Purebase Shifts to Agriculture Amidst Deepening Losses, Going Concern Doubts

TL;DR

**Purebase is bleeding cash and ditching construction for agriculture, a desperate pivot that screams high risk for investors.**

AI Summary

Purebase Corp (PUBC) reported a significant net loss of $1,308,958 for the nine months ended August 31, 2025, an increase from $1,108,700 in the prior-year period. Revenue declined to $285,435 for the nine months ended August 31, 2025, down from $310,036 in the same period of 2024, representing a 7.9% decrease. The company's gross margin also decreased from $229,783 to $212,502 year-over-year. Operating expenses rose to $1,343,140 for the nine months ended August 31, 2025, compared to $1,264,714 in 2024, driven by increased selling, general, and administrative expenses and stock-based compensation. A major strategic shift occurred with the company discontinuing its kaolin-based SCM product development for the construction sector to focus solely on the higher-margin agricultural sector. The company faces substantial doubt about its ability to continue as a going concern, evidenced by an accumulated deficit of $65,517,481 and a working capital deficit of $749,973 as of August 31, 2025, alongside negative cash flows from operations of $947,074. Financing activities included a $650,000 bridge loan from J.J. Astor & Co. in July 2025 and a $123,050 bridge loan from Vanquish Funding Group, Inc. in September 2025, with significant related-party debt conversions. Common stock outstanding increased to 278,718,151 shares as of August 31, 2025, from 250,447,331 shares at November 30, 2024.

Why It Matters

This filing reveals Purebase Corp's precarious financial health, marked by increasing losses and a substantial accumulated deficit, which directly impacts investor confidence and the company's ability to fund future operations. The strategic pivot from the construction materials sector to solely focus on agriculture is a high-stakes move; while aiming for higher margins, it abandons a previously touted growth area and introduces execution risk. For employees, this shift could mean job reallocations or reductions if the agricultural segment doesn't scale quickly. Customers in the construction sector will see Purebase exit the SCM market, potentially impacting supply chains for low-CO2 concrete alternatives, while agricultural customers might see increased product development. Competitively, this move allows other SCM developers to capture market share in the construction sector, while Purebase must now intensely compete in the agricultural minerals space.

Risk Assessment

Risk Level: high — Purebase Corp faces a 'substantial doubt about the Company's ability to continue as a going concern' due to an accumulated deficit of $65,517,481 and a working capital deficit of $749,973 as of August 31, 2025. The company also reported negative cash flows from operations of $947,074 for the nine months ended August 31, 2025, indicating a severe inability to generate cash from its core business.

Analyst Insight

Investors should exercise extreme caution and consider divesting, as Purebase Corp's significant accumulated deficit, negative operating cash flows, and explicit 'going concern' warning signal severe financial distress and high risk of further capital dilution or operational failure. The strategic pivot to agriculture, while potentially offering higher margins, is a speculative move given the company's current financial state and lack of immediate funding certainty.

Financial Highlights

debt To Equity

N/A

revenue

$285,435

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$1,308,958

eps

N/A

gross Margin

74.46%

cash Position

N/A

revenue Growth

-7.9%

Revenue Breakdown

Key Numbers

• $1,308,958 — Net Loss (Increased from $1,108,700 in prior year for nine months ended August 31, 2025)
• $65,517,481 — Accumulated Deficit (As of August 31, 2025, indicating severe historical losses)
• $749,973 — Working Capital Deficit (As of August 31, 2025, highlighting liquidity issues)
• $947,074 — Negative Cash Flows from Operations (For the nine months ended August 31, 2025, demonstrating inability to generate cash from core business)
• $285,435 — Revenue, net (Decreased from $310,036 in prior year for nine months ended August 31, 2025)
• 278,718,151 — Common Shares Outstanding (Increased from 250,447,331 at November 30, 2024, indicating significant dilution)
• $650,000 — Bridge Loan (Secured from J.J. Astor & Co. in July 2025 with a 30% interest rate)
• $150,000 — Debt Discount (Associated with the $650,000 bridge loan from J.J. Astor & Co.)
• $123,050 — Bridge Loan (Secured from Vanquish Funding Group, Inc. in September 2025 with a 12% interest rate)
• $2,177,662 — Convertible Debt Converted to Common Stock (Related party debt converted for the nine months ended August 31, 2025)

Key Players & Entities

• Purebase Corp (company) — registrant
• USMC (company) — significant shareholder and related party lender
• John Bremer (person) — director of Purebase and officer/director/owner of USMC and US Mine, LLC
• A. Scott Dockter (person) — Chief Executive Officer of Purebase Corp
• Teresa Dockter (person) — spouse of A. Scott Dockter
• J.J. Astor & Co. (company) — bridge loan lender
• Vanquish Funding Group, Inc. (company) — bridge loan lender
• Dockter Farms LLC (company) — guarantor and pledgor for J.J. Astor & Co. loan
• US Mine LLC (company) — provider of industrial minerals and party to Master Agreement
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company faces substantial doubt about its ability to continue as a going concern, evidenced by an accumulated deficit of $65,517,481 and a working capital deficit of $749,973 as of August 31, 2025. Negative cash flows from operations of $947,074 further highlight this risk.
• Declining Revenue and Margins [high — financial]: Revenue for the nine months ended August 31, 2025, decreased by 7.9% to $285,435 from $310,036 in the prior year. Gross margin also declined from $229,783 to $212,502, indicating pressure on profitability.
• Increased Operating Expenses [medium — operational]: Operating expenses rose to $1,343,140 for the nine months ended August 31, 2025, from $1,264,714 in the prior year. This increase was driven by higher selling, general, and administrative expenses and stock-based compensation.
• Significant Share Dilution [medium — financial]: Common stock outstanding increased to 278,718,151 shares as of August 31, 2025, from 250,447,331 shares at November 30, 2024. This substantial increase suggests significant dilution for existing shareholders.
• Reliance on Bridge Financing [high — financial]: The company secured a $650,000 bridge loan from J.J. Astor & Co. with a 30% interest rate and a $150,000 debt discount, and a $123,050 bridge loan from Vanquish Funding Group, Inc. with a 12% interest rate. This indicates a reliance on short-term, potentially expensive debt.
• Related-Party Debt Conversions [medium — financial]: A significant amount of $2,177,662 in related-party convertible debt was converted to common stock for the nine months ended August 31, 2025. The terms and implications of these conversions require careful scrutiny.

Industry Context

Purebase Corp operates in the agricultural sector, focusing on higher-margin products after discontinuing its kaolin-based SCM development for construction. The agricultural inputs market is competitive, requiring innovation and efficient production to maintain margins. Companies in this space often face cyclical demand and regulatory scrutiny regarding product efficacy and environmental impact.

Regulatory Implications

As a publicly traded company, Purebase is subject to SEC regulations, including timely and accurate financial reporting. The company's going concern disclosure necessitates careful monitoring by regulators and investors. Any misrepresentation or failure to comply with reporting standards could lead to penalties.

What Investors Should Do

1. Monitor cash burn and future financing activities closely.
2. Evaluate the strategic shift to the agricultural sector.
3. Scrutinize related-party transactions and debt conversions.
4. Assess the likelihood of continued operations.

Key Dates

• 2025-07-01: Secured $650,000 bridge loan from J.J. Astor & Co. — Provided immediate liquidity but at a high interest rate (30%) and with a significant debt discount, increasing future financial burden.
• 2025-08-31: Nine months ended August 31, 2025 financial results reported — Showed increased net loss, decreased revenue, and negative operating cash flow, reinforcing going concern doubts.
• 2025-09-01: Secured $123,050 bridge loan from Vanquish Funding Group, Inc. — Further reliance on short-term financing to manage operations, with a 12% interest rate.
• 2024-11-30: Previous fiscal year-end — Benchmark for comparison of current period's financial performance and position, showing a lower share count.

Glossary

Going Concern

An assumption that a company will continue to operate for the foreseeable future, typically at least 12 months. If substantial doubt exists, it must be disclosed. (Purebase faces substantial doubt about its ability to continue as a going concern, indicating severe financial distress.)

Accumulated Deficit

The cumulative net losses of a company since its inception, representing the total losses that have not been offset by profits or capital contributions. (Purebase's $65,517,481 accumulated deficit highlights a long history of unprofitability.)

Working Capital Deficit

Occurs when a company's current liabilities exceed its current assets, indicating a short-term liquidity shortage. (A working capital deficit of $749,973 signals immediate challenges in meeting short-term obligations.)

Bridge Loan

A short-term loan used to cover a company's immediate financing needs until a longer-term financing solution is secured. (Purebase has relied on bridge loans, such as those from J.J. Astor & Co. and Vanquish Funding Group, Inc., to manage its cash flow.)

Debt Discount

The difference between the face value of a debt instrument and the amount received when it is issued, often due to high interest rates or unfavorable terms. (A $150,000 debt discount on the $650,000 bridge loan indicates the high cost of this financing.)

Stock-Based Compensation

Compensation provided to employees in the form of stock options or shares, which is recognized as an expense. (An increase in stock-based compensation contributed to the rise in operating expenses.)

Convertible Debt

Debt that can be converted into shares of the issuing company's stock under certain conditions. (Significant conversion of related-party convertible debt into common stock has occurred, impacting share count and potentially ownership structure.)

Year-Over-Year Comparison

Compared to the prior year period, Purebase Corp. has experienced a 7.9% decrease in revenue for the nine months ended August 31, 2025, falling to $285,435. Gross margins have also compressed, and operating expenses have increased, leading to a wider net loss of $1,308,958. The company's financial position has weakened, with a growing accumulated deficit and a working capital deficit, alongside a significant increase in outstanding common shares, indicating substantial dilution.

Filing Documents

• form10-q.htm (10-Q) — 1246KB
• ex31-1.htm (EX-31.1) — 20KB
• ex31-2.htm (EX-31.2) — 20KB
• ex32-1.htm (EX-32.1) — 8KB
• ex32-2.htm (EX-32.2) — 8KB
• 0001493152-25-018111.txt ( ) — 7423KB
• pubc-20250831.xsd (EX-101.SCH) — 45KB
• pubc-20250831_cal.xml (EX-101.CAL) — 48KB
• pubc-20250831_def.xml (EX-101.DEF) — 307KB
• pubc-20250831_lab.xml (EX-101.LAB) — 416KB
• pubc-20250831_pre.xml (EX-101.PRE) — 399KB
• form10-q_htm.xml (XML) — 1100KB

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 3 CONDENSED CONSOLIDATED BALANCE SHEETS AS OF AUGUST 31, 2025 AND NOVEMBER 30, 2024 3 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2025 AND 2024 4 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2025 AND 2024 5 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED AUGUST 31, 2025 AND 2024 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 7 ITEM 2.

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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 28 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 33 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 33 PART II. OTHER INFORMATION 35 ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 35 ITEM 1A.

RISK FACTORS

RISK FACTORS 35 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 35 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 35 ITEM 4. MINE SAFETY DISCLOSURES 35 ITEM 5. OTHER INFORMATION 35 ITEM 6. EXHIBITS 35

SIGNATURES

SIGNATURES 36 2 PART I – FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PUREBASE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS August 31, 2025 November 30, 2024 (Unaudited) (Audited) ASSETS Current Assets: Cash and cash equivalents $ 97,921 $ 28,100 Accounts receivable, net 9,828 - Prepaid expenses and other assets 44,688 19,512 Right of use asset 11,496 - Total Current Assets 163,933 47,612 Property and equipment, net 743,982 749,437 Total Assets $ 907,915 $ 797,049 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable and accrued expenses $ 230,663 $ 93,548 Interest payable, related party 46,761 74,673 Line of credit, related party - 898,449 Advances, related party 99,000 - Note payable, related party 31,000 31,000 Note payable, net of debt discount 422,834 - Lease liability 11,648 - Contingent stock issuance liability 31,500 - Convertible notes payable, related parties 40,500 43,000 Total Current Liabilities 913,906 1,140,670 Interest payable, related party, net of current portion - 29,733 Convertible notes payable; related party, net of current portion - 618,000 Total Liabilities 913,906 1,788,403 Commitments and Contingencies (Note 9) - - Stockholders' Deficit: Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding at August 31, 2025 and November 30, 2024 - - Common stock, $ 0.001 par value; 520,000,000 shares authorized; 278,718,151 and 250,447,331 shares issued and outstanding at August 31, 2025 and November 30, 2024, respectively 278,718 250,447 Additional paid in capital 65,232,772 62,966,722 Accumulated deficit ( 65,517,481 ) ( 64,208,523 ) Total Stockholders' Deficit ( 5,991 ) ( 991,354 ) Total Liabilities and Stockholders' Deficit $ 907,915 $ 797,049 The accompanying notes are an integral part of these unaudited condensed consolid

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