Rail Vision (RVSN) said Tuesday it has signed a non-binding term sheet to acquire a 51% stake in Quantum Transportation, a company specializing in error correction technologies.

Under the proposed deal, Rail Vision said it will issue shares equal to about 4.99% of its share capital to select Quantum Transportation shareholders in exchange for their full holdings.

Rail Vision will additionally provide up to $700,000 in a convertible loan at an 8% annual interest rate to Quantum Transportation to support ongoing operations and development, the company said.

The transaction is expected to close within 60 days, subject to satisfaction of all conditions and regulatory approvals.

Rail Vision said the acquisition will combine Quantum Transportation's patented quantum error correction decoder with its vision and safety technologies for better anomaly detection, predictive maintenance and autonomous rail operations.

Shares of Rail Vision were up 18% in recent Tuesday premarket activity.