Mr. Romain Nouzareth reports

SATO TECHNOLOGIES SIGNS LETTER OF INTENT WITH BHUTAN'S GELEPHU MINDFULNESS CITY AUTHORITY TO DEVELOP A HYDRO-POWERED SOVEREIGN AI COMPUTE CAMPUS

Sato Technologies Corp. has signed a letter of intent, with an effective date of June 20, 2026, with the Gelephu Mindfulness City Authority, the governing and regulatory authority of the Gelephu Mindfulness City Special Administrative Region in the Kingdom of Bhutan, to develop a renewable-energy-powered, phased artificial intelligence data centre campus. The LOI establishes a framework for the parties to negotiate definitive agreements covering power, site development, project structure, early works, financing and commercial offtake.

The signing of the LOI marks Sato's strategic expansion into sovereign AI compute alongside its existing operations in Quebec. The project is anticipated to create a large-scale AI infrastructure anchored in reliable domestic renewable power and developed in partnership with the GMCA, pairing Bhutan's hydroelectric resources with demand for advanced AI infrastructure originating in South Asian and Indian markets.

Pursuant to the LOI, GMC will reserve 100 megawatts of firm power for the project, subject to an initial development phase of five megawatts, with a potential expansion pathway to 500 megawatts. Additional commercial terms customary for transactions such as the proposed transaction will be finalized in binding definitive agreements within 12 months following the signing of the LOI.

Bhutan is amongst the world's few carbon-negative countries and generates all its electricity through renewable sources, primarily from hydro power. It is also, according to IMF projections, one of the fastest-growing economies in the world.

At the same time, India is one of the world's fastest-growing AI markets, yet domestic data centre expansion is increasingly constrained by power availability and multiyear grid timelines.

The project is expected to be developed within GMC, the special administrative region initiated and championed by King Jigme Khesar Namgyel Wangchuck, the Druk Gyalpo. GMC reflects his long-term vision for Bhutan: to create a vibrant economic hub by providing a conducive business environment and compelling incentives, while fostering a mindfulness city encompassing conscious and sustainable businesses, inspired by Buddhist spiritual heritage and distinguished by the uniqueness of the Bhutanese identity. Sato is honoured to contribute to the realization of this vision.

Sato brings years of experience operating dense, hydro-powered digital infrastructure. Just as Sato's facility in Quebec demonstrated the value of clean energy compute, Bhutan's hydro resources could offer an abundant, stable, well-priced and low-carbon foundation for next-generation AI workloads.

Completion of the proposed transaction is subject to a number of conditions, including, but not limited to, completion of any required financing, approval by Sato's board of directors, satisfactory due diligence by both parties and execution of the definitive agreements. There can be no assurance that the proposed transaction will be completed as proposed or at all. Even if the definitive agreements are signed, the proposed transaction may not be completed. The company will notify shareholders and provide the key terms of the definitive agreements through a news release if the definitive agreements are signed or if the LOI is terminated.

Investors are cautioned that, except as disclosed in Sato's filings on SEDAR+, information regarding the proposed transaction may not be complete and should not be relied upon.

Statements

"This project is the product of a deliberate effort to find the next jurisdiction where clean, sovereign power and serious AI ambition meet," said Mathieu Nouzareth, co-founder and director of Sato, who originated and leads the project. "Bhutan offers a rare combination of hydroelectric resources and forward-looking governance. We are honoured to help advance His Majesty The King's vision for Bhutan."

Gelephu Mindfulness City was conceived under the king's vision of an economy built on Bhutan's values and its abundant clean energy," said Pang Yee Ean, co-chief executive officer of Gelephu Mindfulness City. "Sustainable, high-value digital infrastructure of this kind is exactly what GMC was created to attract. We welcome Sato to our Green Technology Valley and look forward to a project that reflects our commitment to environmental stewardship, advanced technology and long-term prosperity for the region."

"Bhutan has always measured progress by the well-being of its people and the health of its land," said Kalu Rinpoche, lineage holder of the Shangpa Kagyu tradition and a founding force behind the project. "If the tools of this new age are guided by wisdom and compassion, they can serve humanity rather than diminish it. It is my hope that this project takes root in that spirit, bringing opportunity to Bhutan and to the region while remaining true to the values of this land."

Sato was advised on its Bhutanese engagement by Anders Forsberg, who has supported the partnership since its early stages.

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. The company is listed on the TSX Venture Exchange under the symbol SATO and on the OTCQB under the symbol CCPU.F.

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