Mr. Romain Nouzareth reports

SATO TECHNOLOGIES CORP. REPORTS SECOND QUARTER 2026 RESULTS AND COMPLETES SETTLEMENT OF SENIOR SECURED DEBT

Sato Technologies Corp. has released its unaudited financial results for the three and six months ended June 30, 2026.

Readers are directed to the company's unaudited condensed interim consolidated financial statements and management's discussion and analysis (MD&A) for the three and six months ended June 30, 2026, for full details, which are available on SEDAR+ and the company's website. All amounts are in Canadian dollars unless otherwise stated.

Q2 (second quarter) 2026 key highlights:

• Subsequent to the quarter-end, on Aug. 24, 2026, the company completed a loan settlement agreement with Sygnum Bank AG, eliminating all of the company's senior secured indebtedness and the associated future debt service requirements. The company expects to recognize a gain on settlement of approximately $2.02-million in the third quarter of 2026.
• The company announced a non-brokered private placement of up to $1.5-million, a portion of the proceeds of which is intended to finance the cash payment under the settlement.
• The company entered into a non-binding letter of intent with the Gelephu Mindfulness City Authority in Bhutan for a phased, renewable-energy-powered AI (artificial intelligence) data centre campus intended to serve demand for AI compute capacity in India and the broader region.
• The company continued discussions with several parties regarding the potential use of Center One for AI and HPC data centre operations.
• Up to approximately 50 per cent of the mining fleet remained down-clocked in response to prevailing bitcoin prices, network difficulty, electricity costs and equipment efficiency.

Second quarter 2026 financial highlights:

• Revenue of $1,135,976, down 62 per cent from $3,019,539 in Q2 2025;
• 11 bitcoin (BTC) mined, compared with 22 BTC in Q2 2025;
• Gross loss of $490,713, compared with a gross loss of $110,379 in Q2 2025;
• Net loss of $922,517, compared with a net loss of $766,454 in Q2 2025;
• Compute power profit (loss) (1) of $127,438, compared with $431,505 in Q2 2025;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (2) of negative $597,157, compared with negative $108,804 in Q2 2025;
• Cash of $275,315 and a working capital deficiency of $2,747,398 at June 30, 2026;
• Digital assets (including restricted digital assets) (3) of $608,633 at June 30, 2026, compared with $829,827 at Dec. 31, 2025.

Six months ended June 30, 2026:

• Revenue of $2,487,521, down 58 per cent from $5,979,413;
• 24 BTC mined, compared with 44 BTC;
• Gross loss of $1,056,159, compared with gross profit of $188,018;
• Net loss of $2,189,828, compared with a net loss of $1,651,896.

Operations and liquidity

Bitcoin production declined to 11 BTC in the quarter from 22 BTC in Q2 2025. The principal driver was the company's decision to down-clock approximately up to 50 per cent of its mining fleet, taking off-line equipment that was not expected to operate profitably at prevailing bitcoin prices and electricity costs. Network conditions were also less favourable, with average bitcoin network hash rate near all-time highs at approximately 922 EH/s (exahashes per second) at June 30, 2026, compared with approximately 843 EH/s a year earlier. The average market price of BTC was approximately $70,500 (U.S.) during the quarter, compared with approximately $99,500 (U.S.) in the first half of 2025.

Cost of operations decreased to $1,626,689 (Q2 2025: $3,129,918) and general and administrative expenses decreased to $460,236 (Q2 2025: $542,147). At June 30, 2026, the company had cash of $275,315 and a working capital deficiency of $2,747,398. The completion of the settlement subsequent to the quarter-end removes the company's senior secured borrowings from current liabilities.

The company's financial statements continue to disclose a material uncertainty that may cast significant doubt on its ability to continue as a going concern. The company's AI and HPC strategy will require additional financing, customer commitments and infrastructure investment.

Settlement of senior secured debt

On Aug. 24, 2026, the company and its wholly owned subsidiary, Canada Computational Unlimited Inc. (CCU), entered into a loan settlement agreement with Sygnum Bank AG to settle CCU's outstanding loan with Sygnum. Pursuant to the loan settlement agreement, Sygnum retained all bitcoin held in the relevant accounts held with Sygnum, being approximately 6.69 BTC, and CCU made a cash payment of 150,000 Swiss francs (approximately $258,000 (Canadian)), in full satisfaction of the loan, and full release of all of the obligations of CCU and the company in connection with the loan. The settlement of the loan eliminates all the company's senior secured indebtedness, leaving the company free of secured debt as it advances the AI conversion of its Joliette facility.

The settlement also releases the collateral and account control arrangements that had applied to the company's mining proceeds. The company expects to recognize a gain on settlement of approximately $2.02-million in the third quarter of 2026; the final amount will depend on the carrying amount and fair value of the bitcoin transferred, the applicable Canadian dollar/Swiss franc exchange rate, accrued interest and settlement costs at the settlement date.

Advancing the AI transition

Sato continues to advance a multiphase plan to repurpose a portion of Center One, its 20-megawatt hydro-powered facility in Joliette, Que., into high-density AI compute capacity, and is engaged in discussions with several parties regarding commercial hosting relationships, strategic partnerships, joint ventures and other structures through which its existing power capacity and infrastructure could be deployed for AI and HPC workloads. These discussions are at various stages and no definitive agreement has been entered into.

On July 6, 2026, the company announced a non-binding letter of intent with the Gelephu Mindfulness City Authority, establishing a framework for the potential development of a renewable-energy-powered, phased AI data centre campus in Bhutan intended to serve demand for AI compute capacity in India and the broader region. The letter of intent contemplates an initial development phase of five megawatts (MW) and the reservation of up to 100 MW of firm power, with a potential expansion pathway to 500 MW. The project remains at an early stage and is subject to due diligence, the negotiation and execution of definitive agreements, regulatory approvals, financing, and customer commitments.

The company continues to operate as a bitcoin miner during this period and to modulate its computing load in response to mining economics.

Other subsequent events

The company announced a non-brokered private placement of up to 15 million units at 10 cents per unit for gross proceeds of up to $1.5-million. Each unit consists of one common share and one-half of one common share purchase warrant, each whole warrant exercisable at 20 cents per share for 24 months. The offering remains subject to the acceptance of the TSX Venture Exchange.

The company also entered into an agreement to settle $25,000 of consulting fees through the issuance of 250,000 units at a deemed price of 10 cents per unit. The debt settlement remains subject to the company's receipt of all necessary regulatory and other approvals, including the approval of the TSX-V. Subsequent to the quarter-end, the company also completed the repricing of certain outstanding stock options approved by shareholders at the annual general and special meeting held on June 22, 2026.

Chief executive officer comment

"This quarter closes a chapter," said Romain Nouzareth, chairman and CEO. "We have eliminated our senior secured debt, recovered control of our own mining proceeds and removed the constraint that has shaped every decision we have made for the past year. The mining P&L reflects a deliberate choice: We switched off machines that were not earning their electricity rather than run them for the sake of hash rate. What matters now is what we do with a 20 MW hydro-powered site, a clean balance sheet and a letter of intent in Bhutan. Our priority is securing the customer commitments and the capital to deliver the AI transition."

About Sato Technologies Corp.

Sato, founded in 2017, is a publicly listed company providing efficient computing power. The company currently operates one data centre tailored to provide computing power for bitcoin mining, and is advancing the conversion of its Joliette, Que., facility to artificial intelligence and high performance computing workloads. The company is listed on the TSX-V and OTCQB.

Refer to the reconciliation to adjusted EBITDA and computer power profit section of this news release and in the MD&A, copies of which can be found under Sato's profile on SEDAR+.

(1) Compute power profit is a non-IFRS (international financial reporting standards) financial measure.

(2) Adjusted EBITDA is a non-IFRS financial measure.

(3) This is a supplementary financial measure.

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