Earnings release
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SATO Technologies Corp. Reports Second Quarter 2026 Results and Completes Settlement of Senior Secured Debt Toronto, Ontario--(Newsfile Corp. - August 26, 2026) - SATO Technologies Corp. (TSXV: SATO) (OTCQB: CCPUF) ("SATO" or the "Company") today announced 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 for the three and six months ended June 30, 2026 (the " MD&A ") for full details, which are available on SEDAR+ ( www.sedarplus.ca ) and at www.bysato.com . All amounts are in Canadian dollars unless otherwise stated. Q2 2026 Key Highlights Subsequent to quarter-end, on August 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 $2,020,000 in the third quarter of 2026. The Company announced a non-brokered private placement of up to $1,500,000, a portion of the proceeds of which is intended to fund 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 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 approximatively 50% 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% 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 2 of $(597,157), compared with $(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 December 31, 2025 Six Months Ended June 30, 2026
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Revenue of $2,487,521, down 58% 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% of its mining fleet, taking offline 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 hashrate near all-time highs at approximately 922 EH/s at June 30, 2026, compared with approximately 843 EH/s a year earlier. The average market price of BTC was approximately US$70,500 during the quarter, compared with approximately US$99,500 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 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 August 24, 2026, the Company and its wholly-owned subsidiary Canada Computational Unlimited Inc. (" CCU ") entered into a loan settlement agreement (the " Loan Settlement Agreement ") with Sygnum Bank AG (" Sygnum ") to settle CCU's outstanding loan with Sygnum (the " Loan "). 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 CHF150,000 (approximatively CAD$258,000), 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 $2,020,000 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 multi-phase plan to repurpose a portion of Center One, its 20 MW hydro- powered facility in Joliette, Québec, 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,
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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 5 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 15,000,000 units at $0.10 per unit for gross proceeds of up to $1,500,000 (the " Offering "). Each unit consists of one common share and one-half of one common share purchase warrant, each whole warrant exercisable at $0.20 per share for 24 months. The offering remains subject to the acceptance of the TSX Venture Exchange (" TSXV "). 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 $0.10 per unit (the " Debt Settlement "). The Debt Settlement remains subject to the Company's receipt of all necessary regulatory and other approvals, including the approval of the TSXV. Subsequent to 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. CEO Comment " This quarter closes a chapter," said Romain Nouzareth, Chairman & 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 hashrate. 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. " On behalf of the Board, Romain Nouzareth Chairman & CEO, SATO Technologies Corp. About SATO SATO, founded in 2017, is a publicly listed company providing efficient computing power. The Company currently operates one data center tailored to provide computing power for Bitcoin Mining, and is advancing the conversion of its Joliette, Québec facility to artificial intelligence and high-performance computing workloads. The Company is listed on (TSXV: SATO) and (OTCQB: CCPUF). To learn more about SATO, visit www.bysato.com . For additional information, please contact: Investor Relations: invest@bysato.com Phone: +1 (347) 280 3663 Non-IFRS and Supplementary Financial Measures This press release makes reference to certain non-GAAP/non-IFRS (" International Financial Reporting Standards ") measures including, but not limited to, Adjusted EBITDA and Computer Power
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Profits, and to working capital and digital assets (including restricted digital assets), which are supplementary financial measures. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other companies and should not be considered in isolation nor as a substitute for analysis of financial information reported under IFRS. Rather, they are provided as additional information to complement IFRS measures by providing a further understanding of operations from management's perspective. Management uses these measures to EBITDA as a key financial metric to evaluate SATO's operating performance as a complement to results provided in accordance with IFRS. Adjusted EBITDA represents net income excluding finance income, finance expense, income taxes, depreciation, and amortization, and adjusted for non-cash and non-recurring transactions. Management believes that the items excluded from Adjusted EBITDA are not connected to and do not represent the operating performance of SATO. Management believes that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by SATO's main business activities prior to taking into consideration how those activities are financed and taxed as well as expenses related to stock-based compensation, depreciation, amortization, restructuring costs, other expense (income), and foreign exchange (gain) loss. Accordingly, management believes that this measure may also be useful to investors in enhancing their understanding of SATO's operating performance. It is a key measure used by SATO's management and board of directors to understand and evaluate SATO's operating performance, to prepare annual budgets, and to help develop operating plans. Compute Power Profit represents gross profit (revenue earned from mining pool operators less cost of revenue), excluding (i) depreciation, (ii) revenue and site operating costs directly attributable to hosting revenue, and (iii) other revenue. This measure focuses on profitability from core compute power operations, giving investors clearer insight into operational efficiency and scalability before considering non-operating factors. Management and the board use Compute Power Profit to assess performance and cost efficiency of compute services, monitor trends and guide infrastructure and energy decisions, and support budgeting and forecasting. Previously called "Mining Profit," the name was changed to "Compute Power Profit" to reflect SATO's broader focus on compute power services beyond traditional mining. Refer to reconciliation to Adjusted EBITDA and Computer Power Profit under the " Non-IFRS Financial Measures" section of this release and in the MD&A, copies of which can be found under SATO Technologies Corp.'s profile on SEDAR+ at sedarplus.ca . Reconciliation of Net Loss to Adjusted EBITDA Q2 2026 ($) Q2 2025 ($) Net loss (922,517) (766,454) Add (deduct): Finance expense 153,650 185,844 Depreciation and amortization 368,555 547,164 EBITDA (400,312) (33,446) Share-based compensation - 100,604 Gain on debt modification (214,930) - Loss (gain) on use of digital assets 30,973 (353,530) Unrealized gain on revaluation of digital assets - (72,554) Unrealized foreign exchange loss (gain) (12,888) 250,122 Adjusted EBITDA (597,157) (108,804)
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Reconciliation of Gross Profit (Loss) to Compute Power Profit Q2 2026 ($) Q2 2025 ($) Gross profit (loss) (490,713) (110,379) Add (deduct): Other revenue (5,280) (5,280) Depreciation and amortization 368,555 547,164 Compute Power Profit (Loss) (127,438) 431,505 Digital Assets (including restricted digital assets) is a supplementary financial measure, which represents the total value of digital assets held by the Company, including those subject to contractual or regulatory restrictions. It comprises unrestricted digital assets available for operational use and restricted digital assets that are reserved for specific obligations or held under lock-up arrangements. Cautionary Statement Regarding Forward-Looking Information Certain statements in this news release are forward-looking statements or contain forward-looking information, which may include, but are not limited to, statements with respect to the future financial or operating performance of SATO and its projects, business strategy, corporate plans, objectives and goals, as well as the market conditions applicable to SATO. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements include, among others: the expected impact on the Company as a result of the settlement with Syngum and its accounting treatment; the completion of the announced private placement and the use of its proceeds; the Company's AI and HPC transition plan, including the potential conversion of Center One and the proposed development in Bhutan; the availability of financing and customer commitments; the working capital deficiency and going-concern considerations; the Bitcoin mining environment; and other future events. 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 TSXV may not approve the Offering or the Debt Settlement; the Offering and the settlement of the Loan may not position the Company as intended; the Company may not complete its planned AI related projects, including the potential project with the Gelephu Mindfulness City Authority in Bhutan; volatility in digital asset markets; 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 TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
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RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. 1 Compute Power Profit is a non-IFRS financial measure. Refer to the Non-IFRS Financial Measures section of this news release for more information on each non-IFRS financial measure. 2 Adjusted EBITDA is a non-IFRS financial measure. Refer to the Non-IFRS Financial Measures section of this news release for more information on each non-IFRS financial measure. 3 This is a supplementary financial measure. Refer to the Non-IFRS Financial Measures section of this news release for more information on each supplementary financial measure. To view the source version of this press release, please visit https://www.newsfilecorp.com/release/311686