Railtown AI Technologies Executes Amalgamation Agreement with AI Partnerships Corp. and Announces MOU with DIGITAL

Rhea-AI Summary

Railtown AI Technologies (OTCQB: RLAIF) entered an amalgamation agreement to acquire AI Partnerships Corp. via a three‑cornered amalgamation, making AIP a wholly owned subsidiary.

Consideration includes up to 50,000,000 Railtown shares (40M issued at $0.50 deemed price, representing 17.8% post‑transaction) and 10M performance shares in escrow tied to recurring revenue milestones. Escrow release depends on $1M and $2M annual recurring revenue targets within 36 months. AIP shareholders representing ~51.24% agreed to voting support. Railtown also highlighted an MOU between AIP and DIGITAL for referrals, joint initiatives, and ecosystem engagement.

Positive

• 40,000,000 shares issued at $0.50 deemed price (17.8% post‑transaction)
• 10,000,000 performance shares escrowed tied to revenue milestones
• Escrow release linked to $1M and $2M ARR milestones within 36 months
• AIP shareholders holding ~51.24% entered voting support agreements
• Strategic MOU with DIGITAL for referrals and joint initiatives

Negative

• Up to 50,000,000 new shares issued, diluting existing holders
• Escrow release contingent on achieving ARR milestones within 36 months
• Indemnity clause allows cancellation of shares for indemnification claims

Vancouver, British Columbia--(Newsfile Corp. - October 8, 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, further to its previously announced memorandum of understanding with AI Partnerships Corp. ("AIP"), it has entered into an amalgamation agreement with AIP (the "Amalgamation Agreement"), pursuant to which Railtown will acquire all of the issued and outstanding shares of AIP in exchange for common shares of Railtown by way of a three-cornered amalgamation (the "Transaction") and AIP will become a wholly-owned subsidiary of Railtown. This milestone marks a major step in Railtown's vision to create a "first of its kind" artificial intelligence (AI) affiliate marketplace, leveraging its core technologies and agentic frameworks to connect Canada's AI ecosystem to secure, sovereign computer infrastructure.

As explained in more detail below, highlights of the transaction are:

• 40 million shares issued at a deemed price of $0.50 per share (representing 17.8% of the fully diluted post-transaction shares outstanding); such shares restricted to staged release over 18 months or 36 months (in the case of AIP's founders).
• an additional 10 million performance shares at a deemed price of $0.50 per share (representing 4.5% of the fully diluted post-transaction shares outstanding) issued into escrow to be released upon recurring revenue milestones as delineated below.

Strengthening the Ecosystem through DIGITAL Partnership

Following completion of the Transaction, Railtown is also pleased to announce that it will have the benefit of a memorandum of understanding entered into by AIP and DIGITAL (the "DIGITAL MOU"). DIGITAL connects technology builders and buyers to accelerate the adoption and commercialization of Canadian solutions. Key aspects of this partnership include:

• Bi-directional Referrals: Connecting DIGITAL members with AIP Affiliates and vice versa to enhance collaboration.

• Joint Initiatives: Co-hosting events, webinars, and ideation sessions to drive AI thought leadership.

• Ecosystem Engagement: Inviting members, clients, and personnel from both organizations to participate in working groups, roundtables, and knowledge-sharing events.

"I expect that partnering with DIGITAL will empower Railtown and AIP affiliates to tap into a world-class network of innovators and ecosystem leaders," said Tom Corr, CEO of AIP. "By integrating marketplace connections, compute infrastructure, and ecosystem engagement, we're fuelling collaboration and growth across Canada's AI sector."

"Access to compute and customers are among the top barriers for Canadian AI innovators," said Serena Nguyen, Chief Development Officer of DIGITAL, one of Canada's Global Innovation Clusters. "The collaboration between AIP and Railtown unlocks an exciting combination of networks and AI Infrastructure. This is how we unlock Canada's AI commercialization potential and lead on the global stage."

DIGITAL is a national non-profit that grows Canadian companies by accelerating the development, adoption and commercialization of Canadian digital technologies. Through a unique combination of co-investment, cross-industry collaboration, IP creation and digital talent development, DIGITAL has built one of the strongest digital innovation ecosystems in Canada.

"First of Its Kind" AI Affiliate Marketplace

Railtown's acquisition of AIP, combined with AIP's strategic partnership with DIGITAL, underscores Railtown's vision to create a "First of its Kind" AI affiliate marketplace. This platform is expected to leverage AIP's existing partnership network by connecting AIP Affiliates to Railtown's agentic frameworks, sovereign compute resources, investment opportunities, and ecosystem support. By looking to position itself at the heart of Canada's AI innovation ecosystem, Railtown believes it is accelerating adoption, commercialization, and growth for Canadian AI companies.

"I believe the acquisition of AIP will amplify Railtown's ability to connect Canadian AI innovators with secure, sovereign compute infrastructure, driving scalable growth," said Cory Brandolini, CEO of Railtown.

"In my view, the combination of Railtown with AIP represents an opportunity for AIP to leverage the Railtown application development and agentic product offerings by AIP's Affiliate network and their end-users, while at the same time growing the AIP Affiliate network and the AI product marketplace," stated Dr. Tom Corr, CEO of AIP.

The Transaction

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, 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.

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.

About DIGITAL
DIGITAL brings together industry leaders, SMEs, and post-secondary institutions to collaborate on large-scale projects that drive innovation and the development of technology solutions in sectors critical to Canada, such as mining and energy, housing, workforce development, and health. Since 2018, they have delivered billions in projected revenue for Canadian companies, retained sovereign IP, launched hundreds of commercial products, and helped tens of thousands of Canadians gain the skills needed for the digital economy.

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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, the benefits of the Transaction to both Railtown and AIP, the development of a "First of Its Kind" AI Affiliate marketplace, benefits that may be received by Railtown as a result of the Digital MOU and terms of the partnerships with DIGITAL 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/269614

FAQ

What does Railtown's amalgamation with AI Partnerships Corp mean for RLAIF shareholders?

Railtown will acquire AIP and issue up to 50,000,000 shares, including 40M issued at a $0.50 deemed price, which dilutes existing shareholders while adding AIP assets and partnerships.

How are the AIP consideration shares structured in the RLAIF transaction dated October 8, 2025?

Consideration includes 40M shares issued at $0.50 deemed price, 10M performance shares in escrow, and staged transfer restrictions with quarterly releases and 18–36 month holds.

What revenue milestones must RLAIF meet to release escrowed performance shares?

Escrow release requires Railtown recording $1M ARR for first tranche and $2M ARR for second tranche from AIP Affiliates within 36 months of closing.

How much shareholder support did AIP provide for the RLAIF amalgamation?

Shareholders holding approximately 51.24% of AIP entered into voting support agreements for the Transaction.

What are the key risks to investors from the RLAIF–AIP transaction announced October 8, 2025?

Key risks include share dilution from up to 50M new shares, escrowed shares tied to milestones, and potential cancellation via indemnity claims.

What strategic benefit does the DIGITAL MOU bring to Railtown (RLAIF)?

The MOU with DIGITAL provides bi‑directional referrals, joint events, and ecosystem engagement to help commercialize Canadian AI solutions and connect affiliates to customers and compute.