SATO Technologies Corp. Announces Upsize of Private Placement to $1.4 Million and Closes First Tranche Backed by Management and Insiders

Rhea-AI Summary

SATO Technologies (OTCQB: CCPUF) upsized a non‑brokered private placement to C$1.4 million and closed the first tranche for $867,381.82 on March 16, 2026. The Offering includes Units at C$0.06375 and convertible Debenture Units; proceeds will be used for working capital and general corporate purposes.

The Debentures bear 15% annual interest, mature March 16, 2029, and convert at C$0.085 (year 1) or C$0.10 thereafter; Warrants extend to March 16, 2029 or 2031 depending on security type.

Positive

• Upsized financing to C$1.4 million
• First tranche closed for $867,381.82
• Debentures carry 15% annual interest

Negative

• Insider subscriptions increased insider holdings to 17.23% non‑diluted
• Potential dilution from warrants and convertible debentures through 2029–2031
• Debentures are unsecured and subject to a springing lien

Toronto, Ontario--(Newsfile Corp. - March 16, 2026) - SATO Technologies Corp. (TSXV: SATO) (OTCQB: CCPUF) ("SATO" or the "Company") is pleased to announce that it has upsized its previously announced non-brokered private placement to aggregate gross proceeds of up to C$1,400,000, consisting of: (i) up to 16,470,587 units (the "Units") of the Company at a price of $0.06375 per Unit for proceeds of up to C$1,050,000 (the "Unit Offering"); and (ii) up to 350 convertible debenture units (the "Debenture Units" and together with the Units, the "Offered Securities") for proceeds of up to C$350,000 (the "Debenture Unit Offering", and together with the Unit Offering, the "Offering").

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 $0.06375 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 comprised of one common share (a "Common Share") and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder to acquire one additional Common Share at an exercise price of $0.085 per Common Share during the first year following the date of issuance, and $0.10 per Common Share thereafter, until March 16, 2031.

Each Debenture Unit issued in connection with the Debenture Unit Offering is comprised of a C$1,000 principal amount unsecured convertible debenture (a "Debenture") and detachable Warrants equal to the number of Common Shares issuable upon full conversion of the Debenture. The Debentures will bear 15% 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 ("TSXV"), and priced in accordance with applicable TSXV 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 $0.085 per Common Share during the first year following the date of issuance and $0.10 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 $0.10 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 ongoing operational needs, with Offering proceeds deployed to supplement such funding 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 Québec 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, CEO 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 ("MI 61-101"). In the first tranche, one arm's length subscriber purchased 2,080,000 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% 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 TSXV.

Debt Settlement

The Company also announces that it was indebted to a certain creditor in the amount of USD$25,000 (C$34,105) as of February 28, 2026 (the "Indebtedness"), pursuant to a consulting agreement (the "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 TSXV). 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 $0.06375 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 TSXV'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, Mathieu beneficially owns, directly or indirectly, 14,142,894 common shares, representing approximately 17.23% 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 Mathieu that are convertible into or exercisable for common shares, including stock options and warrants, Mathieu would beneficially own, directly or indirectly, 20,846,929 common shares, representing approximately 25.40% 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, Romain beneficially owns, directly or indirectly, 11,079,552 common shares, representing approximately 13.50% 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 Romain that are convertible into or exercisable for common shares, including stock options, warrants and the Debentures, Romain would beneficially own, directly or indirectly, 20,731,620 common shares, representing approximately 25.26% of the issued and outstanding common shares of the Company on a fully diluted basis.

The securities were acquired for investment purposes. Each of Messrs. Mathieu Nouzareth and Romain Nouzareth may, depending on market conditions, increase or decrease their ownership from time to time. Early warning reports will be filed by each under the Company's profile on SEDAR+ at www.sedarplus.ca 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.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the Securities in the United States. The Securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About SATO

SATO, founded in 2017, is a publicly listed digital infrastructure company transitioning from cryptocurrency mining to AI compute. The Company currently operates a 20 MW data center in Québec powered by 100% renewable hydroelectricity, with plans to develop AI factory capacity across multiple sites. The Company is listed on TSXV: SATO & OTCQB: CCPUF. To learn more about SATO, visit www.bysato.com.

For additional information, please contact:

SATO Technologies Corp.
Romain Nouzareth, CEO
Email: invest@bysato.com
Phone: +1 (347) 280 3663

Forward-Looking Statements Disclaimer

This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements in this news release include, without limitation, statements regarding: completion of the Offering (including its size, structure and timing), the issuance of Units and Convertible Debenture Units, the debt settlement in connection with the Consulting Agreement, the terms of the Debentures and Warrants, subscriber participation, the intended use of proceeds, and the receipt of all required approvals, including final approval of the TSXV.

Forward-looking statements reflect management's current expectations based on information available at the time of this news release and are subject to a variety of risks and uncertainties that may cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, but are not limited to: the Company may not complete the Offering on the terms described or at all; the TSX Venture Exchange may not approve the Offering; the conditions to closing may not be satisfied; the proceeds of the Offering may not be used as currently anticipated; volatility in digital asset markets (including fluctuations in the price of Bitcoin and other digital assets and the economics of cryptocurrency mining); general market conditions; and other factors outside the Company's control.

Although the Company believes that the assumptions underlying these forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and involve inherent uncertainties and risks. Undue reliance should not be placed on such statements. Actual results may differ materially from those currently anticipated.

The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/288667

FAQ

What did SATO (CCPUF) announce about its private placement on March 16, 2026?

SATO announced an upsized non‑brokered private placement to C$1.4 million and closed the first tranche for $867,381.82. According to the company, the Offering includes Units at C$0.06375 and convertible Debenture Units priced at $1,000 each.

What are the key terms of the convertible Debenture Units in SATO's offering (CCPUF)?

Each Debenture Unit bears 15% annual interest and matures March 16, 2029, with conversion at C$0.085 in year one. According to the company, interest is payable quarterly in cash or shares and warrants attach upon conversion.

How will SATO (CCPUF) use proceeds from the private placement?

Proceeds will be used for working capital and general corporate purposes, supplementing cryptocurrency mining revenues. According to the company, management retains discretion on allocation, timing, and prioritization of the funds.

Did SATO insiders participate in the March 2026 financing and how much do they now own (CCPUF)?

Yes; insiders subscribed in the first tranche, and Mathieu Nouzareth beneficially owns about 17.23% non‑diluted following closing. According to the company, his fully diluted stake would be about 25.40% assuming conversion and exercise.

What shareholder dilution should investors expect from SATO's (CCPUF) Units and Warrants?

Investors should expect dilution from detachable warrants and convertible debentures exercisable through 2029–2031 at C$0.085–0.10 conversion/exercise prices. According to the company, warrants and debentures create potential share issuance if holders convert or exercise.

Was any debt settled as part of SATO's March 2026 announcements (CCPUF)?

Yes; the company settled USD$25,000 (C$34,105) of consulting indebtedness by issuing 534,980 Units at C$0.06375 per Unit. According to the company, the creditor was arm's length and no new insider or control person was created.