MineHub to acquire Jules AI from Nyteco

Executive Summary

• MineHub Technologies Inc. has signed a definitive asset purchase agreement to acquire Jules AI from Nyteco Inc., expanding its digital platform into the recycled materials and scrap metals market.
• The transaction is valued at up to $20 million (U.S.), consisting of a $1.9 million upfront payment and an $18.1 million three-year earnout based on cumulative revenue targets.
• The acquisition integrates Jules AI’s AI-driven automation for scrap trading with MineHub’s existing bulk and refined metals solutions, targeting a $1-trillion global sector.

Key Details

• Transaction Structure: Asset purchase agreement to acquire Jules AI from Nyteco Inc. (Toronto-based incubator, arm's length to MineHub).
• Upfront Consideration: $1.9 million (U.S.), paid via:
  • Issuance of approximately $1.35 million (U.S.) in MineHub common shares.
  • Balance paid in cash.
• Earnout Consideration: $18.1 million (U.S.), payable via MineHub shares or cash at MineHub’s sole direction.
  • Triggered by cumulative three-year revenue target of $5 million (U.S.).
  • Represents a multiple of 3.6x on revenue.
  • Measured and payable at the first, second, and third anniversaries of closing.
• Share Pricing:
  • Closing shares issued at a deemed price of $0.74 per share (floor price).
  • Future earnout shares priced at the higher of the floor price ($0.74) or a 10-day VWAP prior to issuance.
• Resale Restrictions:
  • Initial shares: 37-month hold (10% released at 13 months, 15% at 25 months, balance at 37 months).
  • Earnout shares: Contractual restrictions up to 49 months from closing, with earliest release at 37 months.
  • Additional notice periods and daily volumetric sales limits apply to onward sales.
• Closing Conditions: Expected within 90 days, subject to TSX Venture Exchange approval and customary regulatory/closing conditions.
• Strategic Rationale:
  • Expands MineHub’s platform to include recycled materials and alloys, complementing existing bulk and refined metals offerings.
  • Provides access to the $1-trillion (U.S.) scrap sector; Jules AI processed nearly 2 million metric tonnes of scrap in 2024.
  • Integrates Jules AI’s AI-driven execution (automating document verification, data entry, and compliance) with MineHub’s system of record.
  • Targets growth in EV batteries, aerospace alloys, and green construction.
• Financial Performance of Target: Jules AI demonstrated strong revenue growth and is nearing break-even at current levels.
• Adviser: Haywood Securities Inc. acting as financial adviser, receiving a fee payable in cash and/or securities.
• Additional Corporate Action: Grant of 475,000 stock options to senior officers, directors, and consultants.
  • Exercise price: $0.75 per share.
  • Term: 5 years.
  • Vesting: As determined by the Board.
  • Hold period: 4 months and 1 day.

Notable Quotes

• Andrea Aranguren, CEO of MineHub: "Jules AI's advanced AI capabilities and their proven track record with top-tier scrap and recycled materials companies perfectly complement MineHub's strengths in bulk and refined metals. Together, we're not just expanding our platform; we're building the digital infrastructure needed to connect key stages of the metals value chain, from mine to recycling, enhancing transparency and resilience across global supply chains."
• Sean Davidson, Founder and CEO of Nyteco: "MineHub is the natural home for the next stage of commercialization. As we gear our offering to agentic AI execution of commodity trade workflows, we needed the right partner to spur its commercial growth. MineHub's robust evolution in our adjoining industry make it a perfect home to grow together."