Sato Technologies arranges financing for $1.3-million

Executive Summary

• Sato Technologies Corp. has arranged a non-brokered private placement for aggregate gross proceeds of up to C$1.3 million, consisting of equity units and convertible debenture units.
• The offering includes the issuance of up to 14,901,960 equity units at 6.375 cents per unit and up to 350 convertible debenture units at $1,000 principal each.
• The company is also settling a $25,000 USD consulting debt by issuing 534,980 units on the same terms as the private placement, subject to TSX-V approval.

Key Details

• Total Gross Proceeds: Up to C$1.3 million.
• Equity Component:
  • Up to 14,901,960 units.
  • Price: 6.375 cents per unit.
  • Gross Proceeds: Up to $950,000.
  • Composition: Each unit consists of one common share and one common share purchase warrant.
  • Warrant Terms: Exercise price of 8.5 cents for the first year, increasing to 10 cents thereafter; expiry five years from issuance.
• Debt Component:
  • Up to 350 convertible debenture units.
  • Principal Amount: $1,000 per unit.
  • Gross Proceeds: Up to $350,000.
  • Interest: 15% annual interest, payable quarterly in cash or common shares (at holder's option, subject to TSX-V approval for share settlement).
  • Maturity: Three years from date of issue.
  • Conversion: Convertible at holder's option into common shares at 8.5 cents (first year) or 10 cents (thereafter) per share.
  • Security: Unsecured, subject to a springing first-priority lien upon repayment/release of the company's loan facility with Sygnum Bank AG.
  • Detachable Warrants: Each debenture unit includes detachable warrants to purchase one common share at 10 cents per share for three years.
• Use of Proceeds: Working capital and general corporate purposes, supplementing revenues from cryptocurrency mining operations and existing cash flows.
• Regulatory Conditions: Subject to TSX-V approval and other necessary regulatory approvals. Closing intended as soon as possible post-approval.
• Hold Period: Four-month hold period in Canada for all securities issued.
• Debt Settlement Transaction:
  • Amount: $25,000 USD ($34,105 CAD) owed to a creditor under a consulting agreement (accrued as of Feb. 28, 2026).
  • Settlement Method: Issuance of 534,980 units on the same terms as the private placement units.
  • Status: Subject to TSX-V approval.
  • Hold Period: Four months and one day from issuance.
  • Insider Status: Creditor is an arm's-length party; issuance will not create a new insider or control person.
• Insider Participation: Insiders may participate; if so, it constitutes a related party transaction. The company intends to rely on exemptions from formal valuation and minority shareholder approval requirements under MI 61-101, assuming insider participation does not exceed 25% of market capitalization.

Notable Quotes

• None provided in the text.