Vancouver, British Columbia--(Newsfile Corp. - November 6, 2025) - Railtown AI Technologies Inc. (CSE: RAIL) (OTCQB: RLAIF) ("Railtown" or the "Company"), a leader in Canadian-built artificial intelligence (AI) solutions, is pleased to announce that it intends to complete its previously announced proposed amalgamation transaction with AI Partnerships Corp. ("AIP") on November 14, 2025 (the "Transaction").
The Transaction will close pursuant to an amalgamation agreement (as amended) entered into among the Company, a wholly owned subsidiary of the Company ("SubCo") and AIP, as previously announced on October 8, 2025 (the "Amalgamation Agreement").
Under the terms of the Transaction, Railtown will acquire all of the outstanding shares of AIP from the holders thereof in exchange for up to 50,000,000 common shares of Railtown representing an exchange ratio of approximately 2.52 Railtown shares for each AIP share acquired (subject to adjustment in accordance with the Amalgamation Agreement) (collectively, the "Consideration Shares"). The Consideration Shares will be subject to escrow and contractual restrictions on transfer as follows:
10,000,000 of the Consideration Shares (the "Escrow Shares"), on a pro rata basis to all AIP shareholders, will be placed in escrow upon closing of the Transaction (the "Effective Date") and subject to release or cancellation on the following basis:
1,000,000 Escrow Shares (the "Indemnity Shares"), on a pro rata basis to all AIP shareholders, will be subject to cancellation for no consideration in the event Railtown makes an indemnification claim prior to the date that is 12 months from the Effective Date, with one Consideration Share being cancelled for every $0.50 of Railtown's claim; and
50% of the Escrow Shares (including any Indemnity Shares that were not cancelled) will be eligible for release from escrow upon Railtown recording annual recurring revenue from AIP Affiliates equal to or greater than $1 million from the Effective Date to the date that is 36 months from the Effective Date (the "First Milestone") and the remaining 50% of the Escrow Shares will be eligible for release from escrow upon Railtown recording annual recurring revenue from AIP Affiliates equal to or greater than $2,000,000 (the "Second Milestone") from the Effective Date to the date that is 36 months from the Effective Date. If the First Milestone and/or Second Milestone are not met by the date that is 36 months from the Effective Date, the Escrow Shares that were to be released upon satisfaction of such milestone will be cancelled for no consideration. The Escrow Shares to be released from escrow as a result of satisfaction of the First Milestone or Second Milestone will be released upon satisfaction of such milestone but no earlier than 18 months from the Effective Date and no later than 36 months from the Effective Date, provided that certain Consideration Shares (the "Key Shareholder Shares") received by key AIP shareholders (the "Key Shareholders") will instead be released from escrow on the date that is 36 months from the Effective Date;
all other Key Shareholder Shares received by the Key Shareholders will be placed into escrow on the Effective Date and released in equal quarterly instalments during the 36 months following the Effective Date, with 10% of 4/5th of the total number of Key Shareholder Shares held by the Key Shareholders being released on the Effective Date; and
all other Consideration Shares will be subject to a contractual restriction on transfer pursuant to the Amalgamation Agreement with 10% of such shares being released from any restriction on transfer as of the Effective Date and the remainder being released in six equal instalments of 15% on a quarterly basis until the date that is 18 months from the Effective Date.
The Amalgamation Agreement was negotiated at arm's length between representatives of Railtown and AIP. In connection with the execution of the Amalgamation Agreement and in support of the Transaction, shareholders of AIP holding approximately 51.24% of the outstanding shares of AIP have entered into voting support agreements with Railtown and AIP in support of the Transaction.
Completion of the Transaction is subject to a number of conditions, including, but not limited to, the approval of the Transaction from the Canadian Securities Exchange and receipt of required shareholder approval by AIP. There can be no assurance that the Transaction will be completed as proposed or at all. The completion of the Transaction is also subject to other customary conditions for a transaction of this nature.
For additional information on the Transaction and the Amalgamation Agreement, please refer to the News Release dated October 8, 2025 filed under the Company's issuer profile on SEDAR+ at www.sedarplus.ca and posted under the heading "News Releases" on the Company's website at www.railtownaitechnologies.com.
About Railtown
Railtown AI Technologies Inc. is dedicated to transforming the way agentic software is built, deployed, and scaled. Through its intelligent AI frameworks and observability solutions, Railtown believes it empowers companies and developers to quickly build and deploy agentic solutions while simultaneously providing observability into agent health, reliability and performance.
About AI Partnerships Corporation
AI Partnerships Corp. was formed in 2020 with the goal of establishing a world-wide affiliate network of AI-as-a-Service based companies that are focused on providing AI-based solutions in a select number of sectors. These sectors include healthcare, manufacturing, supply chain and fintech, as well as sector agnostic AI development tools and applications. AIP has established a network of over 180 SaaS-based AI affiliates (each an "AIP Affiliate"), primarily headquartered in Canada and the US, who have offices in 13 countries world-wide.
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ON BEHALF OF THE BOARD
"Cory Brandolini"
Cory Brandolini, Chief Executive Officer
INVESTOR CONTACT
Rebecca Kerswell
Investor Relations Contact
Email: investors@railtown.ai
Phone: 1-604-417-4440
This news release contains forward-looking statements relating to the future operations of the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will," "may", "should", "intends", "anticipates", "expects" and similar expressions. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the future plans and objectives of the Company, the ability to satisfy or waive on satisfactory terms any conditions to the completion of the Transaction, and the benefits of the Transaction to both Railtown and AIP are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are risks detailed from time to time in the filings made by the Company with securities regulators.
Readers are cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. As a result, the Company cannot guarantee that any forward-looking statement will materialize, and readers should not place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company will only update or revise publicly any of the included forward- looking statements as expressly required by Canadian securities law.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/273589
