UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: Ended May 31, 2022February 28, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Periodtransition period from ___________________________________ to ___________________________________
Commission file number: number 000-55517
PUREBASE CORPORATION
(Exact name of registrant as specified in its charter)
| Nevada | 27-2060863 | |
(State or other Jurisdiction | (I.R.S. Employer | |
| of Incorporation or Organization) |
Identification No.) |
8631 State Highway, 124 Ione, California | 95640 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(209) 274-9143
(Registrant’s telephone number, including area code)
N/A
(Former address)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.0001
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit)submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smallersmall reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” andor an “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)7(a)(2)(B) of the ExchangeSecurities Act: ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 13, 2022,April 12, 2023, there were shares of the registrant’s common stock outstanding.
PUREBASE CORPORATION AND SUBSIDIARIES
FOR THE QUARTERLY PERIOD ENDED MAY 31, 2022FEBRUARY 28, 2023
| 2 |
PUREBASE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| May 31, | November 30, | February 28, | November 30, | |||||||||||||
| 2022 | 2021 | 2023 | 2022 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 106,529 | $ | 132,309 | $ | 21,423 | $ | 19,055 | ||||||||
| Accounts receivable, net of allowances for uncollectables of $- and $18,277, respectively | 37,696 | 2,000 | ||||||||||||||
| Accounts receivable, net of allowances for uncollectables of zero | 53,880 | - | ||||||||||||||
| Prepaid expenses and other assets | 1,148 | 4,594 | 2,957 | 4,731 | ||||||||||||
| Total Current Assets | 145,373 | 138,903 | 78,260 | 23,786 | ||||||||||||
| Property and equipment, net | 620,000 | 620,000 | 620,000 | 620,000 | ||||||||||||
| Right of use asset | 7,109 | 15,639 | 69,649 | 79,599 | ||||||||||||
| Total Assets | $ | 772,482 | $ | 774,542 | $ | 767,909 | $ | 723,385 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||||
| Current Liabilities: | ||||||||||||||||
| Accounts payable and accrued expenses | $ | 106,563 | $ | 156,616 | $ | 236,006 | $ | 115,478 | ||||||||
| Settlement liability | 400,000 | 400,000 | 400,000 | 400,000 | ||||||||||||
| Lease liability | 7,407 | 16,095 | ||||||||||||||
| Lease liability, current | 39,372 | 38,882 | ||||||||||||||
| Note payable to officer | 48,716 | 58,716 | 18,716 | 28,716 | ||||||||||||
| Due to affiliated entities | 258,848 | 729,059 | ||||||||||||||
| Convertible notes payable - related party, net of discount of $- and $5,329, respectively | - | 994,671 | ||||||||||||||
| Convertible notes payable, related party | 42,000 | 36,000 | ||||||||||||||
| Notes payable, related party | 25,000 | 25,000 | - | 25,000 | ||||||||||||
| Notes payable | ||||||||||||||||
| Total Current Liabilities | 846,534 | 2,380,157 | 736,094 | 644,076 | ||||||||||||
| Convertible notes payable - related party, net of current portion, and net of discount of $- | - | 579,769 | ||||||||||||||
| Lease liability, net of current portion | 30,852 | 40,880 | ||||||||||||||
| Convertible notes payable; related party, net of current portion | 919,209 | 610,889 | ||||||||||||||
| Total Liabilities | 846,534 | 2,959,926 | 1,686,155 | 1,295,845 | ||||||||||||
| Commitments and Contingencies (Note 8) | - | - | ||||||||||||||
| Commitments and Contingencies (Note 9) | - | - | ||||||||||||||
| Stockholders’ Deficit: | ||||||||||||||||
| Preferred stock, $ par value; shares authorized; and shares issued and outstanding, respectively | - | - | ||||||||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding, at May 31, 2022 and November 30, 2021, respectively | 168,719 | 144,977 | ||||||||||||||
| Preferred stock, $ par value; shares authorized; shares issued and outstanding, at February 28, 2023 and November 30, 2022 | - | - | ||||||||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding, at February 28, 2023 and November 30, 2022, respectively | 160,050 | 160,350 | ||||||||||||||
| Additional paid in capital | 39,534,375 | 18,730,863 | 58,396,152 | 52,910,839 | ||||||||||||
| Accumulated deficit | (39,777,146 | ) | (21,061,224 | ) | (59,474,448 | ) | (53,643,649 | ) | ||||||||
| Total Stockholders’ Deficit | (74,052 | ) | (2,185,384 | ) | (918,246 | ) | (572,460 | ) | ||||||||
| Total Liabilities and Stockholders’ Deficit | $ | 772,482 | $ | 774,542 | $ | 767,909 | $ | 723,385 | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
PUREBASE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| May 31, 2022 | May 31, 2021 | May 31, 2022 | May 31, 2021 | February 28, 2023 | February 28, 2022 | |||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | For the Three Months Ended | ||||||||||||||||||||||
| May 31, 2022 | May 31, 2021 | May 31, 2022 | May 31, 2021 | February 28, 2023 | February 28, 2022 | |||||||||||||||||||
| Revenue, net | $ | 228,476 | $ | 30,000 | $ | 228,476 | $ | 30,000 | $ | 52,256 | $ | - | ||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Selling, general and administrative | 7,622,810 | 412,861 | 18,823,211 | 633,787 | 5,886,870 | 11,200,401 | ||||||||||||||||||
| Product fulfillment | 88,030 | 15,594 | 91,282 | 17,708 | 22,463 | 3,252 | ||||||||||||||||||
| Total Operating Expenses | 7,710,840 | 428,455 | 18,914,493 | 651,495 | 5,909,333 | 11,203,653 | ||||||||||||||||||
| Loss From Operations | (7,482,364 | ) | (398,455 | ) | (18,686,017 | ) | (621,495 | ) | (5,857,077 | ) | (11,203,653 | ) | ||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Other income | - | 23,200 | 2,007 | 23,200 | 35,401 | 2,007 | ||||||||||||||||||
| Interest expense | (11,013 | ) | (31,088 | ) | (31,911 | ) | (46,048 | ) | (9,123 | ) | (20,898 | ) | ||||||||||||
| Total Other Income (Expense) | (11,013 | ) | (7,888 | ) | (29,904 | ) | (22,848 | ) | 26,278 | (18,891 | ) | |||||||||||||
| Net Loss | $ | (7,493,377 | ) | $ | (406,343 | ) | $ | (18,715,921 | ) | $ | (644,343 | ) | $ | (5,830,799 | ) | $ | (11,222,544 | ) | ||||||
| Loss per Common Share - Basic and Diluted | $ | (0.03 | ) | $ | (0.00 | ) | $ | (0.08 | ) | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.05 | ) | ||||||
| Weighted Average Shares Outstanding - Basic and Diluted | 229,316,070 | 214,981,071 | 222,424,978 | 214,965,990 | 230,749,672 | 215,380,751 | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
PUREBASE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2023 AND 2022
(Unaudited)
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance at November 30, 2021 | - | $ | - | 215,380,751 | $ | 144,977 | $ | 18,730,863 | $ | (21,061,224 | ) | $ | (2,185,384 | ) | ||||||||||||||
| Stock based compensation - shares | - | - | - | - | 10,949,738 | - | 10,949,738 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (11,222,544 | ) | (11,222,544 | ) | |||||||||||||||||||
| Balance as of February 28, 2022 | - | $ | - | 215,380,751 | $ | 144,977 | $ | 29,680,601 | $ | (32,283,768 | ) | $ | (2,458,190 | ) | ||||||||||||||
| Balance at November 30, 2022 | - | $ | - | 230,753,005 | $ | 160,350 | $ | 52,910,839 | $ | (53,643,649 | ) | $ | (572,460 | ) | ||||||||||||||
| Stock based compensation - shares | - | - | - | - | 5,485,013 | - | 5,485,013 | |||||||||||||||||||||
| Settlement share surrender | - | - | (300,000 | ) | (300 | ) | 300 | - | - | |||||||||||||||||||
| Net loss | - | - | - | - | - | (5,830,799 | ) | (5,830,799 | ) | |||||||||||||||||||
| Balance as of February 28, 2023 | - | $ | - | 230,453,005 | $ | 160,050 | $ | 58,396,152 | $ | (59,474,448 | ) | $ | (918,246 | ) | ||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
PUREBASE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| February 28, 2023 | February 28, 2022 | |||||||
| For the Three Months Ended | ||||||||
| February 28, 2023 | February 28, 2022 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | (5,830,799 | ) | $ | (11,222,544 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | 5,485,013 | 10,949,738 | ||||||
| Amortization of debt discount | - | 5,329 | ||||||
| Non-cash director compensation | 6,000 | - | ||||||
| Non-cash effect of right of use asset | - | (52 | ) | |||||
| Gain on debt forgiveness | (35,401 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (53,880 | ) | - | |||||
| Prepaid expenses and other assets | 1,774 | (8,470 | ) | |||||
| Right of use asset | 9,950 | - | ||||||
| Accounts payable and accrued expenses | 139,249 | 36,455 | ||||||
| Lease liability | (9,538 | ) | - | |||||
| Net Cash Used In Operating Activities | (287,632 | ) | (239,544 | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Advances from related party | 300,000 | 118,000 | ||||||
| Payments on notes payable, related party | (10,000 | ) | ||||||
| Net Cash Provided By Financing Activities | 290,000 | 118,000 | ||||||
| Net Increase (Decrease) In Cash and Cash Equivalents | 2,368 | (121,544 | ) | |||||
| Cash and Cash Equivalents- Beginning of Period | 19,055 | 132,309 | ||||||
| Cash and Cash Equivalents - End of Period | $ | 21,423 | $ | 10,765 | ||||
| Supplemental Cash Flow Information: | ||||||||
| Cash paid for: | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | - | $ | - | ||||
| Noncash operating and financing activities: | ||||||||
| Vendors paid for on behalf of the Company by USMC | $ | 8,320 | $ | 2,284 | ||||
| Due to affiliates exchanged for convertible debt | $ | 300,000 | $ | - | ||||
| Director compensation - accrued as convertible debt | $ | 6,000 | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
PUREBASE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Unaudited)
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance at November 30, 2020 | - | $ | - | 214,950,741 | $ | 144,547 | $ | 11,307,806 | $ | (12,754,027 | ) | $ | (1,301,674 | ) | ||||||||||||||
| Stock based compensation | - | - | - | - | 10,688 | - | 10,688 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (238,000 | ) | (238,000 | ) | |||||||||||||||||||
| Balance at February 28, 2021 | - | $ | - | 214,950,741 | $ | 144,547 | $ | 11,318,494 | $ | (12,992,027 | ) | $ | (1,528,986 | ) | ||||||||||||||
| Stock based compensation - shares | - | - | 430,000 | 430 | 24,245 | - | 24,675 | |||||||||||||||||||||
| Stock based compensation - options | - | - | - | - | 44,148 | - | 44,148 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (406,343 | ) | (406,343 | ) | |||||||||||||||||||
| Balance at May 31, 2021 | - | $ | - | 215,380,741 | 144,977 | 11,386,887 | (13,398,370 | ) | (1,866,506 | ) | ||||||||||||||||||
| Balance at November 30, 2021 | - | - | 215,380,751 | 144,977 | 18,730,863 | (21,061,224 | ) | (2,185,384 | ) | |||||||||||||||||||
| Stock based compensation - shares | - | - | - | - | 10,949,738 | - | 10,949,738 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (11,222,544 | ) | (11,222,544 | ) | |||||||||||||||||||
| Balance as of February 28, 2022 | - | $ | - | 215,380,751 | 144,977 | 29,680,601 | (32,283,769 | ) | (2,458,191 | ) | ||||||||||||||||||
| Stock based compensation - shares | - | - | - | - | 7,304,345 | - | 7,304,345 | |||||||||||||||||||||
| Convertible debt converted into common stock | - | - | 23,741,655 | 23,742 | 2,549,429 | - | 2,573,171 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (7,493,377 | ) | (7,493,377 | ) | |||||||||||||||||||
| Balance at May 31, 2022 | - | $ | - | 239,122,406 | $ | 168,719 | $ | 39,534,375 | $ | (39,777,146 | ) | $ | (74,052 | ) | ||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
PUREBASE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| May 31, 2022 | May 31, 2021 | |||||||
| For the Six Months Ended | ||||||||
| May 31, 2022 | May 31, 2021 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | (18,715,921 | ) | $ | (644,343 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | 18,254,083 | 79,511 | ||||||
| Amortization of debt discount | 5,329 | 21,775 | ||||||
| Non-cash effect of right of use asset | - | 401 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (35,696 | ) | (30,000 | ) | ||||
| Prepaid expenses and other current assets | 3,446 | 4,376 | ||||||
| Accounts payable and accrued expenses | 62,979 | 42,359 | ||||||
| Net Cash Used In Operating Activities | (425,780 | ) | (525,921 | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Advances from related parties | 410,000 | 569,461 | ||||||
| Payments on notes due to officers | (10,000 | ) | (38,100 | ) | ||||
| Net Cash Provided By Financing Activities | 400,000 | 531,361 | ||||||
| Net Increase In Cash | (25,780 | ) | 5,440 | |||||
| Cash - Beginning of Period | 132,309 | 7,450 | ||||||
| Cash - End of Period | $ | 106,529 | $ | 12,890 | ||||
| Supplemental Cash Flow Information: | ||||||||
| Cash paid for: | ||||||||
| Noncash operating, investing and financing activities: | ||||||||
| Vendors paid for on behalf of the Company by USMC | $ | 4,282 | $ | 22,150 | ||||
| Due to affiliates exchanged for convertible debt | $ | 884,493 | $ | 1,401,769 | ||||
| Convertible debt converted to common stock | $ | 2,464,262 | $ | - | ||||
| Accrued interested converted to common stock | $ | 108,909 | $ | - | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
PUREBASE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NoteNOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS
Corporate HistoryOverview
The CompanyPurebase Corporation (“Purebase” or the “Company”) was incorporated in the State of Nevada on March 2, 2010 under the name Port of Call Online, Inc. to create a web-based service. The Company is an industrial mineral and natural resource company that would offer boaters an easy, convenient, fun, easy to use, online resource to help them plan and organize their boating trips. Pursuant to a corporate reorganization consummated on December 23, 2014, the Company changed its business focusprovides solutions to the identification, acquisition, exploration, developmentagriculture and full-scale exploitation of industrial and natural mineral propertiesconstruction materials markets in the United States for the development of products for the constructionthrough its two subsidiaries, Purebase Agricultural, Inc., a Nevada corporation (“Purebase AG”), and agriculture markets. In line with this business focus, the Company changed its name to PureBase Corporation in January 2015.U.S. Agricultural Minerals, LLC, a Nevada limited liability company (“Purebase SCM”), respectively.
The Company is headquartered in Ione, California.
Business OverviewAgricultural Sector
The Company through its two divisions, Purebase Ag and Purebase SCM, is engaged in the agricultural and construction-materials sectors. In the agricultural sector, the Company’s business is to developdevelops specialized fertilizers, sun protectants, soil amendments and bio-stimulants for organic and non-organic sustainable agriculture.
In the construction sector, the Company’s focus since 2020 has been to develop and test a kaolin-based product that will help create a lower CO2-emitting concrete (through the use of high-quality supplementary cementitious materials (“SCM’s”.)) The Company is developing a SCM that it believes can potentially replace up to 40% of cement, the most polluting part of concrete. As government agencies continue to enact stricter requirements for less-polluting forms of concrete, the Company believes there are significant opportunities for high-quality SCM products in the construction-materials sector.
In the agricultural sector, the Company has developed and will seek to develop additional products derived from mineralized materials of leonardite, kaolin clay, laterite, and other natural minerals. These mineral and soil amendments are used to protect crops, plants and fruits from the sun and winter damage, to provide nutrients to plants, and to improve dormancy and soil ecology to help farmers increase the yields of their harvests.
The Company is building a brand family under the parent trade name “Purebase,” consisting of its Purebase Shade Advantage WP(WP) product, a kaolin-clay based sun protectant for crops. Itcrops and Humic Advantage a humic acid product derived from leonardite.
Construction Sector
The Company has been developing and testing a kaolin-based product that it believes will help create a lower CO2-emitting concrete through the use of high-quality supplementary cementitious materials (“SCMs”). The Company is also involveddeveloping a SCM that it believes can potentially replace up to 40% of cement, the most polluting part of concrete. As government agencies continue to enact stricter requirements for less-polluting forms of concrete, the Company believes there are significant opportunities for high-quality SCM products in the early testing of soil amendment products based on humic and fulvic acids derived from leonardite. Other agricultural products are in the development stage.construction-materials sector.
The Company utilizes the services of US Mine Corporation (“USMC”), a Nevada corporation and a significant shareholder of the Company, for the development and contract mining of industrial mineral and metal projects, throughout North America, exploration drilling, preparation of feasibility studies, mine modeling, on-site construction, production, site reclamation and for product fulfillment. Exploration services include securing necessary permits, environmental compliance, and reclamation plans. In addition, a substantial portion of the minerals to be utilizedused by the Company isare obtained from properties owned or controlled by USMC. A. Scott Dockter, the Company’s Principal Executive Officer and a director, and John Bremer, a director, are also officers, directors and owners of USMC.
NOTE 2 – GOING CONCERN AND LIQUIDITY
The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. At May 31, 2022,As of February 28, 2023, the Company had a significant accumulated deficit of $39,777,14659,474,448 and working capital deficit of $701,161657,834. For the sixthree months ended May 31, 2022,February 28, 2023, the Company had a loss from operations of $18,715,9215,857,077 and negative cash flows from operations of $425,780287,632. The Company’s operating activities consume the majority of its cash resources. The Company anticipates that it will continue to incur operating losses as it executes its development plans for 2022, as well as other potential strategic and business development initiatives.2023. In addition, the Company has had and expects to have negative cash flows from operations, at least into the near future. The Company has previously funded, and plans to continue funding, these losses primarily with additional infusions of cash from advances from an affiliate,USMC and the sale of equity and convertible notes. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
| 7 |
The Company’s plan, through the continued promotion of its servicesproducts to existing and potential customers, is to generate sufficient revenues to cover its anticipated expenses. The Company is currently exploring several options to meet its short-term cash requirements, including issuances of equity securities or equity-linked securities fromto USMC and other third parties.
Although no assurances can be given as to the Company’s ability to deliver on its revenue plans or that unforeseen expenses may arise, management currently believes that the revenue to be generated from operations together with equity and debt financing, including funding from USMC in connection with the March 23, 2022 securities purchase agreement and March 7, 2023 securities purchase agreement, will provide the necessary funding for the Company to continue as a going concern for the next 12twelve months. On April 7,The March 23, 2022 the Company entered into a securities purchase agreement with USMC, a related party, pursuant to whichprovides for the issuance by the Company may issueof up to an aggregate of $1,000,000 of two-year convertible promissory notes to USMC a related party (see Note 10)12). The notes bear interest at 5% per annum and any outstanding principal or interest under the notes are convertible into shares of the Company’s common stock, at any time at the option of the holder, at a conversion price of $0.39 per share. Currently, the Company has not issued any$919,209 of convertible notes under suchthe March 23, 2022 securities purchase agreement and may issue an additional $80,791 of convertible notes. The March 7, 2023 securities purchase agreement provides for the issuance by the Company of up to an aggregate of $1,000,000 of two-year convertible promissory notes to USMC (see Note 12). The notes bear interest at 8% per annum and any outstanding principal or interest under the notes are convertible into shares of the Company’s common stock, at any time at the option of the holder, at a conversion price of $0.10 per share. As of the date hereof, USMC has purchased an aggregate principal amount of notes of $160,000 under the March 7, 2023 securities purchase agreement. However, thereThere currently are no other arrangements or agreements for such financing, and management cannot guarantee any other potential debt or equity financing will be available, or if available, on favorable terms. As such, these matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issue date of this report. If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations, or cease its operations completely.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) including Form 10-Q and Regulation S-X. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments, unless otherwise indicated) which are, in the opinion of management, necessary to fairly state the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to such rules and regulations. These financial statements and the information included under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the audited financial statements and explanatory notes thereto for the year ended November 30, 20212022 in our Annual Report on Form 10-K filed on March 15, 2022February 28, 2023 with the SEC. The results of the sixthree months ended MayMarch 31, 20222023 (unaudited) are not necessarily indicative of the results to be expected for the full year ending November 30, 2022.2023.
Principles of Consolidation
These unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries PureBase AG and USAM.Purebase SCM. Intercompany accounts and transactions have been eliminated upon consolidation.
| 8 |
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and equity-based transactions at the date of the financial statements and the revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the unaudited condensed consolidated financial statements. Significant estimates include the allowance for doubtful accounts, useful lives of property and equipment, deferred tax asset and valuation allowance, and assumptions used in Black-Scholes-Merton, or BSM,the Black-Scholes valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.
Revenue
The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. The Company derives revenues from the sale of its agricultural products. The Company’s contracted transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s contracts have a single performance obligation which are not separately identifiable from other promises in the contracts and is, therefore, not distinct. The Company’s performance obligation is satisfied upon the transfer of risk of loss to the customer.
Revenue consists of the following by product offering for the six months ended May 31, 2022:Practical Expedients
SCHEDULE OF DISAGGREGATED REVENUE
As part of ASC Topic 606, the Company has adopted several practical expedients including:
CROP WHITE II | SHADE ADVANTAGE (WP) | SHADE ADVANTAGE (WPM) | Total | |||||||||||
| $ | 192,780 | $ | 18,624 | $ | 17,072 | $ | 228,476 | |||||||
| ● | Significant Financing Component – the Company does not adjust the promised amount of consideration for the effects of a significant financing component since the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to the customer and when the customer pays for that good or service will be one year or less. | |
| ● | Unsatisfied Performance Obligations – all performance obligations related to contracts with a duration for less than one year, the Company has elected to apply the optional exemption provided in ASC Topic 606 and therefore is not required to disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period. | |
| ● | Shipping and Handling Activities – the Company elected to account for shipping and handling activities as a fulfillment cost rather than as a separate performance obligation. | |
| ● | Right to Invoice – the Company has a right to consideration from a customer in an amount that corresponds directly with the value provided to the customer of the Company’s performance completed to date. The Company may recognize revenue in the amount to which the entity has a right to invoice. |
Disaggregated Revenue
Revenue consists of the following by product offering for the sixthree months ended May 31, 2021:February 28, 2023:
SCHEDULE OF DISAGGREGATED REVENUE
| CROP WHITE II | SHADE ADVANTAGE (WP) | SulFe Hume Si ADVANTAGE | Total | |||||||||||
| $ | - | $ | 776 | $ | 51,480 | $ | 52,256 | |||||||
The Company did not have any revenue for the three months ended February 28, 2022.
CROP WHITE II | SHADE ADVANTAGE (WP) | SHADE ADVANTAGE (WPM) | Total | |||||||||||
| $ | - | $ | 30,000 | $ | - | $ | 30,000 | |||||||
| 9 |
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. There were 0no cash equivalents as of May 31, 2022February 28, 2023 and November 30, 2021.2022.
AccountAccounts Receivable
The Company periodically assesses its accounts and other receivables for collectability on a specific identification basis. If collectability of an account becomes unlikely, an allowance is recorded for that doubtful account. TheAs of February 28, 2023 and November 30, 2022, the Company has determined that there was no allowance for doubtful accounts as of May 31, 2022, and an allowance of $18,277 as of November 30, 2021.was necessary.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally three to five years. Expenditures that enhance the useful lives of the assets are capitalized and depreciated.
SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY AND EQUIPMENT
| Equipment | 3-5 years |
| Autos and trucks | 5 years |
Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. The Company currently has $620,000 in property and equipment, that itprimarily two ball mills, acquired on May 1, 2020. As of May 31, 2022,February 28, 2023, the Company has not put the acquired property and equipment to use. As such, the Company has not recorded depreciation.depreciation related to these assets.
Impairment of Long-Lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. NaNNo impairment losses were recorded during the three and six months ended May 31, 2022February 28, 2023 and 2021.February 28, 2022.
Shipping and Handling
The Company incurs shipping and handling costs which are charged back to the customer. There were noThe Company incurred shipping and handling costs incurredof $2,400 and no handling costs during the three and six months ended May 31,February 28, 2023 and 2022, and 2021.respectively.
Advertising and Marketing Costs
The Company expenses advertising and marketing costs as they are incurred. Advertising and marketing expenses were $29,2600 and $42,000 for the six months ended May 31, 2022 and 2021, respectively, and $17,220 and $26,00012,040 for the three months ended May 31,February 28, 2023 and February 28, 2022, and 2021, respectively, and are recorded in selling, general and administrative expenses onin the statementaccompanying condensed consolidated statements of operations.
| 10 |
Fair Value Measurements
As defined in ASC 820, “Fair“Fair Value Measurements and Disclosures,” fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.
| Level 1: | Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. |
| Level 2: | Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. |
| Level 3: | Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. |
Fair Value of Financial Instruments
The carrying value of cash, accounts receivable, accounts payable and accrued expenses approximate their fair values based on the short-term maturity of these instruments. The carrying amount of notes approximates the estimated fair value for these financial instruments as management believes that such notes constitute substantially all of the Company’s debt and interest payable on the notes approximates the Company’s incremental borrowing rate.
Net loss per share of common stock is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the year.three-month periods ended February 28, 2023 and 2022. All outstanding options are considered potential common stock. The dilutive effect, if any, of stock options are calculated using the treasury stock method. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Since the effect of common stock equivalents is anti-dilutive with respect to losses, outstanding options have been excluded from the Company’s computation of net loss per share of common stock for the sixthree months ended May 31, 2022February 28, 2023 and May 31, 2021.February 28, 2022.
SCHEDULE OF OUTSTANDING SHARES EXCLUDED FROM DILUTED LOSS PER SHARE
| Six Months Ended | Three Months Ended, | |||||||||||||||
| May 31, 2022 | May 31, 2021 | February 28, 2023 | February 28, 2022 | |||||||||||||
| Convertible Notes | - | 129,117,358 | 2,753,278 | 6,250,000 | ||||||||||||
| Stock Options | 59,595,000 | 1,595,000 | 128,688,187 | 1,595,000 | ||||||||||||
| Total | 59,595,000 | 130,712,358 | 131,441,465 | 7,845,000 | ||||||||||||
| Three Months Ended | ||||||||
| May 31, 2022 | May 31, 2021 | |||||||
| Convertible Notes | - | 129,117,358 | ||||||
| Stock Options | 1,595,000 | 1,595,000 | ||||||
| Total | 1,595,000 | 130,712,358 | ||||||
| 11 |
Stock-Based Compensation
The Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock-based awards made to employees, including employee stock options, in the accompanying condensed consolidated statements of operations.
For stock options issued to employees and members of the Company’s Board of Directors (the “Board”) for their services, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stockcommon stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.common stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised.
Pursuant to ASU 2018-07 Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services in accordance ASC 718. The Company uses valuation methods and assumptions to value the stock options that are in line with the process for valuing employee stock options noted above.
Leases
With the adoption of ASC 842, Leasesoperating lease agreements are required to be recognized on the balance sheet as Right-of-Use (“ROU”) assets and corresponding lease liabilities. Right-of-use (“ROU”)ROU assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that wethe Company will exercise that option.
Leases in which our company is the lessee are comprised ofThe Company leases its corporate offices. All of the leases are classified as operating leases. The Company is a party to a two-year lease with USMC a related party, for 1,000 square feet of office space located in Ione, California (the “Ione Lease”) with respect to its corporate operations (See Note 10)12). TheEffective November 1, 2022, the Ione Lease expires in November 2022 (subjectwas amended to automatic extensions onextend the lease through October 2024 and to add an additional 700 square feet of office space for a month-to-month basis) and has atotal monthly base rental during the initial termprice of $1,5003,500. per month, with automatic one-month renewals. The remaining weighted average term is 0.421.6 years. The Company discounted lease payments using its estimated incremental borrowing rate at December 1, 2020. The weighted average incremental borrowing rate applied was 5%.
In accordance with ASC 842, Leases, wethe Company recognized a ROU asset and corresponding lease liability on ourthe condensed consolidated balance sheet for long-term office leases. See Note 7 – Leases for further discussion, including the impact on ourthe accompanying unaudited condensed consolidated financial statements and related disclosures.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in incomeoperations in the period that includes the enactment date.
The Company utilizes ASC 740, “IncomeIncome Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.
| 12 |
For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the condensed consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the condensed consolidated statements of operations.
Exploration Stage
In accordance with U.S. GAAP, expenditures relating to the acquisition of mineral rights are initially capitalized as incurred while exploration and pre-extraction expenditures are expensed as incurred until such time as the Company exits the exploration stage by establishing proven or probable reserves. Expenditures relating to exploration activities such as drill programs to establish mineralized materials are expensed as incurred. Expenditures relating to pre-extraction activities are expensed as incurred until such time proven or probable reserves are established for that project, after which expenditures relating to mine development activities for that particular project are capitalized as incurred. As of February 28, 2023, the Company was not engaged in any mine exploration.
Mineral Rights
Acquisition costs of mineral rights are capitalized as incurred while exploration and pre-extraction expenditures are expensed as incurred until such time as the Company exits the exploration stage by establishing proven or probable reserves, as defined by the SEC under Industry Guide 7, through the completion of a “final” or “bankable” feasibility study. Expenditures relating to exploration activities are expensed as incurred and expenditures relating to pre-extraction activities are expensed as incurred until such time proven or probable reserves are established for that project, after which subsequent expenditures relating to development activities for that particular project are capitalized as incurred.
Where proven and probable reserves have been established, the project’s capitalized expenditures are depleted over proven and probable reserves upon commencement of production using the units-of-production method. Where proven and probable reserves have not been established, such capitalized expenditures are depleted over the estimated production life upon commencement of extraction using the straight-line method.
The carrying values of the mineral rights are assessed for impairment by management on a quarterly basis or when indicators of impairment exist. Should management determine that these carrying values cannot be recovered, the unrecoverable amounts are written off against earnings. As of February 28, 2023 and 2022, the Company did not have any capitalized mineral rights.
Recent Accounting Pronouncements
All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company.
| 13 |
NOTE 4 – MINING RIGHTS
Federal Preference Rights Lease in Esmeralda County NV
This Preference Rights Lease is granted by the Bureau of Land Management (“BLM”) covering approximately 2,500 acres of land located in the Mount Diablo Meridian area of Nevada. Contained in the leased property is the Chimney 1 Potassium/Sulfur Deposit which consists of 15.5 acres of land fully permitted for mining operation which is situated within the 2,500 acres held by the Company. All rights and obligations under the Preference Rights Lease have been assigned to the Company by USMC. These rights were initially recorded at their cost of $200,000. At November 30, 2020, the Company fully impaired the asset. This lease requires a payment of $7,503 per year to the BLM.
Snow White Mine located in San Bernardino County, CA – Deposit
On November 28, 2014 US Mining and Minerals Corporation entered into a Purchase Agreement in which it agreed to sell its fee simple property interest and certain mining claims to USMC. In contemplation of the Plan and Agreement of Reorganization, on December 1, 2014, USMC, a related party, assigned its rights and obligations under the Purchase Agreement to the Company pursuant to an Assignment of Purchase Agreement. As a result of the Assignment, the Company assumed the purchaser position under the Purchase Agreement. The Purchase Agreement involves the sale of approximately 280 acres of mining property containing 5 placer mining claims known as the Snow White Mine located near Barstow, California in San Bernardino County. The property is covered by a Conditional Use Permit allowing the mining of the property and a Plan of Operation and Reclamation Plan has been approved by San Bernardino County and the BLM. An initial deposit of $50,000 was paid to by the Company and held in escrow, and the Purchase Agreement required the payment of an additional $600,000 at the end of the escrow period. There was a delay in the original seller, Joseph Richard Matthewson, receiving a clear title to the property and a fully permitted project, both of which were conditions to closing.the closing of the sale from US Mining and Minerals Corporation to the Company. In light of the foregoing, and the payment of an additional $25,000, the parties agreed to extend the closing. Due to delays in the Company securing the necessary funding to close the purchase of the Snow White Mine property, John Bremer, a shareholder and a director of the Company, paid $575,000 to acquire the property interest and mining claims on or about October 15, 2015. Mr. Bremer willagreed to transfer title to the Company when the Company pays Mr. Bremerupon payment of $575,000 plus expenses to Mr. Bremer, however, the Company is under no obligation to do so. The mining claims require a minimum royalty payment of $3,500 per year to be made by the Company.
During the year ended November 30, 2017, USMC, agreed to offset the $75,000 deposit against money owed toCompany, which is paid by USMC. As a result, the purchase price is $650,000 plus expenses. Mr. Bremer has not restricted the Company from continuing its exploration on or access to the Snow White mine property.
On September 5, 2019, the Company’s board of directors approved the discontinuance of all mining and related activities at the Snow White project. The Company has no further obligation related to this project.
On April 1, 2020, the Company entered into a purchase and sale agreement with the Bremer Family 1995 Living Trust a related party of the Company,(the “Trust”), pursuant to which the Company will purchase the Snow White Mine for $836,000 (the “Purchase Price”). from the Trust. The Purchase Price plus 5%5% interest is payable in full in cash at the closing which must occur at any time before April 1, 2022 (the “Closing Date”). On April 14, 2022, the agreement was amended to extend the Closing Date to April 14, 2023. On April 7, 2023 the agreement was further amended to extend the Closing Date to April 1, 2024.
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at:
SCHEDULE OF PROPERTY AND EQUIPMENT
| February 28, 2023 | November 30, 2022 | |||||||
| Furniture and equipment | $ | 6,952 | $ | 6,952 | ||||
| Machinery and equipment | 35,151 | 35,151 | ||||||
| Automobiles and trucks | 25,061 | 25,061 | ||||||
| Construction in process | 620,000 | 620,000 | ||||||
| Property and equipment, gross | 687,164 | 687,164 | ||||||
| Less: accumulated depreciation | (67,164 | ) | (67,164 | ) | ||||
| Property and equipment, net | $ | 620,000 | $ | 620,000 | ||||
There was no depreciation expense for the three months ended February 28, 2023 and 2022, respectively.
NOTE 6 – NOTES PAYABLE
Bayshore Capital Advisors, LLC
On February 26, 2016, the Company issued a promissory note to Bayshore Capital Advisors, LLC (“Bayshore Capital”), an affiliate through common ownership of a 10%10% major shareholderstockholder of the Company, for $25,000 for working capital at an interest rate of 6%6% per annum. The note was payable August 26, 2016, or when the Company closes a bridge financing, whichever occurs first. TheOn February 4, 2023, Bayshore Capital agreed to cancel the $25,000 debt, plus $10,146 of accrued and unpaid interest. Prior to the cancellation of the note, the Company iswas in default on this note at May 31, 2022. During the six months ended May 31, 2022, the Company did not make repayments towards the outstanding balance of the note. The balance on the note was $25,000 as of May 31, 2022 and November 30, 2021 (see Note 10). Total interest expense on the note was $750255 for the six months ended May 31, 2022 and 2021, respectively. Total interest expense on the note was $380370 for the three months ended May 31,February 28, 2023 and February 28, 2022, and 2021.respectively.
A. Scott Dockter – President and Chief Executive Officer
On August 31, 2017, the Company issued a note in the amount of $197,096 to A. Scott Dockter, President, Chief Executive Officer and a director of the Company, to consolidate the total amounts due to Mr. Dockter. The note bears interest at 6%6% and is due upon demand. During the sixthree months ended May 31,February 28, 2023 and 2022, the Company paid $10,000 and $0, respectively, towards the outstanding balance of the note. The balance on the note was $48,716 and $58,716 as of May 31, 2022 and November 30, 2021, respectively (See Note 10). Total interest expense on the note was $1,706379 and $3,369 for the six months ended May 31, 2022 and 2021, respectively. Total interest expense on the note was $837 and $1,507869 for the three months ended May 31,February 28, 2023 and 2022, respectively. The balance on the note was $18,716and 2021,$28,716 as of February 28, 2023 and November 30, 2022, respectively. There was $41,545 and $41,167 of accrued interest as of February 28, 2023 and November 30, 2022, respectively.
Convertible Promissory Notes – USMC
December 1, 2019
On December 1, 2019, in connection with the September 26, 2019 securities purchase agreement with USMC a related party, (See Note 10)12), the Company issued a convertible promissory note in the amount of $20,000to USMC, with a maturity date of December 31, 2021(“ (“Tranche #1”). The note bears interest at 5% 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock, at any time at the option of the holder, at a conversion price of $0.16per share. On April 7, 2022, the December 1, 2019 note was amended to extend the maturity date to April 30, 2022. Thereafter, on April 7, 2022, and USMC gave notice of conversion of the outstanding principal balance of $20,000of the December 1, 2019 note, plus accrued interest totaling $2,351through such date, into shares of the Company’s common stock.
The issuance of Tranche #1 resulted in a discount from the beneficial conversion feature totaling $20,000. Total straight-line amortization of this discount totaled $0 and $4,783 during the six months ended May 31, 2022 and May 31, 2021, respectively. Total straight-line amortization of this discount totaled $0 and $2,417815 during the three months ended May 31,February 28, 2023 and February 28, 2022, and May 31, 2021, respectively. Total interest expense on Tranche #1 was approximately $3500 and $500 for the six months ended May 31, 2022 and 2021, respectively. Total interest expense on Tranche #1 was approximately $100 and $250 for the three months ended May 31, 2022February 28, 2023 and 2021, respectively.February 28, 2022.
January 1, 2020
On January 1, 2020, in connection with the September 26, 2019 securities purchase agreement with USMC a related party, (See Note 10)12), the Company issued a convertible promissory note in the amount of $86,000to USMC, with a maturity date of January 1, 2022(“ (“Tranche #2”). The note bears interest at 5% 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock, at any time at the option of the holder, at a conversion price of $0.16per share. On April 7, 2022, the January 1, 2020 note was amended to extend the maturity date to April 30, 2022. Thereafter, on April 7, 2022, and USMC gave notice of conversion of the outstanding principal balance of $86,000of the January 1, 2020 note, plus accrued interest totaling $9,743through such date, into shares of the Company’s common stock.
The issuance of Tranche #2 resulted in a discount from the beneficial conversion feature totaling $32,250. Total straight-line amortization of this discount totaled $1,4120 and $8,0291,412 for the six months ended May 31, 2022 and May 31, 2021, respectively. Total straight-line amortization of this discount totaled $1,412 and $4,059 during the three months ended May 31,February 28, 2023 and February 28, 2022, and May 31, 2021, respectively. Total interest expense on Tranche #2 was approximately $1,5000 and $2,100 for the six months ended May 31, 2022 and 2021, respectively. Total interest expense on Tranche #2 was approximately $450 and $1,0801,060 for the three months ended May 31,February 28, 2023 and February 28, 2022, and 2021, respectively.
February 1, 2020
On February 1, 2020, in connection with the September 26, 2019 securities purchase agreement with USMC a related party, (See Note 10)12), the Company issued a convertible promissory note in the amount of $72,000 to USMC, with a maturity date of February 1, 2022 (“Tranche #3”). The note bears interest at 5%5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock, at any time at the option of the holder, at a conversion price of $0.16 per share. On April 7, 2022, the February 1, 2020 note was amended to extend the maturity date to April 30, 2022. Thereafter, on April 7, 2022, and USMC gave notice of conversion of the outstanding principal balance of $72,000 of the February 1, 2020 note, plus accrued interest totaling $7,851 through such date, into shares of the Company’s common stock.
The issuance of Tranche #3 resulted in a discount from the beneficial conversion feature totaling $36,000. Total straight-line amortization of this discount totaled $3,1030 and $8,9633,103 for the six months ended May 31, 2022 and 2021, respectively. Total straight-line amortization of this discount totaled $3,103 and $4,531 during the three months ended May 31,February 28, 2023 and February 28, 2022, and May 31, 2021, respectively. Total interest expense on Tranche #3 was approximately $1,260 and $1,795 for the six months ended May 31, 2022 and 2021, respectively. Total interest expense on Tranche #3 was approximately $3750 and $900 for the three months ended May 31, 2022February 28, 2023 and 2021, respectively.February 28, 2022.
| 15 |
December 1, 2020
On December 1, 2020, in connection with the September 26, 2019 securities purchase agreement with USMC a related party, (See Note 10)12), the Company issued a convertible promissory note in the amount of $822,000 to USMC, with a maturity date of November 25, 2022 (“Tranche 4”). The note bears interest at 5%5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.16 per share. On April 7, 2022 USMC gave notice of conversion of the outstanding principal balance of $822,000 of the December 1, 2020 note, plus accrued interest totaling $55,401 through such date, into shares of the Company’s common stock. Total interest expense on Tranche #4 was approximately $17,7000 and $17,200 for the six months ended May 31, 2022 and 2021, respectively. Total interest expense on Tranche #4 was approximately $7,500 and $10,40010,100 for the three months ended May 31,February 28, 2023 and February 28, 2023 and 2022, and 2021, respectively.
March 17, 2021
On March 17, 2021, in connection with the March 11, 2021 securities purchase agreement with USMC a related party (see Note 10)12), the Company issued a convertible promissory note in the amount of $579,769 to USMC, with a maturity date of March 17, 2023 (“Tranche #5”). The note bears interest at 5%5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.088 per share. On April 7, 2022 USMC gave notice of conversion of the outstanding principal balance of $579,769.39 of the March 17, 2021 note, plus accrued interest totaling $30,656 through such date, into shares of the Company’s common stock. Total interest expense on Tranche #5 was approximately $8,8000 and $13,3007,150 for the six months ended May 31, 2022 and 2021, respectively. Total interest expense on Tranche #5 was approximately $1,700 and $7,400 for the three months ended May 31,February 28, 2023 and 2022, and 2021, respectively.
March 14, 2022
On March 14, 2022, in connection with the November 25, 2020 securities purchase agreement with USMC a related party (see Note 10)12), the Company issued a convertible promissory note in the amount of $884,429.28884,429 to USMC, with a maturity date of March 14, 2024 (“Tranche #6”). The note bears interest at 5%5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.088 per share. On April 7, 202222022 USMC gave notice of conversion of the outstanding principal balance of $884,492.28884,492 of the March 14, 2022 note, plus accrued interest totaling $2,908 through such date, into shares of the Company’s common stock. Total interest expense on Tranche #6 was approximately $2,908 for the six months ended May 31, 2022. Total interest expense on Tranche #6 was approximately $2,9080 for the three months ended May 31, 2022.February 28, 2023.
August 30, 2022
On August 30, 2022, in connection with the April 7, 2022 securities purchase agreement with USMC (see Note 12), the Company issued a convertible promissory note in the amount of $470,862 to USMC, with a maturity date of August 30, 2024 (“Tranche #7”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.39 per share. Total interest expense on Tranche #7 was $5,805 for the three months ended February 28, 2023.
November 29, 2022
On November 29, 2022, in connection with the April 7, 2022 securities purchase agreement with USMC (see Note 12), the Company issued a convertible promissory note in the amount of $140,027 to USMC, with a maturity date of August 30, 2024 (“Tranche #8”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.39 per share. Total interest expense on Tranche #8 was $1,726 for the three months ended February 28, 2023.
| 16 |
February 28, 2023
On February 28, 2023, in connection with the April 7, 2022 securities purchase agreement with USMC (see Note 12), the Company issued a convertible promissory note in the amount of $308,320 to USMC, with a maturity date of February 28, 2025 (“Tranche #9”). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock at any time at the option of the noteholder, at a conversion price of $0.39 per share. Total interest expense on Tranche #9 was $0 for the three months ended February 28, 2023.
March 20, 2023
On March 20, 2023, the Company entered into a securities purchase agreement with USMC, effective March 7, 2023, pursuant to which USMC may purchase up to $1,000,000 of the Company’s 8% unsecured convertible two-year promissory notes in one or more closings. The notes are convertible into the Company’s common stock at a conversion price of $0.10 per share. As of the date hereof, USMC has purchased an aggregate principal amount of notes of $160,000 under the securities purchase agreement.
Convertible Debt – Board of Directors
On April 8, 2021, the Company entered into a twelve month director agreement with Jeffrey Guzy, as amended on August 26, 2022 (the “Guzy Director Agreement”) pursuant to which Mr. Guzy will serve as a director of the Company, which agreement will automatically renew (the “Renewal Date”) for successive one-year terms unless either party notifies the other of its desire not to renew the Agreement within 30 days of the expiration of the then current term. As compensation therefor, Mr. Guzy is entitled to a cash fee of $ per month which accrues as % debt to the Company until the Company has its first cash-flow positive month. Any amounts owed to Mr. Guzy at the Renewal Date or upon Mr. Guzy’ resignation or removal (the “Termination Date”) will be converted into common stock at a price per share equal to market price on the exchange or trading market where such stock is then traded or quoted or the volume-weighted average price (“VWAP”) of the common stock for the 20-days immediately preceding the Renewal Date or the Termination Date, as the case may be. As of February 28, 2023, cash fees owed to Mr. Guzy as per the terms of the agreement were deferred and debt in the amount of $ is owed to Mr. Guzy.
On August 13, 2021, the Company entered into a twelve month director agreement with Dr. Kurtis, as amended on August 26, 2022 (the “Kurtis Director Agreement”) pursuant to which Dr. Kurtis will provide up to five hours per month of board services, which agreement will automatically renew for successive one-year terms unless either party notifies the other of its desire not to renew the Agreement within 30 days of the expiration of the then current term. As compensation therefor, Dr. Kurtis is entitled to a cash fee of $ per month which accrues as debt to the Company until the Company has its first cash-flow positive month. Any amounts owed to Dr. Kurtis at the Renewal Date or the Termination Date will be converted into common stock at a price per share equal to market price on the exchange or trading market where such stock is then traded or quoted or the VWAP of the common stock for the 20-days immediately preceding the Renewal Date or the Termination Date, as the case may be. As of February 28, 2023, cash fees owed to Dr. Kurtis as per the terms of the agreement were deferred and debt in the amount of $ is owed to Dr. Kurtis.
NOTE 7 – LEASES
The following table presents net lease cost and other supplemental lease information:
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION
| Three Months Ended February 28, 2023 | ||||
| Lease cost | ||||
| Operating lease cost (cost resulting from lease payments) | $ | 10,500 | ||
| Short term lease cost | - | |||
| Sublease income | - | |||
| Net lease cost | $ | 10,500 | ||
| Operating lease – operating cash flows (fixed payments) | $ | 10,500 | ||
| Operating lease – operating cash flows (liability reduction) | $ | 9,538 | ||
| Non-current leases – right of use assets | $ | 69,649 | ||
| Current liabilities – operating lease liabilities | $ | 39,372 | ||
| Non-current liabilities – operating lease liabilities | $ | 30,852 | ||
| 17 |
| Three Months Ended February 28, 2022 | ||||
| Lease cost | ||||
| Operating lease cost (cost resulting from lease payments) | $ | 4,500 | ||
| Short term lease cost | - | |||
| Sublease income | - | |||
| Net lease cost | $ | 4,500 | ||
| Operating lease – operating cash flows (fixed payments) | $ | 4,500 | ||
| Operating lease – operating cash flows (liability reduction) | $ | 4,107 | ||
| Non-current leases – right of use assets | $ | 28,434 | ||
| Current liabilities – operating lease liabilities | $ | 15,504 | ||
| Non-current liabilities – operating lease liabilities | $ | 13,223 | ||
Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the three months ended February 28, 2023:
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS
| Fiscal Year | Operating Leases | |||
| Remainder of 2023 | $ | 42,000 | ||
| 2024 | 31,500 | |||
| Total future minimum lease payments | 73,500 | |||
| Amount representing interest | (3,276 | ) | ||
| Present value of net future minimum lease payments | $ | 70,224 | ||
NOTE 68 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following amounts:amounts as of:
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES
As of May 31, 2022 | As of November 30, 2021 | |||||||
| Accounts payable | $ | 34,918 | $ | 2,647 | ||||
| Accrued interest – related party | 49,496 | 126,806 | ||||||
| Accrued compensation | 22,148 | 27,163 | ||||||
| Accounts payable and accrued expenses | $ | 106,563 | $ | 156,616 | ||||
NOTE 7 – LEASES
The following table presents net lease cost and other supplemental lease information:
SCHEDULE OF LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION
| Six Months Ended May 31, 2022 | ||||
| Lease cost | - | |||
| Operating lease cost (cost resulting from lease payments) | $ | 9,000 | ||
| Short term lease cost | - | |||
| Sublease income | - | |||
| Net lease cost | $ | 9,000 | ||
| Operating lease – operating cash flows (fixed payments) | $ | 9,000 | ||
| Operating lease – operating cash flows (liability reduction) | $ | 8,688 | ||
| Non-current leases – right of use assets | $ | 7,109 | ||
| Current liabilities – operating lease liabilities | $ | 7,407 | ||
| Non-current liabilities – operating lease liabilities | $ | - | ||
Six Months Ended May 31, 2021 | ||||
| Lease cost | - | |||
| Operating lease cost (cost resulting from lease payments) | $ | 9,000 | ||
| Short term lease cost | - | |||
| Sublease income | - | |||
| Net lease cost | $ | 9,000 | ||
| Operating lease – operating cash flows (fixed payments) | $ | 9,000 | ||
| Operating lease – operating cash flows (liability reduction) | $ | 8,265 | ||
| Non-current leases – right of use assets | $ | 24,169 | ||
| Current liabilities – operating lease liabilities | $ | 17,161 | ||
| Non-current liabilities – operating lease liabilities | $ | 7,407 | ||
Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the six months ended May 31, 2022:
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS
| Fiscal Year | Operating Leases | |||
| Remainder of 2022 | $ | 7,500 | ||
| Total future minimum lease payments | 7,500 | |||
| Amount representing interest | 93 | |||
| Present value of net future minimum lease payments | $ | 7,407 | ||
| February 28, 2023 | November 30, 2022 | |||||||
| Accounts payable | $ | 145,349 | $ | 30,078 | ||||
| Accrued interest – related party | 55,030 | 57,226 | ||||||
| Accrued compensation | 35,627 | 28,134 | ||||||
| Accounts payable and accrued expenses | $ | 236,006 | $ | 115,478 | ||||
NOTE 89 – COMMITMENTS AND CONTINGENCIES
Office and Rental Property Leases
The Company is usingleasing office space provided byfrom USMC, a related partycompany that is owned by the Company’s majority shareholders and directorsdirectors. A. Scott Dockter and John Bremer.Bremer (See Note 10)12).
Mineral Properties
The Company’s mineral rights require various annual lease payments (See Note 4).
| 18 |
Legal Matters
On July 8, 2020, the Company’s former Chief Financial Officer, Al Calvanico (“Calvanico”), filed a demand for arbitration alleging retaliation, wrongful termination, and demand for a minimum of $600,000 in alleged stock value, plus interest, recovery of past and future wages, attorneys’ fees, and punitive damages (collectively, the “Calvanico Claims”). The Company denied all Calvanico Claims. The Company believes Calvanico is owed nothing because it takes the position that Calvanico was not terminated, but rather, his employment contract expired on September 21, 2019, in accordance with its terms, and was not renewed by Company and because Calvanico never exercised his stock options. On February 14, 2020, the Company requested in writing that Calvanico exercise his stock options within 30 days. Calvanico failed to do so. To date, Calvanico has not exercised his stock options. This dispute is currently in theThe binding arbitration discovery phase. An arbitration hearing is scheduled for November 8-11, 2022 before arbitrator, Scott Silverman in Los Angeles.
On January 11, 2019, the Company filed a complaint in the Second Judicial District Court in the State of Nevada, Washoe County (Case # CV19-00097) against Agregen International Corp (“Agregen”) and Robert Hurtado alleging the misuse of proprietary and confidential information acquired by Mr. Hurtado while employed by the Company as Vice President of Agricultural Research and Development. Mr. Hurtado was terminated in March 2018 and since that time the Company alleges that he conspired with Agregen to improperly use proprietary and confidential information to compete with the Company which constitute breaches of the non-compete and confidentiality provisions of his employment agreement with the Company. The Company was seeking $100,000,000 in monetary damages. On March 14, 2019, Agregen and Mr. Hurtado filed an answer to the Company’s Complaint that the allegations were false. An Early Case Conference was heldconcluded on February 3, 2023. Initial Closing Briefs are due on April 26, 2019,25, 2023, and a pre-trial conference was heldReply Briefs are due on July 10, 2019. On March 13, 2020, the Company filed a First Amended Complaint, adding James Todd Gauer and John Gingerich as additional defendants. A settlement agreement was entered into between the parties, effectiveMay 25, 2023. The arbitrator’s decision is due June 3, 2022 and a Notice of Settlement was filed in the District Court pursuant to which, among other things, certain shares of the Company’s common stock beneficially owned by the defendants will be surrendered to the Company.30, 2023.
On March 29, 2019, the Company was served with a complaint filed by Superior Soils Supplements LLC (“Superior Soils”) in the Superior Court of the State of California in and for the County of Kings (Case #19C-0124) relating to 64 truckloads of soil amendments delivered to a customer by the Company on behalf of Superior Soils. Superior Soils alleged that the soil amendments were not labeled correctly requiring the entire shipment of product to be returned to the Company. The complaint alleges breach of contract, misrepresentations, fraudulent concealment and unfair competition. The complaint seeks damages of approximately $300,000400,000. and, although the Company is vigorously defending such claims and believes that there is little to no risk of liability, it has accrued $400,000 for such risk. The Company filed its answer on May 6, 2019, denying responsibility for the mis-labellingmislabeling and denying any liability for damages therefrom. The matter is set for trial in AprilMay 2023.
Contractual Matters
On November 1, 2013, we entered into an agreement with USMC, a related party, in which USMC provides various technical evaluations and mine development services for the Company with regard to the various mining properties/rights owned by the Company. Terms of services and compensation will be determined for each project undertaken by USMC.
On October 12, 2018, the Board approved a material supply agreement with USMC, a related party, pursuant to which USMC will provideprovides designated natural resources to the Company at predetermined prices (see Note 10)12).
Note 10 - STOCKHOLDERS’ EQUITY
On May 19, 2022, the Company entered into an agreement with Newbridge Securities Corporation (“Newbridge”) for a twelve-month term, pursuant to which Newbridge provided investment banking and corporate advisory services to the Company. As consideration therefor, the Company issued Newbridge 300,000 shares of common stock on June 17, 2022 which shares are subject to a 12-month lockup from the date of issuance. The shares were issued at a fair value of $ per share.
The Company accounted for its stock-based compensation in accordance with the fair value recognition provisions of FASB ASC Topic 718, “Compensation – Stock Compensation.”
2017 Equity Incentive Plan
On November 10, 2017 the Board approved the 2017 PureBase Corporation Stock Option Plan which is intended to be a qualified stock option plan (the “Option Plan”). The Board reserved shares of the Company’s common stock to be issued pursuant to options granted under the Option Plan. The Option Plan was subsequently approved by shareholders on September 28, 2018. As of May 31, 2022,February 28, 2023, options to purchase an aggregate of shares of common stock have been granted under the Option Plan.
| 19 |
The Company has also granted options to purchase an aggregate of shares of common stock pursuant to employment contracts with certain employees prior to the adoption of the Option Plan.
On May 19,June 3, 2022, in connection with the settlement agreement with Agregen, Robert Hurtado, James Todd Gauer and John Gingerich, the Company entered intogranted James Todd Gauer an agreement with Newbridge Securities Corporation (“Newbridge”), pursuantimmediately exercisable option to which Newbridge will provide investment banking and corporate advisory services to the Company. As consideration therefor, the Company issued Newbridgepurchase shares of common stock, on June 17, 2022 whichthe equivalent number of shares are subjectof common stock that were surrendered to the Company, at an exercise price of $ per share and a 12-month lockup fromfair value of $. The option was valued using the date of issuance.Black-Scholes option pricing model under the assumptions in the below table.
On August 26, 2022, the Company granted an immediately exercisable options to purchase an aggregate of shares of common stock to members of the Board, consultants and employees for services to be performed. The options were issued at an exercise price of $ per share and a total fair value of $. The options were valued using the Black-Scholes option pricing model under the assumptions in the below table.
| Grant Date | Number of Options | Stock Price | Exercise Price | Expected Volatility | Risk-free Interest Rate | Dividend Rate | Expected Term | Fair Value | ||||||||||||||||||||||
| 250,000 | $ | 0.15 | $ | 0.10 | 281.00 | % | 0.85 | % | 0.00 | % | years | $ | 36,708 | |||||||||||||||||
| 200,000 | $ | 0.46 | $ | 0.36 | 266.00 | % | 0.79 | % | 0.00 | % | years | $ | 90,944 | |||||||||||||||||
| 116,000,000 | $ | 0.38 | $ | 0.38 | 278.00 | % | 1.26 | % | 0.00 | % | years | $ | 43,808,780 | |||||||||||||||||
| 8,669,400 | $ | 0.22 | $ | 2.50 | 274.50 | % | 2.95 | % | 0.00 | % | years | $ | 1,856,151 | |||||||||||||||||
| 1,734,615 | $ | 0.24 | $ | 0.24 | 269.24 | % | 3.20 | % | 0.00 | % | years | $ | 411,668 | |||||||||||||||||
| 242,424 | $ | 0.24 | $ | 0.24 | 276.76 | % | 3.20 | % | 0.00 | % | years | $ | 57,264 | |||||||||||||||||
| 246,748 | $ | 0.24 | $ | 0.24 | 207.37 | % | 3.20 | % | 0.00 | % | years | $ | 53,479 | |||||||||||||||||
The Company did not grant stock options during the sixthree months ended May 31,February 28, 2023 and February 28, 2022.
The weighted average non-vested grant date fair value of non-vested options was $ and $ at February 28, 2023 and November 30, 2022, and May 31, 2021.respectively.
SCHEDULE OF STOCK OPTION ACTIVITY
| Weighted | Weighted | |||||||||||||||
| Average | Number | Average | ||||||||||||||
| Shares | Exercise Price | of Shares | Exercise Price | |||||||||||||
| Outstanding at November 30, 2021 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ||||||||||||||||
| Expired or cancelled | ||||||||||||||||
| Outstanding at May 31, 2022 | ||||||||||||||||
| Outstanding at February 28, 2022 | ||||||||||||||||
| Outstanding at November 30, 2022 | $ | |||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ||||||||||||||||
| Expired or cancelled | ||||||||||||||||
| Outstanding at February 28, 2023 | $ | |||||||||||||||
| 20 |
SCHEDULE OF STOCK OPTION SHARES OUTSTANDING AND EXERCISABLE
| Weighted- | Weighted- | |||||||||||||||||
| Average | Average | |||||||||||||||||
| Range of | Outstanding | Remaining Life | Exercise | Number | ||||||||||||||
| exercise prices | Options | In Years | Price | Exercisable | ||||||||||||||
| $ | 0.099 | 400,000 | $ | 0.099 | 400,000 | |||||||||||||
| 0.10 | 645,000 | 0.10 | 645,000 | |||||||||||||||
| 0.12 | 50,000 | 0.12 | 50,000 | |||||||||||||||
| 0.36 | 200,000 | 0.36 | - | |||||||||||||||
| 0.38 | 116,000,000 | 0.38 | 58,000,000 | |||||||||||||||
| 3.00 | 500,000 | 3.00 | 500,000 | |||||||||||||||
| 117,795,000 | $ | 0.39 | 59,595,000 | |||||||||||||||
| Weighted- | Weighted- | |||||||||||||||||
| Average | Average | |||||||||||||||||
| Exercise | Outstanding | Remaining Life | Exercise | Number | ||||||||||||||
| Price | Options | In Years | Price | Exercisable | ||||||||||||||
| $ | $ | |||||||||||||||||
| $ | ||||||||||||||||||
The compensation expense attributed to the issuance of the options is recognized as they are vested.options vest.
The stock options granted under the Option Plan are exercisable forover various terms from thee to from the grant date and
Total compensation expense related to the options was $ and $ for the six months ended May 31, 2022 and May 31, 2021, respectively. Total compensation expense related to the options was $ and $ for the three months ended May 31,February 28, 2023 and February 28, 2022, and May 31, 2021, respectively. As of May 31, 2022,February 28, 2023, there was $18,211,5331,819,638 in future compensation cost related to non-vested stock options.
The aggregate intrinsic value is $As of February 28, 2023 for totalof the outstanding and exercisable options which was based on ourhad an intrinsic value as the options exercise prices were greater than the estimated fair value of the common stock of $ as of May 31, 2022, which is the aggregate fair value of the common stock that would have been received by the option holders had all option holders exercised their options as of that date, net of the aggregate exercise price..
NOTE 1012 –RELATED PARTY TRANSACTIONS
Bayshore Capital Advisors, LLC
On February 26, 2016, the Company issued a promissory note in the principal amount of $25,000 with an interest rate of 6% per annum to Bayshore Capital Advisors, LLC (“Bayshore Capital”), an affiliate through common ownership of a 10%10 shareholder% major stockholder of the Company, for $25,000 for working capital purposes.at an interest rate of 6% per annum. The note was payable August 26, 2016, or when the Company closes a bridge financing, whichever occurs first. TheOn February 4, 2023, Bayshore Capital agreed to cancel the $25,000 debt, plus $10,146 of accrued and unpaid interest. Prior to the cancellation of the note, the Company iswas in default on thisthe note. Total interest expense on the note at May 31, 2022.was $255 and $370 for the three months ended February 28, 2023 and February 28, 2022, respectively.
US Mine Corporation
The Company entered into a contract mining agreement with USMC, a company owned by the majority stockholders of the Company,which A. Scott Dockter, the Company’s Chief Executive Officer and a director and John Bremer, a director, each own 33%, pursuant to which USMC provides various technical evaluations and mine development services to the Company. During the sixthree months ended May 31,February 28, 2023 and 2022, and 2021, the Company did not make anymade $21,914 and $0 of purchases from USMC. No services were rendered by USMC for the sixthree months ended May 31, 2022February, 2023 and 2021.2022. In addition, during the sixthree months ended May 31,February 28, 2023 and 2022, and 2021, USMC paid $4,2828,320 and $22,1502,284, respectively, of expenses to the Company’s vendors and creditors on behalf of the CompanyCompany. During the three months ended February 28, 2023 and also2022, USMC made cash advances to the Company of $410,000300,000 and $569,461118,000, respectively, which are recorded as part of due to affiliates on the Company’s unauditedcondensed consolidated balance sheets. TheAll amounts owed for services rendered, expenses paid on behalf of the Company, and cash advances were converted into the Company’s common stock pursuant to the September 5, 2019 Debt Exchange Agreement, (See Note 5) and the November 25, 2020 Securities Purchase Agreement (See Note 5)6) and the April 7, 2022 Securities Purchase Agreement (See Note 6). The Company did not have a balance due to USMC was $258,848 and $729,059 at May 31, 2022on February 28, 2023 and November 30, 2021, respectively.2022.
| 21 |
USMC Notes
On September 26, 2019, theThe Company has entered into aone or more securities purchase agreementagreements with USMC pursuant to which USMC may purchase up to $1,000,000 of the Company’s 5%unsecured convertible two-year promissory notes in one or more closings. The notes are convertible into the Company’s common stock at a conversion price of $0.16 per share. As of April 7, 2022, USMC had purchased notes totaling $1,000,000 with maturity dates ranging from December 1, 2021, through November 25, 2022 (see Note 5)6). Interest expenseThe outstanding balance on thesethe convertible notes totaleddue to USMC was $3,121919,209 and $4,438610,889 for the six months ended May 31,on February 28, 2023 and November 30, 2022, and 2021, respectively. Interest expense on thesethe convertible notes due to USMC totaled $927 7,532and $2,24326,991 for the three months ended May 31, 2022 and 2021, respectively. On April 7, 2022, the December 1, 2019, January 1, 2020February 28, 2023 and February 1, 2020 notes were amended to extend the maturity dates to April 30, 2022. Thereafter, on April 7,28, 2022, USMC converted the aggregate outstanding principal balance of $1,000,000 of the December 1, 2019, January 1, 2020, February 1, 2020 and December 1, 2020 notes, plus accrued interest totaling $75,346 through such date, into shares of the Company’s common stocksrespectively.
On November 25, 2020, the Company entered a securities purchase agreement with USMC pursuant to which USMC may purchase up to $2,000,000 of the Company’s 5% unsecured two-year promissory notes in one or more closings. The notes are convertible into the Company’s common stock at a conversion price of $0.088 per share. As of April 7, 2022, USMC has purchased notes totaling $1,579,769 with a maturity date of March 17, 2023 (see Note 5). Interest expense on these notes totaled $26,494 and $23,105 for the six months ended May 31, 2022 and 2021, respectively. Interest expense on these notes totaled $9,212 and $17,746 for the three months ended May 31, 2022 and 2021, respectively. On March 14, 2022, in connection with the November 25, 2020, securities purchase agreement with USMC, a related party, the Company issued a convertible promissory note in the amount of $884,492.28 to USMC, with a maturity date of March 14, 2024. The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company’s common stock, at any time at the option of the Holder, at a conversion price of $0.088 per share. Interest expense on this note totaled $2,908 for the six months ended May 31, 2022. Interest expense on this note totaled $2,908 for the three months ended May 31, 2022. On April 7, 2022, USMC converted the aggregate outstanding principal balance of $1,464,337 of the November 25, 2020 note and March 14, 2022 note, plus accrued interest totaling $33,564 through such date, into shares of the Company’s common stock.Mining Agreements
On April 7, 2022, the Company entered into a securities purchase agreement with USMC, effective March 23, 2022, pursuant to which USMC may purchase up to $1,000,000 of the Company’s 5% unsecured convertible two-year promissory notes in one or more closings. The notes are convertible into the Company’s common stock at a conversion price of $0.39 per share.
There was no outstanding balance on the above notes as of May 31, 2022. The outstanding balance due on the above notes to USMC was $1,579,769 at November 30, 2021.
On April 22, 2020, the Company entered into a Material Supply Agreement (the “Supply Agreement”) with USMC which amended the prior Materials Supply Agreement entered into on October 12, 2018. AllUnder the terms of the Supply Agreement, all kaolin clay purchased by the Company from USMC under the Supply Agreement must be used exclusively for agricultural products and supplementary cementitious materials. Under the terms of the Supply Agreement, theThe Company will pay $25 per ton for the kaolin clay for supplementary cementitious materials and $145 per ton for bagged products for clay for agriculture (in each case plus an additional $5 royalty fee per ton). The Supply Agreement also provides that if USMC provides pricing to any other customer which is more favorable than that provided to the Company, USMC will adjust the cost to the Company to conform to the more favorable terms. The initial term of the Supply Agreement is three years, which automatically renews for three successive one-year terms, unless either party provides notice of termination at least sixty days prior to the end of the then current term. Either party has the right to terminate the Supply Agreement for a material breach which is not cured within 90 days. For the three months ended February 28, 2023 and 2022, the Company purchased $21,914 and $0, respectively, under the Supply Agreement. Since April 22, 2020, the Company has purchased $280,356 of materials under the Supply Agreement.
US Mine LLC
On May 27, 2021, the Company entered into the Materials Extraction Agreement with US Mine, LLC, pursuant to which the Company acquired the right to extract up to 100,000,000 of certain raw clay materials. The Materials Extraction Agreement is effective until 100,000,000 tons of material are extracted.extracted. As compensation for such right, the Company issued a ten-year convertible promissory note in the principal amount of $50,000,000 to US Mine, LLC (the “US Mine Note”). The US Mine Note bears interest at the rate of 2.5% per annum which is payable upon maturity. Amounts due under the US Mine Note may be converted into shares of the Company’s common stock at the option of the noteholder, at a conversion price of $ per share. The noteholder may convert (i) up to 50% of the outstanding balance on or after such date as the Company’s common stock is listed for trading on any national securities exchange, (ii) up to an additional 25% of the outstanding balance on or after the six-month anniversary of such initial trading date, and (iii) the remaining 25% on or after the twelve-month anniversary of such initial trading date.date. In addition, the Company will pay US Mine, LLC a royalty fee of $5.00 per ton of materials extracted and any royalty not paid in a timely manner with be subject to 15% interest per annum and compounded monthly.
On October 6, 2021, and prior to consummation of activities under the Materials Extraction Agreement, the Company and US Mine, LLC executed an amendment to the Materials Extraction Agreement (the “Amendment”). Pursuant to the Amendment, the US Mine Note was retroactively rescinded, ab initio and an option to purchase an aggregate of shares of the Company’s common stock at an exercise price of $ per share until April 6, 2028, was issued to US Mine, LLC as compensation. Shares subject to the option vestvested as to shares on April 6, 2022, shares on October 6, 2022, and shares will vest on April 6, 2023. This agreement was further amended and restated on June 21, 2022, with the same option purchase, vesting and exercise schedule. For the sixthree months ended May 31, 2022,February 28, 2023 the Company expensed $ in stock-based compensation expense related to the issuance of the option on October 16, 2021 to US Mine LLC under the Materials Extraction Agreement.
Leases
On October 1, 2020 the Company entered into a two-year lease agreement for its office space with USMC with a monthly rent of $1,500 (See Note 7).
Transactions with Officers
On August 31, 2017, the Company issued a note in the amount of $197,096 to A. Scott Dockter, President, Chief Executive Officer and a director of the Company, to consolidate the total amounts due to Mr. Dockter. The note bears interest at 6%6% and is due upon demand. During the sixthree months ended May 31,February 28, 2023 and 2022, the Company madepaid $10,000 repaymentand $0, respectively, towards the outstanding balance of the note. The balance on the note was $48,71618,716 and $58,71628,716 as of May 31, 2022February 28, 2023 and November 30, 2021, respectively (See Note 10). Total interest expense on the note was $1,706 and $3,369 for the six months ended May 31, 2022, and 2021, respectively. Total interest expense on the note was $837379 and $1,507869 for the three months ended May 31,February 28, 2023 and 2022, respectively. There was $41,545and 2021,$41,167 of accrued interest on the note as of February 28, 2023 and November 30, 2022, respectively.
| 22 |
Convertible Debt – Board of Directors
On April 8, 2021, the Company entered into the Guzy Director Agreement (see Note 6) pursuant to which Mr. Guzy will serve as a director of the Company, which agreement will automatically renew for successive one-year terms unless either party notifies the other of its desire not to renew the Agreement within 30 days of the expiration of the then current term. As compensation therefor, Mr. Guzy is entitled to a cash fee of $ per month which accrues as % debt to the Company until the Company has its first cash-flow positive month. Any amounts owed to Mr. Guzy at the Renewal Date or upon Mr. Guzy’ resignation or removal will be converted into common stock at a price per share equal to market price on the exchange or trading market where such stock is then traded or quoted or the VWAP of the common stock for the 20-days immediately preceding the Renewal Date or the Termination Date, as the case may be. The Agreement also includes a non-competition provision during the term of the Agreement and for twelve months thereafter.
On August 13, 2021, the Company entered into the Kurtis Director Agreement (see Note 6) pursuant to which Dr. Kurtis will provide up to five hours per month of board services, which agreement will automatically renew for successive one-year terms unless either party notifies the other of its desire not to renew the Agreement within 30 days of the expiration of the then current term. As compensation therefor, Dr. Kurtis is entitled to a cash fee of $ per month which accrues as debt to the Company until the Company has its first cash-flow positive month. Any amounts owed to Dr. Kurtis at the Renewal Date or upon Dr. Kurtis’ resignation or removal will be converted into common stock at a price per share equal to market price on the exchange or trading market where such stock is then traded or quoted or the VWAP of the common stock for the 20-days immediately preceding the Renewal Date or the Termination Date, as the case may be. The Agreement includes a non-competition provision during the term of the Agreement and for twelve months thereafter.
Leases
On October 1, 2020, the Company entered into a two-year lease agreement for its office space with USMC with a monthly rent of $1,500 (See Note 7). The lease was amended to extend the term for an additional two years to November 1, 2024 and to add an additional 700 square feet of office space for a total monthly rental price of $3,500 per month,
NOTE 1113 – CONCENTRATION OF CREDIT RISK
Cash Deposits
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of May 31, 2022February 28, 2023 and November 30, 2021,2022, the Company had no deposits in excess of the FDIC insured limit.
Revenues
SCHEDULE OF CONCENTRATION OF CREDIT RISK
Three customers accounted for 100% of total revenue for the six months ended May 31, 2022, as set forth below:
One customer accounted for 100% of total revenue for the six months ended May 31, 2021.
Accounts Receivable
Two customers accounted for 100% of purchases for the accounts receivable as of May 31, 2022,three months ended February 28, 2023, as set forth below:
SCHEDULE OF CONCENTRATION OF CREDIT RISK
| Customer A | 99 | % | ||||
| Customer B | 1 | % |
The Company had no revenue for the three months ended February 28, 2022.
| 23 |
Accounts Receivable
One customer accounted for 100% of the accounts receivable as of February 28, 2023. There were no receivables on November 30, 2021.2022.
Vendors
Six
One supplier accounted for 100% of purchases for the three months ended February 28, 2023.
Four suppliers accounted for 8570% of purchases as of May 31,for the three months ended February 28, 2022, as set forth below:
| Vendor A | 22 | % | ||||
| Vendor B | 18 | % | ||||
| Vendor C | 16 | % | ||||
| Vendor D | ||||||
| % | ||||||
Two suppliers accounted for 88% of purchases as of November 31, 2021, as set forth below:
NOTE 1214 – SUBSEQUENT EVENTS
A settlement agreement was entered into betweenIn accordance with ASC 855, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events and Agregen International Corp, Robert Hurtado, James Todd Gauer and John Gingerich, effective June 3, 2022, and a Notice of Settlement was filed intransactions that occurred after February 28, 2023 through the Second Judicial District Court indate the State of Nevada, Washoe County pursuant to which, amongcondensed consolidated financial statements were filed. During this period the Company did not have any material reportable subsequent events other things, certain shares of the Company’s common stock beneficially owned by the defendants will be surrendered to the Company. Refer to Note 8 for more information.than those stated below:
On May 19, 2022,March 20, 2023, the Company entered into ana securities purchase agreement with Newbridge Securities Corporation (“Newbridge”),USMC, effective March 7, 2023, pursuant to which Newbridge will provide investment banking and corporate advisory servicesUSMC may purchase up to $1,000,000 of the Company. As consideration therefor,Company’s 8% unsecured convertible two-year promissory notes in one or more closings. The notes are convertible into the Company issued Newbridge shares ofCompany’s common stock on June 17, 2022 which shares are subject toat a 12-month lockup from the date of issuance.
On June 9, 2022, the Company issued shares of common stock to Jeffrey Guzy, a director, pursuant to his exercise of a stock option at an exerciseconversion price of $0.10per share. As of the date hereof, USMC has purchased an aggregate principal amount of notes of $160,000 under the securities purchase agreement.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements that reflect management’s current views with respect to future events and financial performance. Forward-looking statements are statements in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of our management team, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended November 30, 2021,2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2022,February 28, 2023, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation:
| ● | absence of contracts with customers or suppliers; |
| ● | our ability to maintain and develop relationships with customers and suppliers; |
| ● | the impact of competitive products and pricing; |
| ● | supply constraints or difficulties; |
| ● | the retention and availability of key personnel; |
| ● | general economic and business conditions; |
| ● | substantial doubt about our ability to continue as a going concern; |
| ● | our ability to successfully implement our business plan; |
| ● | our need to raise additional funds in the future; |
| ● | our ability to successfully recruit and retain qualified personnel in order to continue our operations; |
| ● | our ability to successfully acquire, develop or commercialize new products; |
| ● | the commercial success of our products; |
| ● | the impact of any industry regulation; |
| ● | our ability to develop existing mining projects or establish proven or probable reserves; |
| ● | our dependence on one vendor for our minerals for our products; |
| ● | the impact of potentially losing the rights to properties; |
| ● | the impact of the increase in the price of natural resources; and |
| ● | the continued impact of the COVID-19 pandemic. |
We undertake no obligation to update or revise forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report, except as required by law.
As used in this Quarterly Report and unless otherwise indicated, the terms “Company,” “we,” “us,” and “our,” refer to PureBase Corporation and its wholly-owned subsidiaries, PureBase Agricultural, Inc., a Nevada corporation (“PureBase AG”) and U.S. Agricultural Minerals, LLC, a Nevada limited liability company (“USAM”Purebase SCM”).
Business Overview
The Company,We are an industrial mineral and natural resource company that provides solutions to the agriculture and construction materials markets in the United States, through itsour two divisions,subsidiaries, Purebase AgAG, and Purebase SCM, is engaged in the agriculturalrespectively. The Company has not yet commenced mining operations and construction-materials sectors. In the agricultural sector, the Company’s business is torelies on US Mine LLC for its raw materials.
| 25 |
Agricultural Sector
We develop specialized fertilizers, sun protectants, soil amendments and bio-stimulants for organic and non-organic sustainable agriculture.
In the construction sector, the Company’s focus since 2020 has been to develop and test a kaolin-based product that will help create a lower CO2-emitting concrete (through the use of high-quality SCM’s.) The Company is developing a SCM that it believes can potentially replace up to 40% of cement, the most polluting part of concrete. As government agencies continue to enact stricter requirements for less-polluting forms of concrete, the Company believes there are significant opportunities for high-quality SCM products in the construction-materials sector.
In the agricultural sector, the Company has We have developed and will seek to develop additional products derived from mineralized materials of leonardite, kaolin clay, laterite, and other natural minerals. These mineral and soil amendments are used to protect crops, plants and fruits from the sun and winter damage, to provide nutrients to plants, and to improve dormancy and soil ecology to help farmers increase the yields of their harvests.
The Company is We are building a brand family under the parent trade name “Purebase,” consisting of its Purebase Shade Advantage WP product, a kaolin-clay based sun protectant for crops. The Company is also involved in the early testing of soil amendment products based oncrops and Humic Advantage a humic and fulvic acidsacid product derived from leonardite. Other agricultural products are in the development stage.
The Company utilizesConstruction Sector
We are developing and testing a kaolin-based product that it believes will help create a lower CO2-emitting concrete through the use of high-quality supplementary cementitious materials (“SCMs”). We are developing SCMs for the construction material markets, particularly the cement markets that we believe can potentially replace up to 40% of cement, the most polluting part of concrete. As government agencies continue to enact stricter requirements for less-polluting forms of concrete, we believe there are significant opportunities for high-quality SCM products in the construction-materials sector.
We utilize the services of US Mine Corporation (“USMC”), a Nevada corporation, and a significant shareholder of the CompanyUSMC, for the development and contract mining of industrial mineral and metal projects, throughout North America, exploration drilling, preparation of feasibility studies, mine modeling, on-site construction, production, site reclamation and for product fulfillment. Exploration services include securing necessary permits, environmental compliance, and reclamation plans. In addition, a substantial portion of the minerals to be utilizedused by the Company isare obtained from properties owned or controlled by USMC.
A. Scott Dockter, the Company’s Chief Executive Officer and a director, and John Bremer, a director, are also officers, directors and owners of USMC.
Recent Developments
On March 14,February 28, 2023, in connection with the April 7, 2022, securities purchase agreement with USMC, a related party, the Company issued a two-year 5% unsecured convertible promissory note in the amount of $308,320 to USMC, in the principal amountwith a maturity date of $884,492.28 (the “March 14, 2022 Note”February 28, 2025 (“Tranche #9”), pursuant to the terms of a securities purchase agreement, dated March 17, 2021, with USMC.. The note bears interest at 5% per annum which is payable on maturity. Amounts due under the March 14, 2022 Notenote may be converted into shares of the Company’s common stock at any time at the option of the holder,noteholder, at a conversion price of $0.088$0.39 per share. The conversion price and number of shares issuable upon conversion of the March 14, 2022 Note is subject to adjustment from time to time for any subdivision or consolidation of the Company’s shares and other dilutive events.
On April 7, 2022, the “Company entered into a First Amendment to Promissory Notes (the “Note Amendment”) with USMC, the holder of the Company’s outstanding 5% unsecured convertible promissory notes (the “2019/2020 Notes”) issued under a securities purchase agreement, dated September 26, 2019. Pursuant to the Note Amendment, the maturity dates were extended, to April 30, 2022, for: (i) a 2019/2020 Note in the principal amount of $20,000, originally issued on December 1, 2019, with a maturity date of December 1, 2021, (ii) a 2019/2020 Note in the principal amount of $86,000, originally issued on January 1, 2020, with a maturity date of January 1, 2022, and (iii) a 2019/2020 Note in the principal amount of $72,000, originally issued on February 1, 2022, with a maturity date of February 1, 2022 (collectively, the “2019/2020 Amended Notes”). In addition, USMC waived any “Event of Default” under the 2019/2020 Amended Notes for the Company’s failure to pay any principal amount or interest due under the 2019/2020 Amended Notes, or failure to perform any other covenant, obligation, condition or agreement contained in any of the 2019/2020 Amended Notes. Except as expressly provided in the Note Amendment, all of the terms of the 2019/2020 Notes remain in full force and effect.
On April 7, 2022,March 20, 2023, the Company also entered into a securities purchase agreement with USMC, effective as of March 23, 2022,7, 2023, pursuant to which USMC may purchase up to an additional $1,000,000 of two year 5%the Company’s 8% unsecured convertible two-year promissory notes (“2022/2023 Notes”), in one or more closings. Amounts due under the 2022/2023 NotesThe notes are convertible into shares ofthe Company’s common stock at any time at the option of the holder, at a conversion price of $0.39$0.10 per share, subject to adjustment for any subdivision or consolidationshare. As of the Company’s shares and other standard dilutive events.
On April 7, 2022,date hereof, USMC elected to convert all amounts due under the 5% unsecured convertible promissory notes into shares of common stock of the Company as follows: (i) thehas purchased an aggregate principal amount of $20,000, and accrued interest in the aggregate amountnotes of $2,350.68, due$160,000 under the outstanding note issued on December 1, 2019, into an aggregate of 139,692 shares, (ii) the principal amount of $86,000, and accrued interest in the aggregate amount of $9,742.74, due under the outstanding note issued on January 1, 2020, into an aggregate of 598,392 shares, (iii) the principal amount of $72,000, and accrued interest in the aggregate amount of $7,850.96, due under the outstanding note issued on February 1, 2020, was an aggregate of 499,068 shares, (iv) the principal amount of $822,000, and accrued interest in the aggregate amount of $55,400.55, due under the outstanding note issued on November 25, 2020, was converted into a total of 5,483,753 shares, (v) the principal amount of $579,769.39, and accrued interest in the aggregate amount of $30,656.30, due under the outstanding note issued on March 17, 2021, an aggregate of 6,936,656 shares, and (vi) the principal amount of $884,492.28, and accrued interest in the aggregate amount of $2,907.92, due under the outstanding note issued on March 14, 2022, an aggregate of 10,084,093 shares.
On May 19, 2022, the Company entered into an agreement with Newbridge Securities Corporation (“Newbridge”), whereby, Newbridge will provide investment banking and corporate advisory services to the Company in exchange for 300,000 shares of the Company’s restricted common stock. The common stock was issued on June 17, 2022 and will vest 12 months from the date of issuance.
A. Scott Dockter, the principal executive officer and a director and shareholder of the Company, and John Bremer, a director and shareholder of the Company, are also officers, directors and shareholders of USMC.securities purchase agreement.
Results of Operations
Comparison of the Three Months Ended May 31, 2022 andFebruary 28, 2023 to the Three Months Ended May 31, 2021February 28, 2022
A comparison of the Company’s operating results for the three months ended May 31, 2022 and May 31, 2021 are summarized as follows:
| February 28, | February 28, | |||||||||||
| 2023 | 2022 | Variance | ||||||||||
| Revenue, net | $ | 52,256 | $ | - | $ | 52,256 | ||||||
| Operating Expenses: | ||||||||||||
| Selling, general and administrative | 5,886,870 | 11,200,401 | (5,313,531 | ) | ||||||||
| Product fulfillment | 22,463 | 3,252 | 19,211 | |||||||||
| Loss from operations | (5,857,077 | ) | (11,203,653 | ) | (5,346,576 | ) | ||||||
| Other income (expense) | 35,401 | 2,007 | 33,394 | |||||||||
| Interest expense | (9,123 | ) | (20,898 | ) | (11,775 | ) | ||||||
| Net Loss | $ | (5,830,799 | ) | $ | (11,222,544 | ) | $ | (5,391,745 | ) | |||
| May 31, | May 31, | |||||||||||
| 2022 | 2021 | Variance | ||||||||||
| Revenues | $ | 228,476 | $ | 30,000 | $ | 198,476 | ||||||
| Operating expenses: | ||||||||||||
| Selling, general & administrative | 7,622,810 | 412,861 | 7,209,949 | |||||||||
| Product fulfillment, exploration and mining | 88,030 | 15,594 | 72,436 | |||||||||
| Loss from operations | (7,482,364 | ) | (398,455 | ) | (7,083,909 | ) | ||||||
| Other income (expense) | (11,013 | ) | (7,888 | ) | (3,135 | ) | ||||||
| Net Loss | $ | (7,493,377 | ) | $ | (406,343 | ) | $ | (7,087,034 | ) | |||
| 26 |
Revenues
Revenue increased by $198,476, or 662%,$52,256 for the three months ended May 31, 2022February 28, 2023, as compared to the three months ended May 31, 2021,February 28, 2022. This increase was primarily due to an increase in purchases by the Company’s customers buying more product during the three months ended May 31, 2022.February 28, 2023.
Operating Expenses
Total operating expenses increaseddecreased by $7,282,385,$5,346,576, or 1,700%48%, for the three months ended May 31, 2022February 28, 2023, as compared to the three months ended May 31, 2021 as a result of an increase in stock compensation cost resulting primarily from the Company issuing stock options to US Mine, LLC.
February 28, 2022. Selling, general and administrative expenses increaseddecreased by $7,209,949,$5,313,531, or 1,746%47%, for the three months ended May 31, 2022,February 28, 2023, as compared to the three months ended May 31, 2021,February 28, 2022. The decrease in selling, general and administrative expenses was primarily due to an increasea decrease in stock-based compensation of approximately $7,280,100 in stock compensation cost due primarily from the Company issuing stock options to US Mine, LLC.
Product fulfillment, exploration and mining expenses$5,490,826 for the three months ended May 31, 2022, increased $72,436, or 465%February 28, 2023, as compared to the three months ended May 31,February 28, 2022.
The Company continued to expense the option to purchase an aggregate of 116,000,000 shares of common stock granted to USMC on October 6, 2021 through March 2023. Thereafter, the Company no longer expenses such option which is expected to result in a decrease in stock-based operating expense.
Product fulfillment expenses increased by $19,211, or 591%, for the three months ended February 28, 2023, as compared to the three months ended February 28, 2022, primarily due to anthe increase in exploration costs.revenue during the three months ended February 28, 2023.
Other Income (Expense)(Expenses)
OtherTotal other income (expense) increased by $3,125,$45,169, or 40%239%, for the three months ended May 31, 2022,February 28, 2023, as compared to the three months ended May 31, 2021,February 28, 2022, primarily due to an increasea gain on forgiveness of debt and accrued interest in the amount of $35,401 and a decrease in interest expense as a result of $11,775 for the Company issuing a convertible note in the principal amount of $884,492 to USMC subsequentthree months ended February 28, 2023 compared to the three months ended May 31, 2022.
Comparison of the Six Months Ended May 31, 2022 and the Six Months Ended May 31, 2021
A comparison of the Company’s operating results for the six months ended May 31, 2022 and May 31, 2021 are summarized as follows:
| May 31, | May 31, | |||||||||||
| 2022 | 2021 | Variance | ||||||||||
| Revenues | $ | 228,476 | $ | 30,000 | $ | 198,476 | ||||||
| Operating expenses: | ||||||||||||
| Selling, general & administrative | 18,823,211 | 633,787 | 18,189,424 | |||||||||
| Product fulfillment, exploration and mining | 91,282 | 17,708 | 73,574 | |||||||||
| Loss from operations | (18,686,017 | ) | (621,495 | ) | (18,064,522 | ) | ||||||
| Other income (expense) | (29,904 | ) | (22,848 | ) | (7,056 | ) | ||||||
| Net Loss | $ | (18,715,921 | ) | $ | (644,343 | ) | $ | (18,071,578 | ) | |||
Revenues
Revenue increased by $198,476, or 662%, for the six months ended May 31, 2022 as compared to the six months ended May 31, 2021, primarily due to the Company’s customers buying more product during the three months ended May 31,February 28, 2022.
Operating Expenses
Total operating expenses increased by $18,262,998, or 2,803% for the six months ended May 31, 2022 as compared to the six months ended May 31, 2021 as a result of an increase in stock compensation cost resulting primarily from the Company issuing stock options to US Mine, LLC.
Selling, general and administrative expenses increased by $18,189,424, or 2,870%, for the six months ended May 31, 2022, as compared to the six months ended May 31, 2021, due to an increase of approximately $18,219,150 in stock compensation cost due primarily from the Company issuing stock options to US Mine, LLC.
Product fulfillment, exploration and mining expenses for the six months ended May 31, 2022, increased $73,574, or 415% as compared to the six months ended May 31, 2021 due to an increase in exploration costs.
Other Income (Expense)
Other income (expense) increased by $7,056, or 31%, for the six months ended May 31, 2022, as compared to the six months ended May 31, 2021, primarily due to an increase in interest expense as a result of the Company issuing a convertible note in the principal amount of $884,492 to USMC subsequent to the six months ended May 31, 2022
Liquidity and Capital Resources
As of May 31, 2022,February 28, 2023, we had $106,529 in cash on hand of $21,423 and a working capital deficiency of $701,161,$657,834, as compared to cash on hand of $132,209$19,055 and a working capital deficiency of $2,241,254$620,290 as of November 30, 2021.2022. The decreaseincrease in working capital deficiency is mainly dueprimarily a result of an increase in accounts payable and accrued expenses, which are partially offset by an increase in accounts receivable of $53,880 and a decrease in notes payable of $25,000.
The Company’s operating activities consume the majority of its cash resources. The Company anticipates that it will continue to incur operating losses as it executes its development plans for 2023, as well as other potential strategic and business development initiatives. In addition, the Company has had and expects to have negative cash flows from operations, at least into the near future. The Company has previously funded, and plans to continue funding, these losses with cash advances from USMC and the sale of equity, and convertible notes. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Although no assurances can be given as to the conversion of notes dueCompany’s ability to deliver on its revenue plans or that unforeseen expenses may arise, management currently believes that the revenue to be generated from operations together with equity and debt financing, including funding from USMC in connection with the amount of $2,573,171 into common stock.
WeMarch 23, 2022 securities purchase agreement and March 7, 2023 securities purchase agreement, will require additional fundsprovide the necessary funding for the Company to implement our growth strategy. We do not believe that our current cash and cash equivalents will be sufficient to meet our working capital requirementscontinue as a going concern for the next twelve months. We have had negative cash flow from operating activities as we have not yet begun to generate sufficient and consistent revenues to cover our operating expenses. Until we are able to establish a sufficient revenue stream from operations our ability to meet our current financial liabilities and commitments will be primarily dependent upon proceeds from outside capital sources including USMC, an affiliated entity.
On February 28, 2023, in connection with the April 7, 2022 the Company entered into a securities purchase agreement with USMC, a related party, pursuant to which the Company may issue up to an aggregate of $1,000,000 of two-yearissued a convertible promissory notesnote in the amount of $308,320 to USMC, with a related party (see Note 10).maturity date of February 28, 2025. The notes bearnote bears interest at 5% per annum and any outstanding principal or interestannum. Amounts due under the notes are convertiblenote may be converted into shares of the Company’s common stock at any time at the option of the holder,noteholder, at a conversion price of $0.39 per share. Currently,
| 27 |
On March 20, 2023, the Company has not issued any notes under suchentered into a securities purchase agreement. However, thereagreement with USMC, effective March 7, 2023, pursuant to which USMC may purchase up to $1,000,000 of the Company’s 8% unsecured convertible two-year promissory notes in one or more closings. The notes are convertible into the Company’s common stock at a conversion price of $0.10 per share.
Going Concern
The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared assuming that the Company will continue as a going concern. The Company has accumulated losses from inception through February 28, 2023, of $59,474,448, as well as negative cash flows from operating activities and a working capital deficiency. During the three months ended February 28, 2023, the Company received net cash proceeds of $300,000 from USMC. Additionally, USMC paid $8,320 to vendors on behalf of the Company during the three months ended February 28, 2023. The Company does not have sufficient cash to meet its obligations in the twelve months following the date of this Quarterly Report if it does not generate additional revenue and obtain equity and debt financing from USMC or other third parties. There currently are no other arrangements or agreements for such financing, and management cannot guaranteethere can be no assurances that any other potential debt or equity financing will be available, or if available, on favorable terms. As such, these matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the issue date of this report. If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations, or cease operations completely.
Furthermore, such outside financing would likely take the form of bank loans, private offerings of debt or equity securities, advances from affiliates or some combination of these. The issuance of additional equity securities would dilute the stock ownership of current shareholders while incurring debt and may subject the Company to restrictions on its operations and corporate actions.
Going Concern
The unaudited condensed consolidated financial statements presented in this Quarterly Report have been prepared under the assumption that the Company will continue as a going concern. The Company has accumulated losses from inception through May 31, 2022, of $39,777,146, as well as negative cash flows from operating activities. During the six months ended May 31, 2022, the Company received net cash proceeds of $410,000 from USMC, an affiliated entity. Presently the Company does not have sufficient cash to meet its debt and due to affiliated entities obligations in the twelve months following the date of this Quarterly Report. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is in the process of evaluating various financing alternatives in order to finance the capital requirements of the Company. There can be no assurance that the Company will be successful with its fund-raising initiatives.
The unaudited condensed consolidated financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.
Working Capital Deficiency
Our working capital deficiency as of May 31, 2022, in comparison to our working capital deficiency as of November 30, 2021, is summarized as follows:
| May 31, | November 30, | February 28, | November 30, | |||||||||||||
| 2022 | 2021 | 2023 | 2022 | |||||||||||||
| Current assets | $ | 145,373 | $ | 138,903 | $ | 78,260 | $ | 23,786 | ||||||||
| Current liabilities | 846,534 | 2,380,157 | 736,094 | 644,076 | ||||||||||||
| Working capital deficiency | $ | 701,161 | $ | (2,241,254 | ) | $ | (657,834 | ) | $ | (620,290 | ) | |||||
The $6,740 increase, or 5%, increase in current assets is primarily due to anthe increase of accounts receivable of $53,880. The increase in current liabilities is primarily a result of the increase in accounts receivablepayable and accrued expenses of $35,696, partially offset by a decrease in cash of $25,780 and a decrease in prepaid expenses and other assets of $3,446. Current liabilities decreased $1,533,623, or 64% during the six months ended May 31, 2022, as compared to the six months ended May 31, 2021 primarily due to a decrease in convertible notes payable of $994,671 and a decrease of amounts due to affiliated entities of $470,211 during the six months ended May 31, 2022.$120,528.
Cash Flows
| Six Months Ended | ||||||||
| May 31, 2022 | May 31, 2021 | |||||||
| Net cash used in operating activities | $ | (425,780 | ) | $ | (525,921 | ) | ||
| Net cash provided by financing activities | 400,000 | 531,361 | ||||||
| Increase or (decrease) in cash | $ | (25,780 | ) | $ | 5,440 | |||
Three Months Ended February 28, | ||||||||
| 2023 | 2022 | |||||||
| Net cash used in operating activities | $ | (287,632 | ) | $ | (239,544 | ) | ||
| Net cash provided by investing activities | - | - | ||||||
| Net cash provided by financing activities | 290,000 | 118,000 | ||||||
| Increase (decrease) in cash | $ | 2,368 | $ | (121,544 | ) | |||
Operating Activities
Net cash used in operating activities was $425,780$287,632 for the sixthree months ended May 31, 2022,February 28, 2023, primarily due to a net loss of $18,715,921,$5,830,799, which primarily consisted of a non-cash expense of $18,254,083$5,485,013 related to stock-based compensation cost wagesand an increase of $252,068 and professional fees$53,880 in accounts receivable, which was partially offset by an increase of $239,529.$139,249 in accounts payable.
Net cash used in operating activities was $525,921$239,544 for the sixthree months ended May 31, 2021,February 28, 2022, primarily due to a net loss of $644,343$11,222,544, which primarily consisted of a non-cash expense of $10,949,738 related to stock-based compensation cost, wages of $128,217 and professional fees of $88,320, which was partially offset by non-cash expensesan increase of $101,687 related to stock-based compensation and amortization of debt discount and $16,735 of cash provided by changes in the levels of operating assets and liabilities, primarily as a result of increases$36,455 in accounts payable and accrued expenses, partially offset by an increase in accounts receivable.payable.
| 28 |
Investing Activities
There were no investing activities during the sixthree months ended May 31, 2022February 28, 2023 and May 31, 2021.February 28, 2022.
Financing Activities
For the sixthree months ended May 31,February 28, 2023, net cash provided by financing activities was $290,000, with $300,000 being an advance to the Company by USMC and subsequently exchanged into a convertible note.
For the three months ended February 28, 2022, net cash provided by financing activities was $400,000, consisting of $410,000$118,000, which was advanced to the Company by USMC and recorded as part of due to affiliated entities on the balance sheet and a $10,000 principal payment to notes due to officers.
For the six months ended May 31, 2020, net cash provided by financing activities was $387,811, which was primarily due to $178,000 received from convertible notes payable with USMC and $161,000 advanced to the Company by USMC.sheet.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Policies and Procedures
Our significant accounting policies are more fully described in Note 1 to our condensed consolidated financial statements included in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended November 30, 2021,2022, as filed with the SEC on March 15, 2022.February 28, 2023.
Recently Adopted Accounting Pronouncements
Our recently adopted accounting pronouncements are more fully described in Note 23 to our unaudited condensed consolidated financial statements included in this Quarterly Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e)13a-15I and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, our disclosure controls and procedures were not effective as of May 31, 2022February 28, 2023 due to the material weaknesses in internal control over financial reporting described below.
| 29 |
Material Weaknesses in Internal Control over Financial Reporting
A material weakness, as defined in the standards established by the Sarbanes-Oxley is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
The ineffectiveness of the Company’s internal control over financial reporting was due to the following material weaknesses:
| ● | Inadequate segregation of duties consistent with control objectives; |
| ● | Lack of formal policies and procedures; |
| ● | Lack of risk assessment procedures on internal controls to detect financial reporting risks on a timely manner; and |
| ● | Lack of personnel with U.S. GAAP |
Management’s Plan to Remediate the Material Weakness
Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions include:
| ● | Continue to search for and evaluate qualified independent outside directors; |
| ● | Continue to search for a qualified chief financial officer; |
| ● | Identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; and |
| ● | Continue to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures. |
We have engaged a third-party financial operations consulting firm to assist with the preparation of SEC reporting.
Management will continue to monitor and evaluate the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal controlcontrols over financial reporting that occurred during the first quarter ended May 31, 2022February 28, 2023 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Except as described below, there are no material pending legal proceedings in which we or any of our subsidiaries is a party or in which any director, officer or affiliate of ours, any owner of record or beneficially of more than 5% of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us.
On July 8, 2020, the Company’s former Chief Financial Officer, Al Calvanico (“Calvanico”), filed a demand for arbitration alleging retaliation, wrongful termination, and demand for a minimum of $600,000 in alleged stock value, plus interest, recovery of past and future wages, attorneys’ fees, and punitive damages (collectively, the “Calvanico Claims”). The Company denied all Calvanico Claims. The Company believes Calvanico is owed nothing because it takes the position that Calvanico was not terminated, but rather, his employment contract expired on September 21, 2019, in accordance with its terms, and was not renewed by Company and because Calvanico never exercised his stock options. On February 14, 2020, the Company requested in writing that Calvanico exercise his stock options within 30 days. Calvanico failed to do so. To date, Calvanico has not exercised his stock options. This disputeThe binding arbitration concluded on February 3, 2023. The arbitrator’s decision is currently in the arbitration discovery phase. An arbitration hearing is scheduled for November 8-11, 2022 before arbitrator, Scott Silverman in Los Angeles.
On January 11, 2019, the Company filed a complaint in the Second Judicial District Court in the State of Nevada, Washoe County (Case # CV19-00097) against Agregen International Corp (“Agregen”) and Robert Hurtado alleging the misuse of proprietary and confidential information acquired by Mr. Hurtado while employed by the Company as Vice President of Agricultural Research and Development. Mr. Hurtado was terminated in March 2018 and since that time the Company alleges that he conspired with Agregen to improperly use proprietary and confidential information to compete with the Company which constitute breaches of the non-compete and confidentiality provisions of his employment agreement with the Company. The Company was seeking $100,000,000 in monetary damages. On March 14, 2019, Agregen and Mr. Hurtado filed an answer to the Company’s Complaint that the allegations were false. An Early Case Conference was held on April 26, 2019, and a pre-trial conference was held on July 10, 2019. On March 13, 2020, the Company filed a First Amended Complaint, adding James Todd Gauer and John Gingerich as additional defendants. A settlement agreement was entered into between the parties, effectivedue June 3, 2022 and a Notice of Settlement was filed in the District Court pursuant to which, among other things, certain shares of the Company’s common stock beneficially owned by the defendants will be surrendered to the Company.30, 2023.
On March 29, 2019, the Company was served with a complaint filed by Superior Soils Supplements LLC (“Superior Soils”) in the Superior Court of the State of California in and for the County of Kings (Case #19C-0124) relating to 64 truckloads of soil amendments delivered to a customer by the Company on behalf of Superior Soils. Superior Soils alleged that the soil amendments were not labeled correctly requiring the entire shipment of product to be returned to the Company. The complaint alleges breach of contract, misrepresentations, fraudulent concealment and unfair competition. The complaint seeks damages of approximately $300,000.$400,000 and, although the Company is vigorously defending such claims and believes that there is little to no risk of liability, it has accrued $400,000 for such risk. The Company filed its answer on May 6, 2019, denying responsibility for the mis-labellingmislabeling and denying any liability for damages therefrom. The matter is set for trial in AprilMay 2023.
ITEM 1A. RISK FACTORS
As a smaller reporting company, we are not required to provide the information required by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
Except as set forth below, thereThere were no sales of equity securities during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Current Report on Form 8-K filed by the Company.
On May 19, 2022, the Company entered into an agreement with Newbridge Securities Corporation (“Newbridge”), pursuant to which Newbridge will provide investment banking and corporate advisory services to the Company. As consideration therefor, the Company issued Newbridge 300,000 shares of common stock on June 17, 2022 which shares are subject to a 12-month lockup from the date of issuance.
On June 9, 2022, the Company issued 250,000 shares of common stock to Jeffrey Guzy, a director, pursuant to his exercise of a stock option at an exercise price of $0.10 per share.
On July 7, 2022, the Company issued an aggregate of 23,741,655 shares of its common stock to USMC pursuant to USMC’s notices of conversion, dated April 7, 2022, of an aggregate of $2,464,261.74 of principal amount of convertible promissory notes and $108,909 of accrued interest on such convertible promissory notes.
The above issuances did not involve any underwriters, underwriting discounts or commissions, or any public offering and we believe are exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There are no defaults upon senior securities that were not previously reported in a Current Report on Form 8-K.None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
| 31 |
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibit Number | Description | |
| 31* | Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and Chief Financial Officer | |
| 32* | Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and the Chief Financial Officer | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PUREBASE CORPORATION | ||
| By: | /s/ A. Scott Dockter | |
| A. Scott Dockter | ||
| Chief Executive Officer and Chief Financial Officer | ||
| (Principal Executive Officer and Principal Financial and Accounting Officer) | ||
| Date: | ||