PureBase Corporation

10/15/2025 | Press release | Distributed by Public on 10/15/2025 10:34

Quarterly Report for Quarter Ending August 31, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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, 2024, as filed with the Securities and Exchange Commission (the "SEC") on February 28, 2025, 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; and
the impact of the increase in the price of natural resources.

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 ("PureBase AM").

Business Overview

We are an industrial mineral and natural resource company that provides solutions to the agriculture and construction materials markets in the United States, through our two subsidiaries, Purebase AG, and Purebase AM, respectively. The Company has not yet commenced mining operations and relies on USMC for its mineral resources extracted from mineral sites owned by US Mine LLC.

We obtain certain raw clay materials from USMC through a materials extraction agreement with US Mine LLC. US Mine LLC owns the mining property which USMC leases. USMC pays US Mine LLC a royalty, for which the Company reimburses USMC.

Agricultural Sector

We develop specialized fertilizers, sun protectants, soil amendments and bio-stimulants for organic and non-organic sustainable agriculture. 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. 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 and Humic Advantage a humic acid product derived from leonardite.

Construction Sector

We had been developing and testing a kaolin-based product that we believed would help create a lower CO2-emitting concrete through the use of high-quality supplementary cementitious materials ("SCMs"). We were developing SCMs for the construction material markets, particularly the cement markets that we believed could 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 believed there were significant opportunities for high-quality SCM products in the construction-materials sector.

We decided that we will no longer develop and pursue the SCM market. We have has decided to instead further develop and expand our presence in the agricultural sector, as we believe that we can achieve higher margins in that sector and that construction of an SCM plant would take approximately two years.

We utilize the services of USMC for the development and contract mining of industrial mineral and metal projects, exploration drilling, preparation of feasibility studies, mine modeling, on-site construction, production, site reclamation and product fulfillment. Exploration services include securing necessary permits, environmental compliance, and reclamation plans. In addition, a substantial portion of the minerals used by the Company are obtained from properties owned or controlled by USMC. John Bremer, a director, is also an officer, director and, as of June 18, 2025, 33% owner of USMC.

Recent Developments

On July 10, 2025, the Company entered into a $53,000 bridge loan with J.J. Astor & Co. The note bears interest at 30% and matures on May 10, 2026. The loan is to be paid in forty weekly installments of $1,722.50 beginning on July 21, 2025.

On July 28, 2025 (the "Effective Date") the Company, together with Dockter Farms, LLC, a California limited liability company ("Dockter Farms") entered into a loan agreement (the "Loan Agreement") with J.J. Astor & Co., a Utah corporation (the "Lender") for the aggregate principal amount of $650,000. $50,350 was used to pay the balance of the July 10, 2025 $53,000 bridge loan with J.J. Astor. The Company plans to use the proceeds from the loan for working capital and general corporate purposes. As consideration for entering into the Loan Agreement, the Company will issue 750,000 shares of its common stock to the Lender. If within 90 days, the market price of the Company's common stock, is not greater than $0.50) per share, the Company will issue an additional 750,000 shares to the Lender. To induce the Lender to enter into the Loan Agreement, Mr. Scott Dockter, the Company's Chief Executive Officer, executed an Affidavit of Confession of Judgment in favor of the Lender. The secured promissory note evidencing the loan was issued with an original issue discount of $150,000, matures on May 5, 2026 and is payable in forty weekly installments beginning August 5, 2025, of which the first eight installments are $8,125 and the remaining thirty-two installments are $18,281. Upon the event of a default, the note becomes immediately due and payable at an increased interest rate of the sum of: (1) the then outstanding principal amount, multiplied by 120%, plus default interest at of 19% per annum, compounded daily. While the note remains outstanding, the Company may not, without the Lender's written consent: (i) amend or modify the terms of any existing indebtedness, (ii) incur additional indebtedness, (iii) grant liens on any of its assets, or (iv) enter into transactions with any affiliates. The note ranks senior to all other indebtedness of the Company.

The Company's obligations under the note are secured by a senior first lien security interest in all of the assets and properties of the Company, as well as all of the equity interests in Dockter Farms, pursuant to a pledge and security agreement (the "Security Agreement") entered into by the Company, Dockter Farms, and the Lender. In addition, Dockter Farms granted the Lender a deed of trust on certain real property pursuant to a Second Deed of Trust.

On September 24, 2025, the Company entered into a $123,050 bridge loan with Vanquish Funding Group, Inc. The note bears interest at 12% during the ten-month term of the loan. The loan is to be paid in five monthly installments with $68,908 due March 30, 2026, and $17,227 due each on April 30, 2026, May 30, 2026, June 30, 2026, and July 30, 2026.

Results of Operations

Comparison of the Three Months Ended August 31, 2025 to the Three Months Ended August 31, 2024

August 31, 2025 August 31, 2024 Variance
Revenue, net $ 86,814 $ 204,314 $ (117,500 )
Cost of goods sold 20,190 47,178 (26,988 )
Operating income 66,624 157,136 (90,512 )
Operating Expenses:
Selling, general and administrative 422,272 406,379 15,893
Stock based compensation 20,091 4,191 15,900
Total operating expenses 442,363 410,570 31,793
Loss from operations (375,739 ) (253,434 ) (122,305 )
Interest expense (90,352 ) - (90,352 )
Interest expense, related parties (14,608 ) (23,404 ) 8,796
Loss before provision for income taxes (480,699 ) (276,838 ) (203,861 )
Provision for income tases - - -
Net Loss $ (480,699 ) $ (276,838 ) $ (203,861 )

Revenues

Revenue decreased by $117,500, or 58%, for the three months ended August 31, 2025, as compared to the three months ended August 31, 2024. This decrease was due to cooler weather in the three months ended August 31, 2025 as compared to the three months ended August 31, 2024.

Cost of Goods Sold

Cost of goods sold decreased by $26,988, or 57%, for the three months ended August 31, 2025, as compared to the three months ended August 31, 2024, as a result of a decrease in products sold in the three months ended May 31, 2024.

Operating Expenses

Total operating expenses increased by $31,793, or 8%, for the three months ended August 31, 2025, as compared to the three months ended August 31, 2024. The increase in operating expenses was primarily due to an increase in general and administrative wages and related expenses of $59,230, an increase in stock-based compensation of $15,900, and an increase in selling expenses of $15,785, offset by a decrease in professional services of $28,932, and a decrease in various general and administrative expenses of $30,190 due primarily to a $45,444 decrease in repairs for the calciner pilot plant for the three months ended August 31, 2025, as compared to the three months ended August 31, 2024.

Interest Expense

Interest expense increased by $90,352 for the three months ended August 31, 2025, as compared to the three months ended August 31, 2024. The increase was due to interest on the J.J. Astor note payable in 2025.

Interest Expense, Related Parties

Interest expense decreased by $8,796 for the three months ended August 31, 2025, as compared to the three months ended August 31, 2024, primarily due to the June 16, 2025 conversion to common stock of borrowings on the line of credit, on the increased advances on a note payable, and on the additional other advances from USMC.

Comparison of the Nine Months Ended August 31, 2025 to the Nine Months Ended August 31, 2024

August, 2025

August 31, 2024 Variance
Revenue, net $ 285,435 $ 310,036 $ (24,601 )
Cost of goods sold 72,933 80,253 (7,320 )
Operating income 212,502 229,783 (17,281 )
Operating Expenses:
Selling, general and administrative 1,278,981 1,248,141 30,840
Stock based compensation 64,159 16,573 47,586
Total operating expenses 1,343,140 1,264,714 78,426
Loss from operations (1,130,638 ) (1,034,931 ) (95,707 )
Interest expense (90,352 ) - (90,352 )
Interest expense, related parties (85,568 ) (71,369 ) (14,199 )
Loss before provision for income taxes (1,306,558 ) (1,106,300 ) (200,258 )
Provision for income tases 2,400 2,400 -
Net Loss $ (1,308,958 ) $ (1,108,700 ) $ (200,258 )

Revenues

Revenue decreased by $24,601 or 8%, for the nine months ended August 31, 2025, as compared to the nine months ended August 31, 2024. This decrease was due to cooler weather in the three months ended August 31, 2025 as compared to the three months ended August 31, 2024.

Cost of Goods Sold

Cost of goods sold decreased by $7,320, or 9%, for the nine months ended August 31, 2025, as compared to the nine months ended August 31, 2024, as a result of a decrease in products sold in the nine months ended August 31, 2025.

Operating Expenses

Total operating expenses increased by $78,426, or 6%, for the nine months ended August 31, 2025, as compared to the nine months ended August 31, 2024. The increase in operating expenses was primarily due to an increase in general and administrative wages and related expenses of $94,335, an increase in stock-based compensation of $47,586, and an increase in selling expenses of $17,349, offset by a decrease in professional services of $59,454 and a decrease in various general and administrative expenses of $21,390 primarily due to a $45,444 decrease in repairs for the calciner pilot plant for the nine months ended August 31, 2025, as compared to the nine months ended August 31, 2024.

Interest Expense

Interest expense increased by $90,352 for the nine months ended August 31, 2025, as compared to the nine months ended August 31, 2024. The increase was due to interest on the J.J. Astor note payable in 2025.

Interest Expense, Related Parties

Interest expense increased by $14,199, or 20%, for the nine months ended August 31, 2025, as compared to the nine months ended August 31, 2024, primarily due to increased borrowings on the line of credit, increased advances on a note payable, and additional other advances from USMC, partially offset by the conversion of five convertible promissory notes to common stock in January 2024 and the June 16, 2025 conversion to common stock of borrowings on the line of credit, on the increased advances on a note payable, and on the additional other advances from USMC.

Liquidity and Capital Resources

As of August 31, 2025, we had cash on hand of $97,921 and a working capital deficiency of $749,973, as compared to cash on hand of $28,100 and a working capital deficiency of $1,093,058 as of November 30, 2024. The decrease in working capital deficiency of $343,085 is a result of the conversion to common stock of $1,000,000 of the line of credit with USMC, the conversion to common stock of $416,449 of advances from USMC, an increase in prepaid expenses of $25,176, an increase in cash of $69,821, an increase in accounts receivable of $9,828, a decrease in interest payable related party of $27,912, and a decrease in convertible notes payable related parties of $2,500, offset by an increase in advances from USMC of $515,449, an increase in the line of credit with USMC of $101,551, an increase of accounts payable and accrued expenses of $137,115, a decrease in net right of use asset/liability of $152, an increase in contingent stock issuance liability of $31,500, and an increase in a note payable from J.J. Astor of $422,834.

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 2025 and 2026, 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 these losses with cash advances from USMC and the sale of equity and convertible notes. The Company will no longer be funded by infusions of cash from advances from USMC.

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 bridge loans and equity and debt financing, will provide the necessary funding for the Company to continue as a going concern for the next twelve months.

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 August 31, 2025 of $65,517,481, negative cash flows from operating activities of $947,074for the nine months ended August 31, 2025 and a working capital deficiency of $749,973 as of August 31, 2025. During the nine months ended August 31, 2025, the Company received net cash proceeds of $617,000 from USMC through a line of credit and additional advances and cash proceeds, net of payments, of $485,395 from a third-party bridge loan. The Company has received net cash proceeds of $100,000 on September 29, 2025 from a third-party bridge loan. If the Company does not generate additional revenue and obtain bridge loans or equity and debt financing from third parties, it will not have sufficient cash to meet its obligations for the next twelve months following the date of this Quarterly Report on Form 10-Q. There currently are no other arrangements or agreements for financing, and there 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 date of this Quarterly Report on Form 10-Q. The condensed consolidated financial statements in this Quarterly Report on Form 10-Q do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Working Capital Deficiency

August 31, 2025

November 30, 2024
Current assets $ 163,933 $ 47,612
Current liabilities 913,906 1,140,670
Working capital deficiency $ (749,973 ) $ (1,093,058 )

The increase in current assets of $116,321 as of August 31, 2025, is due to an increase in prepaid expenses of $25,176, an increase in cash of $69,821, an increase in right of use asset of $11,496, and an increase in accounts receivable of $9,828. The decrease in current liabilities of $226,764 is the result of an increase in advances from USMC of $515,449, an increase in the line of credit with USMC of $101,551, an increase of accounts payable and accrued expenses of $137,115, an increase in lease liability of $11,648, an increase in contingent stock issuance liability of $31,500, and an increase in notes payable to a third party of $422,834, offset by the conversion to common stock of $1,000,000 of the line of credit with USMC, the conversion to common stock of $416,449 of advances from USMC, a decrease in interest payable related parties of $27,912, and a decrease in convertible notes payable related parties of $2,500.

Cash Flows

Nine Months Ended
August 31, 2025 August 31, 2024
Net cash used in operating activities $ (947,074 ) $ (1,957,010 )
Net cash used in investing activities - -
Net cash provided by financing activities 1,016,895 1,982,684
Increase in cash $ 69,821 $ 25,674

Operating Activities

Net cash used in operating activities was $947,074 for the nine months ended August 31, 2025, due to a net loss of $1,308,958, an increase in accounts receivable of $9,828, and an increase in prepaid expenses and other current assets of $25,176, offset by an increase in accounts payable and accrued expenses of $137,115, an increase in interest payable related parties of $85,568, an increase in stock-based compensation of $64,159, an increase in contingent liability for stock to be issued of $31,500, an increase in non-cash board of directors compensation of $14,500, an increase in debt discount amortization of $54,439, an increase in common stock issued for services of $4,000, an increase in depreciation of $5,455, and an increase in right of use asset and liability, net, of $152. Net cash used in operating activities was $1,957,010 for the nine months ended August 31, 2024, due to a net loss of $1,108,700, an increase in accounts receivable of $74,244, a decrease in accounts payable and accrued expenses of $174,126, a decrease in interest payable related party of $43,673, a decrease in prepaid expenses and other current assets of $5,349, a decrease in right of use asset and liability, net, of $618, and a decrease in settlement liability of $618,000, offset by an increase in depreciation of $1,127, an increase in stock-based compensation of $16,573, an increase in stock issued for services of $32,000, and an increase in non-cash board of directors compensation of $18,000.

Investing Activities

There were no investing activities in the nine months ended August 31, 2025 and 2024.

Financing Activities

For the nine months ended August 31, 2025, net cash provided by financing activities was $1,016,895, consisting of advances from USMC of $515,449, increases in the line of credit from USMC of $101,551, net proceeds of $485,395 from notes payable from a third party, and $11,000 in proceeds from loans from a related party, offset by $85,500 payments on the third-party notes and $11,000 payments on loans from a related party. For the nine months ended August 31, 2024, net cash provided by financing activities was $1,982,684, consisting advances in the line of credit from USMC of $1,373,400 and advances from USMC on a convertible note of $618,000, offset by a $8,716 partial payment on a loan from the Chief Executive Officer of the Company.

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, 2024, as filed with the SEC on February 28, 2025.

Recently Adopted Accounting Pronouncements

Our recently adopted accounting pronouncements are more fully described in Note 3 to our unaudited condensed consolidated financial statements included in this Quarterly Report.

PureBase Corporation published this content on October 15, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 15, 2025 at 16:34 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]