Sparx Technology Inc. signed a non-binding letter of intent to acquire Railtown Capital Corp. (TSXV:RLT.P) in a reverse merger transaction for CAD 14 million on February 19, 2021. Prior to effecting the share exchange, Railtown will consolidate its Common Shares on a 2:1 basis. Shareholders of Sparx will be issued an aggregate of up to 32.5 million post Consolidation Common Shares. Upon completion of the transaction, the shareholders of Sparx will become shareholders of Railtown. In connection with the transaction, Sparx will complete a private placement financing of up to 7.5 million subscription receipts at a price of CAD 0.40 per Subscription Receipt for aggregate gross proceeds of up to CAD 3 million. On completion of the transaction, Sparx will be a wholly owned subsidiary of the Resulting Issuer. On closing of the transaction, the Resulting Issuer's name will be changed to "Sparx Technology Inc." or another name acceptable to Sparx. The resulting company after completion of the transaction will carry on the current business of Sparx and intends to be listed on the TSXV.

Upon completion of the transaction, the Board and senior management of the resulting company will be drawn largely from the current Sparx team. The initial three independent Board members will be Drew Craig, Brian Brady and Richard Hubbard. Closing of the transaction is subject to, among other things, completion of due diligence, the entry into a definitive agreement, customary conditions set forth in such agreement, approval of the shareholders of Sparx, acceptance for filing of the TSXV and completion of a private placement financing. Railtown will not be required to obtain shareholder approval of the transaction. Closing is expected to occur by May 31, 2021.