Mr. Romain Nouzareth reports

SATO TECHNOLOGIES CORP. ANNOUNCES UPSIZE OF PRIVATE PLACEMENT TO $1.4 MILLION AND CLOSES FIRST TRANCHE BACKED BY MANAGEMENT AND INSIDERS

Sato Technologies Corp. has upsized its previously announced non-brokered private placement to aggregate gross proceeds of up to $1.4-million, consisting of: (i) up to 16,470,587 units of the company at a price of 6.375 cents per unit for proceeds of up to $1.05-million; and (ii) up to 350 convertible debenture units for proceeds of up to $350,000.

The company also announces that it has closed the first tranche of the offering for aggregate gross proceeds of $867,381.82. In connection with the first tranche of the offering, the company issued and sold 8,272,655 units at a price of 6.375 cents per unit for proceeds of $527,381.82, and 340 debenture units at a price of $1,000 per debenture unit for proceeds of $340,000.

Each unit issued in connection with the unit offering is composed of one common share and one common share purchase warrant. Each warrant will entitle the holder to acquire one additional common share at an exercise price of 8.5 cents per common share during the first year following the date of issuance, and 10 cents per common share thereafter, until March 16, 2031.

Each debenture unit issued in connection with the debenture unit offering is composed of a $1,000 principal amount unsecured convertible debenture and detachable warrants equal to the number of common shares issuable upon full conversion of the debenture. The debentures will bear 15-per-cent annual interest, payable quarterly in cash or common shares, at the option of the holder, with any share-settled interest being subject to the approval of the TSX Venture Exchange, and priced in accordance with applicable TSX Venture Exchange policies at the time of payment. The debentures will mature on March 16, 2029. The debentures will be convertible, at the option of the holder, into common shares of the company at a conversion price of 8.5 cents per common share during the first year following the date of issuance and 10 cents per common share thereafter until March 16, 2029.

The debentures are unsecured, subject to a springing first-priority lien upon repayment or release of the company's loan facility with Sygnum Bank AG, and rank pari passu with all other debentures issued in further tranches under the offering. Each detachable warrant entitles the holder thereof to purchase one common share at an exercise price of 10 cents until March 16, 2029.

The net proceeds of the offering will be used for working capital and general corporate purposes. Consistent with its capital management strategy, the company intends to prioritize revenues from its cryptocurrency mining operations and existing cash flows for continuing operational needs, with offering proceeds deployed to supplement such financing and support broader corporate purposes as management deems appropriate. The company retains full discretion as to the allocation, timing and prioritization of the use of proceeds described herein.

The offered securities were issued in the first tranche, and may be issued in subsequent tranches, by way of private placement: (a) in all provinces and territories of Canada pursuant to applicable prospectus exemptions; (b) in the United States to accredited investors in reliance on exemptions from registration under Rule 506(b) of Regulation D under the U.S. Securities Act of 1933, as amended, without general solicitation or advertising; and (c) in other jurisdictions on a private placement basis in compliance with applicable securities laws and without requiring any prospectus or registration filing. All securities issued under the offering are subject to a four-month-and-one-day statutory hold period in Canada in accordance with applicable securities laws. The company may close additional tranches of the offering and will issue a further news release upon the closing of any such tranche.

The first tranche of the offering was subscribed for by members of the company's management and board of directors, including Romain Nouzareth (chief executive officer and chairman), Mathieu Nouzareth (director), Kyle Appleby (chief financial officer) and two independent directors. In addition, a Quebec operating partner of the company participated in the unit offering on an arm's-length basis.

"This is the most aligned capital raise I've been part of," said Romain Nouzareth, chief executive officer and chairman. "When your co-founder, your CFO, your board and your local operating partner all invest alongside you, it says more than any pitch deck. We're building something real, and we're backing it with our own capital."

Certain insiders of the company participated in the first tranche of the offering. Such participation constitutes a related-party transaction within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). In the first tranche, one arm's-length subscriber purchased 2.08 million units, with insiders of the company subscribing for 6,192,655 units and all 340 debenture units. The company is relying on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 set out in sections 5.5(a) and 5.7(1)(a), respectively, as the fair market value of the securities issued to insiders (and the consideration paid therefor) does not exceed 25 per cent of the company's market capitalization, calculated in accordance with MI 61-101.

The offering remains subject to the company's receipt of all necessary regulatory and other approvals, including the final acceptance of the TSX-V.

Debt settlement

The company also announces that it was indebted to a certain creditor in the amount of $25,000 (U.S.) ($34,105 (Canadian)) as of Feb. 28, 2026, pursuant to a consulting agreement. The indebtedness represented payments for services accrued under the consulting agreement and were not considered investor relations services (as defined in the policies of the TSX-V). The company entered into a debt settlement agreement with the creditor, pursuant to which the parties agreed that the indebtedness would be settled through the issuance of 534,980 units of the company at a deemed price of 6.375 cents per unit, being the same price and on the same terms as the units issued under the unit offering. The creditor is an arm's-length party to the company, and the issuance of the units in connection with the debt settlement did not result in the creation of a new insider or control person of the company (as such terms are defined in the TSX-V's policies). The securities issued in connection with the debt settlement are subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws.

Early warning disclosures

In connection with the offering, Mathieu Nouzareth, a director of the company, acquired 5,816,184 units. Immediately following the closing of the offering, he beneficially owns, directly or indirectly, 14,142,894 common shares, representing approximately 17.23 per cent of the issued and outstanding common shares of the company on a non-diluted basis. Assuming the conversion or exercise of all securities held by him that are convertible into or exercisable for common shares, including stock options and warrants, he would beneficially own, directly or indirectly, 20,846,929 common shares, representing approximately 25.40 per cent of the issued and outstanding common shares of the company on a fully diluted basis.

In connection with the offering, Romain Nouzareth, chief executive officer and chairman of the company, acquired 340 convertible debenture units. Immediately following the closing of the offering, he beneficially owns, directly or indirectly, 11,079,552 common shares, representing approximately 13.50 per cent of the issued and outstanding common shares of the company on a non-diluted basis. Assuming the conversion or exercise of all securities held by him that are convertible into or exercisable for common shares, including stock options, warrants and the debentures, he would beneficially own, directly or indirectly, 20,731,620 common shares, representing approximately 25.26 per cent of the issued and outstanding common shares of the company on a fully diluted basis.

The securities were acquired for investment purposes. Each of Mathieu Nouzareth and Romain Nouzareth may, depending on market conditions, increase or decrease his ownership from time to time. Early warning reports will be filed by each under the company's profile on SEDAR+ in accordance with applicable Canadian securities laws. Copies of the early warning reports may be obtained under the company's profile on SEDAR+ or by contacting the company.

About Sato Technologies Corp.

Sato, founded in 2017, is a publicly listed digital infrastructure company transitioning from cryptocurrency mining to artificial intelligence compute. The company currently operates a 20-megawatt data centre in Quebec powered by 100 per cent renewable hydroelectricity, with plans to develop AI factory capacity across multiple sites. The company is listed on the TSX Venture Exchange and the OTCQB.

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