Document and Entity Information
Document and Entity Information - USD ($) | 9 Months Ended | |
Aug. 31, 2017 | May 31, 2017 | |
Document and Entity Information: | ||
Entity Registrant Name | PureBase Corp | |
Document Type | 10-Q | |
Document Period End Date | Aug. 31, 2017 | |
Trading Symbol | pubc | |
Amendment Flag | false | |
Entity Central Index Key | 1,575,858 | |
Current Fiscal Year End Date | --11-30 | |
Entity Common Stock, Shares Outstanding | 141,347,173 | |
Entity Public Float | $ 52,272,293 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited for August 31, 2017) - USD ($) | Aug. 31, 2017 | Nov. 30, 2016 | |
Current assets | |||
Cash | $ 46,851 | $ 555,648 | |
Accounts Receivable | [1] | 51,846 | 58,897 |
Prepaid expenses and other assets | 7,534 | 38,182 | |
Total Current Assets | 106,231 | 652,727 | |
Property and Equipment | |||
Property and equipment | 42,103 | 35,151 | |
Autos and Trucks | 25,062 | 25,061 | |
Accumulated Depreciation | (49,511) | (40,477) | |
Total Property and Equipment | 17,654 | 19,735 | |
Total Mineral Rights | |||
Mineral Rights Acquisition Costs | 200,000 | 200,000 | |
Deposit on Mineral Rights | 75,000 | 75,000 | |
Total Mineral Rights | 275,000 | 275,000 | |
Total Assets | 398,885 | 947,462 | |
Current Liabilities | |||
Accounts Payable | 17,641 | 160,467 | |
Accrued Payroll and Related | 343,482 | 479,021 | |
Accrued Interest | 136,619 | 97,993 | |
Other Accrued Liabilities | 107,004 | 80,040 | |
Due to Officer | 197,096 | 170,886 | |
Due to Affiliated Entities | 2,164,932 | 1,249,135 | |
Notes Payable Current | 1,025,000 | 1,025,000 | |
Subscription Liability | 500,000 | ||
Total Current Liabilities | 3,991,774 | 3,762,542 | |
Commitments and contingencies | |||
Stockholders' Equity (Deficit) | |||
Common stock | 70,943 | 70,943 | |
Additional paid in capital | 2,797,016 | 2,462,572 | |
Accumulated deficit | (6,460,848) | (5,321,422) | |
Total Controlling Stockholders' Equity (Deficit) | (3,592,889) | (2,787,907) | |
Non-Controlling Interest | (27,173) | ||
Total Stockholders' Equity (Deficit) | (3,592,889) | (2,815,080) | |
Total Liabilities and Stockholders' Deficit | $ 398,885 | $ 947,462 | |
[1] | Net of allowance for doubtful accounts of $0. |
Statement of Financial Position
Statement of Financial Position - Parenthetical - $ / shares | Aug. 31, 2017 | Nov. 30, 2016 |
Statement of Financial Position | ||
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 520,000,000 | 520,000,000 |
Common Stock, Shares Issued | 141,347,173 | 141,347,173 |
Common Stock, Shares Outstanding | 141,347,173 | 141,347,173 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2017 AND 2016 (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | ||||
Statement of Income | |||||||
Revenue | $ 231,899 | $ 12,681 | $ 446,096 | $ 14,121 | |||
Operating expenses: | |||||||
General and administrative | 447,221 | 865,382 | 1,917,371 | 2,080,251 | |||
Exploration and mining expenses | 79,012 | 9,231 | 194,636 | 66,476 | |||
Depreciation and amortization | 3,011 | 3,010 | 9,033 | 9,031 | |||
Total Operating Expense | 529,244 | 877,623 | 2,121,040 | 2,155,758 | |||
Other Income (Expenses) | |||||||
Change in value of derivative liability | 166,435 | 60,569 | |||||
Gain from deconsolidation | [1] | 250,000 | 0 | 562,571 | [2] | 0 | [2] |
Other Income (Expenses) | 12 | 22 | 13 | ||||
Interest Expense | (36,613) | (36,841) | (66,784) | (190,779) | |||
Income Tax Expense | 1,350 | ||||||
Total Other Income (Expenses) | 213,399 | 129,594 | 495,809 | (128,847) | |||
Net Income (Loss) | (83,946) | (735,348) | (1,179,135) | (2,270,484) | |||
Less: Net Loss attributable to Non-Controlling Interest | (5,468) | (39,709) | (5,468) | ||||
Net Loss attributable to Stockholders | [3] | $ (83,946) | $ (729,880) | $ (1,139,426) | [4] | $ (2,265,016) | [4] |
Basic and Diluted Loss Per Share | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) | |||
Weighted average common shares outstanding - basic and diluted | 141,347,173 | 141,008,724 | 141,347,173 | 140,950,297 | |||
[1] | Of Purebase Networks. | ||||||
[2] | Purebase Networks. | ||||||
[3] | To Purebase Corp. | ||||||
[4] | Purebase Corp. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED AUGUST 31, 2017 AND 2016 (UNAUDITED) - USD ($) | 9 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | ||
Operating activities: | |||
Net Income (Loss) | $ (1,179,135) | $ (2,270,484) | |
Add back Net Loss attributable to Non-Controlling Interest | 39,709 | 5,468 | |
Net Loss attributable to Stockholders | [1],[2] | (1,139,426) | (2,265,016) |
Adjustments to reconcile net loss to cash used in operating activities: | |||
Gain from deconsolidation | [3],[4] | (562,571) | 0 |
Depreciation and amortization | 9,033 | 9,031 | |
Stock Based Compensation | 334,444 | 770,745 | |
Excess value of derivative over note payable | 70,125 | ||
Change in value of derivative liability | (60,569) | ||
Amortization of loan discount | 68,764 | ||
Non-controlling interest | (39,709) | (5,468) | |
Accounts Receivable (increase/decrease) | 7,051 | ||
Prepaid expenses and other current assets (increase/decrease) | 3,142 | 500 | |
Accounts payable and accrued expenses (increase/decrease) | 867,156 | 890,645 | |
Net cash used in operating activities | (520,880) | (463,041) | |
Investing Activities: | |||
Proceeds from sale of interest in subsidiary | [4] | 250,000 | 0 |
Effect of deconsolidation of subsidiary | [4] | (453,561) | 0 |
Purchase Equipment | (6,953) | ||
Net cash used in investing activities | (210,514) | ||
Financing activities: | |||
Interest in subsidiary | [4] | 0 | 250,000 |
Proceeds from notes payable | 145,000 | ||
Proceeds from convertible note payable | 45,000 | ||
Advances from related parties | 217,000 | 272,403 | |
Advances to/from officers | 5,597 | (18,720) | |
Net cash provided by financing activities | 222,597 | 693,683 | |
Net change in cash | (508,797) | 172,440 | |
Cash, beginning of period | 555,648 | 66,269 | |
Cash, end of period | 46,851 | 238,709 | |
Supplemental cash flow information: | |||
Income taxes paid in cash | 1,350 | ||
Vendors paid by Affiliated Entities | $ 698,797 | $ 444,764 | |
[1] | Purebase Corp. | ||
[2] | To Purebase Corp. | ||
[3] | Of Purebase Networks. | ||
[4] | Purebase Networks. |
Note 1. Nature of Business
Note 1. Nature of Business | 9 Months Ended |
Aug. 31, 2017 | |
Notes | |
Note 1. Nature of Business | Note 1. Nature of Business Business Overview Purebase Corporation (the "Company"), was incorporated in the State of Nevada on March 2, 2010 to create a web-based service 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 focus to an exploration, mining and product marketing company which will focus on identifying and developing advanced stage natural resource projects which show potential to achieve full production. The business strategy of the Company is to identify, acquire, define, develop and operate world-class industrial and natural resource properties and to contract for mine development and operations services to its mining properties located initially in the Western United States and currently in California and Nevada. The Company intends to engage in the identification, acquisition, development, mining and full-scale exploitation of industrial and natural mineral properties in the United States. The Company plans to package and market such industrial and natural minerals to retail and wholesale industrial and agricultural market sectors. The Company will initially seek to develop deposits of pozzolan, white silica and potassium sulfate on its own properties or acquire such minerals from other sources. These minerals have a wide range of uses including construction, agriculture additives, animal feedstock, ceramics, synthetics, absorbents and electronics. The Company's activities are subject to significant risks and uncertainties including its ability to secure additional funding to pursue its operations. The Company is headquartered in Ione, California. The Company's business is divided into wholly-owned and majority-owned subsidiaries which will operate as business divisions whose sole focus is to develop sector related products and to provide for distribution of those products into primarily the agricultural and construction industry sectors. On May 6, 2016, the Company and Steve Ridder and John Wharton formed Purebase Networks, Inc., ("PNI") a Delaware corporation. PNI was a joint venture to develop an agricultural technology solution comprised of sensors, proprietary wireless technology, and cloud analytics to assist farmers in monitoring and managing the health of their soils. The Company was initially intended to hold a majority interest in PNI and assist in PNI's management. However, due to certain management disagreements, the Company entered into a final settlement agreement in August, 2017, pursuant to which the Company received $250,000 and its ownership interest in PNI was reduced to zero and the Company no longer provides management assistance to PNI. |
Note 2. Summary of Significant
Note 2. Summary of Significant Accounting Policies | 9 Months Ended |
Aug. 31, 2017 | |
Notes | |
Note 2. Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Purebase Corporation and its wholly owned subsidiaries Purebase Agricultural, Inc. (fka. Purebase, Inc.) and US Agricultural Minerals, LLC ("USAM"), collectively referred to as the "Company". All intercompany transactions have been eliminated in consolidation. The condensed consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring entries), which in the opinion of management, are necessary to present fairly the consolidated financial position at August 31, 2017 and the consolidated results of operations of the Company for the three and nine months ended August 31, 2017 and 2016 and cash flows for the nine months ended August 31, 2017 and 2016. Operating results for the three and nine months ended August 31, 2017 are not necessarily indicative of the results that may be expected for the year ending November 30, 2017. The unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and footnotes thereto for the year ended November 30, 2016 filed on Form 10-K on April 14, 2017. Going Concern The Company incurred a net loss of $1,139,426 for the nine months ended August 31, 2017 and generated negative cash flows from operations. In addition, the Company has generated insignificant revenue in conjunction with its business plan. In order to support its operations, the Company will require additional infusions of cash from the sale of equity instruments or the issuance of debt instruments, or the commencement of profitable revenue generating activities. If adequate funds are not available or are not available on acceptable terms, the Company's ability to fund its operations, take advantage of potential acquisition opportunities, develop or enhance its properties in the future or respond to competitive pressures would be significantly limited. Such limitations could require the Company to curtail, suspend or discontinue parts of its business plan. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty. The condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Accounts Receivable The Company uses the specific identification method for recording the provision for doubtful accounts, which was $0 at August 31, 2017 and November 30, 2016. Accounts receivable are written off when all collection attempts have failed. Revenue Recognition Revenue is recognized when the product has shipped and the title has transferred to the customer. Basic and Diluted Net Loss Per Share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding warrants and stock options. The outstanding warrants and stock options have been excluded from the calculation of the diluted loss per share due to their anti-dilutive effect. For the quarters ended August 31, 2017 and August 31, 2016 warrants and options to purchase 805,494 and 7,977,494 shares of common stock respectively, have been excluded from the computation of potential dilutive securities. Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of 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. Property and Equipment Property and equipment are carried at cost. Depreciation is computed using straight line depreciation methods over the estimated useful lives as follows: Equipment 5 years Autos and trucks 5 years Major additions and improvements are capitalized. Costs of maintenance and repairs which do not improve or extend the life of the associated assets are expensed in the period in which they are incurred . Cash and Cash Equivalents The Company considers cash in banks, deposits in transit, and highly liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. 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 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. Mineral Rights Acquisition costs of mineral rights are capitalized as incurred while exploration and pre-extraction expenditures are expensed as incurred until such time 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. Fair Value of Financial Instruments Financial assets and liabilities recorded at fair value in the Company's condensed consolidated balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories, as defined by the standard, are as follows: Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. For certain of our financial instruments, including accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short-term nature. The carrying amount of the Company's notes payable approximates fair value based on prevailing interest rates. Subscription Liability At November 30, 2016, $500,000 was recorded as a "subscription liability" on the Company's condensed consolidated balance sheets relating to PNI's lack of sufficient authorized PNI shares to issue to its investors. The subscription liability was removed as the Company now owns no interest in PNI and no longer consolidates PNI's financial statements with those of the Company. Income Taxes The Company is expected to have net operating loss carryforwards that it can use to offset a certain amount of taxable income in the future. The Company is currently analyzing the amount of loss carryforwards that will be available to reduce future taxable income. The resulting deferred tax assets will be offset by a valuation allowance due to the uncertainty of its realization. The primary difference between income tax expense attributable to continuing operations and the amount of income tax expense that would result from applying domestic federal statutory rates to income before income taxes relates to the recognition of a valuation allowance for deferred income tax assets. The Company has adopted FASB ASC 740-10, " Income Taxes" Impairment of Long-lived Assets The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC 350, "Intangibles Goodwill and Other "Property and Equipment" Recent Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements Going Concern (Topic 915): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU is designed to simplify several aspects of accounting for share-based payment award transactions which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. ASU 2016-09 will become effective for the Company in the quarter ending February 2018. Early adoption is permitted in any interim or annual period. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In April 2016, the FASB issued AS 2016-10, Revenue from Contracts with Customers (Topic 606), which amends certain aspects of the Board's new revenue standard, ASU 201-09, Revenue from Contracts with Customers. The standard should be adopted concurrently with the adoption of ASU 2014-09 which is effective for annual and interim periods beginning after December 15, 2017. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Note 3. Properties
Note 3. Properties | 9 Months Ended |
Aug. 31, 2017 | |
Notes | |
Note 3. Properties | Note 3. Properties Placer Mining Claims Lassen County, CA Placer Mining Claim Notices have been filed and recorded with the US Bureau of Land Management (the "BLM") relating to 50 Placer mining claims identified as "USMC 1" thru "USMC 50" covering 1,145 acres of mining property located in Lassen County, California and known as the "Long Valley Pozzolan Deposit". The Long Valley Pozzolan Deposit is a placer claims resource in which the Company holds non-patented mining rights to 1,145 acres of contiguous placer claims within the boundaries of a known and qualified Pozzolan deposit. These claims were assigned to Purebase by one of its founders at his original cost basis of $0. These claims require a payment of $30,000 per year to the BLM. Federal Preference Rights Lease in Esmeralda County NV This Preference Rights Lease is granted by the 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 Purebase. These rights are presented at their cost of $200,000. This lease requires a payment of $3,000 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 US Mining and Minerals Corp. agreed to sell its fee simple property interest and certain mining claims to US Mine Corp. In contemplation of the Plan and Agreement of Reorganization, on December 1, 2014, US Mine Corp 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 US Bureau of Land Management ("BLM"). An initial deposit of $50,000 was paid to escrow, and the agreement required the payment of an additional $600,000 at the end of the escrow period. There was a delay in the seller receiving a clear title to the property and a fully permitted project, both of which were conditions to closing. In light of the foregoing, and the payment of another $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 Purebase, paid $575,000 to acquire the property on or about October, 15, 2015. Mr. Bremer will transfer title to the Company when the Company pays Mr. Bremer $575,000 plus expenses. The mining claims require a minimum royalty payment of $3,500 per year. |
Note 4. Notes Payable
Note 4. Notes Payable | 9 Months Ended |
Aug. 31, 2017 | |
Notes | |
Note 4. Notes Payable | Note 4. Notes Payable Purebase assumed a $1,000,000 promissory note on November 24, 2014 in connection with the acquisition of USAM by Purebase. The note bears simple interest at an annual rate of 5% and the principal and accrued interest were payable on May 1, 2016. Upon the occurrence of an event of default, which includes voluntary or involuntary bankruptcy, all unpaid principal, accrued interest and other amounts owing are immediately due, payable and collectible by the lender pursuant to applicable law. The balance of the note was $1,000,000 at August 31, 2017 and November 30, 2016. The Note is in default however, the Company continues to have discussions with Note Holder to extend the Note under the same terms and conditions. In February 2016, Bayshore Capital, a major shareholder, advanced $25,000 to Purebase Corp for working capital at 6% per annum. The note was payable August 26, 2016, or when the Company closes its bridge financing, whichever occurs first. The Company is in default on this note. On June 28, 2016, three stockholders assigned their notes and accrued interest from the Company to Arthur Scott Dockter, CEO and a Director of the Company. In return for accepting the assignment of the notes, the Company issued Mr. Dockter a Note in the amount of $122,430, which amount included accumulated interest on the assumed notes. The Note to Mr. Dockter bears interest at 6% per annum and was due September 7, 2016. On August 31, 2017, the Company issued a new Note in the amount of $197,096 to Mr. Dockter (replacing the previous Note for $122,430) to consolidate the total amounts due to and assumed by Mr. Dockter. The new Note to Mr. Dockter bears interest at 6% per annum and is due the earlier of the Company closing of bridge financing or January 15, 2018. |
Note 5. Commitments and Conting
Note 5. Commitments and Contingencies | 9 Months Ended |
Aug. 31, 2017 | |
Notes | |
Note 5. Commitments and Contingencies | Note 5. Commitments and Contingencies Office and Rental Property Leases Purebase is using office space provided by U S Mine Corporation, a company that is owned by the Company's Majority Shareholders and Directors A. Scott Dockter and John Bremer. There is currently no lease between the two Companies for its use of the office space provided. Mineral Properties Our mineral rights require various annual lease payments. See Note 3. Legal Matters Purebase and US Agricultural Minerals, LLC along with certain principals of those entities were named as defendants in a Complaint filed in the Second Judicial District Court in Washoe County, Nevada (Case # CV14 01348) on June 23, 2014. The Complaint was filed by Madelaine and Edwin Durand alleging various causes of action including breach of contract and misrepresentations by various defendants and certain principals of Purebase and USAM. The substance of the Complaint involves the alleged breach and other wrongful acts pertaining to a Mineral Lease Contract and a Non-Disclosure, Confidentiality and Non-Compete Agreement entered into between the Plaintiffs and the Defendants. On September 11, 2014, a Motion to Dismiss was filed on behalf of all Defendants and is pending awaiting determination by the Court. A Hearing on Defendants' Motion to Dismiss was held on April 17, 2015 at which time the Defendants' Motion was denied. In addition, the Plaintiffs were allowed 60 days to amend their Complaint. On June 16, 2015, the Plaintiffs filed an Amended Complaint which, among other things, added the Company as a named Defendant. On June 29, 2015, the Defendants filed a Motion to Dismiss the Amended Complaint. Oral argument on the Defendants' Motion to Dismiss is scheduled for December 17, 2015. On March 2, 2016, the Court issued its decision regarding Defendant's Motion to Dismiss all claims. The Court dismissed nine (9) of the twelve (12) claims against the Defendants. The Plaintiffs were ordered to further amend their Complaint and add their corporation as a named party. On March 25, 2016, the Plaintiffs filed the Court ordered Second Amended Complaint. On April 11, 2016 Defendants filed their Answer to the Second Amended Complaint and filed their Counter Claims against the Plaintiffs. Discovery closed in June, 2017 and a trial date is set for February, 2018. The Company believes that it will prevail in this lawsuit and does not expect the outcome of this case to have a material effect on the Company's financial condition. On April 30, 2016, the Purebase Board of Directors agreed to form a joint venture with John Wharton and Steve Ridder to develop certain technologies to allow farmers to optimize crop growth. In May, 2016 Messrs. Wharton and Ridder incorporated a Delaware corporation called Purebase Networks, Inc.("PNI") to develop these technologies. However, in November, 2016 Purebase became dissatisfied with the management and progress of PNI's business and on November 16, 2016 the PNI Board relieved Mr. Ridder of his officer duties. Effective March 27, 2017, PNI entered into a Settlement Agreement with Mr. Ridder to resolve the dispute pursuant to which the ownership of PNI by Purebase had been reduced to 10% and Purebase had no further involvement in PNI's management. This settlement resulted in a deconsolidation of PNI from the Purebase financial statements which is discussed in Note 7 below. Mr. Ridder's and Mr. Wharton's Settlement Agreement also includes a mutual release from any actions by PNI against Mr. Ridder and Mr. Wharton and Mr. Ridder and Mr. Wharton against PNI. An Amended and Restated Settlement Agreement was entered into on August 10, 2017 pursuant to which Teralytics Inc. (formerly PNI) repurchased Purebase's remaining interest in Teralytics, Inc. and the Company received $250,000. On September 21, 2016 the Company's President, David Vickers, left the Company. Subsequent to his departure, Mr. Vickers has retained legal counsel and is now alleging claims of age discrimination, fraud in the inducement, violation of California Labor Code §970 and breach of contract against the Company. On April 14, 2017, the Company was served by Mr. Vickers' attorney with a demand for arbitration of the above referenced claims. The Company plans to vigorously defend these claims in arbitration, currently scheduled for February 2018. The range of loss could not be determined, but Mr. Vickers' demand for arbitration stated a claim of over $1,000,000. Contractual Matters On November 1, 2013, Purebase entered into an agreement with US Mine Corp, which performs services relating to various technical evaluations and mine development services to Purebase with regard to the various mining properties/rights owned by Purebase. Terms of services and compensation will be determined for each project undertaken by US Mine Corp. Snow White Mine The Company made payments totaling $75,000 towards the purchase of the Snow White Mine. The Company will need to pay Mr. Bremer, a director of Purebase, an additional sum of $575,000 plus expenses, in order to obtain title of this property. Concentration of Credit Risk The Company maintains cash accounts at financial institutions. The accounts are insured by the Federal Deposit Insurance Corporation ("FDIC"). The cash accounts, at times, may exceed federally insured limits. At August 31, 2017, no account exceeded FDIC insurance limits. |
Note 6. Stockholder's Equity
Note 6. Stockholder's Equity | 9 Months Ended |
Aug. 31, 2017 | |
Notes | |
Note 6. Stockholder's Equity | Note 6. Stockholder's Equity Authorized Shares The Company's amended Articles of Incorporation authorize the issuance of up to 520,000,000 shares of $0.001 par value common stock and up to 10,000,000 shares of $0.001 par value preferred shares. No preferred stock was outstanding at August 31, 2017 and November 30, 2016. Warrants and Options Awarded Warrants Outstanding During the course of the year ended November 30, 2015, the Company raised capital through the sale of units. Each unit was comprised of one share of common stock and one warrant. Warrants outstanding at August 31, 2017 were as follows: Shares Exercise price Maturity 243,956 $ 3.75 October 2017 61,538 $ 3.25 October 2017 Warrants The following table summarizes all warrant activity for the nine months ended August 31, 2017: Warrants Outstanding Weighted Average Exercise Price Outstanding at November 30, 2016 477,494 $ 3.42 Granted 0 0 Exercised 0 0 Expired (172,000 ) $ 3.00 Outstanding at August 31, 2017 305,494 $ 3.65 Stock Options To date the Company has not yet established a formal Stock Option Plan. The options that have been granted during the year ended November 30, 2016 were done pursuant to employment contracts entered into by the Company and the respective employee. The Company is planning on establishing a formal stock option plan which will be approved and managed by the Board of Directors and will obtain shareholder approval. There were no stock options granted during the three and nine months ended August 31, 2017. Employee stock-based options compensation expenses for the three and nine months ended August 31, 2017 and August 31, 2016 was as follows: Three Months Three Months Nine Months Nine Months Ended August 31, Ended August 31, Ended August 31, Ended August 31, 2017 2016 2017 2016 General and Administrative $ 51,019 $ 382,539 $ 334,444 $ 770,745 Total $ 51,019 $ 382,539 $ 334,444 $ 770,745 Common stock, stock options or other equity instruments issued to non-employees (including consultants) as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued (unless the fair value of the consideration received can be more reliably measured). The fair value of stock options is determined using the Black-Scholes option-pricing model and is periodically re-measured as the underlying options vest. The following is a schedule summarizing employee and non-employee stock option activity for the nine-months ended August 31, 2017: Number of Options Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Contractual terms Outstanding at December 1, 2016 6,500,000 $ 2.54 0 Granted 0 $ 0 0 Exercised 0 N/A 0 Expired/Cancelled (6,000,000 ) $ 2.50 $ 0 Outstanding 8/31/17 500,000 $ 3.00 0 8.51 years Exercisable 8/31/17 300,000 $ 3.00 0 8.49 years Expected to vest 8/31/2017 200,000 $ 3.00 0 The aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company's common stock for each of the respective periods. As of August 31, 2017, the total unrecognized fair value compensation cost related to non-vested stock options to employees was approximately $310,545 which is expected to be recognized over approximately 1.53 years. On June 23, 2016, the Company entered into Stock Option Agreements with John Wharton and Steve Ridder pursuant to which Mr. Ridder and Mr. Wharton were given an option to purchase up to 5,000,000 and 1,000,000 shares, respectively, of Purebase common stock at an option price of $2.50/share. On March 27, 2017, PNI entered into Settlement Agreements with Mr. Ridder and Mr. Wharton which, among other provisions, included the cancellation of Mr. Ridder's Stock Option Agreement to purchase 5,000,000 shares and Mr. Wharton's Stock Option Agreement to purchase 1,000,000 shares. |
Note 7. Related Party Transacti
Note 7. Related Party Transactions | 9 Months Ended |
Aug. 31, 2017 | |
Notes | |
Note 7. Related Party Transactions | Note 7. Related Party Transactions Purebase temporarily sublet office space from OPTEC Solutions, LLC, a company partly owned by the Company's former CFO, Amy Clemens, on a month-to-month basis. The Company paid rent totaling $0 and $7,500 for the three and nine months ended August 31, 2017 and 2016, respectively. That arrangement has now come to an end since the Company has relocated its corporate headquarters to Ione, California. As of November 30, 2016, the Company had an outstanding balance owed to Amy Clemens, the former CFO, of $21,123, for consulting fees, benefits and miscellaneous expenses, and an outstanding balance of $14,478, owed to OPTEC Solutions, LLC, which is included in accounts payable on the condensed consolidated balance sheets. As of August 31, 2017, the balance owed to Amy Clemens was $16,188. The previous balances due to OPTEC Solutions and Amy Clemens have been assumed by A. Scott Dockter and consolidated into the new Note issued on August 31, 2017. (See Note 4 above). Effective February 29, 2016, a $100,000 note due to Bayshore Capital was assumed by A. Scott Dockter. Mr. Dockter is now responsible for the debt due Bayshore and not the Company. The balance remaining due to A. Scott Dockter on August 31, 2017 was $48,456 and has been consolidated into a new Note dated August 31, 2017 with other amounts due and assumed by Mr. Dockter. (See Note 4 above). On February 26, 2016, Bayshore Capital, a major shareholder of the Company, advanced $25,000 to the Company for working capital at 6% per annum. The note was payable August 26, 2016, or when the Company closes a bridge financing, whichever occurs first. The Company is in default on this note at August 31, 2017. The Company entered into a Contract Mining Agreement with USMC, a company owned by the majority stockholders of the Company, A. Scott Dockter and John Bremer, pursuant to which USMC will provide various technical evaluations and mine development services to the Company. Services totaling $44,575 and $0 were rendered by USMC for the three-months ended August 31, 2017 and 2016, respectively. Services totaling $119,542 and $0 were rendered by USMC for the nine months ended August 31, 2017 and 2016, respectively. During the three-months ended August 31, 2017, USMC paid $98,268 of expenses to the Company's vendors and creditors on behalf of the Company and also made cash advances to the Company of $30,000. During the nine months ended August 31, 2017, USMC paid $698,797 of expenses to the Company's vendors and creditors on behalf of the Company and also made cash advances to the Company of $217,000. The balance due to USMC is $1,923,529 and $1,007,732 at August 31, 2017 and November 30, 2016, respectively. During the year ended November 30, 2016, the Bremer Family Trust whose Trustee, John Bremer, is a major shareholder and Director of the Company, has advanced the Company $216,000 for corporate operating expenses. As of August 31, 2017, and November 30, 2016, the Company owes the Bremer Family Trust a total of $241,403. During the year ended November 30, 2015, the Company paid $25,000 to GroWest Corporation, a company owned by John Bremer, who is a Director and major stockholder of the Company, as a deposit on a mine. The mine purchase subsequently was assumed by John Bremer. See Note 3. On June 28, 2016, three stockholders assigned their notes from the Company to Arthur Scott Dockter, CEO and a Director of the Company. In return for accepting the assignment of the Notes, the Company issued Mr. Dockter a Note in the amount of $122,430 which amount included accumulated interest on the assumed notes. The Note to Mr. Dockter bears interest at 6% and was due September 7, 2016. The Note has been consolidated into a new Note dated August 31, 2017 with other amounts due and assumed by Mr. Dockter. On August 31, 2017, the Company issued a Note in the amount of $197,096 to Arthur Scott Dockter, President, CEO and a Director of the Company to consolidate the total amounts due to and assumed by Mr. Dockter. The Note to Mr. Dockter bears interest at 6% and is due the earlier of closing of bridge financing or January 15, 2018. In April, 2016, the Company entered into a joint venture in order to develop proprietary technologies for use in the agricultural markets, primarily to assist farmers in managing their crops. In furtherance of this joint venture, in May, 2016 a Delaware corporation called Purebase Networks, Inc. ("PNI") was formed in order to develop these farming technologies. The Board of Directors consisted of John Wharton, Steve Ridder and Scott Dockter with Mr. Wharton and Mr. Ridder serving as the executive officers. As of February 28, 2017, the Company owned an 82% ownership interest in PNI. In order to fund PNI's technology development, it raised investor funds of $750,000 of which $500,000 was recorded as a subscription liability on PNI's balance sheet. The Company became dissatisfied with the management and progress of PNI's business and on November 16, 2016 the PNI Board relieved Mr. Ridder of his officer duties. PNI commenced negotiating a Settlement Agreement with Mr. Ridder and Mr. Wharton and entered into Settlement Agreements dated March 27, 2017 with Mr. Ridder and Mr. Wharton to resolve their dispute, terminate the legal actions against Mr. Ridder and restructure the management and ownership of PNI. Mr. Wharton's Settlement Agreement provided for the cancellation of certain stock options granted to him to purchase 1,000,000 shares of the Company's common stock. Mr. Ridder's Settlement Agreement provided for the cancellation of certain stock options granted to him to purchase 5,000,000 shares of the Company's common stock and stipulates that the ownership of PNI by the Company will be reduced to 10%. This settlement has resulted in a deconsolidation of PNI from the Company's financial statements as of the fiscal quarter ended May 31, 2017. As a result of this deconsolidation, the Company carried its remaining 10% interest in PNI as an investment in PNI. On August 10, 2017 Mr. Ridder and the Company entered into an Amended and Restated Settlement Agreement pursuant to which Teralytics, Inc. (formerly PNI) repurchased the Company's remaining 10% interest for $250,000. Due to the elimination of any ownership in Teralytics, Inc. and the absence of any of the Company's officers or Directors serving in similar or any capacity with Teralytics, Inc., the Company will no longer have any ownership interest in or influence over Teralytics, Inc. On September 21, 2016 the Company's President, David Vickers, left the Company. Subsequent to his departure, Mr. Vickers has retained legal counsel and is now alleging claims of age discrimination, fraud in the inducement, violation of California Labor Code §970 and breach of contract against the Company. On April 14, 2017, the Company was served by Mr. Vickers' attorney with a demand for arbitration of the above referenced claims. The Company plans to vigorously defend these claims in arbitration, currently scheduled in February 2018. |
Note 1. Nature of Business_ Bus
Note 1. Nature of Business: Business Overview (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Business Overview | Business Overview Purebase Corporation (the "Company"), was incorporated in the State of Nevada on March 2, 2010 to create a web-based service 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 focus to an exploration, mining and product marketing company which will focus on identifying and developing advanced stage natural resource projects which show potential to achieve full production. The business strategy of the Company is to identify, acquire, define, develop and operate world-class industrial and natural resource properties and to contract for mine development and operations services to its mining properties located initially in the Western United States and currently in California and Nevada. The Company intends to engage in the identification, acquisition, development, mining and full-scale exploitation of industrial and natural mineral properties in the United States. The Company plans to package and market such industrial and natural minerals to retail and wholesale industrial and agricultural market sectors. The Company will initially seek to develop deposits of pozzolan, white silica and potassium sulfate on its own properties or acquire such minerals from other sources. These minerals have a wide range of uses including construction, agriculture additives, animal feedstock, ceramics, synthetics, absorbents and electronics. The Company's activities are subject to significant risks and uncertainties including its ability to secure additional funding to pursue its operations. The Company is headquartered in Ione, California. The Company's business is divided into wholly-owned and majority-owned subsidiaries which will operate as business divisions whose sole focus is to develop sector related products and to provide for distribution of those products into primarily the agricultural and construction industry sectors. On May 6, 2016, the Company and Steve Ridder and John Wharton formed Purebase Networks, Inc., ("PNI") a Delaware corporation. PNI was a joint venture to develop an agricultural technology solution comprised of sensors, proprietary wireless technology, and cloud analytics to assist farmers in monitoring and managing the health of their soils. The Company was initially intended to hold a majority interest in PNI and assist in PNI's management. However, due to certain management disagreements, the Company entered into a final settlement agreement in August, 2017, pursuant to which the Company received $250,000 and its ownership interest in PNI was reduced to zero and the Company no longer provides management assistance to PNI. |
Note 2. Summary of Significan14
Note 2. Summary of Significant Accounting Policies: Basis of Presentation (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Purebase Corporation and its wholly owned subsidiaries Purebase Agricultural, Inc. (fka. Purebase, Inc.) and US Agricultural Minerals, LLC ("USAM"), collectively referred to as the "Company". All intercompany transactions have been eliminated in consolidation. The condensed consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring entries), which in the opinion of management, are necessary to present fairly the consolidated financial position at August 31, 2017 and the consolidated results of operations of the Company for the three and nine months ended August 31, 2017 and 2016 and cash flows for the nine months ended August 31, 2017 and 2016. Operating results for the three and nine months ended August 31, 2017 are not necessarily indicative of the results that may be expected for the year ending November 30, 2017. The unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and footnotes thereto for the year ended November 30, 2016 filed on Form 10-K on April 14, 2017. |
Note 2. Summary of Significan15
Note 2. Summary of Significant Accounting Policies: Going Concern (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Going Concern | Going Concern The Company incurred a net loss of $1,139,426 for the nine months ended August 31, 2017 and generated negative cash flows from operations. In addition, the Company has generated insignificant revenue in conjunction with its business plan. In order to support its operations, the Company will require additional infusions of cash from the sale of equity instruments or the issuance of debt instruments, or the commencement of profitable revenue generating activities. If adequate funds are not available or are not available on acceptable terms, the Company's ability to fund its operations, take advantage of potential acquisition opportunities, develop or enhance its properties in the future or respond to competitive pressures would be significantly limited. Such limitations could require the Company to curtail, suspend or discontinue parts of its business plan. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty. The condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. |
Note 2. Summary of Significan16
Note 2. Summary of Significant Accounting Policies: Accounts Receivable (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Accounts Receivable | Accounts Receivable The Company uses the specific identification method for recording the provision for doubtful accounts, which was $0 at August 31, 2017 and November 30, 2016. Accounts receivable are written off when all collection attempts have failed. |
Note 2. Summary of Significan17
Note 2. Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Revenue Recognition | Revenue Recognition Revenue is recognized when the product has shipped and the title has transferred to the customer. |
Note 2. Summary of Significan18
Note 2. Summary of Significant Accounting Policies: Basic and Diluted Net Loss Per Share (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding warrants and stock options. The outstanding warrants and stock options have been excluded from the calculation of the diluted loss per share due to their anti-dilutive effect. For the quarters ended August 31, 2017 and August 31, 2016 warrants and options to purchase 805,494 and 7,977,494 shares of common stock respectively, have been excluded from the computation of potential dilutive securities. |
Note 2. Summary of Significan19
Note 2. Summary of Significant Accounting Policies: Use of Estimates and Assumptions (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of 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. |
Note 2. Summary of Significan20
Note 2. Summary of Significant Accounting Policies: Property and Equipment (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Property and Equipment | Property and Equipment Property and equipment are carried at cost. Depreciation is computed using straight line depreciation methods over the estimated useful lives as follows: Equipment 5 years Autos and trucks 5 years Major additions and improvements are capitalized. Costs of maintenance and repairs which do not improve or extend the life of the associated assets are expensed in the period in which they are incurred . |
Note 2. Summary of Significan21
Note 2. Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash in banks, deposits in transit, and highly liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. |
Note 2. Summary of Significan22
Note 2. Summary of Significant Accounting Policies: Exploration Stage (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Exploration Stage | 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 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. |
Note 2. Summary of Significan23
Note 2. Summary of Significant Accounting Policies: Mineral Rights (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Mineral Rights | Mineral Rights Acquisition costs of mineral rights are capitalized as incurred while exploration and pre-extraction expenditures are expensed as incurred until such time 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. |
Note 2. Summary of Significan24
Note 2. Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial assets and liabilities recorded at fair value in the Company's condensed consolidated balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories, as defined by the standard, are as follows: Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. For certain of our financial instruments, including accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short-term nature. The carrying amount of the Company's notes payable approximates fair value based on prevailing interest rates. |
Note 2. Summary of Significan25
Note 2. Summary of Significant Accounting Policies: Subscription Liability (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Subscription Liability | Subscription Liability At November 30, 2016, $500,000 was recorded as a "subscription liability" on the Company's condensed consolidated balance sheets relating to PNI's lack of sufficient authorized PNI shares to issue to its investors. The subscription liability was removed as the Company now owns no interest in PNI and no longer consolidates PNI's financial statements with those of the Company. |
Note 2. Summary of Significan26
Note 2. Summary of Significant Accounting Policies: Income Taxes (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Income Taxes | Income Taxes The Company is expected to have net operating loss carryforwards that it can use to offset a certain amount of taxable income in the future. The Company is currently analyzing the amount of loss carryforwards that will be available to reduce future taxable income. The resulting deferred tax assets will be offset by a valuation allowance due to the uncertainty of its realization. The primary difference between income tax expense attributable to continuing operations and the amount of income tax expense that would result from applying domestic federal statutory rates to income before income taxes relates to the recognition of a valuation allowance for deferred income tax assets. The Company has adopted FASB ASC 740-10, " Income Taxes" |
Note 2. Summary of Significan27
Note 2. Summary of Significant Accounting Policies: Impairment of Long-Lived Assets (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Impairment of Long-Lived Assets | Impairment of Long-lived Assets The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC 350, "Intangibles Goodwill and Other "Property and Equipment" |
Note 2. Summary of Significan28
Note 2. Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements Going Concern (Topic 915): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU is designed to simplify several aspects of accounting for share-based payment award transactions which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. ASU 2016-09 will become effective for the Company in the quarter ending February 2018. Early adoption is permitted in any interim or annual period. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In April 2016, the FASB issued AS 2016-10, Revenue from Contracts with Customers (Topic 606), which amends certain aspects of the Board's new revenue standard, ASU 201-09, Revenue from Contracts with Customers. The standard should be adopted concurrently with the adoption of ASU 2014-09 which is effective for annual and interim periods beginning after December 15, 2017. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Note 5. Commitments and Conti29
Note 5. Commitments and Contingencies: Office and Rental Property Leases (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Office and Rental Property Leases | Office and Rental Property Leases Purebase is using office space provided by U S Mine Corporation, a company that is owned by the Company's Majority Shareholders and Directors A. Scott Dockter and John Bremer. There is currently no lease between the two Companies for its use of the office space provided. Mineral Properties Our mineral rights require various annual lease payments. See Note 3. |
Note 5. Commitments and Conti30
Note 5. Commitments and Contingencies: Legal Matters (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Legal Matters | Legal Matters Purebase and US Agricultural Minerals, LLC along with certain principals of those entities were named as defendants in a Complaint filed in the Second Judicial District Court in Washoe County, Nevada (Case # CV14 01348) on June 23, 2014. The Complaint was filed by Madelaine and Edwin Durand alleging various causes of action including breach of contract and misrepresentations by various defendants and certain principals of Purebase and USAM. The substance of the Complaint involves the alleged breach and other wrongful acts pertaining to a Mineral Lease Contract and a Non-Disclosure, Confidentiality and Non-Compete Agreement entered into between the Plaintiffs and the Defendants. On September 11, 2014, a Motion to Dismiss was filed on behalf of all Defendants and is pending awaiting determination by the Court. A Hearing on Defendants' Motion to Dismiss was held on April 17, 2015 at which time the Defendants' Motion was denied. In addition, the Plaintiffs were allowed 60 days to amend their Complaint. On June 16, 2015, the Plaintiffs filed an Amended Complaint which, among other things, added the Company as a named Defendant. On June 29, 2015, the Defendants filed a Motion to Dismiss the Amended Complaint. Oral argument on the Defendants' Motion to Dismiss is scheduled for December 17, 2015. On March 2, 2016, the Court issued its decision regarding Defendant's Motion to Dismiss all claims. The Court dismissed nine (9) of the twelve (12) claims against the Defendants. The Plaintiffs were ordered to further amend their Complaint and add their corporation as a named party. On March 25, 2016, the Plaintiffs filed the Court ordered Second Amended Complaint. On April 11, 2016 Defendants filed their Answer to the Second Amended Complaint and filed their Counter Claims against the Plaintiffs. Discovery closed in June, 2017 and a trial date is set for February, 2018. The Company believes that it will prevail in this lawsuit and does not expect the outcome of this case to have a material effect on the Company's financial condition. On April 30, 2016, the Purebase Board of Directors agreed to form a joint venture with John Wharton and Steve Ridder to develop certain technologies to allow farmers to optimize crop growth. In May, 2016 Messrs. Wharton and Ridder incorporated a Delaware corporation called Purebase Networks, Inc.("PNI") to develop these technologies. However, in November, 2016 Purebase became dissatisfied with the management and progress of PNI's business and on November 16, 2016 the PNI Board relieved Mr. Ridder of his officer duties. Effective March 27, 2017, PNI entered into a Settlement Agreement with Mr. Ridder to resolve the dispute pursuant to which the ownership of PNI by Purebase had been reduced to 10% and Purebase had no further involvement in PNI's management. This settlement resulted in a deconsolidation of PNI from the Purebase financial statements which is discussed in Note 7 below. Mr. Ridder's and Mr. Wharton's Settlement Agreement also includes a mutual release from any actions by PNI against Mr. Ridder and Mr. Wharton and Mr. Ridder and Mr. Wharton against PNI. An Amended and Restated Settlement Agreement was entered into on August 10, 2017 pursuant to which Teralytics Inc. (formerly PNI) repurchased Purebase's remaining interest in Teralytics, Inc. and the Company received $250,000. On September 21, 2016 the Company's President, David Vickers, left the Company. Subsequent to his departure, Mr. Vickers has retained legal counsel and is now alleging claims of age discrimination, fraud in the inducement, violation of California Labor Code §970 and breach of contract against the Company. On April 14, 2017, the Company was served by Mr. Vickers' attorney with a demand for arbitration of the above referenced claims. The Company plans to vigorously defend these claims in arbitration, currently scheduled for February 2018. The range of loss could not be determined, but Mr. Vickers' demand for arbitration stated a claim of over $1,000,000. |
Note 5. Commitments and Conti31
Note 5. Commitments and Contingencies: Contractual Matters (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Contractual Matters | Contractual Matters On November 1, 2013, Purebase entered into an agreement with US Mine Corp, which performs services relating to various technical evaluations and mine development services to Purebase with regard to the various mining properties/rights owned by Purebase. Terms of services and compensation will be determined for each project undertaken by US Mine Corp. Snow White Mine The Company made payments totaling $75,000 towards the purchase of the Snow White Mine. The Company will need to pay Mr. Bremer, a director of Purebase, an additional sum of $575,000 plus expenses, in order to obtain title of this property. |
Note 5. Commitments and Conti32
Note 5. Commitments and Contingencies: Concentration of Credit Risk (Policies) | 9 Months Ended |
Aug. 31, 2017 | |
Policies | |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains cash accounts at financial institutions. The accounts are insured by the Federal Deposit Insurance Corporation ("FDIC"). The cash accounts, at times, may exceed federally insured limits. At August 31, 2017, no account exceeded FDIC insurance limits. |
Note 2. Summary of Significan33
Note 2. Summary of Significant Accounting Policies: Fair Value of Financial Instruments: Fair Value, Measurement Inputs, Disclosure (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Fair Value, Measurement Inputs, Disclosure | Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
Note 6. Stockholder's Equity_ S
Note 6. Stockholder's Equity: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Shares Exercise price Maturity 243,956 $ 3.75 October 2017 61,538 $ 3.25 October 2017 |
Note 6. Stockholder's Equity_35
Note 6. Stockholder's Equity: Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Warrants Outstanding Weighted Average Exercise Price Outstanding at November 30, 2016 477,494 $ 3.42 Granted 0 0 Exercised 0 0 Expired (172,000 ) $ 3.00 Outstanding at August 31, 2017 305,494 $ 3.65 |
Note 6. Stockholder's Equity_36
Note 6. Stockholder's Equity: Share-based Compensation, Stock Options, Activity (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Share-based Compensation, Stock Options, Activity | Three Months Three Months Nine Months Nine Months Ended August 31, Ended August 31, Ended August 31, Ended August 31, 2017 2016 2017 2016 General and Administrative $ 51,019 $ 382,539 $ 334,444 $ 770,745 Total $ 51,019 $ 382,539 $ 334,444 $ 770,745 |
Note 6. Stockholder's Equity_37
Note 6. Stockholder's Equity: Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value (Tables) | 9 Months Ended |
Aug. 31, 2017 | |
Tables/Schedules | |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value | Number of Options Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Contractual terms Outstanding at December 1, 2016 6,500,000 $ 2.54 0 Granted 0 $ 0 0 Exercised 0 N/A 0 Expired/Cancelled (6,000,000 ) $ 2.50 $ 0 Outstanding 8/31/17 500,000 $ 3.00 0 8.51 years Exercisable 8/31/17 300,000 $ 3.00 0 8.49 years Expected to vest 8/31/2017 200,000 $ 3.00 0 |
Note 2. Summary of Significan38
Note 2. Summary of Significant Accounting Policies: Going Concern (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | ||||
Details | |||||||
Net Loss attributable to Stockholders | [1] | $ 83,946 | $ 729,880 | $ 1,139,426 | [2] | $ 2,265,016 | [2] |
[1] | To Purebase Corp. | ||||||
[2] | Purebase Corp. |
Note 2. Summary of Significan39
Note 2. Summary of Significant Accounting Policies: Accounts Receivable (Details) | Aug. 31, 2017USD ($) |
Details | |
Allowance for Doubtful Accounts Receivable, Current | $ 0 |
Note 2. Summary of Significan40
Note 2. Summary of Significant Accounting Policies: Subscription Liability (Details) | Nov. 30, 2016USD ($) |
Details | |
Subscription Liability | $ 500,000 |
Note 4. Notes Payable (Details)
Note 4. Notes Payable (Details) | Aug. 31, 2017USD ($) |
Details | |
Due from Officers or Stockholders, Current | $ 197,096 |
Note 6. Stockholder's Equity (D
Note 6. Stockholder's Equity (Details) - $ / shares | Aug. 31, 2017 | Nov. 30, 2016 |
Details | ||
Common Stock, Shares Authorized | 520,000,000 | 520,000,000 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Note 7. Related Party Transac43
Note 7. Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Aug. 31, 2017 | Aug. 31, 2016 | Aug. 31, 2017 | Aug. 31, 2016 | Nov. 30, 2016 | |
Details | |||||
Operating Leases, Rent Expense, Net | $ 0 | $ 7,500 | |||
Due to Related Parties, Current | 16,188 | $ 16,188 | $ 21,123 | ||
Due to Other Related Parties, Current | 14,478 | ||||
Due to Employees, Current | 48,456 | 48,456 | |||
General Contractor Costs | 44,575 | $ 0 | 119,542 | $ 0 | |
Proceeds from Collaborators | 98,268 | 698,797 | |||
Advances from related parties | 30,000 | 217,000 | $ 272,403 | ||
Related Party Transaction, Due from (to) Related Party, Current | 1,923,529 | 1,923,529 | $ 1,007,732 | ||
Other Loans Payable, Current | $ 241,403 | $ 241,403 |