" or the "Company") is pleased to announce its financial results for the first quarter ended March 31, 2023 ("Q1 2023").

Q1 2023 Financials

• Sales of Verde's multinutrient potassium products, BAKS® and K Forte® sold internationally as Super Greensand® (the "Product") by volume were 108,000 tonnes, compared to 112,000 tonnes in Q1 2022 and 16,558 tonnes in Q1 2021.
• Revenue in Q1 2023 was $11.1 million, compared to $11.3 million in Q1 2022 and $0.8 million in Q1 2021.
• Cash and other receivables held by the Company in Q1 2023 were $34.3 million, compared to $22.3 million in Q1 2022 and $4.8 million in Q1 2021.
• EBITDA before non-cash events in Q1 2023 was $2.0 million, compared to $3.7 million in Q1 2022 and a $0.8 million loss in Q1 2021.
• Total non-current assets in Q1 2023 were $68.3 million, compared to $30.1 million in Q1 2022 and $21.4 million in Q1 2021.
• Net loss in Q1 2023 was $0.1 million, compared to a $3.0 million profit in Q1 2022 and a $1.0 million loss in Q1 2021.
• In Q1 2023, 8,559 million tonnes of chloride have been prevented from being applied into soils by farmers who used the Product in lieu of potassium chloride ("KCl") fertilizers.¹ A total of 121,201 tonnes of chloride has been prevented from being applied into soils by Verde's customers since the Company started production.²

"In Q1 2022, our sales grew by an impressive 574%, and our revenue increased by an astonishing 1,260% compared to Q1 2021. Achieving virtually the same volume as last year in markets that experience the strongest downturns of the last few years in the fertilizer industry is a remarkable accomplishment. The price of soybeans, which represents a major portion of Verde's sales, has declined by 33% in the past 12 months, with a substantial 21% drop in the last three months alone.³ Additionally, potash prices have seen a significant decrease of 67% over the past year, with a sharp decline of 22% in the last three months.⁴ Despite these challenging market conditions, Verde's performance in Q1 2023, delivering results comparable to those achieved in Q1 2022, demonstrates the unwavering commitment and strategic approach of our team, and underscores our ability to thrive in an exceptionally difficult market landscape," stated Cristiano Veloso, Founder, President & CEO of Verde.

Selected Annual Financial Information

The table below summarizes Q1 2023 financial results compared to Q1 2022:

⁽¹⁾ _{- C$864,000 of depreciation related to the investments made in Plant 1, Plant 2 and access routes improvement in the last 12 months that are included in production costs in the financial statements have been reclassified to a non-cash event in the MD&A.}
⁽²⁾ _{- Non GAAP measure}
⁽³⁾ _{- Included in General and Administrative expenses in financial statements}
⁽⁴⁾ _{- Please see Summary of Interest-Bearing Loans and Borrowings notes}
⁽⁵⁾ _{- Please see Income Tax notes in Q1 2023 Management's Discussion and Analysis}

External Factors

Revenue and costs are affected by external factors including changes in the exchange rates between the C$ and R$ along with fluctuations in potassium chloride spot CFR Brazil.⁵ The table below summarizes these changes:

Q1 2023 compared with Q1 2022

EBITDA and EPS
The Company had an EBITDA of $1,969,000 in Q1 2023, compared to $3,678,000 in Q1 2022. This decrease can be mainly attributed to two factors:

1. Higher average freight cost: In Q1 2023, the average freight cost per tonne of Product sold on a CIF (Cost, Insurance, and Freight) basis increased from $44 to $53. This increase was driven by a higher percentage of sales being made to the northern region of Mato Grosso state, which is located farther away from Verde's production facilities. As a result, the weighted average distance of Product delivered increased by 12% in the quarter compared to the previous year, with a $600,000 impact in Q1 2023.
2. Reduction in potassium chloride (KCl) CFR Brazil price compared to the previous year: The drop in KCl prices resulted in a 16% decrease in revenue per tonne excluding freight expenses (FOB price) in Brazilian Reais, from R$308 per tonne in Q1 2022 to R$259 per tonne in Q1 2023. As a result, this had a $435,000 impact on the Company's quarterly results.

Basic loss per share was $0.002 for Q1 2023, compared to earnings of $0.06 for Q1 2022.

Product Sales

Sales by volume decreased by 4% in Q1 2023, to 108,000 tonnes sold, compared to 112,000 tonnes sold in Q1 2022, due to the circumstances summarized below.

At the onset of the Ukrainian war in February 2022, concerns arose regarding potential geopolitical sanctions against Russia and their potential impact on the availability of potash fertilizers. This led to a surge in customer orders during the first and second quarters as they sought to stockpile fertilizers for the upcoming crop season.

However, these concerns proved unfounded as the market actually experienced an oversupply of potash due to increased availability. Coupled with a 15% decrease in potash consumption in Brazil throughout 2022, this resulted in a 23% increase in year-end potash stock in Brazil, highlighting the lower overall demand for the product during the year.⁶

As a consequence, potash prices have significantly declined, witnessing a 67% decrease over the past year, with a sharp 22% decline in the first three months of 2023.⁷ This has prompted farmers to delay their agricultural input purchases as they anticipate further price drops, thereby reducing the demand for fertilizers in Q1 of 2023.

Furthermore, the price of soybeans, which represents the major portion of Verde's sales, has declined by 33% over the past 12 months, with a significant drop of 21% in the last three months.⁸

Despite the exceptional market circumstances witnessed in Q1 2021 and Q1 2022, Verde delivered in Q1 2023 results comparable to those achieved in the previous year.

Revenue

Revenue from sales decreased by 2% in Q1 2023, to $11,125,000 from the sale of 108,000 tonnes of Product, at average $103 per tonne sold; compared to $11,304,000 in Q1 2022 from the sale of 112,000 tonnes of Product, at average $101 per tonne sold.

The increase in average revenue per tonne was mainly due to the higher percentage of CIF sales in the quarter, with 68% in Q1 2023, compared to 60% in Q1 2022.

Average revenue per tonne excluding freight expenses (FOB price) decreased by 10% in Q1 2023, to $67 compared to $75 in Q1 2022 mainly due to the decrease in Potassium Chloride CFR Brazil, from US$750-US$1200 per tonne in Q1 2022 to US$455-US$520 per tonne in Q1 2023⁹. This reduction was partially offset by the 7% appreciation of the Brazilian Real against the Canadian Dollar.

Production costs
Production costs include all direct costs from mining, processing, and the addition of other nutrients to the Product, such as Sulphur and Boron. It also includes the logistics costs from the mine to the plant and related salaries.

Verde's production costs and sales price are based on the following assumptions:

1. Micronutrients added to BAKS® increase its production cost, rendering K Forte® less expensive to produce.
2. Production costs vary based on packaging type, with bulk packaging being less expensive than Big Bags.
3. Plant 1 produces K Forten® Bulk, K Forte® Big Bag, BAKS® Bulk, and BAKS® Big Bag, while Plant 2 exclusively produces K Forte® Bulk. Therefore, Plant 2's production costs are lower than Plant 1's costs, which produces two types of Products and offers two types of packaging options each.

The table below shows a breakdown of full year 2023 Verde's production costs projection for BAKS® and K Forte®, and what percentage of those costs is not controllable by management:

Verde calculates its total production costs as a weighted average of the production costs for BAKS® and K Forte®, taking into account the production site and packaging type for each product. Therefore, comparing the Company's production costs on a quarter-over-quarter basis may not be meaningful due to the varying proportions of the cost factors that impact each quarter.
Production costs increased by 2% in Q1 2023, to $2,710,000 compared to $2,654,000 in Q1 2022. Average cost per tonne increased by 6% in Q1 2023, to $25 compared to $24 in Q1 2022.

Despite a 4% decrease in sales volume, from 112,000 tonnes in Q1 2022 to 108,000 tonnes in Q1 2023, Verde was able to reduce the average production cost in Brazilian Reais. In Q1 2023, the average production cost was R$96.47, compared to R$98.03 in Q1 2022. This cost reduction can be attributed primarily to a shift in the sales mix of packaging types, with a decrease in the percentage of Big Bag sales from 39% in Q1 2022 to 24% in Q1 2023.

Sales Expenses

Sales and marketing expenses

Sales and marketing expenses include employees' salaries, car rentals, travel within Brazil, hotel expenses, and the promotion of the Product in marketing events.

This increase can be primarily attributed to the implementation of a field sales team, which resulted in expenses related to car rentals and travel. Additionally, the Company made additional investments in media and third-party marketing agencies as part of a strategic initiative to attract new customers.

Fees paid to independent sales agents
As part of Verde's marketing and sales strategy, the Company pays out commissions to its independent sales agents.
Fees paid to independent sales agents increased by 1% in Q1 2023, to $137,000 compared to $136,000 in Q1 2022, in line with Q1 2023 sales.

Product delivery freight expenses
Product delivery freight expenses increased by 30% in Q1 2023, to $3,867,000 compared to $2,973,000 in Q1 2022, as the Company has significantly increased the volume sold as CIF (Cost Insurance and Freight), up from 60% of total sales in Q1 2022 to 68% in Q1 2023.

Sales made to states that are situated at a greater distance from Verde's production facilities had a notable effect on the logistics costs. In Q1 2023, the average freight cost per tonne of Product sold on a CIF (Cost, Insurance, and Freight) basis increased from $44 to $53, compared to the previous year. This increase was driven by a higher percentage of sales being made to the northern region of Mato Grosso state, which is located farther away from Verde's production facilities. As a result, the weighted average distance of Product delivered increased by 12% in Q1 2023 compared to Q1 2022, with a $600,000 impact in the quarter.
General and Administrative Expenses

General administrative expenses
These costs include general office expenses, rent, bank fees, insurance, foreign exchange variances and remuneration of executive and administrative staff in Brazil.
General administrative expenses increased by 125% in Q1 2023, to $920,000 compared to $410,000 in Q1 2022.
Prior to Q4 2022, administrative employees working at the offices situated within Verde's production facilities were accounted for as part of the personnel production costs. However, in Q1 2022, an adjustment was implemented to ensure alignment with accounting standards. This adjustment involved shifting the cost centre for expenses associated with 33 employees who met that criterion. As a result, a total of $222,000 was reallocated from production costs to general administrative expenses in the quarter.
Furthermore, additional rental expenses were incurred in Plant 2, which involved the rental of water trucks and metallic structures to support operations.
Additionally, the Company made the decision to outsource cleaning and maintenance services for Plant 1, Plant 2, and Verde's administrative office in São Gotardo. Previously, these services were handled by employees of the Company.
Legal, professional, consultancy and audit costs
Legal and professional fees include legal, professional, consultancy fees along with accountancy, audit and regulatory costs. Consultancy fees are consultants employed in Brazil, such as accounting services, patent process, lawyer's fees and regulatory consultants.
Expenses decreased by 23% in Q1 2023, to $317,000 compared to $411,000 in Q1 2022. The decrease was mainly due to 2022 costs relating to the re-domiciliation of the Company to Singapore.

IT/Software expenses
IT/Software expenses include software licenses such as Microsoft Office, Customer Relationship Management (CRM) software and enterprise resource planning (ERP).
Expenses decreased by 45% in Q1 2023, to $112,000 compared to $204,000 in Q1 2022. Q1 2022 was higher as the Company was implementing the change in its accounts from ERP to SAP Business One. This has now been concluded.
Taxes and licences
Taxes and licence expenses include general taxes, product branding and licence costs.
Expenses increased in Q1 2023, to $23,000 compared to $16,000 in Q1 2022 and increase of $7,000.
Share Based, Equity and Bonus Payments (Non-Cash Events)
These costs represent the expense associated with stock options granted to employees and directors along with equity compensation and non-cash bonuses paid to key management.
Share Based, equity and bonus payments costs decreased by 56% in Q1 2023, to $28,000 compared to $64,000 in Q1 2022. The decrease is a result of a reduction on share based payments in the quarter.
Liquidity and Cash Flows
For additional details see the consolidated statements of cash flows for the quarters ended March 31, 2023 and March 31, 2022 in the quarterly financial statements.

On March 31, 2023, the Company held cash of $4,289,000, a decrease of $4,684,000 on the same period in 2022.

Trade and other receivables increased by 70% in Q1 2023, to $29,996,000 compared to $17,618,000 in Q1 2022. Trade and other payables decreased by 6% in Q1 2023 to $9,494,000 compared to $10,071,000 in Q1 2022.

Q1 2023 Results Conference Call

The Company will host a conference call on Wednesday, May 24, 2023, at 10:00 am Eastern Time, to discuss Q1 2023 results and provide an update. Subscribe using the link below and receive the conference details by email.

The questions can be submitted in advance through the following link up to 48 hours before the conference call: https://bit.ly/Q1_2023_ResultsPresentation_Questions.

The Company's first quarter financial statements and related notes for the period ended March 31, 2023 are available to the public on SEDAR at www.sedar.com and the Company's website at www.investor.verde.ag/.

About Verde AgriTech

Verde is an agricultural technology Company that produces potash fertilizers. Our purpose is to improve the health of all people and the planet. Rooting our solutions in nature, we make agriculture healthier, more productive, and profitable.

Verde is a fully integrated Company: it mines and processes its main feedstock from its 100% owned mineral properties, then sells and distributes the Product.

Verde's focus on research and development has resulted in one patent and eight patents pending. Among its proprietary technologies are Cambridge Tech, 3D Alliance, MicroS Technology, N Keeper, and Bio Revolution.¹³ Currently, the Company is fully licensed to produce up to 2.8 million tonnes per year of its multinutrient potassium fertilizers K Forte® and BAKS®, sold internationally as Super Greensand®. In 2022, it became Brazil's largest potash producer by capacity.¹⁴ Verde has a combined measured and indicated mineral resource of 1.47 billion tonnes at 9.28% K₂O and an inferred mineral resource of 1.85 billion tonnes at 8.60% K₂O (using a 7.5% K₂O cut-off grade).¹⁵ This amounts to 295.70 million tonnes of potash in K₂O. For context, in 2021 Brazil's total consumption of potash in K₂O was 6.57 million¹⁶.

Brazil ranks second in global potash demand and is its single largest importer, currently depending on external sources for over 97% of its potash needs. In 2022, potash accounted for approximately 3% of all Brazilian imports by dollar value.¹⁷

Corporate Presentation

For further information on the Company, please view shareholders' deck:

https://verde.docsend.com/view/hx6998vbxy6vy49x

Investors Newsletter

Subscribe to receive the Company's updates at:

http://cloud.marketing.verde.ag/InvestorsSubscription

The last edition of the newsletter can be accessed at: https://bit.ly/InvestorsNL-April2023

Cautionary Language and Forward-Looking Statements

All Mineral Reserve and Mineral Resources estimates reported by the Company were estimated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards (May 10, 2014). These standards differ significantly from the requirements of the U.S. Securities and Exchange Commission. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

This document contains "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as "forward-looking statements" are made as of the date of this document. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, but are not limited to, statements with respect to:

(i) the estimated amount and grade of Mineral Resources and Mineral Reserves;

(ii) the PFS representing a viable development option for the Project;

(iii) estimates of the capital costs of constructing mine facilities and bringing a mine into production, of sustaining capital and the duration of financing payback periods;

(iv) the estimated amount of future production, both produced and sold;

(v) timing of disclosure for the PFS and recommendations from the Special Committee;

(vi) the Company's competitive position in Brazil and demand for potash; and,

(vii) estimates of operating costs and total costs, net cash flow, net present value and economic returns from an operating mine.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as "expects", "anticipates", "plans", "projects", "estimates", "envisages", "assumes", "intends", "strategy", "goals", "objectives" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

All forward-looking statements are based on Verde's or its consultants' current beliefs as well as various assumptions made by them and information currently available to them. The most significant assumptions are set forth above, but generally these assumptions include, but are not limited to:

(i) the presence of and continuity of resources and reserves at the Project at estimated grades;

(ii) the geotechnical and metallurgical characteristics of rock conforming to sampled results; including the quantities of water and the quality of the water that must be diverted or treated during mining operations;

(iii) the capacities and durability of various machinery and equipment;

(iv) the availability of personnel, machinery and equipment at estimated prices and within the estimated delivery times;

(v) currency exchange rates;

(vi) Super Greensand® and K Forte® sales prices, market size and exchange rate assumed;

(vii) appropriate discount rates applied to the cash flows in the economic analysis;

(viii) tax rates and royalty rates applicable to the proposed mining operation;

(ix) the availability of acceptable financing under assumed structure and costs;

(x) anticipated mining losses and dilution;

(xi) reasonable contingency requirements;

(xii) success in realizing proposed operations;

(xiii) receipt of permits and other regulatory approvals on acceptable terms; and

(xiv) the fulfilment of environmental assessment commitments and arrangements with local communities.

Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward looking statements, such as statements of net present value and internal rates of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur as forecast, but specifically include, without limitation: risks relating to variations in the mineral content within the material identified as Mineral Resources and Mineral Reserves from that predicted; variations in rates of recovery and extraction; the geotechnical characteristics of the rock mined or through which infrastructure is built differing from that predicted, the quantity of water that will need to be diverted or treated during mining operations being different from what is expected to be encountered during mining operations or post closure, or the rate of flow of the water being different; developments in world metals markets; risks relating to fluctuations in the Brazilian Real relative to the Canadian dollar; increases in the estimated capital and operating costs or unanticipated costs; difficulties attracting the necessary work force; increases in financing costs or adverse changes to the terms of available financing, if any; tax rates or royalties being greater than assumed; changes in development or mining plans due to changes in logistical, technical or other factors; changes in project parameters as plans continue to be refined; risks relating to receipt of regulatory approvals; delays in stakeholder negotiations; changes in regulations applying to the development, operation, and closure of mining operations from what currently exists; the effects of competition in the markets in which Verde operates; operational and infrastructure risks and the additional risks described in Verde's Annual Information Form filed with SEDAR in Canada (available at www.sedar.com) for the year ended December 31, 2021. Verde cautions that the foregoing list of factors that may affect future results is not exhaustive.

When relying on our forward-looking statements to make decisions with respect to Verde, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Verde does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Verde or on our behalf, except as required by law.

For additional information please contact:

Cristiano Veloso, Founder, Chairman & Chief Executive Officer

Tel: +55 (31) 3245 0205; Email: investor@verde.ag

www.investor.verde.ag | www.supergreensand.com | www.verde.ag

¹ _{Verde's Product is a salinity and chloride-free replacement for KCl fertilizers. Potassium chloride is composed of approximately 46% of chloride, which can have biocidal effects when excessively applied to soils. According to Heide Hermary (Effects of some synthetic fertilizers on the soil ecosystem, 2007), applying 1 pound of potassium chloride to the soil is equivalent to applying 1 gallon of Clorox bleach, with regard to killing soil microorganisms. Soil microorganisms play a crucial role in agriculture by capturing and storing carbon in the soil, making a significant contribution to the global fight against climate change.}

² _{1 tonne of Product (10% K2O) has 0.1 tonnes of K2O, which is equivalent to 0.17 tonnes of potassium chloride (60% K2O), containing 0.08 tonnes of chloride.}

³ _{Soybeans (Paranaguá) price went from US$40.36 in April 2022 to US$26.93 in April 2023, and from US$34.21 in February 2023 to US$26.93 in April 2023. Source: Economic Research Center of the ESALQ/University of São Paulo. Available at: https://www.cepea.esalq.usp.br/br/indicador/soja.aspx}

⁴ _{Potassium Chloride CFR Brazil price went from US$1200 in April 2022 to US$400 in April 2023, and from US$515 in February 2023 to US$400 in April 2023. Source: Acerto Limited Report.}

⁵ _{Source: Acerto Limited Report.}

⁶ _{Source: Brazilian Fertilizer Mixers Association (from "Associação Misturadores de Adubo do Brasil", in Portuguese).}

⁷ _{Potassium Chloride CFR Brazil price went from US$1200 in April 2022 to US$400 in April 2023, and from US$515 in February 2023 to US$400 in April 2023. Source: Acerto Limited Report.}

⁸ _{Soybeans (Paranaguá) price went from US$40.36 in April 2022 to US$26.93 in April 2023, and from US$34.21 in February 2023 to US$26.93 in April 2023. Source: Economic Research Center of the ESALQ/University of São Paulo. Available at: https://www.cepea.esalq.usp.br/br/indicador/soja.aspx}

⁹ _{Source: Acerto Limited Report.}

¹⁰ _{The costs were estimated based on the following assumptions: Costs in line with Verde's 2023 budget. Sales volume of 1.0Mt per year. Crude Oil WTI (NYM U$/bbl) = US$80.00. Diesel price = U$$1.26. Currency exchange rate: US$1.00 = R$5.25; C$1.00 = R$4.20. Total cost per tonne includes all costs directly related to production and feedstock extraction in addition to assets depreciation.}

¹¹ _{Total cost per tonne includes labor mining, mining, crushing, processing, maintenance of support facilities, product transportation from mine pits to production plants, laboratory expenses, G&A, and environmental compensation expenses.}

¹² _{BAKS® can be customized according to the crop's needs, so it can have several compositions. The 2%S 0.2%B composition is responsible for most of Verde's sales.}

¹³ _{Learn more about our technologies: https://verde.docsend.com/view/yvthnpuv8jx6g4r9}

¹⁴ _{See the release at: https://investor.verde.ag/verde-starts-ramp-up-of-plant-2s-second-stage-to-reach-production-of-2-4mtpy/}

¹⁵ _{As per the National Instrument 43-101 Standards of Disclosure for Mineral Projects within Canada ("NI 43 -101"), filed on SEDAR in 2017. See the Pre-Feasibility Study at: https://investor.verde.ag/wp-content/uploads/2021/01/NI-43-101-Pre-Feasibility-Technical-Report-Cerrado-Verde-Project.pdf}

¹⁶ _{Source: Brazilian Fertilizer Mixers Association (from "Associação Misturadores de Adubo do Brasil", in Portuguese).}

¹⁷ _{Source: Brazilian Comex Stat, available at: http://comexstat.mdic.gov.br/en/geral}