UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
 

 
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 

 
   
For the Fiscal Year Ended
 
Commission File Number
November 30, 2017
 
333-188575

PUREBASE CORPORATION

Nevada
 
27-2060863
(State of Incorporation)
 
(I.R.S. Employer Identification)

Principal Executive Offices:
8625 State Highway 124
Ione, CA 95640
(209) 257-4331

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class
 
Name of Each Exchange on Which Registered
None
 
None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Title of Each Class
Common Stock, par value $0.001
 

Indicate by check mark if the registrant is a well-known seasoned issued, as defined in Rule 405 of the Securities Act.
 
Yes
 
No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes
 
No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes
 
No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes
 
No
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

☐ Large accelerated filer
☐ Accelerated filer
☐ Non-accelerated filer (do not check if a smaller reporting company)
☒ Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes
 
No
 
As of May 31, 2017, the aggregate value of the voting stock held by non-affiliates of the Registrant, computed by reference to the closing price on such date was approximately $6,314,233 based on a price of $0.18 per share. (The number of shares traded is insignificant)

As of February 16, 2018, the Registrant had outstanding 141,347,173 shares of common stock.

Transitional Small Business Disclosure Format:   Yes ☐   No ☒

 
Documents Incorporated by Reference
 
Certain exhibits required by Item 15 have been incorporated by reference from Purebase's previously filed Form 8-K's and Form 10-Q's.
 
 
 
 
TABLE OF CONTENTS
 
 
   
Page of
Report 
     
 
5
13
24
     
 
25
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES. 25
27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 27
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 32
FINANCIAL STATEMENTS INDEX 33
  F-1 to F-17
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 34
34
35
     
 
35
35
40
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 43
CERTAIN RELATIONSHIPS AND RELATED TRANSACTION AND DIRECTOR INDEPENDENCE 44
     
 
49
49
     
50

 
 

 

 
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
 
This annual report on Form 10-K or documents incorporated by reference may contain certain "forward-looking" statements as such term is defined by the Securities and Exchange Commission ("SEC") in its rules, regulations and releases, which represent the Registrant's expectations or beliefs, including but not limited to, statements concerning the Registrant's operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intent," "could," "estimate," "might," "plan," "predict" or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements.
 
These statements may be found under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," as well as in this annual report generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" and matters described in this annual report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this annual report will in fact occur. In addition to the information expressly required to be included in this annual report, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.
 
These risks and uncertainties and other factors include, but are not limited to, those set forth under Item 1A "Risk Factors". All subsequent written and oral forward-looking statements attributable to the Registrant or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements.
 
 
 
ADDITIONAL INFORMATION
 
Descriptions of agreements or other documents contained in this report are intended as summaries and are not necessarily complete. Please refer to the agreements or other documents filed or incorporated herein by reference as exhibits. Please see the exhibit index at the end of this report for a complete list of those exhibits.
 
 
 
 
PART I
 
ITEM 1.        BUSINESS
 
Purebase Corporation ("Purebase", the "Company", "we", or "our") was incorporated in Nevada on March 2, 2010. On January 12, 2015 the Company changed its name to PureBase Corporation and was assigned the new trading symbol "PUBC". The Company' executive offices are located at 8625 State Highway 124, Ione California 95640. The Company's telephone number is (209) 257-4331 and at the Company's Web address, www.Purebase.com .

The Company's Business

Purebase is a diversified, industrial mineral and natural resource company working to provide solutions to the agriculture and construction materials markets. In addition, the Company intends to focus on identifying and developing other advanced stage natural resource projects including metals such as gold and copper which show potential to achieve full production. Purebase's business is currently divided into two divisions, "Purebase Agricultural, Inc." to develop agricultural specialized fertilizers, minerals and biostimulants for organic and sustainable agriculture. Purebase Build "SCM"  will be focused on developing construction sector related products such as cements.  Purebase will provide for distribution of those products into each industry related market. In the future, the Company may establish additional divisions or subsidiaries to develop other natural resource projects.

Agricultural Division

The Company's initial focus is on the organic agricultural market sectors. The Company will seek to develop products derived from mineralized materials of Leonardite, Kaolin Clay, Laterite, Potassium Silicate Sulfate and other natural minerals. These important minerals are used in the agricultural industry to protect crops, plants and fruits from the sun, winter damage, provide nutrients to plants, improve dormancy and improve soil ecology with agricultural minerals and soil amendments to help farmers increase the yields of their harvests.

The Company will also seek to develop mineralized materials of pozzolan,  potassium silicate sulfate for agricultural applications. While some of the Company's current properties which it owns or controls contain pozzolan, potassium silicate sulfate, among other minerals, such mineralizations have yet to be quantified and do not represent "proven" or "probable" reserves as defined in Industry Guide 7 of the federal securities regulations.

Purebase will utilize the services of US Mine Corporation ("USMC"), a private company focusing on the development and contract mining of industrial mineral and metal projects throughout North America to perform exploration drilling, preparation of feasibility studies, mine modeling, on-site construction, mine production and mine site reclamation. Exploration services would also include securing necessary permits, environmental compliance and reclamation plans. In addition, a substantial portion of the minerals to be utilized by Purebase will be obtained from properties owned or controlled by USMC of which Scott Dockter, John Bremer and Craig Barto are officers, directors and owners.

We intend to develop innovative solutions that represent an important value-enhancing element for our agricultural customers. We are building a brand family under the parent trade name, "Purebase", consisting of four primary product lines: Purebase Shade Advantage WP, Purebase Potassium Silicate Sulfate Advantage , Purebase Humate Advantage,  and Purebase Soil Advantage.
 

Purebase Shade Advantage WP is a natural mineral plant protectant that reduces sunburn damage to plant tissue (including fruits and nuts) exposed to UV and infrared radiation .  The protection is achieved through the absorption  and dissipation of ultraviolet and infrared radiation, which protects and reduces the stress on most plants.
The anticipated benefits of this product include:
o
Adheres to plant tissue, fruit and wood bark without the need for surfactants (stickers)
o
Provides protection against sunburn of plant tissue and sun scalding of fruits, nuts and vegetables
o
Designed for application on organic and sustainable crops
o
When sprayed on dormant trees, Shade Advantage WP has the potential of mitigating weather induced dormancy interference
 
Shade Advantage WP is available in 25 lb. compostable and biodegradable bags.
 
Purebase Potassium Silicate Sulfate is derived from a proprietary potassium silicate sulfate mineral deposit. It provides many essential minerals, while improving the nutrient uptake  to plants, and improving soil biology. It can be applied to most crops, trees, vines and turf applications . It is available in granular grade and in bulk orders or 2,000 lbs. bags.
 
Purebase Humate Advantage   is derived from a proprietary deposit of leonardite. The uniquely soluable iron leonardite with high organic matter, carbon and fulvic acid content allows Purebase Humate Advantage to improve soil quality. Products containing humic acids, may increase uptake of micronutrients . It is available in granular grade.
 
Purebase Soil Advantage is an organic registered granular mineral used to improve soil water holding capacity, beneficial microbial diversity and plant nutritional uptake. Used on vineyards, orchards and row crops such as vegetables and fruits.     Purebase Soil Advantage mitigates water ponding and runoff by reducing soil compactness and increases soil flocculation and mitigates sodium problems and increases water holding capacity. It is available in granular grade bulk or 2,000 lbs. bags.

To date, we have on going distributorship agreements with the Aligned Group, Helena Chemical, Salida Ag to consolidate our marketing strategy focused on the 10 western states. We have also initiated exports of Purebase Soil Advantage to Vietnam, Laos and Cambodia. As part of our on-going research, we have successfully concluded product validation  trials conducted by the Helena Research and Development Center.

During fiscal year 2017 Purebase sold Purebase Shade Advantage and Purebase Soil Advantage to Helena Chemicals, The Aligned Group, Clements Nut Company and Salida Ag. Production and distribution of the Company's agricultural products will be dependent on the Company's ability to extract adequate essential minerals from its existing projects or acquire such minerals from other existing sources. The Company currently obtains its minerals from its own mining property, from USMC properties and its Humate minerals from an existing third party mine. The Company believes these sources will be able to provide sufficient minerals for the Company's current needs.

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 by Mr. Ridder 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. In November, 2016, 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. Subsequent to this action, Mr. Ridder and Mr. Wharton entered into Settlement Agreements with the Company, which, among other things, terminated the joint venture. On March 27, 2017 Mr. Wharton entered into a Settlement Agreement which provided for the cancellation of his option to purchase 1,000,000 shares of the Company's common stock and mutual releases by both the Company and Mr. Wharton from any further liability to each
 
 
other. On March 27, 2017 Mr. Ridder entered into a Settlement Agreement in which he agreed to cancel his options to purchase 5,000,000 shares of the Company's common stock and mutual releases by the Company and Mr. Ridder from any further liability to each other. In addition, his Settlement Agreement provided for Mr. Ridder to retain 75% ownership of PNI, Mr. Wharton to retain 15% ownership of PNI and the Company to retain 10% ownership of PNI and for Mr. Scott Dockter and Mr. Wharton to resign from the PNI Board leaving Mr. Ridder as the sole officer and Director of PNI. Pursuant to an Amended and Restated Settlement Agreement with Mr. Ridder entered into on August 10, 2017, he repurchased Purebase's remaining 10% interest in PNI for $250,000.

Construction Division

It is estimated that one ton of CO 2 is released for every ton of portland cement manufactured.  The negative external byproducts of portland cement production is predominantly carbon dioxide. The impact on the environment from the production of portland cement presents a global concern. As such, increasing environmental regulations will continue to add to the direct costs of concrete building materials composed of portland cement. Pozzolan blended cements have lower CO 2 emissions than traditional portland cement. The result is stronger, more durable concrete, better price, and reduced pollution. California is leading the way with legislation such as the California Global Warming Solutions Act of 2006, which requires cement producers to lower emissions or purchase carbon credits for overages of CO 2 to 1990 levels by 2020. The responsible response to this problem is the development of supplemental cementitious materials, or "SCMs". Natural occurring pozzolan is the most environmentally neutral SCM available.   This presents Purebase with a unique and valuable opportunity as a "clean and green" solution provider of natural pozzolan as a replacement for traditional cement used in all types of construction.

Within the Construction Division, operating as Purebase Build, the Company plans to develop and market a Supplementary Cementitious Material ("SCM"), a solution that may be used in large infrastructure development projects for government, commercial industries and residential buildings.

Research has demonstrated that mix designs with as much as a 50% replacement of portland cement used can be a very desirable substitute product offering reduced pollution residuals. The beneficial effects of Pozzolan in terms of compressive strength, performance and durability are mostly attributed to the pozzolanic reaction in which calcium hydroxide is consumed to produce additional C-S-H and C-A-H reaction products. These pozzolanic reaction products fill in pores and result in a refining of the pore size distribution or pore structure. This results in a lowered permeability of the paste and increased overall strength.

Pozzolan cement can be used in most applications including concrete paving, reinforced walls, floors, sidewalks, well-cementing, precast-pre-stressed concrete, concrete pipe, block and paver production.

We plan to produce a pozzolan SCM at very competitive rates. Cartage will play a major factor in pricing, but we anticipate there will still be a substantial cost margin between fly ash used in Portland cement and Pozzolan.

Production of the Company's SCM will depend on the Company's ability to extract adequate amounts of the raw Pozzolan from its existing mining projects.

Purebase is also developing its Distributor Program to strategically co-market and present our mutual products and services to local governments, industry and end consumers. Our Distributor Program will include the benefits of local product labeling, co-marketing materials and reciprocal sales opportunities. The bottom line is a dynamic, fluid partnership that increases business within the Cement Industry.

In the future, the Company may wish to enter additional product markets which derive from natural resources such as glass, silica chips and solar panels.
 

Purebase will utilize the mining services of USMC to identify, acquire, define, develop and operate world-class industrial and natural resource properties and to provide mine development and operations services to mining properties located initially in the Western United States and currently in California and Nevada. Purebase intends to engage in the identification, acquisition, development, mining and full-scale exploitation of natural mineral properties in Ione California as its primary focus.
 
The Company was unable to secure funding during the last fiscal year to fund its proposed development budget for SCM products but hopes to be able to fund further development during FY 2018. The Company will initially rely on outside funding for its development expenses. The need for external financing will be offset by SCM revenues, as and when generated.

Employees

The Company currently has five full-time employees.  Employees include a CEO, a CFO and a Vice President of Agricultural Products Research and Development. We anticipate hiring additional employees during the current year to work the Company's agricultural production operations as our agricultural products development and distribution programs continue to expand. While skilled equipment and operations personnel are in demand, we believe we will be able to hire the necessary workers to sustain our current product development and production programs. In the meantime, the Company will rely on USMC to provide the Company's mining services. Our employees are not expected to be subject to a labor contract or collective bargaining agreements. We consider our employee relations to be good.

Outside services, relating primarily to agricultural market research and product development, and relating to the development and application of SCMs, as well as other technical matters as may be deemed useful in the product development and branding activities, will be provided by independent contractors.

Industry Overview
Agricultural Industry

Agriculture and agriculture-related industries contributed $992.0 billion to the U.S. gross domestic product (GDP) in 2015, a 5.5% of GDP. The output of America's farms contributed $136.7 billion of this sum- about 1% of GDP. In 2015, 21.4 million full time and part time jobs were related to agriculture and food sectors – about 11 % of the total U.S. employment. Direct on-farm employment accounted for about 2.6 million of these jobs, or 1.4% of U.S. employment. (Source: The US Department of Agriculture, Economic Research Service, Farm Production Expenditures, USDA Certified Organic Survey.)
 
U.S. land area amounts to nearly 2.3 billion acres, with about 0.9 billion acres dedicated to Agriculture in 2 million farms in 2015 per USDA Agricultural Statistics. Per the 2016 USDA agricultural statistics, the 10 western states, Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah and Washington represent 35% of all land dedicated to agriculture with 25% of all farms.
 
Farm production expenditures in the U.S. are estimated at $346.9 billion for 2016, down from $ 362.8 billion in 2015. In 2016, crop farms expenditures decreased to $ 177.0 billion, down 1.8%. Combined crop inputs (chemicals, fertilizers, and seeds) are $52.8 billion, accounting for 29.8 % of crop farms total expenses. California contributed most to the 2016 United States total expenditures, with expenses of $34.2 billion (9.9%). California expenditures are down 3.8% from the 2015 estimate of $35.5 billion. Iowa, the next leading state, has $26.3 billion in expenses (7.6%) and Texas with $23.9 billion.
 
Per the USDA Certified Organic Survey of September 2017, of the 5 million acres certified as organic, 2.7 million are for crops in 13,560 farms in the U.S. Organic Agricultural Crops represent $ 4.2 billion. California farms 12.3% of the total U.S. organic crop acreage and produces 50% of the values ($2.2 billion).
 

Virtually all farms today utilize various fertilizers and/or soil amendments to better utilize water resources and increase crop yields. Purebase agricultural minerals are formulated for organic and sustainable crop farming primarily for the 10 most western states based in California as a launching pad. These products address some of the core problems of twenty first century precision agriculture such as weather induced plant stress, water conservation, soil degradation, all from an ecologically responsible perspective such as minimizing carbon foot print, no waste mining and formulating products that bring strong economic value to farming by substantially lessening the economic burden on producers.
 
Crops account for the largest share of the value of U.S. agricultural production. The value of agricultural production in the United States has risen over the past decade due to increases in production as well as higher prices. Yield gains for crops have been particularly important, although acreage has also risen recently in response to elevated prices since 2008. Falling prices led to a slight decline in value of crop production in 2013. While livestock production increased over the decade, prices were up more than 60% between 2003 and 2013, contributing to the rising value of livestock production and its agricultural consumption.
 
Climate change including an increase in drought trends and an increasing population base are exacerbating the problem of adequate food production. Pesticides, GMO crops and irrigation with reclaimed water are some of the current solutions, but this is proving to be toxic to the environment, plant, animal and human health. Purebase intends to promote environmental conservation through the manufacture, sale, and distribution of the highest quality industrial minerals and natural resources in the marketplace. Our plan is to create a high-quality alternative to current GMO limited use soil amendments in the world's markets by offering a high quality water conservation product.

Construction Industry

Concrete is a common building material consisting of water, sand, gravel (i.e. aggregate), and cement. The Economist in June 2013 estimated world cement-makers' annual revenue at $250 billion. The United States is the world's 3rd largest producer of cement. Portland Cement is the most prevalent cementing material in the world.
 
The USA is the world's 3rd largest producer of Cement. According to the Portland Cement Association (PCA), United States cement consumption in 2016 was 92 million metric tons and forecasts an estimated 94 million metric tons in 2017 and 96 million metric tons in 2018.

Competition

Major competitors in the Purebase agricultural products include:
Surround WP. Leading kaolin clay based shade protectant in the industry. Mined and manufactured in Georgia, USA and Novasource, part of the Tessenderlo group.
The Andersons Humic Solutions. Leading humic based products mining and manufacturing firm focused in the US Midwest, produces highly competitive organic products. Their products are sold and successfully distributed throughout the US market.

Major competitors in the Cement Additive Industry include:
Boral:  Boral Limited is Australia's largest building and construction materials supplier and has significant operations in the USA and in Asia. With approximately $5 billion worth of sales, Boral has over 15,900 employees working across 717 operating sites.  The US operations include the country's largest brick manufacturer, the largest clay tile manufacturer, one of the largest fly ash suppliers, and the group holds a strong position in the Denver construction materials market and more recently in Oklahoma construction materials.  Boral Materials Technologies has approximately 40 locations around the country including operations at electrical utility plants, fly ash terminals and sales offices marketing approximately 4 million tons of fly ash annually.
 
 
 
 
Salt River Materials Group: SRM, which is the marketing arm of Phoenix Cement is a leading supplier of portland and masonry cements, fly ash and other Pozzolan SCMs, both normal and light weight aggregates, and natural gypsum products throughout Arizona and the Southwestern United States. SRM manages approximately 500,000 tons of fly ash annually.
 
Pricing Competition

The cement additive sector relies heavily on the construction industry.  Increased construction activity ultimately decreases the amount of available competitive products, particularly fly ash.  Reduced availability of competitive products results in increased costs making our natural pozzolan alternative more attractive to prospective customers.
The Top 3 buying criteria for SCMs are:

1.       Product quality
2.       Price with product proximity (i.e. cartage / delivery) as a principle factor in price
3.       Service and support

Many of our competitors have greater exploration, production, and capital resources than we do, and may be able to compete more effectively in any of these areas. For example, these competitors may be able to spend greater amounts on acquisition of desirable mineral properties, on exploration of their mineral properties and on development of their mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance the exploration and development of their mineral properties. Our inability to secure capital to fund exploration and, if warranted, development costs for our mineral properties would create a competitive cost disadvantage in the marketplace which would have a material adverse effect on our operations and potential profitability.

We do not foresee any difficulties in the hiring and retention of qualified geologists, exploration personnel or equipment operators in the numbers or at the times desired.

Government Controls and Regulations

Natural resource exploration, mining and processing operations are subject to various federal, state and local laws and regulations governing prospecting, exploration, development, production, labor standards, occupational health, mine safety, control of toxic substances, and other matters involving environmental protection and employment.  United States environmental protection laws address the maintenance of air and water quality standards, the preservation of threatened and endangered species of wildlife and vegetation, the preservation of certain archaeological sites, reclamation, and limitations on the generation, transportation, storage and disposal of solid and hazardous wastes, among other things.  There can be no assurance that all the required permits and governmental approvals necessary for any mining project with which we may be associated can be obtained on a timely basis, or maintained in good standing.  Delays in obtaining or failure to obtain necessary government permits and approvals may adversely impact our operations. The regulatory environment in which we operate could change in ways that would substantially increase costs to achieve compliance.  In addition, significant changes in regulation could have a material adverse effect on our operations and ability to timely and effectively implement our drilling/mapping programs and develop our mining properties.

Outlined below are some of the more significant aspects of governmental controls and regulations which materially affect the mining properties we or our third party mineral suppliers will seek to explore and develop.
 

Federal Regulation of Mining Activity

Mining operations are subject to numerous federal, state and local laws and regulations.  At the federal level, mining properties are subject to inspection and regulation by the Division of Mine Safety and Health Administration of the Department of Labor ("MSHA") under provisions of the Federal Mine Safety and Health Act of 1977. The Occupation and Safety Health Administration ("OSHA") also has jurisdiction over certain safety and health standards not covered by MSHA.  Mining operations and all proposed exploration and development will require a variety of permits.  In addition, any mining operations occurring on federal property are subject to regulation and inspection by the Bureau of Land Management ("BLM"). While we have considerable experience in the mining permitting process, permitting procedures are complex, costly, time consuming and subject to potential regulatory delay.  We currently own mining rights in several properties having existing permits in place or properties where existing permitting requirements and other applicable environmental protection laws and regulations would not pose a material hindrance to our ability to explore and develop such properties. As part of our initial evaluation of suitable projects, we will ascertain a property's regulatory compliance status and any issues affecting current or future permitting requirements.  However, we cannot be certain that future changes in laws and regulations would not result in significant additional expenses, capital expenditures, restrictions or delays associated with the exploration and development of our current or future projects.  We cannot predict whether we will be able to obtain new permits or whether material changes in permit conditions will be imposed.  Obtaining new mining permits or the imposition of additional conditions could have a material adverse effect on our ability to develop the mining properties in which we have an interest or ownership or could increase the costs charged by third party suppliers or decrease the amount of minerals available from third party suppliers.

Legislation has been introduced in prior sessions of the U.S. Congress to make significant revisions to the U.S. General Mining Law of 1872 that would affect our potential development of unpatented mining claims on federal lands, including any royalty on mineral production. It cannot be predicted whether any of these proposals will become law.  Any levy of the type proposed would only apply to unpatented federal lands and accordingly could adversely affect the profitability of any future mineral production from projects being explored by the Company on federal property.

All of our current mining projects will be governed by the Bureau of Land Management and the US Forest Service. The Federal Land Policy and Management Act (1976) established the BLM's multiple-use mandate to manage the public lands "in a manner that will protect the quality of scientific, scenic, historical, ecological, environmental, air and atmospheric, water resource, and archeological values; that, where appropriate, will preserve and protect certain public lands in their natural condition". The Lands, Minerals & Water Rights branch coordinates with BLM planning and resource specialists to manage surface resources, minerals and water rights to ensure that authorized uses of public lands do nothing to diminish their health and productivity or impair their use and enjoyment by present and future generations.
 
With respect to the permits required for our projects mentioned above, we may be unable to obtain such permits in a timely manner, on reasonable terms, or at all. If we, or our third party suppliers, cannot obtain or maintain the necessary permits, or if there is a delay in receiving such permits, our timetable and business plan for development and mining of these properties or those of third party suppliers could be adversely affected. See Item 1A. "Risk Factors" for more information.
 
 
 
Mining Environmental Regulations

Mining activities, including drilling, mapping and development and production activities are subject to environmental laws, policies and regulations. These laws, policies and regulations affect, among other matters, emissions to the air, discharges to water, management of waste, management of hazardous substances, protection of natural resources, protection of endangered species, protection of antiquities and reclamation of mined land. Legislation and implementation of regulations adopted or proposed by the United States Environmental Protection Agency ("EPA"), the BLM and by comparable agencies in various states, directly and indirectly affect the mining industry in the United States. These laws and regulations address the environmental impact of mining and mineral processing, including potential contamination of soil and water from tailings, discharges and other wastes generated by the mining process.  In particular, legislation such as the Clean Water Act, the Clean Air Act, the Federal Resource Conservation and Recovery Act ("RCRA"), and the National Environmental Policy Act require analysis and/or impose effluent standards, new source performance standards, air quality standards and other design or operational requirements for various components of mining and mineral processing, including natural resource mining and processing of the type to be conducted by the Company.  Such statutes also may impose liability on mine developers for remediation of waste they have created.
 
Mining projects also are subject to regulations under (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or "Superfund") which regulates and establishes liability for the release of hazardous substances and (ii) the Endangered Species Act ("ESA") which identifies endangered species of plants and animals and regulates activities to protect these species and their habitats.  Revisions to "CERCLA" and "ESA" are being considered by Congress; however, the impact of these potential revisions on our business is not clear at this time.
 
The Clean Air Act, as amended, mandates the establishment of a Federal air permitting program, identifies a list of hazardous air pollutants, including various metals and pollutants, and establishes new EPA enforcement authority.  The EPA has published final regulations establishing the minimum elements of state operating permit programs.  We will be required to comply with these EPA standards to the extent adopted by the State in which development projects are located.
 
In addition, developing mining sites requires mitigation of long-term environmental impacts by stabilizing, contouring, re-sloping, and revegetating various portions of a site. While a portion of the required work can be performed concurrently with developing the property, completion of the environmental mitigation occurs once removal of all materials and facilities has been completed. These reclamation efforts are conducted in accordance with detailed plans which have been reviewed and approved by the appropriate regulatory agencies.  The mining developer must insure that all necessary cash deposits and financial resources to cover the estimated costs of such reclamation as required by permit are made.
 
Any exploration and development of mining projects by the Company will be conducted in substantial compliance with federal and state regulations and be consistent with the need to remediate any environmental impact.

Agricultural Products Certifications
 
All sales of agricultural products have to be registered in order to be sold, distributed and /or applied in farming operations. Standards for registration are set by and regulated by the USDA (United States Department of Agriculture) at the federal level.  All state agencies must also comply with federal guidelines. There are guidelines for the registration and labelling of the products for agriculture use, some of which are federal, others are State. Our product(s) which are organic must meet several additional qualifications in order to become registered.
 
In California, for example, the task of regulating the registration processes is carried out by the California Department of Food and Agriculture (CDFA). There are some activities within the regulatory process that are executed by recognized and licensed private entities such as chemical laboratories and certifying laboratories. In some instances, per various international treaties, some of bilateral and some by regional structures (European Union, etc) some governmental and private organizations are recognized and licensed to play particular roles in certifying and/or in the certifying processes.
 
 
Currently Purebase has two products fully registered as an organic plant protectant: Purebase Soil Advantage and Purebase Shade Advantage WP. The WP stands for Wettable Powder which means the powder goes into suspension when mixed with water. We have registration certificates for this product in several states including California and Washington. Purebase is currently pursuing US and California registration of its other agricultural products.
 
ITEM 1A.     RISK FACTORS
 
You should carefully consider the following risk factors in evaluating our business.  We have described the risks we consider to be material.  However, there may be additional risks that we view as not material or of which we are not presently aware.  If any of the risks described below were to occur, our business, prospects, financial condition, results of operations or cash flow could be materially adversely affected.
 
BUSINESS RISKS
 
Purebase has a limited operating history which makes the evaluation of its future business prospects difficult.

The Company changed its business focus to its current business of developing industrial and natural resources as a result of a reorganization with Purebase Ag which occurred in December, 2014. Most of the Company's current agricultural business is conducted through its wholly-owned subsidiary Purebase Ag which is a development stage company which commenced its business in 2014. Consequently, the Company and its subsidiaries have only limited operating history and an unproven business strategy and mining properties and production facilities that are currently being developed. Our primary activities to date have been the design of our business plan and identifying and acquiring various natural mineral property rights or leases relating to mining projects which fit our project profile as well as developing agricultural supplements and SCM's. The Company commenced selling its agricultural products during FY 2017.  As such we may not be able to achieve positive cash flows and our lack of operating history makes evaluation of our future business and prospects difficult.  The Company's success is dependent upon the successful development of suitable mineral projects, establishing its mineral production capability and selling its agricultural products. Any future success that we might achieve will depend upon many factors, including factors beyond our control which cannot be predicted at this time. These factors may include but are not limited to: changes in or increased levels of competition; the availability and cost of bringing mineral projects into production; the amount of industrial and/or natural resources identified and the market price of and the uses for such minerals. These conditions may have a material adverse effect upon our business operating results and financial condition.

As a relatively new company, Purebase is unable to predict future revenues which makes an evaluation of its business speculative.

The Company and its subsidiaries have generated only limited revenues during FY 2017. Because of the Company's current business focus, lack of operating history and the introduction of its mining development and product strategy, its ability to accurately forecast revenues is very difficult.  Future variables include the development and production of minerals from the Company's mining projects, the market for the natural resources being acquired from third party suppliers, the price of various mineral resources, building its production facilities and establishing a customer base.  To the extent we are unsuccessful in establishing our business strategy and generating revenues through development of our own mining property or through our subsidiaries, Purebase Ag and Purebase Build, we may be unable to appropriately adjust spending in a timely manner to compensate for any revenue shortfall or will have to reduce our operating expenses, causing us to forego potential revenue generating activities, either of which could have a material adverse effect in our business, results of operations and financial condition.
 

Purebase expects its operating expenses to increase in the future with no assurance that revenues will be sufficient to cover those expenses which could delay or prevent Purebase from achieving profitability.
 
As the Company's business grows and expands, the Company will spend substantial capital on developing its various mining projects, research and development of uses for its minerals being mined or acquired, establishing its operating infrastructure and creating strategic relationships.  We expect our cost of revenues, property and facility development, general and administrative expenses, to continue to increase.  If revenues do not increase to correspond with these increased expenses or if outside capital is not secured, there may be a material adverse effect on our business, cash flow and financial condition.
 
If the Company fails to raise additional capital to fund its business growth and project development, the Company's business could fail.
 
The Company is currently relying substantially on capital infusions from a related party, USMC, to fund its ongoing operations. The Company anticipates having to raise significant amounts of capital from other sources to meet its anticipated needs for working capital and other cash requirements for the near term to develop its mining properties, production facilities and uses for its mineral resources.  The Company will attempt to raise such capital through the future issuance of stock or incurring debt. However, there is no assurance that we will be successful in raising sufficient additional capital from third parties and we have no arrangements for future financing with USMC. Consequently, there can be no assurance that current or additional financing will be available to us.  If adequate funds are not available or are not available on acceptable terms, our ability to fund the Company's projects, take advantage of potential acquisition opportunities, develop or enhance the uses of our mineral resources or respond to competitive pressures would be significantly limited.  Such limitation could have a material adverse effect on the Company's business and financial condition.
 
Raising funds through debt or equity financings in the future, would dilute the ownership of our existing stockholders and possibly subordinate certain of their rights to the rights of new investors or creditors.
 
We expect to raise additional funds in debt or equity financings if they are available to us on terms we believe reasonable to provide for working capital, carry out mining development and production programs, expand our marketing efforts or to make acquisitions.  Any sales of additional equity or convertible debt securities would result in dilution of the equity interests of our existing stockholders, which could be substantial. Additionally, if we issue shares of preferred stock or convertible debt to raise funds, the holders of those securities might be entitled to various preferential rights over the holders of our Common Stock, including repayment of their investment, and possibly additional amounts, before any payments could be made to holders of our Common Stock in connection with an acquisition of the Company.  Incurring additional debt, if authorized, would create rights and preferences that would be senior to, or otherwise adversely affect, the rights and the value of our Common Stock and would have to be repaid from future cash flow before there would be any return to investors.
 
Our business will depend on certain key Purebase personnel, the loss of which would adversely affect our chances of success.
 
The Company's success depends to a significant extent upon the continued service of its senior management, key executives and consultants.  We do not have "key person" life insurance policies on any of our officers or other employees.  The Company currently has employment agreements with its CFO and Vice President. Nevertheless, the loss of the services of these key members of senior management, other key personnel, or our inability to retain high quality subcontractors and production personnel would have a material adverse effect on our business and operating results.
 
 
Former Purebase Ag stockholders are able to control the Company.
 
As a result of a Reorganization which occurred in December, 2014, the initial stockholders of Purebase, Inc. (now Purebase Ag) were issued common stock of the Company representing 61% of the Company's outstanding common stock.  Accordingly, Mr. A. Scott Dockter and other former Purebase, Inc. stockholders currently have the ability to control the affairs of the Company for the foreseeable future.

An increase in the price of natural resources will adversely affect our chances of success.

The Company's business plan is based on current development costs and current prices of  the natural resources being developed by the Company. However the price of minerals can be very volatile and subject to numerous factors beyond our control including industrial and agricultural demand, inflation, the supply of certain minerals in the market, and the costs of mining, refining and shipping of the minerals. Since the Company will be obtaining the majority of its minerals from third party suppliers, any significant increase in the price of these natural resources will have a materially adverse effect on the results of the Company's operations unless it is able to offset such a price increase by implementing other cost cutting measures or passing such increases on to its customers. While the Company has attempted to secure stable pricing and supply pursuant to its long term agreement with USMC, there is no assurance that the Company will not  incur future price increases or supply shortages of its raw materials.

We have not yet developed our existing mining projects and have not established any Proven or Probable Reserves; dependence on one vendor for most of minerals for products.

The Company and its subsidiary Purebase Ag, have to date identified and acquired an interest in several mineral resource projects. However, the Company has commenced development of only one of these projects. During the past fiscal year, the Company purchased 85% of its minerals from one source, US Mine Corp., a related party to the Company. While the Company and Purebase Ag believe that, based upon available data and the assumptions used and judgments made in interpreting such data, minerals available from US Mine Corp. and/or the properties/interests currently owned by Purebase Ag will yield commercially viable amounts of mineral resources, neither the Company nor Purebase Ag have done the necessary exploration/evaluation to establish any proven or probable reserves. Therefore we are unable to determine the quantity and quality of the mineral resources we may be able to recover. There is significant uncertainty in any resource estimate such that the actual deposits encountered or mineralization validated and the economic viability of mining the deposits may differ materially from our expectations. The Company's inability to obtain its necessary minerals from its own properties or from US Mine Corp. or identify other sources of minerals, would have an adverse effect on the Company's potential revenues from and growth of its business.

We may lose rights to properties if we fail to meet payment requirements or development and/or production schedules.

We expect to acquire rights to some of our mineral properties from leaseholds or purchase mining rights that require the payment of royalties, rent, minimum development expenditures or other installment fees or specified expenditures. If we fail to make these payments/expenditures when they are due, our mineral rights to the property may be terminated. This would be true for any other mineral rights which require payments to be made in order to maintain such rights.

Some contracts with respect to mineral rights we may acquire may require development or production schedules. If we are unable to meet any or all of the development or production schedules, we could lose all or a portion of our interests in such properties. Moreover, we may be required in certain instances to pay for government permitting or posting reclamation bonds in order to maintain or utilize our mineral rights in such properties. Because our ability to make some of these payments is likely to depend on our ability to generate internal cash flow or obtain external financing, we may not have the funds necessary to meet these development/production schedules by the required dates.
 

Management may be unable to implement the Business Strategy.

The Company's business strategy is to develop and extract or obtain certain minerals which they believe can have significant commercial applications and value. The Company's business strategy also includes developing new uses and products derived from these mineral resources, such as the use of pozzolan as an ingredient for cement or sulfate and Humate for agricultural uses. There is no assurance that we will be able to identify and/or develop commercially viable uses for the minerals we will be mining or obtaining. In addition, even if we identify and/or develop commercial uses and markets for our minerals, the time and cost of mining or otherwise obtaining, refining, blending and distributing such minerals may exceed our expectations or, when developed, the amount of minerals available may fall significantly short of our expectations thus providing a lower return on investment or a loss to the Company.

We have not yet established sustained and increasing sales from our customer base or distribution system.

During the past year we have prepared and sent samples of our agricultural products to several potential industrial and retail customers and have established a customer base and distribution system for our agricultural products.  However, we are now engaged in promoting sales and marketing in order to increase the sales revenue of our agricultural products to customers and through the distribution system. To date we have not obtained any supply contracts for our minerals and agricultural products and sales increases have been modest. With regard to our SCM products, while we believe our other mineral resources will have significant markets for SCM  and agricultural applications, we have not yet entered into any agreements to purchase our minerals or SCM products nor have we established a distribution system to deliver our minerals and SCM products to customers. Our inability to attract additional customers or to deliver products in a time and cost effective manner would have an adverse effect on our potential revenues from and growth of our business.

Mineral exploration and mining are highly regulated industries.

Mining is subject to extensive regulation by state and federal regulatory authorities. State and federal statutes regulate environmental quality, safety, exploration procedures, reclamation, employees' health and safety, use of explosives, air quality standards, pollution of stream and fresh water sources, noxious odors, noise, dust, and other environmental protection controls as well as the rights of adjoining property owners. We will strive to verify that projects currently owned or being considered, are currently operating or can be operated in substantial compliance with all known safety and environmental standards and regulations applicable to such mining properties and activities. We will also seek suppliers and service providers, such as USMC, who we believe are operating in substantial compliance with all safety and environmental standards and regulations applicable to such mining properties and activities. However, there can be no assurance that our compliance efforts regarding our own properties could be challenged or that future changes in federal or state laws, regulations or interpretations thereof will not have a material adverse effect on our ability to establish and sustain mining operations of our own properties or adversely affect the mining properties of our suppliers.

Certain of our current and proposed products will require certifications before being suitable for intended purposes.

Some of our agricultural products and our SCM's will require certain certifications before being suitable for labelling and usage. For example, our SCM must be certified by the ASTM International (American Society for Testing and Materials International)   to meet certain strength standards in order to be certified for use in large government projects. Similarly, our agricultural products must be certified under US Department of Agriculture ("USDA")  and CDFA specifications and properly labeled. While the Company as certified two of its agricultural products under USDA and CDFA specifications and  is currently working with various laboratories and agencies to acquire future certifications, there is no assurance as to if or when such certifications will be obtained.
 

The Auditor's Report states there is substantial uncertainty about the ability of the Company to continue its operations as a going concern.

In their audit report dated February 27, 2018 included in this Form 10-K, the auditors expressed an opinion that substantial doubt exists as to whether the Company can continue as an ongoing business. In addition, the audit report also contained a "going concern" caveat as to the Company's ability to continue as a going concern. We believe that if we do not raise additional capital from outside sources in the near future or if the development of our mining properties or production facilities do not generate revenues as planned, we may be forced to delay the implementation of our business plans or curtail our business operations.

We will face competition in our market space.

At the present time the Company is aware of other companies providing similar minerals and natural resources to those of the Company's.  In addition, other entities not currently offering the minerals or product uses similar to the Company's may enter the industrial and agricultural markets.  The Company's natural resources and products will also have to compete with established minerals (such as fly ash for use in making cement) which are already in commercial and agricultural use. Any such competitors would likely have greater financial, mining production, production facilities, marketing and sales resources than the Company.  Increased competition may result in pricing pressures and the inability to increase market share, which may have an adverse effect on the Company's business, operating results and financial condition.

We will incur increased costs and may have difficulty attracting and retaining qualified directors and executive officers as a result of being a public company.

Purebase is a public "reporting company" with the US Securities and Exchange Commission ("SEC"). As a public reporting company, we will incur significant legal, accounting, reporting and other expenses not generally applicable to a private company.  We also will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 as well as other rules implemented by the SEC. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly.  We also expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage.  As a result, we may experience difficulty attracting and retaining qualified individuals to serve on our board of directors or as executive officers. We cannot predict or estimate the amount of these continuing costs we will incur as a result of being a public company.

SECURITIES RISKS
Most of the Company's outstanding shares were issued with resale restrictions which are now eligible for removal.
The shares of the Company's common stock issued in the 2014 Reorganization transaction or other private placement transactions as well  as shares held by affiliates, representing approximately 89% of the shares outstanding, have not be registered under the Securities Act or under any state's securities laws for public sale. As a result, these shares are deemed to be "restricted" or "control" shares as defined in Rule 144 under the Securities Act and subject to resale restrictions. Consequently, these shares cannot be freely sold unless registered under the Securities Act of 1933 or sold pursuant to an available exemption under Rule 144. However, since the Company has been previously designated as a "shell company" under the Securities Act, the resale exemption under Rule 144(i) continues to be available only for so long as the Company remains current in all of its reporting requirements. Approximately 20,403,854 shares of the Company's restricted common stock held by non-affiliate stockholders are eligible for resale pursuant to Rule 144 without resale restrictions. The price of the Company's common stock traded on the OTCQB trading market could be adversely affected should a significant number of non-affiliate stockholders choose to sell their shares pursuant to Rule 144.
 
 
Inadequate market liquidity may make it difficult to sell our stock.
 
There is currently a very limited public market for our Common Stock, and we can give no assurance that there will always be such a market nor can we give assurance that the market for our stock will develop sufficiently to create significant market liquidity and stable market prices in the future.  A stockholder may find it difficult or impossible to sell shares of our Common Stock in the public market because of the limited number of potential buyers at any time or because of fluctuations in our market price.  In addition, the shares of our Common Stock are not eligible as a margin security and lending institutions may not accept our Common Stock as collateral for a loan.
 
We do not anticipate paying any dividends in the foreseeable future, which may reduce the return on your investment in our common stock.
 
To date, the Company has not paid any cash dividends on its common stock and does not anticipate paying any such dividends in the foreseeable future.  Payment of future dividends will depend on earnings, our capital requirements, our debt facilities and other factors considered appropriate by our Executive Officers and Directors. There is no assurance that we will, at any time, generate sufficient profits or surplus cash that would be available for distribution as a dividend to the holders of our common stock. Our current plans are to use any profits that we may generate to fund our ongoing operations and future acquisitions. Therefore, any return on your investment would derive from an increase in the price of our stock, which may or may not occur.

There is a limited active trading market for our common stock making our stock vulnerable to significant price and volume fluctuations.

There is currently a limited active trading market for our common stock which is listed and traded on the OTCQB (owned by NASDAQ Stock Market, Inc.). The OTCQB is not a listing service or exchange, but is instead a dealer quotation service for subscribing members. Consequently, the market for our common stock will depend to a certain extent on the number of market makers trading in our stock. The market price of our common stock may be significantly affected by factors such as actual or anticipated fluctuations in our operating results, the activities of our market makers, general market conditions and other factors. In addition, stock markets have from time to time experienced significant price and volume fluctuations that have particularly affected the market prices of the shares of development stage companies such as Purebase, which may adversely affect the market price of our common stock in a material manner.

In addition, the financial markets have experienced recent extreme price and volume fluctuations. The market prices of securities in the natural resource industry have been highly volatile and may continue to be highly volatile in the future, some of which may be unrelated to the operating performance of particular companies. The sale or attempted sale of a large amount of common stock into the market may also have a significant impact on the trading price of our common stock. Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance .
 
ITEM 2.       PROPERTIES

Office/Production Facilities

Our corporate offices are located at 8625 State Highway 124 Ione, CA 95640. The Company's telephone number is (209) 257-4331 and on the Web at www.Purebase.com .
 


Mineral Properties/Interests
While our main emphasis is developing and distributing our agricultural products, we may in the future undertake the commercialization of our three mining properties, one of which we own, one of which is leased and one of which we have the right to acquire from a related party. The Company has two Pozzolan projects, one located in Northern California, and the other in Southern California to serve those areas as primary markets for the agricultural and construction sectors. The Company's potassium sulfate project is located in south central Nevada which is close to the central valley markets we expect to serve with our agricultural products. While all of the properties contain mineralized material, all of the Company's properties are exploration stage properties under Industry Guide 7 unless and until "proven or probable reserves" are defined.

Company Right to Acquire Properties

Snow White Mine in San Bernardino County, CA

On November 28, 2014 US Mining and Minerals Corporation entered into a Purchase Agreement in which US Mining and Minerals Corp. (as "Seller") agreed to sell its fee simple property interest and certain mining claims relating to its Snow White Mine property to US Mine Corp for a purchase price of $650,000. 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 at which time the Company paid a $50,000 down payment to the Seller. As a result of the Assignment, the Company assumed the purchaser position under the Purchase Agreement and the obligation to pay the remaining $600,000 of the purchase price. 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 (which was advanced by John Bremer), 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 director of both Purebase and US Mine Corp, acquired the property on or about October 15, 2015 by paying the remaining purchase price balance of $575,000 to the Seller. During the year ended November 30, 2017, US Mine Corp. agreed to offset the $75,000 deposit against money owed to US Mine Corp. Mr. Bremer is holding the property and will transfer title to the Company when the Company reimburses Mr. Bremer for his acquisition expenses.  Mr. Bremer has not restricted the Company from continuing its exploration on the property or access to property in any way. The mining claims require a minimum royalty payment of $3,500 per year.

The Snow White Mine property consists of approximately 280 acres of mining property containing 5 placer mining claims known as the Snow White Mine. The Snow White Mine property is located 17 miles north of Hinkley, California in San Bernardino County. This 280 acre combination of owned property (80 acres) and Non-Patented Placer Claims (200 acres) includes 8.33 acres which are conditionally permitted and ready for further development. The Project entry is made on Hinkley Road which is a 4 mile paved county-maintained road which converts to an existing unpaved road for the remaining 13 miles to the mine site.

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"). The fee property comes with clear title to surface and mineral rights. The claims are situated on federal BLM land. These claims are held with annual maintenance payments to the BLM and annual filings of intent to hold and affidavit assessment work. There is no expiration date on ownership of the leases as long as the annual payments are made and the annual filings are completed. They are both current.  There is no equipment present at the claims location. No improvements have been made at the claims location.  Power when needed, is from portable generators. Processing equipment when onsite is self-powered.
 
 

According to reports prepared by the California Journal of Mines and Geology, Vol. No. 49, and the California State Department of Natural Resources Bulletin#174 prepared in 1959, the property was formerly known as the Williams Brothers Quarry and classified as a very large pumicite deposit approximately 70 foot in thickness underlain by Rhyolitic tuffaceous beds and overlain by layers of Perlite and Rhyolite, all minerals which are classified as Aluminum Silicate due to their primary chemical and petrographic constituents. There are no current records of production for the early operation of this mine. The Snow White Mine was previously owned by MATCON, US Mining and Materials Corporation.

The principal mineral deposit found within the Snow White Mine site is a unique combination of naturally formed, extremely pure, lightweight "ash-like" aluminum silicate mineral products that were created by explosive, volcanic activity. This unique deposit consists of multi-layered strata of finely shattered or "atomized" rhyolitic glass with various amounts of aluminum, potassium, and magnesium as well as other trace minerals. This combined  blend  of  stratified  aluminum  silicate  materials is an extremely pure, naturally clean mineral product, which is free of external contamination as a result of its volcanic formation and uniform settlement in beds on the floor of an ancient lake bed that formed in this Superior Lake quadrangle  of the West Mojave  Desert region.

The Snow White Mine mineral geology and chemical makeup of Pozzolan make it an ideal mineral for use as an SCM. Based upon the methodology of the available geological reports for this project, combined with local knowledge of the site and the application of reasonable volume calculations, the Company believes there is an economically viable, accessible combined ore body of mined pumice, tuff/breccia, perlite, and rhyolite ore within the full 280 acre Snow White Mine property. The fee property and claims location have had no exploratory drilling done by Purebase that identifies proven or probable reserves. However, there is visual and geological evidence to suggest these minerals are present along with information contained within previous state and third party reports. The Company believes this data indicates that mineralized materials do exist which could be economically and legally extracted and produced. The Company does not have a current exploration plan for this property.

Purebase Ag Properties

Placer Mining Claims USMC 1-50

On July 30, 2014 Purebase Ag entered into a Placer Claims Assignment Agreement pursuant to which Scott Dockter and Teresa Dockter assigned their rights to certain Placer Mining Claim Notices 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" (the "USMC Placer Claims") for which Purebase Ag issued 12,118,000   shares of its common stock to Scott and Teresa Dockter in exchange for these Mining Rights.

The USMC Placer Claims is a placer claims resource covering 1,145 acres of mining property located in Lassen County, California and located in an area known as the "Long Valley Pozzolan Deposit". Purebase Ag holds non-patented mining rights to the property consisting of contiguous placer claims within the boundaries of a known and qualified Pozzolan deposit. This property can be accessed at multiple entry points. At the Northern portion of the property at the intersection of Hwy 70 and Hwy 395 there is a paved entrance that leads to an off- road entry to the claims area. At the Southern end of the property there is a paved entry off the Hwy that leads to an off-road entry to the site. Approximately 6.5 miles north of the California and Nevada state line is this Southern Paved Hwy entrance that also permits access to the property. These claims are situated on federal BLM land require annual maintenance payments to the BLM and annual filings of intent to hold and affidavit assessment work. There is no expiration date on ownership of the leases as long as the annual payments are made and the annual filings are completed. They are both current. There have been no previous operators at these claim locations, consequently no improvements have been made at the claims location. There is no equipment present at the claims location. Power when needed, is from portable generators. Processing equipment when onsite is self-powered.
 

While the USMC Placer Claims property is native and undisturbed and has not been previously explored or mined, this area is included in a State sponsored report showing this area is underlain by mineral deposits for which geological information indicates that significant inferred resources of natural pozzolan are present. The State sponsored report was previously filed as Exhibit 10.6. The Long Valley Pozzolan Deposit is a lacustrine diatomaceous and tuffaceous siltstone which is exposed in a north-south trend for a distance of nearly 10 miles. Long Valley is one of several Miocene-Pliocene age sedimentary basins in northeastern California and northwestern Nevada. The area is marked by the complex structural styles of the Sierra Nevada Basin and Range transition zone. Among the leading structural styles are northerly trending normal faulting characteristic of the eastern Sierra Nevada and north-northeast trending extensional normal faulting characteristic of the Basin and Range. The project is in an area defined in a State sponsored report as an area containing a unique blend of volcanic origin and diatoms. Based on visual and geological evidence suggesting these minerals are present along with the information contained within the state sponsored report, the Company believes this data indicates that mineralization does exist which could be economically and legally extracted and produced once necessary permits are obtained.
 
This project will be designed as an open pit mine. Purebase Ag is developing exploration plans which include preparing a drill program to define the limits and mineralization calculations of the minerals present and preparing the Phase I portion of the permitting plans. This will also include completing all required environmental and regulatory applications and reviews with the BLM, State of California and Lassen County. The economic potential for this project makes it an attractive source of SCM in the region. The Company does not have a current exploration plan for this property.
 
Long Valley Physical Factors :

Water : There are no perennial streams on the permit area. There are numerous washes or intermittent streams. There are no known springs either seasonal or year round. No ground water is known at the shallow depths which the drilling will be conducted.  No ground water has been encountered in the workings of the Alum Mine. The depth to ground water in the Alum well to the Northwest of the permit area is unknown. An exploration well for geothermal investigation was drilled adjacent to the Alum Mine site. No data on the location has been obtained.

Vegetation : The area has vegetative cover of approximately 50%. The primary form of vegetation observed was creosote bush and sage. Some minor grasses and forbs were observed but were not identified.

Wildlife Information : No large mammals have has been observed on the site. The habitat is extremely limited because of the very sparse vegetation. Several species of small rodents are believed to be present on the location but none have been observed. Some desert reptiles are present on the location. No known endangered species are known to be residents on the locations.

Present land Use : The lands in question are currently used only for minor wildlife habitat and occasional recreation (off road vehicle) use.

Exploration Plan : When and if exploration of this property is commenced, exploration will focus on the surrounding area to the existing mine site location within a 50 acre +/- section and the drill holes will be primarily shallow (<200 ft.) drill holes located on sites throughout the identified area at 500' centers +/-. Each drill site selected shall be located and identified on post exploration mapping with Lat/Lon coordinates. Drilling will be limited to sites which can be accessed by truck or crawler mounted drills. Drilling is expected to by either core, conventional rotary or reverse circulation methods. Drill pads will be of limited extent, dependent on the equipment available, but in general approximately 12 ft.by 40  ft. The cuttings will be sampled and tested using an Olympus XRF handheld analyzer with random split samples being collected logged and forwarded to a third party laboratory for conformation testing.  The excess being available for drill hole plugging.
 
 
 

 
Federal Mineral Preference Rights Lease in Esmeralda County, NV

On October 6, 2014 Purebase Ag entered into an Assignment of Lease from US Mine Corp. pursuant to which Purebase Ag acquired the rights to a Preference Rights Lease granted by the BLM covering approximately 2,500 acres of land located on the western side of the Weepah Hills in the Mount Diablo Meridian area of Esmeralda County, Nevada (referred to as the "Esmeralda Project"). In exchange for the Assignment of Lease, Purebase Ag assumed the obligation to pay all future annual lease payments of $7,503 each and to assume all other ongoing fees and expenses relating to the development of the Esmeralda Project.
 
Contained in the Esmeralda Project's leased property is the mining property known as 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 under a Federal Mineral Preference Right Lease. There are annual minimum royalty and rental payments. The project has an approved Reclamation Plan – Nevada Division of Environmental Protection Permit #0192 – and an approved Plan of Operations, BLM Case Number N65-99-001P. There is a reclamation bond in place in the amount of $47,310.30. The BLM is the bond holder.
 
The current operation is an open pit mine site which is fully permitted and partially developed. The total allowed disturbed acreage for the existing and approved reclamation plan is 14.45 acres. The site entrance is located approximately 10 miles south of Hwy 95/6 on Hwy 265 on the East side of the Hwy. The mine site location is 3.4 miles of unpaved road from the Hwy. The existing site equipment consists of a 40' storage container, a 8,000 gallon water tank and portable single axel truck scale. Pit development has begun and rectified drawings have been recorded to the existing site disturbance. Power when needed, is from portable generators. Processing equipment when onsite is self-powered.
 
The property is known to contain large amounts of altered volcanic tuff composed of Alunite, K-Alum, Jarosite, Gypsum, Native Sulfur and K-feldspar. The geology of the area around the mine site includes deposits of potassium and sulfur described as being in an elongated dike like or neck like mass of rhyolite having the appearance of being intrusive into gently folded white and red sedimentary rhyolitic tuffs of Tertiary age. Sulfur occurs in this area as irregular seams and blebs in altered Tertiary sedimentary rocks and welded tuffs (Albers and Stewart 1972). The area has been mapped as Tertiary Esperanza Formation. Much of the area is covered with quaternary alluvium partially obscuring the relationships of the underlying rocks. It appears that these fumarolic deposits are related to plutonic outcrops in the area, specifically the Weepah Hills Pluton.
 
 
 
 
 


In the future, the Company may wish to enter additional product markets which derive from natural resources such as procuring properties containing silica sand and Kaolin clays which could be used to make glass, silica chips and solar panels. The Company may also acquire properties containing humate in order to augment its agricultural soil supplements. However, at the current time, the Company will continue to acquire most of  its raw materials for its agricultural products from USMC and other third party suppliers.
 
In addition, in the future the Company may expand its natural resources development to include certain metals such as copper, gold, silver, lead and zinc.
 
ITEM 3.       LEGAL PROCEEDINGS
 
The Company, Purebase Ag and US Agricultural Minerals, LLC ("USAM") 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 Ag and USAM. The substance of the Complaint involves the alleged breach and other wrongful acts including the staking and attempted recordation of claims by Defendants pertaining to a Non-Disclosure, Confidentiality and Non-Compete Agreement entered into between the Plaintiffs and the Defendants on June 26, 2012 and a Mineral Lease contract dated July 10, 2012 relating to certain mining claims allegedly owned by Plaintiffs and known as the Sierra Lady Mining Claims. The Plaintiffs are seeking an injunction to prevent further staking and disclosure of confidential information relating to the Sierra Lady
 
 
 
 
Mining Claims and monetary damages while the Defendants seek to dismiss the case alleging that the Plaintiffs did not have good title to the mineral rights they were attempting to lease to Defendants. 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. 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 and ordered Plaintiffs 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 in the above entitled matter filed their Answer to the Second Amended Complaint and filed their Counter Claims against the Plaintiffs. Plaintiffs have filed a Motion to Dismiss the Company's Counter Claims and Motion to Strike Third Party Complaint.  On July 22, 2016, the Court served an Order to Set Hearing for Oral Argument on Plaintiff's Motion to Dismiss. On July 15, 2016 Defendants' counsel filed a Motion to Quash two Subpoenas served on Defendants by the Plaintiffs and on July 18, 2016 Defendants' counsel filed a Motion for Protective Order against the Plaintiffs. On September 28, 2016, a Discovery Referee assigned to the case issued a "Recommendation for Order" on Defendants' Motions. The Motion to Quash has been settled and the Motion for Protective Order remains pending. Discovery closed in June, 2017. The jury trial commenced on February 12, 2018 and following the Plaintiff's presentation of their case, on February 14, 2018 the Judge entered a Directed Verdict in favor of the Defendants. Furthermore, in exchange for the Defendants waiving their cross complaint for damages, Plaintiff's agreed to waive all rights to appeal the verdict.
 
On September 21, 2016 the Company's President, David Vickers, was terminated by the Company. Subsequent to his termination, Mr. Vickers 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 arbitration proceeding will be handled by the Judicial Arbitration and Mediation Services, Inc. (JAMS) and is currently midway through the discovery phase. An evidentiary hearing is currently scheduled for May 23, 2018.  The range of loss could not be determined, but Mr. Vickers' demand for arbitration stated a claim of over $1,000,000. The Company plans to vigorously defend these claims in arbitration proceeding.
 
ITEM 4.        MINE SAFETY DISCLOSURES

The exploration and development of our mining projects will be subject to regulation by the Federal Mine Safety and Health Administration ("MSHA") under the Federal Mine Safety and Health Act of 1977 (the "Mine Act"). MSHA's activities include the inspection of mining operations on a regular basis and the issuance of various citations and orders when it believes a violation has occurred under the Mine Act. Following passage of the Mine Improvement and New Emergency Response Act of 2006, MSHA has significantly increased its inspection and enforcement programs.

Purebase, as well as its mining service provider, USMC, as natural resource mining operators, will be required to report certain mine safety violations or other regulatory matters as mandated by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 4 of Regulation S-K. Any such violations or regulatory matters must be disclosed in Exhibit 95 to be included with the Company's Annual Report on Form 10-K.

Since the Company has only conducted limited mining operations, only the Chimney 1 sulfate mineral project is MSHA approved for operation. The Company's remaining mining projects have not been inspected by MSHA. The Company or its project operators have not received any citations or orders pertaining to any violation of the Mine Act or any other federal or state regulation relating to its mining activities during FY 2017.
 
 
 
 
 
 
 
PART II
 
ITEM 5.       MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
 
Market for Our Common Stock
 
Our Common Stock is approved for quotation on the OTCQB (operated by the OTC Markets Group) where it is traded under the symbol "PUBC".  As of February 16, 2018 the most recent trade of our Common Stock was at $0.10 per share for an insignificant number of shares traded.
 
Price Range of Our Common Stock
 
A public trading market having the characteristics of depth, liquidity and orderliness depends upon the existence of market makers as well as the presence of willing buyers and sellers, which are circumstances over which we do not have control. The following table sets forth the high and low closing prices reported by the OTCQB for our Common Stock in the periods indicated below. The quotations below reflect inter-dealer selling prices, without retail mark-up, markdown or commission, and may not represent actual transactions.
 
Company's Common Stock
 
High
   
Low
 
 
           
December 1, 2015-February 29, 2016
 
$
4.00
   
$
1.92
 
March 1, 2016 – May 31, 2016
 
$
2.20
   
$
0.60
 
June 1, 2016 – August 31, 2016
 
$
2.00
   
$
0.25
 
September 1, 2016 – November 30, 2016
 
$
0.26
   
$
0.15
 
December 1, 2016-February 28, 2017
 
$
0.23
   
$
0.15
 
March 1, 2017 – May 31, 2017
 
$
0.18
   
$
0.02
 
June 1, 2017 – August 31, 2017
 
$
0.38
   
$
0.15
 
September 1, 2017 – November 30, 2017
 
$
0.26
   
$
0.10
 

Stockholders
 
As of February 1, 2018, there were approximately 77 holders of record of our Common Stock. This amount does not include stockholders whose shares are held in street name or Cede & Co.
 
Dividend Policy
 
There are no restrictions in our Articles of Incorporation or Bylaws that prevent us from declaring dividends. However, the Nevada Revised Statutes do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
 
1.
We would not be able to pay our debts as they become due in the usual course of business; or
2.
Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders, if any, who have preferential rights superior to those receiving the dividend.
 
We have never declared or paid any cash dividends on our Common Stock. We currently anticipate that we will retain all future earnings for the expansion and operation of our business and do not anticipate paying cash dividends in the foreseeable future.
 
 
Transfer Agent
Effective as of August 21, 2017 Purebase's transfer agent for its common stock, TranShare Securities Transfer and Registrar, entered into a Servicing Agreement with Island Stock Transfer pursuant to which Island Stock Transfer commenced providing stock transfer services d/b/a TranShare Corporation. TranShare Corporation's address is 15500 Roosevelt Blvd., Suite 301, Clearwater, FL 33760; Phone Number: (303) 662-1112.
Our Common Stock is subject to the "penny stock regulation"

Our common stock is currently deemed to be "penny stock".  Penny stocks generally are equity securities with a price of less than $5.00 per share other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system.  Our securities are subject to "penny stock rules" that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase.  Consequently, the "penny stock rules" may restrict the ability of broker-dealers to buy and sell our securities or may deter broker-dealers from executing transactions in our stock which may have the effect of reducing the level of trading activity of our common stock in the secondary market.

The Financial Industry Regulatory Authority ("FINRA") sales practice requirements may limit stockholders' ability to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit a stockholder's ability to buy and sell our stock and have an adverse effect on the market for shares of our common stock.

Securities Authorized For Issuance Under Equity Compensation Plans
On November 10, 2017 the Company's Board of Directors approved the 2017 Purebase Corporation Stock Option Plan which is intended to be a qualified stock option plan (the "Option Plan"). The Board allocated up to 10,000,000 shares of Purebase common stock to be issued pursuant to options granted under the Option Plan. Awards will consist if both incentive and non-incentive stock options. The Option Plan has a term of 10 years. The Option Plan is subject to stockholder approval prior to November 10, 2018. The Option Plan is administered by the Compensation Committee of the Board of Directors. As of January 31, 2018, no options had been granted under the Option Plan.
Recent Sales of Unregistered Securities
The Company has previously reported sales of unregistered securities in its Form 10-Q's, 10-K's and Form 8-K's, during the two fiscal years ending November 30, 2015 and November 30, 2016, and for the first three quarters of fiscal year 2017. The Company did not issue any additional shares during the fourth quarter of fiscal year 2017.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

The Company did not purchase any of its shares of common stock or other securities during the fiscal year ended November 30, 2017.
 

ITEM 6.       SELECTED FINANCIAL DATA
 
The Company is not required to provide this information.
 
ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this annual report.
 
Plan of Operations
 
The Company intends to engage in the development, distribution and establishment of production facilities for its various agricultural products as its top priority. The Company may also proceed with the identification, acquisition, development, and full-scale exploitation of industrial and natural minerals at its properties or acquire mineral from other suppliers in the United States. The Company is also evaluating other possible mineral resource projects and processing facilities including gold, silver, lead, zinc  and/or copper opportunities.
 
Results of Operations
 
The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operation and financial condition for the fiscal years ended November 30, 2016 and November 30, 2017 relating to the operations of the Company and its subsidiaries.
 
Overview
 
During the most recently completed fiscal year ended November 30, 2017, the Company generated revenues of $484,706 from the sale of its agricultural products compared to revenues of $177,705 generated in FY 2016. Total assets decreased from $947,462 as of November 30, 2016 to $286,103 as of November 30, 2017. Total liabilities increased from $3,762,542 at November 30, 2016 to $4,318,665 at November 30, 2017 reflecting the continuing increase in the agricultural products production costs occurring during FY 2017.
 
Results of Operations for the fiscal year ended November 30, 2017 relating to the operations of the Company and its subsidiaries compared to the fiscal year ended November 30, 2016.
 
The Company's operating results for the fiscal year ended November 30, 2016 and the Company's operating results for the fiscal year ended November 30, 2017 are summarized as follows:
 
 
Year Ended
 
Year Ended
 
 
11/30/17
 
11/30/16
 
Revenue
 
$
484,706
   
$
177,705
 
Operating Expenses
 
$
2,626,873
   
$
2,732,470
 
Net Loss
 
$
1,669,271
   
$
2,701,166
 
 
Revenue
 
The Company generated modest revenue from operations totaling $177,705 during FY 2016. These sales were made to customers who acquired our agricultural products primarily for testing purposes. The Company's revenues increased to $484,706 during FY 2017 (a 172% increase) as the Company increased sales of its agricultural products to customers. The Company has expanded its marketing efforts pertaining to its agricultural minerals products.
 
 
Operating Costs and Expenses
 
Total operating expenses for the Company for the fiscal year ended November 30, 2017 were $2,626,873 compared to $2,732,470 of expenses incurred by the Company for the fiscal year ended November 30, 2016. This slight decrease is attributed to a decrease of $156,614 in general and administrative expenses partially offset by a $49,465 increase in exploration and mining expenses relating to the Company's agricultural business. Product fulfillment, exploration and mining costs for the fiscal year ended November 30, 2017 were $268,426 compared to $218,961 for the fiscal year ended November 30, 2016, an increase of 22%. The increase in product fulfillment, exploration and mining costs is the result of higher expenses related to the Company's increasing sales of its agricultural products Division.
 
General and administrative costs for the Company for the fiscal year ended November 30, 2017 were $2,344,855 and for the fiscal year ended November 30, 2016 the expenses incurred by the Company were $2,501, 468. The decrease in general and administrative expenses is partially attributable to the departure of the Company's President in October 2016 and the Company's inhouse counsel in March 2017. Included in the Company's G&A expenses are professional fees for the fiscal year ended November 30, 2017 which were $509,747 and for the period ended November 30, 2016 the expenses incurred were $311,609. The increase in professional fees is attributed to increased legal expenses related to the Company's termination of the joint venture with Purebase Networks and the preparation for trial of the Durand litigation as well as costs associated with the Company's SEC reporting obligations.
 
Interest expense decreased from $212,823 for the period ended November 30, 2016 to $89,697 for the fiscal year ended November 30, 2017. The decrease was due primarily to the conversion of debt during the 2016 fiscal year.
 
Net Loss
 
The Company incurred a net loss of $1,669,271 for the fiscal year ended November 30, 2017 compared to the Company's net loss of $2,701,166 for the period ended November 30, 2016, a decrease of 37%. The decrease in net loss is due primarily to a one-time gain of $562,571from the termination of the joint venture with Purebase Networks coupled with a $123,126 decrease in interest expense and a $307,000 increase in revenues.
 
Liquidity and Capital Resources
 
At November 30, 2017, the Company's cash balance was $6,286 and it had a working capital deficit of $4,245,656.  The Company has insufficient cash on hand to pursue its current or long range business plan and the Company will be required to raise additional capital to fund its operations. Until we are able to establish a sufficient revenue stream from operations our ability to meet our current financial liabilities and commitments will be primarily dependent upon the continued advances from USMC, investments from new or existing investors or loans from existing stockholders and management or outside capital sources. During FY 2017, the Company was primarily reliant for its working capital needs on advances and support from USMC which aggregated $1,248,573 for fiscal year 2017.  Management believes that our current cash and cash equivalents will not be sufficient to meet our working capital requirements for the next twelve-month period. We have had negative cash flow from operating activities as we have not yet begun to generate sufficient revenues from mineral production or product sales.  The Company plans to raise the capital required to satisfy its immediate short-term needs and additional capital required to meet its estimated funding requirements for the next twelve months primarily through additional advances from USMC, the private placement of Company equity securities, by way of loans, and through such other financing transactions as the Company may determine.
 
 
We expect further development of our current agricultural products business to continue generating increasing revenues during the current fiscal year but do not expect revenues to cover our entire current operating expenses which we anticipate will increase as we implement our business plan. Consequently, we will continue to be dependent on outside sources of capital to sustain our operations and implement our business plan until operating revenues are sufficient to cover our operating expenses. If we are unable to raise sufficient capital we will be required to delay or forego some portion of our business plan, which would have a material adverse effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of capital or that our estimates of our capital requirements will prove to be accurate.  Even if we are able to secure outside financing, it may not be available in the amounts or times when we require or on terms we find acceptable.  Furthermore, such financing would likely take the form of bank loans, private placements of debt or equity securities or some combination of these.  The issuance of additional equity securities would dilute the stock ownership of current investors while incurring loans, lines of credit or long-term debt by the Company would increase its cash flow requirements and possible loss of valuable assets if such obligations were not repaid in accordance with their terms.

Going Concern

The consolidated financial statements presented in this annual report have been prepared under the assumption that the Company will continue as a going concern. The Company had a net operating loss of $1,669,271 and $2,701,166 during the fiscal years 2017 and 2016 respectively. The Company had a working capital deficiency of $4,245,656 and $3,109,815 during 2017 and 2016, respectively. The Company did not have sufficient cash at November 30, 2017 to fund normal operations for the next 12 months. The Company has realized modest revenues and its ability to continue as a going concern is dependent on the Company's ability to raise capital to fund its future product development and sales as well as working capital requirements. The Company's plans for the long-term attainment and continuation as a going concern include financing the Company's future operations through outside capital advances from USMC, sales of its common stock, entering into debt or line of credit facilities, generating increasing revenue from the sale of agricultural production and sales activities and the eventual profitable exploitation of its mineral resource properties. There is no assurance that the Company will be able to obtain funds from any of these potential sources of capital. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company is currently investigating a number of alternatives for raising additional capital with potential investors, lenders and joint venture partners.

Recent Financing Transactions

During the fiscal year ended November 30, 2017 the Company did not issue any additional stock through the private placement of its common stock or as a result of conversion of any notes payable.

Issuance of Common Stock

During FY 2016 the holders of $204,197 of debt converted such debt into 434,074 shares of the Company's common stock.

The Company did not raise additional funds through the issuance of its common stock to raise capital during the fiscal year ended November 30, 2017.

Debt Financing

During FY 2017 a related party of Purebase, USMC, advanced a total of $1,248,572   to Purebase to fund ongoing operations. During FY 2016, USMC advanced a total of $976,466 to Purebase to fund ongoing operations.
 

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.

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. As of January 15, 2018 this note had not been repaid and is currently in default.

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

In 2017 Mr. Dockter advanced $5,597 to the Company and assumed $20,613 in Company liabilities.
 
Tabular Disclosure of Contractual Obligations existing as of November 30, 2017:
 
 
       
Payment due by period
 
 
 
Total
   
Less than 1 year
   
1-3 years
   
3-5 years
   
More than 5 years
 
 
                             
Long-Term Debt Obligations
 
$
1,025,000
   
$
1,025,000
   
$
-0-
   
$
-0-
   
$
-0-
 
 
                                       
Mineral Lease Obligations
   
37,515
     
7,503
     
15,006
     
15,006
   
$
-0-
 
 
                                       
Operating Lease Obligations
   
-0-
     
-0-
     
-0-
   
$
-0-
   
$
-0-
 
 
                                       
Total
 
$
1,062,515
   
$
1,032,503
   
$
15,006
   
$
15,006
   
$
-0-
 

Off-Balance Sheet Arrangements

The Company has not engaged in any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies
Revenue Recognition
Revenue is recognized when the product has shipped, and the title has transferred to the customer.

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 consolidated 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.
 

Cash and Cash Equivalents
 
The Company considers all highly liquid instruments with an original maturity of three months or less at the time of issuance to be cash equivalents.

Income Taxes
 
Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities, applying tax rates expected to be enacted for the year in which we expect the differences will reverse or settle. Based on the evaluation of available evidence, we recognize future tax benefits, such as net operating loss carryforwards, to the extent that we believe it is more likely than not that we will realize these benefits. We periodically assess the likelihood that we will be able to recover our deferred tax assets and reflect any changes in our estimates in the valuation allowance, with a corresponding adjustment to earnings as appropriate. In assessing a need for a valuation allowance, we look to the future reversal of existing taxable temporary differences and estimated future taxable income.
 
Exploration Stage Company
 
With regard to the Company's mining activities, the Company is considered to be an exploration stage company as defined in Industry Guide No. 7. The Company's development stage activities consist of evaluating and developing several mining properties located in Nevada and California. Sources of financing for these development stage activities have been primarily debt and equity financing.
 
Valuation of long-lived assets
 
Long-lived assets, consisting primarily of property and equipment, comprise a significant portion of our total assets.  Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable.  Recoverability of assets is measured by a comparison of the carrying value of an asset to the future net cash flows expected to be generated by those assets.  The cash flow projections are based on historical experience, management's view of growth rates within the industry, and the anticipated future economic environment.
 
Factors we consider important that could trigger a review for impairment include the following:
 
(a)
significant underperformance relative to expected historical or projected future operating results,
(b)
significant changes in the manner of our use of acquired assets or the strategy of our overall business, and
(c)
significant negative industry or economic trends.
When we determine that the carrying value of long-lived assets and related goodwill and enterprise-level goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure any impairment based on a projected discounted cash flow method using a discount rate determined by our management to be commensurate with the risk inherent in our current business model.
 
Exploration Costs
 
Mining exploration costs are expensed as incurred. All costs related to property acquisitions are capitalized.
 
 
Mine Project Development Costs
 
Mine project development costs consist of all costs associated with bringing mining property into production, to develop new mineral resource bodies and to develop mining areas substantially in advance of current production. The decision to develop a mining project is based on assessment of the commercial viability of the property, the availability of alternative sources of minerals and the availability of financing. Once the decision to proceed to development is made and we have established proven or probable reserves, development and other expenditures relating to the project will be deferred and carried at cost with the intention that these will be depleted by charges against earnings from future mining operations. No depreciation will be charged against the property until commercial production commences. After a mining property has been brought into commercial production, any additional work on that property will be expensed as incurred, except for large development programs, which will be deferred and depleted.
 
Mining Reclamation Costs
 
Mine reclamation costs and related accrued liabilities, which are based on our interpretation of current environmental and regulatory requirements, are accrued and expensed, upon determination.
 
Based on current environmental regulations and known reclamation requirements, management has included its best estimates of these obligations in its reclamation accruals which amounted to $0 at November 30, 2017. However, it is reasonably possible that our best estimates of our ultimate reclamation liabilities could change as a result of changes in regulations or cost estimates.
 
Valuation of Derivative Instruments
 
FASB ASC 815-15 "Derivative and Hedging" requires bifurcation of embedded derivative instruments and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black Scholes model as a valuation technique.  Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as Adjustments to Fair Value of Derivatives. In addition, the fair values of freestanding derivative instruments such as warrants are valued using Black Scholes models.
 
Stock-Based Compensation
 
We will account for any future issuance of stock options to employees using the fair market value method according to FASB ASC 718, "Compensation – Stock Compensation".
 
Adopted Accounting Pronouncements
 
See Note 2 to the Consolidated Financial Statements.
 
ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not required to provide this information.
 
 
 
ITEM 8.       FINANCIAL STATEMENTS


INDEX TO FINANCIAL STATEMENTS FOR
PUREBASE CORPORATION

   
   
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of Purebase Corporation:

We have audited the accompanying consolidated balance sheets of Purebase Corporation and Subsidiaries as of November 30, 2017 and 2016, and the related consolidated statements of operations, stockholders' deficit and cash flows for the years then ended.  The Company's management is responsible for these consolidated financial statements.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Purebase Corporation and Subsidiaries as of November 30, 2017 and 2016, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred substantial operating losses and negative cash flows from operations during the years ended November 30, 2017 and 2016. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding those matters also are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Rose Snyder & Jacobs LLP

Rose, Snyder & Jacobs LLP
Encino, California

February 27, 2018







 
Purebase Corporation
 
November 30,
   
November 30,
 
Consolidated Balance Sheets
 
2017
   
2016
 
 
           
ASSETS
           
 
           
Current assets
           
Cash
 
$
6,286
   
$
555,648
 
Accounts Receivable, net of allowance for doubtful accounts of $0
   
60,888
     
58,897
 
Prepaid expenses and other assets
 
5,835
   
38,182
 
Total current assets
   
73,009
     
652,727
 
 
               
Property and Equipment
               
Property and Equipment
   
42,103
     
35,151
 
Autos and Trucks
   
25,061
     
25,061
 
Accumulated Depreciation
   
(54,070
)
   
(40,477
)
Total Property and Equipment
   
13,094
     
19,735
 
 
               
Mineral Rights Acquisition Costs
   
200,000
     
200,000
 
Deposit on mineral rights
   
0
     
75,000
 
 
               
Total Assets
 
$
286,103
   
$
947,462
 
 
               
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
 
               
Current Liabilities
               
Accounts Payable
 
$
81,098
   
$
160,467
 
Accrued Payroll and Related
   
250,223
     
479,021
 
Accrued Interest
   
152,442
     
97,993
 
Other Accrued Liabilities
   
115,098
     
80,040
 
Due to Officer
   
197,096
     
170,886
 
Due to Affiliated Entities
   
2,497,708
     
1,249,135
 
Notes Payable Current
   
1,025,000
     
1,025,000
 
Convertible Notes Payable, Net
               
Subscription Liability
 
0
   
500,000
 
Total Current Liabilities
   
4,318,665
     
3,762,542
 
 
               
Commitments and Contingencies
               
 
               
Stockholders' Equity (Deficit)
               
Purebase Corp. Stockholders' Equity (Deficit)
               
Common stock $0.001 par value, 520,000,000 shares authorized,
   
70,943
     
70,943
 
141,347,173 shares issued and outstanding
               
Additional paid in capital
   
2,847,479
     
2,462,572
 
Accumulated deficit
   
(6,950,984
)
   
(5,321,422
)
Total Purebase Corp. Stockholders' Equity (Deficit)
   
(4,032,562
)
   
(2,787,907
)
Non-Controlling Interest
   
0
     
(27,173
)
Total Stockholders' Equity (Deficit)
   
(4,032,562
)
   
(2,815,080
)
 
               
Total Liabilities and Stockholders' Deficit
 
$
286,103
   
$
947,462
 
 
 

 
Purebase Corporation
 
For the
   
For the
 
Consolidated Statements of Operations
 
Year Ended
   
Year Ended
 
 
 
November 30,
   
November 30,
 
 
 
2017
   
2016
 
 
           
Revenue
 
$
484,706
   
$
177,705
 
 
               
Operating expenses:
               
General and administrative
   
2,344,855
     
2,501,468
 
Product fulfillment, exploration and mining expenses
   
268,426
     
218,961
 
Depreciation and amortization
   
13,592
     
12,041
 
Total Operating Expense
   
2,626,873
     
2,732,470
 
                 
Other Income (Expenses)
               
Change in value of Derivative Liability
   
0
     
65,061
 
Gain from deconsolidation of Purebase Networks
   
562,571
     
0
 
Other Income (Expense)
   
22
     
14
 
Interest Expense
   
(89,697
)
   
(212,823
)
Income Tax Expense
   
0
     
1,350
 
Total Other Income (Expenses)
   
472,896
     
(146,398
)
 
               
Net Income (Loss)
 
$
(1,669,271
)
 
$
(2,701,166
)
 
               
Less: Net Loss attributable to Non-Controlling Interest
   
(39,709
)
   
(76,139
)
 
               
Net Loss attributable to Purebase Corp. Stockholders
 
$
(1,629,562
)
 
$
(2,625,027
)
 
               
Basic and Diluted Loss Per Share
 
$
(0.01
)
 
$
(0.02
)
 
               
Weighted average common shares
               
outstanding - basic and diluted
   
141,347,173
     
141,042,682
 

 
 
 
 
The accompanying notes are an integral part of these financial statements
 

 
Purebase Corporation
                               
Consolidated Statement of Stockholders' Equity (Deficit)
               
Non-Controlling
       
 
             
Additional
         
Interest in
   
Total
 
 
 
Common Stock
   
Paid-in
   
Deficit
   
Purebase
   
Stockholders'
 
 
 
Shares
   
Amount
   
Capital
   
Accumulated
   
Networks
   
Equity
 
Balance, November 30, 2015
   
140,913,099
   
$
70,509
   
$
1,641,815
   
$
(2,696,395
)
 
$
0
   
$
(984,071
)
 
                                               
Issuance of units for Converted Debt
   
434,074
     
434
     
203,763
                   
$
204,197
 
                                                 
Stock based compensation
                   
411,069
             
4,891
   
$
415,960
 
 
                                               
Interest in Purebase Networks
                   
205,925
             
44,075
   
$
250,000
 
 
                                               
Net loss
                           
(2,625,027
)
   
(76,139
)
 
$
(2,701,166
)
 
                                               
Balance, November 30, 2016
   
141,347,173
   
$
70,943
   
$
2,462,572
   
$
(5,321,422
)
   
(27,173
)
 
$
(2,815,080
)
 
                                               
Stock based compensation
                   
384,907
                   
$
384,907
 
 
                                               
Net loss
                           
(1,629,562
)
   
(39,709
)
 
$
(1,669,271
)
                                                 
Deconsolidation of Purebase Networks
                                   
66,882
   
$
66,882
 
 
                                               
Balance, November 30, 2017
   
141,347,173
   
$
70,943
   
$
2,847,479
   
$
(6,950,984
)
         
$
(4,032,562
)
 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of these financial statements
 
 
PUREBASE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED NOVEMBER 30, 2017 AND 2016
(UNAUDITED)
 
 
 
Year Ended
November 30,
2017
   
Year Ended
November 30,
2016
 
Operating activities:
           
Net Loss
 
$
(1,669,271
)
 
$
(2,701,166
)
Add back Net Loss attributable to Non-Controlling Interest
 
$
39,709
   
$
76,139
 
Net Loss attributable to Purebase Corp.
 
$
(1,629,562
)
 
$
(2,625,027
)
Adjustments to reconcile net income (loss) to cash used in operating activities:
               
Gain on Deconsolidation of Purebase Networks
   
(562,571
)
   
0
 
Depreciation and amortization
   
13,592
     
12,041
 
Stock Based Compensation
   
384,907
     
415,960
 
Excess value of derivative over note payable
   
0
     
70,125
 
Change in value of derivative liability
   
0
     
(65,061
)
Amortization of loan discount
   
0
     
77,295
 
Non-controlling interest
   
(39,709
)
   
(76,139
)
Effect of changes in:
               
Accounts Receivable
   
(1,991
)
   
(58,897
)
Prepaid expenses and other current assets
   
4,841
     
(37,682
)
Accounts payable and accrued expenses
   
1,054,048
     
1,253,484
 
Net cash used in operating activities
   
(776,445
)
   
(1,033,901
)
 
               
Investing Activities:
               
Proceeds from settlement of Purebase Networks
   
250,000
     
0
 
Purebase Networks cash balance upon deconsolidation
   
(453,561
)
   
0
 
Purchase Equipment
   
(6,953
)
   
0
 
Net cash provided/(used) in investing activities
   
(210,514
)
   
0
 
 
               
Financing activities:
               
Interest in Purebase Networks
   
0
     
250,000
 
Proceeds from Subscription Liability
   
0
     
500,000
 
Proceeds from Convertible notes payable
   
0
     
45,000
 
Proceeds from notes payable
   
0
     
145,000
 
Advances from/(to) officer
   
5,597
     
(18,720
)
Advances from affiliated entities
   
432,000
     
602,000
 
Net cash provided by financing activities
   
437,597
     
1,523,280
 
 
               
Net change in cash
   
(549,362
)
   
489,379
 
Cash, beginning of period
   
555,648
     
66,269
 
Cash, end of period
 
$
6,286
   
$
555,648
 
 
               
Supplemental cash flow information:
               
Income taxes paid in cash
 
$
0
   
$
1,350
 
Vendors paid by Affiliated Entities
 
$
736,038
   
$
615,465
 
Assumption of debt by CEO
 
$
20,613
   
$
222,430
 
Conversion of notes payable
 
$
0
   
$
204,197
 
 
 
The accompanying notes are an integral part of these financial statements
 
 
 
PUREBASE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2017

NOTE 1.  NATURE OF BUSINESS

Business Activity

Purebase Corporation (the "Company"), was incorporated in the State of Nevada on March 2, 2010. 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 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, 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.

Purebase is headquartered in Ione, California. Purebase's business is divided into wholly-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.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Purebase Corporation and its wholly owned subsidiaries Purebase Agricultural, Inc. (f.k.a. Purebase, Inc.) and US Agricultural Minerals, LLC ("USAM") and its majority-owned subsidiary Purebase Networks, Inc. (until March 2017), collectively referred to as the "Company".  All intercompany transactions have been eliminated in consolidation. The consolidated financial statements reflect all adjustments, which in the opinion of management, are necessary to present fairly the consolidated financial position at November 30, 2017 and November 30, 2016 and the consolidated results of operations and cash flows of the Company for the fiscal years ended November 30, 2017 and November 30, 2016.

Going Concern

The Company incurred a net loss of $1,669,271 for the fiscal year ended November 30, 2017 and generated negative cash flows from operations. In addition the Company has generated modest revenue in conjunction with its business plan. In order to support its operations, the Company will require additional infusions of cash from advances from an affiliate, 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 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 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
 
 
 
Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

could result from the outcome of this uncertainty. The 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 November 30, 2017 and 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 years ended November 30, 2017 and 2016 warrants and options to purchase 500,000 and 6,977,494, 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:

Property and 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 . When there is a disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is reflected in net income.

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. The Company has not experienced any losses in such accounts. The Company's accounts are insured by the FDIC but at times may exceed federally insured limits. At November 30, 2017 no accounts exceeded FDIC limits.
 
 
Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements
 

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 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.
 
 
Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Derivative Liability

During the year ended November 30, 2016 the Company's derivative liability was eliminated upon the conversion of all the convertible debt.
 
We measure our conversion feature liability issued from our debt financings on a recurring basis. In accordance with current accounting rules , the liability for conversion feature is being marked to market each quarter-end until it is completely settled. The conversion feature is valued using the Black Scholes option pricing model, using both observable and unobservable inputs and assumptions. Significant increases (decreases) in any of these inputs could result in significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the expected term is accompanied by a change in the assumption used for the risk free rate and the expected stock volatility.
 
The following table summarizes our fair value measurements using significant Level III inputs, and changes therein, for the years ended November 30, 2016 and 2017:
 
Level III
 
Conversion feature
 
 
     
Balance as of November 30, 2015
 
$
57,366
 
Issuance convertible note payable
 
$
109,324
 
Conversion of Notes Payable
 
$
101,629
 
Reduction in fair value
 
$
(65,061
)
Balance as of November 30, 2016
 
$
0
 
Balance as of November 30, 2017
 
$
0
 

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" which clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold of more likely than not as a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. The Company's policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties totaled $0 for the years ended November 30, 2017 and 2016.  The Company's net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.
 
 

 
Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

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 " and ASC 360,  "Property and Equipment" . Long-lived assets to be held and used are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable. We measure recoverability by comparing the carrying amount of an asset to the expected future undiscounted net cash flows generated by the asset. If we determine that the asset may not be recoverable, or if the carrying amount of an asset exceeds its estimated future undiscounted cash flows, we recognize an impairment charge to the extent of the difference between the fair value and the asset's carrying amount. No impairment losses were recorded during the years ended November 30, 2017 and 2016.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02,  Leases (Topic 842) , which supersedes existing guidance on accounting for leases in "Leases (Topic 840)" and generally requires all leases to be recognized in the consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.
 
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

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 1,145acres 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 was granted by the BLM to US Mine Corp. 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
 
 
 
 
Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

operation which is situated within the 2,500 acres. All rights and obligations under the Preference Rights lease have been assigned to the Company by US Mine Corp. These rights are presented at their cost of $200,000.
 
This lease requires minimum payments of $7,503 per year to the BLM.

Snow White Mine located in San Bernardino County, CA – Deposit

On November 28, 2014 US Mining and Minerals Corporation entered into a Purchase Agreement in which 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. During the year ended November 30, 2017, US Mine Corp. agreed to offset the $75,000 deposit against money owed to US Mine Corp.

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 November 30, 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.

On July 13, 2015, the Company issued a promissory note in the amount of $100,000 for general working capital needs. Effective February 29, 2016, the $100,000 note due to Bayshore Capital, a shareholder, was assumed by A. Scott Dockter.  Mr. Dockter is responsible for the debt to Bayshore Capital.  This debt reassignment allowed advances to this officer be settled in full.

On September 10, 2015, Purebase issued a promissory note of $54,000 to an unaffiliated third party for general working capital needs.  This note bears interest at 8% per annum with the principal and accrued interest due June 11, 2016.  The note was convertible, at the option of the holder, into shares of common stock.  The conversion price shall be equal to 58% of the average of the lowest 3 out of the 10 closing bid prices prior to conversion.  The Company also has to reserve 6.5 times the number of shares into which the note converts. During the year ended November 30, 2016 the lender converted the balance of the note and accrued interest totaling $56,160 into 117,458 shares of the Company's common stock with conversion prices ranging from $0.319 to $0.9957 per share.
 
During FY 2016, Purebase Corp. received $45,000 from Crown Bridge Financing ("CBF") for working capital.  The note carries an interest rate of 5% per annum with principal and accrued interest due January 2017.  The note was convertible at the option of the holder into shares of common stock. The conversion price
 
 
 
Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

shall be equal to 58% of the lowest trading price of the 20 closing bid prices prior to conversion.  The Company also had to reserve 10 times the number of shares into which the note converts. During the year ended November 30, 2016 CBF converted the balance of the note and accrued interest totaling $46,408 into 316,616 shares of the Company's common stock with conversion prices ranging from $0.116 to $0.232 per share.
 
On January 21 2016, Inuit Artist Gallery, a shareholder, advanced $20,000 to the Company for bridge financing at 6% per annum.  The note was payable June 21, 2016, or when the Company closes its bridge financing, whichever is sooner.
 
On February 26, 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 at November 30, 2017.
 
On March 4, 2016, Luigi Ruffolo, a shareholder, and Joseph Panetta, a shareholder, each advanced $50,000 to the Company for bridge financing at 6% per annum. The notes were due September 4, 2016, or when the Company closes its bridge financing, whichever occurs first.
 
On June 28, 2016, Inuit Artists Gallery, Luigi Ruffolo and Joseph Panetta assigned their notes and accrued interest from the Company to Arthur Scott Dockter, CEO and a Director of the Company. Mr. Dockter accepted the assignment as made.  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. 
 
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. As of January 15, 2018 this note had not been repaid and is currently in default.
 
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,
 

Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

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. The jury trial commenced on February 12, 2018 and following the Plaintiff's presentation of their case, on February 14, 2018 the Judge entered a Directed Verdict in favor of the Defendants.
 
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. Purebase owned a 82% interest in this new company and Scott Dockter was a Director along with Messrs. Wharton and Ridder. In order to fund this farming technology PNI raised approximately $750,000 from investors of which $500,000 was recorded as a subscription liability on November 30, 2016. 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. Subsequent to this action, PNI obtained a Temporary Restraining Order against Mr. Ridder to prevent him from taking any further action relating to PNI's business or corporate funds. In March 2017 PNI entered into a Settlement Agreement with Mr. Ridder to resolve the dispute, terminate the legal actions against Mr. Ridder and restructure the management and ownership of PNI. Mr. Ridder's Settlement Agreement stipulates that the ownership of PNI by Purebase will be reduced to 10%. 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. It is too early to estimate the likelihood of an unfavorable outcome, however Mr. Vickers' demand for arbitration stated a claim of over $1,000,000. An evidentiary hearing is scheduled for May 23, 2018. The Company plans to vigorously defend these claims in arbitration.

Contractual Matters

On November 1, 2013, Purebase entered into an agreement with US Mine Corp, which performs services relating to product fulfillment and 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. During the year ended November 30, 2017, US Mine Corp. agreed to offset the $75,000 deposit against money owed to US Mine Corp.  The Company will need to pay Mr. Bremer, a director of both US Mine Corp and Purebase, the additional sum of $650,000 plus expenses, in order to obtain title of this property.
 

Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

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 November 30, 2017 there were no accounts which exceeded FDIC insurance limits.

NOTE 6.  STOCKHOLDERS' 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 November 30, 2017 and 2016.

Warrants and Option Awarded

Warrants
 
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. There were no warrants outstanding at November 30, 2017.
 
The following table summarizes all warrant activity for the years ended November 30, 2017 and 2016:
 
 
Warrants
Outstanding
   
Weighted
Average
Exercise Price
 
 
           
Outstanding at November 30, 2015
   
477,494
   
$
3.42
 
Granted
   
0
     
0
 
Exercised
   
0
     
0
 
Expired
   
0
     
0
 
Outstanding at November 30, 2016
   
477,494
   
$
3.42
 
Granted
   
0
     
0
 
Exercised
   
0
     
0
 
Expired
   
(477,494
)
 
$
3.42
 
Outstanding at November 30, 2017
   
0
   
$
0
 

Stock Options

On November 10, 2017 the Company's Board of Directors approved the 2017 Purebase Corporation Stock Option Plan which is intended to be a qualified stock option plan (the "Option Plan"). The Board allocated up to 10,000,000 shares of Purebase common stock to be issued pursuant to options granted under the Option Plan. The Company plans to obtain shareholder approval within one year of its establishment . As of November 30, 2017 no options had been granted under the Option Plan.
The Company has also granted options pursuant to employment contracts entered into by the Company and the respective employee during the year ended November 30, 2016.

The estimated weighted average fair values of the options granted during the year ended November 30, 2016 is $1.90 per share. There were no options granted during the year ended November 30, 2017.
 


Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

The Company estimates the fair value of each option award using the Black-Scholes option-pricing model. The Company used the following assumptions to estimate the fair value of stock options issued during the year ended November 30, 2016.
 
 
 
November 30, 2016
 
         
Expected volatility
   
150
%
Expected Term
6 years
 
Dividend Yield
   
0
%
Risk-free interest Rate
   
0.68
%

Employee stock-based options compensation expenses for the years ended November 30, 2017 and 2016 included in general and administrative expense totaled $384,907 and $415,960, respectively.
 
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 year ended November 30, 2017.
 
 
 
Number of
Options
   
Weighted Average Exercise Price
   
Aggregate Intrinsic Value
 
Weighted Average
Contractual terms
 
                       
Outstanding at December 1, 2015
   
0
     
0
     
0
   
Granted
   
7,500,000
   
$
2.60
     
0
   
Exercised
   
0
     
N/A
     
0
   
Expired/Cancelled
   
(1,000,000
)
 
$
3.00
   
$
0
   
Outstanding 11/30/16
   
6,500,000
   
$
2.54
     
0
   
Granted
   
0
   
$
0
     
0
   
Exercised
   
0
   
$
N/A
     
0
   
Expired/Cancelled
   
(6,000,000
)
 
$
2.5
     
0
   
Outstanding 11/30/17
   
500,000
   
$
3.00
     
0
 
8.26 years
Exercisable 11/30/2017
   
300,000
   
$
3.00
     
0
 
8.24 years
Expected to vest 11/30/17
   
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.
 
The aggregate intrinsic value of options outstanding and exercisable was $0 for the years ended November 30, 2017 and 2016.
 
As of November 30, 2017 the total unrecognized fair value compensation cost related to non-vested stock options to employees was approximately $260,082 which is expected to be recognized over approximately 1.28 years.
 

Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

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 years ended November 30, 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, and OPTEC Solutions of $20,613, for consulting fees, benefits and miscellaneous expenses. 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.
 
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.
 
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 November 30, 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 Product fulfillment and various technical evaluations and mine development services to the Company.  Services totaling $155,534 and $110,164 were rendered by USMC for the year ended November 30, 2017 and 2016, respectively.
 
During the year ended November 30, 2017, USMC paid $736,038 of expenses to the Company's vendors and creditors on behalf of the Company and also made cash advances to the Company of $432,000. The balance due to USMC is $2,497,708 and $1,007,732 at November 30, 2017 and November 30, 2016, respectively. During the year ended November 30, 2017, USMC agreed to offset a $75,000 deposit on a mining property against money owed to USMC.
 
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.  During FY 2017 Mr. Bremer assigned the outstanding amount of $241,403 to USMC. As of November 30, 2017 and November 30, 2016, the Company owed the Bremer Family Trust a total of $0 and $241,403, respectively.
 
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.
 
 
 
Purebase Corporation and Subsidiaries
Notes to Consolidated Financial Statements

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 November 30, 2016, 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. On August 10, 2017 Mr. Ridder and the Company entered into an Amended and Restated Settlement Agreement pursuant to which Teralytics, Inc. (formerly PNI) obtained 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.

NOTE 8.  CONCENTRATIONS

Major Customers

The Company had three major customers that represented 55% and 77% of total sales for the years ended November 30, 2017 and 2016, respectively. Accounts receivable from two customers represented 100% and 98% of total accounts receivable at November 30, 2017 and 2016, respectively.

Major Vendors

For the years ended November 30, 2017 and 2016, purchases from one vendor comprised approximately 85% and 100% of total purchases, respectively. This one vendor was US Mine Corp, a related party to the Company.
 
 
 
 
 





ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.     CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the fiscal year covered by this Report, the Company's Chief Executive Officer and Chief Financial Officer (the "Certifying Officers"), evaluated the effectiveness of the Company's "disclosure controls and procedures," as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on that evaluation, the Certifying Officers concluded that, as of the date of the evaluation, the Company's disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed in the Company's periodic filings under the Securities Exchange Act of 1934 is accumulated and communicated to management to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting .
 
The Certifying Officers have also indicated that there were no changes in internal controls over financial reporting during the Company's last quarter of the fiscal year ended November 30, 2017.
 
Management's Annual Report on Internal Control Over Financial Reporting.

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Management evaluates the effectiveness of the Company's internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – "Integrated Framework."  Management, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting as of November 30, 2017 and concluded that it is ineffective in assuring that the financial reports of the Company are free from material errors or misstatements.

Management has identified three material weaknesses and is taking action to remedy and remove the weakness in its internal controls over financial reporting:

Lack of an independent financial expert on the Board. The current board of directors now includes a majority of non-employee Directors however the Board still lacks an independent financial expert. The current board is composed of four members and may be expanded to as many as nine members under the Company's By-Laws.
Lack of adequate accounting resources and adequate segregation of duties over various accounting and reporting functions. Currently, the Company's CFO is responsible for all bookkeeping and oversight relating to the Company's financial reports and cash flow. The Company plans to diversify some of the CFO's current functions in order to achieve adequate segregation of duties over various accounting and reporting functions.
 
 
 
 
Lack of adequate oversight/approval of transactions with related parties of the Company. In order to partially address this issue, the Board consented to appointing its two independent directors, Messrs. Gingerich and Lim, as "Negotiators" to negotiate any transactions on behalf of the Company with affiliated entities or where a conflict of interest may be present. The Company intends to adopt additional procedures for disbursing funds to officers and affiliates of the Company.

Our management, including the Certifying Officers, does not expect that our disclosure controls or our internal controls will prevent all errors and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

This annual report does not include an attestation report by the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to current rules of the SEC that permit the Company, as a smaller reporting company, to provide only management's report in this annual report.
 
ITEM 9B.     OTHER INFORMATION
 
None.
 
PART III
 
ITEM 10.      DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
Name
 
Age
 
Position
 
Director Since
A. Scott Dockter
 
61
 
CEO and Director
 
9/24/2014
Calvin Lim
 
60
 
Director
 
10/27/2014
John Bremer
 
68
 
Director
 
12/23/2014
John Gingerich
 
64
 
Director
 
9/24/2015
Al Calvanico
 
58
 
CFO
 
3/15/2016

Our Board of Directors currently consists of four members. Each director holds office until his/her successor is duly elected by the stockholders.  Executive officers serve at the pleasure of the Board of Directors.  Our current directors and executive officers are:
 
A. Scott Dockter has been the CEO and Director of the Company since September 24, 2014 and President and a Director of Purebase Ag. since January 22, 2014. Mr. Dockter also serves as the CEO and a Director of US Mine Corp. from 2012 to the present. US Mine Corp. is a private company focusing on the development and contract mining of industrial mineral and metal projects.  Mr. Dockter was also a Manager-Member of U.S. Agricultural Minerals, LLC from its inception in June, 2013
 
 
 
until its acquisition by Purebase Ag on November 24, 2014 however he continues as the COO of the LLC. Mr. Dockter is also a Manager-Member of US Mine, LLC which owns a 3,306 - acre mining property located in Ione, CA. From July 2010 to June 2012, Mr. Dockter served as CEO, President and Chairman of Steele Resources Corp., a public company and its subsidiary Steele Resources, Inc. which were involved in the property evaluation and exploration for gold. Over the course of his 30-year career, Mr. Dockter has been responsible for the development of several large open pit and underground mines in the United States, having worked extensively in the states of Nevada, California, Idaho, and Montana. Mr. Dockter has had comprehensive involvement in all aspects of the mining business, including exploration, permitting, mine development, financing, operations, asset acquisitions, and marketing and sales. His experience covers a wide range of commodities including industrial minerals, gold, silver, copper and other precious metals. Mr. Dockter has over 19-years' experience as a director of public corporations and has broad experience in the debt and equity markets. He has personally owned mines, operated mines, constructed mine infrastructures (physical, production and process) and produced precious metals. Mr. Dockter is not currently an officer or director of any other reporting company.
 
Calvin Lim was appointed to the Board of Directors on October 27, 2014. Mr. Lim was also appointed a Director of Purebase Ag on February 5, 2015.Mr. Lim owned and operated two large Chinese restaurants in Sacramento from 1981 to 2003. From 1984 to 2006 he served as President of Hoi Sing Inc., which was a company which invested in properties located in Hong Kong and China and he was co-owner of the Oriental Trading Company which was involved in the Chinese imports and exports business until its closure in 2008. Mr. Lim is now retired. Mr. Lim earned his bachelor's degree in Business Administration from Sacramento State University. Mr. Lim is not currently an officer or director of any other reporting company.
 
John Bremer was appointed a Director of the Company in December, 2014. Mr. Bremer was also appointed a Director of Purebase Ag on February 5, 2015.  Mr. Bremer is a seasoned executive managing successful businesses for the past 36 years. From February 20, 2014 to the present he has served as a Director and President of U.S Mine Corp. Mr. Bremer was also a Manager-Member of US Agricultural Minerals, LLC from its inception in June, 2013 until its acquisition by Purebase Ag on November 24, 2014.Mr. Bremer is also a Manager-Member of US Mine, LLC which owns a 3,306 - acre mining property located in Ione, CA. For the past 21 years he has been the CEO of GroWest, Inc. a holding company with subsidiary companies in the heavy equipment rental and property development business in California. Mr. Bremer started his career teaching college level horticulture and soil science classes. When Mr. Bremer moved on from teaching he opened and managed large mining operations for Riverside Cement and California Portland Cement Company. During his time working with cement producers he was engaged in several cement solutions. An example was helping design material input methodologies to reduce the Nitrogen Oxide emissions from calcining cement. This interaction and knowledge of the cement industry has led to the creation of proprietary cement replacement products. Mr. Bremer also developed a large organic composting operation in Riverside County which provided a successful management solution for bio solids from Los Angeles, Orange and Riverside Counties. Once that company completed its development and was well positioned, he successfully sold it to Synagro Technologies and the company continues today as a part of The Carlyle Group. Mr. Bremer has successfully developed several other properties in the Riverside County and Napa Valley which included comprehensive experience in permitting processes. Mr. Bremer earned his Bachelor's degree in Agri-Business from California State Polytechnic University, Pomona, CA.  Mr. Bremer is not currently an officer or director of any other reporting company.
 
John Gingerich was appointed to the Company's Board of Directors on September 24, 2015. Since December, 2002 Mr. Gingerich has been President of Geotechnical Business Solutions Inc. ("GBS") which provides mine and financing consulting services. GBS has its corporate offices in Mississauga, Canada. Commencing in June, 2007 Mr. Gingerich also became President, CEO and Chairman of Advanced Explorations Inc., ("AEI") a junior mining company with executive offices located in Toronto, Canada. On July 8, 2015 AEI filed for bankruptcy protection under the Canadian Bankruptcy and Insolvency Act. Mr. Gingerich left AEI in August, 2016 at which time AEI was seeking to
 
 
restructure under bankruptcy as debtor-in-possession. Beginning in December 2010 Mr. Gingerich was appointed Chairman of the Board of Bactech Environmental Corp. which provides mine tailings (environmental) cleanup services and, from July, 2015 until February, 2016, he served on the Board of MagIndustries Corporation which is a Potash Mine developer.  He has served 20 years as the Chairman for the Exploration Division of the Canadian Mining and Research Organization (CAMIRO), a mineral industry run and funded research organization. Mr. Gingerich earned a Bachelor Degree in Physics from Simon Fraser University in 1979. Mr. Gingerich is not currently an officer or director of any other reporting company.
 
Al Calvanico was appointed Executive Vice President & Chief Financial Officer for the Company on March 15, 2016. Mr. Calvanico earned an Executive Masters of Business Administration from the Claremont Graduate School, Peter F. Drucker School of Management and a Bachelor of Science in Economics – Accounting, from the City University of New York. He has almost 30 years of senior financial management experience having served most recently from February 2006 to March 2016 as Executive Vice President and Chief Financial Officer for Robar Enterprises Inc. and its subsidiaries, with assets in Mining, Construction Materials & Recycling. Mr. Calvanico is not currently an officer or director of any other reporting company.

Other Significant Employees
 
Robert Hurtado joined the Company as VP Agricultural Products Research & Development in August, 2015 and for a year prior to that, he was a consultant to the Company. His primary duties include identifying minerals that may have agricultural applications, research and development of potential products and developing manufacturing technology to commercially produce such products. Mr. Hurtado has over 35 years of experience in agriculture and has managed large farming operations including sugar cane mills, banana companies, melons, vegetables and energy crops. Mr. Hurtado has occupied positions of Vice President of Product Development, Executive Director, President and CEO in several agricultural companies in Latin America, Europe, and the Western United States.  He has also consulted on agricultural technologies for several companies in California, Arizona, Mexico, The Netherlands, Ecuador and Nicaragua. Mr. Hurtado has been involved in developing and establishing pre and post-harvest organic and sustainable technologies for over two decades. His experience includes applied field research, identifying and establishing new markets in different countries while developing new product lines for specific crop types and environmental conditions.  He is a member of the International Society for Horticultural Science, The Soil Science of America and the American Society of Agronomy. Mr. Hurtado is a graduate of the University of California, Berkeley with degrees in Economics and Development Studies and has conducted several post graduate studies at INCAE Business School, Nicaragua.
 
Directors serve for a one-year term or until his or her successor is elected and qualified. Our Bylaws provide for one to nine directors with the Board having the authority to set the number of Directors within that range. The Board has determined four directors as the current authorized number. Our executive officers are appointed by the Board of Directors and serve at the discretion of the Board.
 
Corporate Governance
 
Our Board of Directors has four directors and on October 21, 2016 it established an Audit Committee. The current members of the Audit Committee are John Bremer and John Gingerich. Our Board does not have an executive committee or any committee performing similar functions. We are not currently listed on a national securities exchange or on an inter-dealer quotation system that has requirements that a majority of the Board of Directors be independent however, 3 of our 4 Directors are not officers/employees of the Company.
 
 
Audit Committee Functions
 
The Company established  an Audit Committee on October 21,2016 and is responsible for reviewing and monitoring our financial statements and internal accounting procedures, recommending the selection of independent auditors and, evaluating the scope of the annual audit, reviewing audit results, consulting with management and our independent auditor prior to presentation of financial statements to stockholders and, as appropriate, initiating inquiries into aspects of our internal accounting controls and financial affairs. The Audit Committee did not meet during fiscal year ended November 30, 2017.
 
Compensation and Nominations Committees
 
The Company established a Compensation Committee on October 21, 2016. Currently, John Gingerich and Calvin Lim are the members of this committee and will be reporting to the Board of Directors, who will then participate in discussions concerning executive officer compensation, issuances of stock options and other compensatory matters. The Compensation Committee met once during the fiscal year ended November 30, 2017.
 
Stockholder Communication Policy
 
Stockholders may send communications to the Board or individual members of the Board by writing to them, care of Secretary, Purebase Corporation, 8625 State Highway 124, P.O. Box 757, Ione CA 95640,  who will forward the communication to the intended director or directors, and officers of the Company.  If the stockholder wishes the communication to be confidential, then the communication should be provided in a form that will maintain confidentiality. Examples of ways to submit a confidential communication would be to conspicuously mark "CONFIDENTIAL" on any envelope or package submitted or, if an e-mail communication, request the Director's personal e-mail address to send a communication rather than the Company's general e-mail address.
 
Code of Business Conduct and Ethics
 
The Board adopt a Code of Business Conduct and Ethics on October 21, 2016, that applies to all directors, officers and employees of the Company.  We will provide any person, without charge, a copy of this Code by requesting a copy in writing sent to Purebase Corporation, 8625 State Highway 124, P.O. Box 757, Ione CA 95640, Attention: Corporate Secretary.
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
The Company's securities were registered under §12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") on September 24, 2015. Consequently the reporting requirements of §16(a) as well as the Proxy Rules of the Exchange Act became applicable to the Company on September 24, 2015.
 
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of the Company's common stock to file reports of ownership initially on Form 3 and changes in ownership thereafter on Form 4 with the SEC.  Such executive officers, directors and 10% stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms they file.  Upon registering under §12(g) of the Exchange Act, all of the Company's Directors, executive officers and 10% stockholders were required to file an initial Form 3 with the SEC.
 
 
Based solely upon its review of copies of such forms received by it, or on written representations from certain reporting persons that no other filings were required for such persons, the Company believes that, since December 1, 2016, its executive officers and directors and 10% stockholders complied with all applicable Section 16(a) filing requirements except as follows:
 
Mr. Calvanico (CFO) was required to file a Form 3 by March 25, 2016 but did not file his Form 3 until May 1, 2017. Mr. Calvanico acquired 3,000 shares of the Company's common stock in May, 2017 but did not file a Form 5 reporting such acquisition until February 12, 2018.
 
Mr. Dockter disposed of shares of the Company's common stock during FY 2016 but did not file a Form  5 reporting such dispositions until May 4, 2017. Mr. Dockter also disposed of shares of the Company's common stock during FY 2017 but did not file a Form 5 reporting such dispositions until January 30, 2018.
 
Limitation of Liability and Indemnification Matters
 
The Company's Bylaws provide that it will indemnify its officers and directors, employees and agents and former officers, directors, employees and agents so long as such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company. This indemnification includes expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by these individuals in connection with such action, suit, or proceeding, including any appeal thereof, subject to the qualifications contained in Nevada law as it now exists. Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Company in advance of the final disposition of such action, suit, or proceeding upon authorization of the Board of Directors and receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he or she is entitled to be indemnified by the Company as authorized in the Bylaws. This indemnification will continue as to a person who has ceased to be a director, officer, employee or agent, and will benefit their heirs, executors, and administrators. These indemnification rights are not deemed exclusive of any other rights to which any such person may otherwise be entitled apart from the Bylaws. Nevada law generally provides that a corporation shall have the power of indemnify persons if they acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. In the event any such person is judged liable for negligence or misconduct, this indemnification will apply only if approved by the court in which the action was pending. Any other indemnification shall be made only after the determination by the Company's Board of Directors (excluding any director who was party to such action), by independent legal counsel in a written opinion, or by a majority vote of stockholders (excluding any stockholders who were parties to such action) to provide such indemnification.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
 
Board Meetings and Committees
 
Our Board of Directors held four meetings during the fiscal year ended November 30, 2017 and acted by unanimous written consent on two occasions. Each director during fiscal year 2017 participated in at least 75% of the aggregate number of the meetings or actions taken in lieu of a meeting of the Board held during fiscal year 2017.
 
 
Attendance of Directors at Annual Meetings of Stockholders
 
The Company has a policy of encouraging, but not requiring, directors to attend the Company's annual meeting of stockholders.
 
Compensation Paid to Directors
 
At present we do not pay our Directors any compensation or cost reimbursement for their service as Directors. We have no standard arrangement pursuant to which our Directors are compensated for any services provided as a director or for committee participation or special assignments.  The Company's Directors were not paid any compensation during fiscal years 2017 or 2016 for services as a Director.
 
ITEM 11.      EXECUTIVE COMPENSATION
 
The following table sets forth the compensation of the Company's Principal Executive Officers during the fiscal years ended November 30, 2017 and 2016 and each employee who received annual compensation in excess of $100,000 during the last completed fiscal year.

SUMMARY COMPENSATION TABLE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Name & Position
 
Fiscal Year
 
Salary
($)
 
Bonus
($)
 
Stock Awards
($)
 
Option Awards
($)
 
Non-Equity Incentive Plan Compensation
($)
 
Nonqualified Deferred Compensation Earnings
($)
 
All Other Compensation
($)
 
Total
($)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Scott Dockter (Pres/CEO)
 
 
2017
2016
 
 
 
118,462
120,000
 
 
 
-0-
-0-
 
 
 
-0-
-0-
 
 
 
-0-
-0-
 
 
 
-0-
-0-
 
 
 
-0-
-0-
 
 
 
-0-
-0-
 
 
 
118,462
120,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Al Calvanico (EVP/CFO) (1)
 
 
 
2017
2016
 
 
227,051
162,916
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
607,227 (3)
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
227,051
770,143
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Michael Kessler
(GenCounsel/
Secretary) (2)
 
 
 
2017
2016
 
 
  49,813
150,000
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
  49,813
150,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Robert Hurtado
(VP)
 
 
 
2017
2016
 
 
118,462
120,000
 
 
     -0-
     -0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
-0-
-0-
 
 
118,462
120,000

(1)
Mr. Calvanico was appointed CFO on March 15, 2016.
(2)
Mr. Kessler was terminated on March 6, 2017
(3)
Grant date fair value of stock options to purchase 300,000 shares of the Company's common stock which are subject to vesting over 3 years

 
 
The Company intends to pay cash compensation to its officers and consulting fees to entities providing services to the Company and owned by its Directors in the future as determined and approved by the Compensation Committee of the Company's Board of Directors.

Equity Based Compensation

On November 10, 2017 the Company's Board of Directors approved the 2017 Purebase Corporation Stock Option Plan which is intended to be a qualified stock option plan (the "Option Plan"). The Board allocated up to 10,000,000 shares of Purebase common stock to be issued pursuant to options granted under the Option Plan. Awards will consist if both incentive and non-incentive stock options. The Option Plan has a term of 10 years.  Option Plan is administered by the Compensation Committee of the Board of Directors.  As of November 30, 2017 no options had been granted under the Option Plan.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Name & Position
 
Number of securities underlying unexercised options/ exercisable
 
Number of securities underlying unexercised options/ un- exercisable
 
Equity incentive plan awards: Number of securities underlying unexercised/unerned options
 
Option exercise price  ($)
 
 
Option Expiration date
 
Number of shares of stock that have not vested
 
Market value of shares of stock that have not vested    ($)
 
Equity incentive plan awards: Number of unearned shares or other rights that have not vested
 
Equity incentive plan awards: Market or payout value of unearned shares or other rights that have not vested  ($)
Al Calvanico (CFO)
 
 
200,000
 
 
 
100,000
 
 
-0-
 
 
3.00
 
 
3/14/26
 
 
 
 
100,000
 
 
 
 
10,000
 
 
 
 
-0-
 
 
 
 
-0-
 
 

Employee Pension, Profit Sharing or Other Retirement Plans
 
Purebase does not have a defined benefit pension plan or profit sharing or other retirement plan.
 
Compensation Discussion and Analysis
 
Compensation of Executive Officers
 
The Compensation Committee will supervise our executive compensation program for named individuals. The Committee is comprised of two members of the Board who are non-employee directors. Members of our management will not attend executive sessions of the Committee but will, upon request, provide input regarding their performance to the Committee. The Board has not engaged any outside compensation consultants and has not delegated its authority to anyone.
 
 
During fiscal year 2017 the Board hopes to be able to initiate employee base salaries and grant a full range of incentives based upon the individual effort and the overall success of the Company during the current fiscal year. The Board has not determined specific target objectives due to the significant challenges which face the Company as a development stage company during the current fiscal year.  However, we will monitor the efforts of individual officers and employees and the overall success of the Company in determining if and when incentives can be granted.  Because we have not determined any target objectives, we are unable to provide an assessment of how likely it will be for incentives to be achieved by our executive officers. Achievement of incentives involves future performance and, therefore, is subject to significant uncertainties. However, the Board believes it will establish future target objectives that are achievable with an appropriate amount of dedication and hard work.
 
Compensation Philosophy
 
The Compensation Committee will determine compensation levels and components for Named Executive Officers ("NEOs") to attract, retain, and motivate talent in our competitive market environment while focusing the management team and the Company on the creation of long-term value for stockholders. Positions included as NEOs during FY 2018 include: Principal Executive Officer and the Chief Financial Officer.  Other positions may be added as business conditions warrant. If an NEO is also a Director, such NEO will abstain from participating in or voting on his/her own compensation package.
 
The Compensation Committee will administer four elements for NEO's compensation: base salary (cash), short-term incentives (bonus – cash, equity, or both), long-term incentives (equity), and benefits.  The total compensation package will reflect the Company's "Pay for Performance" philosophy, which is to couple employee rewards with the interests of stockholders. We believe strongly that retention and motivation of successful employees is in the long-term interest of stockholders.  Further, we believe in development and internal promotion of proven, existing employees whenever optimal for the interests of the Company.  When cash flow permits, the Board will target the total compensation level over time to be competitive with comparable companies in our industry segments and geographic locations.
 
For the purpose of determining short-term incentives, performance is measured by two variables: contribution to and leadership in the development of the Company's core service business and property development and contributions to the potential business and financial success of the Company.  These variables are considered by the Board to be the cornerstones for the creation of long-term stockholder value. The Board also evaluates the general economic and market conditions when applying these measurements.  The Board believes that it is in the best interest of our stockholders to have a part of total compensation "at-risk" and dependent upon our future performance.
 
Historically, there are several directly comparable public companies in the US mineral resource mining and agricultural products fields. Many of our competitors are much larger companies that are not directly comparable in size, geographic coverage, and scope of production. Therefore, a direct peer group comparison may not be appropriate and salary survey information from multiple sources will be used to supplement available company data.
 
Base Salary
 
The base salaries for executive officers will be evaluated annually after the completion of each fiscal year. It will be adjusted, when the Company's financial condition permits, to be competitive with the external market, job responsibilities, and the individual's performance in their job and is subject to any employment agreement or compensation arrangements with that individual.
 
 
Short-Term Incentive (Bonus)
 
The Board will strive to grant bonuses to incentivize officers and employees when their job performance warrants such bonuses and the financial condition of the Company permits such incentives to be granted.  Since we have been in business for only a short period of time, the Board will evaluate whether any bonuses are warranted after an evaluation of each fiscal year's performance. No bonuses were awarded during the 2017 or 2016 fiscal years.
 
Long-Term Incentives (Stock Options)
 
The Board believes that providing stock and option grants to its officers and directors rewards such individuals for the long-term financial success of the Company and links their rewards to those of our stockholders.
 
On November 10, 2017 the Company's Board of Directors approved the 2017 Purebase Corporation Stock Option Plan which is intended to be a qualified stock option plan (the "Option Plan"). The Board allocated up to 10,000,000 shares of Purebase common stock to be issued pursuant to options granted under the Option Plan. Awards will consist if both incentive and non-incentive stock options. The Option Plan has a term of 10 years.
 
The Company has also granted options pursuant to employment contracts entered into by the Company and the respective employee.
 
The Board may evaluate and adopt other inventive plans and retirement plans in order to allow its officers and employees to participate in the Company's long-term success.
 
Benefits
 
Officers are entitled to participate in all benefits provided to employees of the Company and/or Purebase Ag. At the present time, the Company does not offer such benefits.
 
Employment Agreements
 
As of the end of FY 2017, the Company's CFO had an executive employment agreement which has a 3 year term expiring in March, 2019 and Mr. Hurtado had an employment agreement which has a 5 year term expiring in April, 2021.
 
ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 
The following tables set forth as of December 31, 2017, the ownership of the Company's common stock by its current directors, and its executive officers and all officers and directors as a group, and each person known to be the beneficial owner of more than 5% of the Company's outstanding common stock. To the Company's best knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are no known pending or anticipated arrangements that may cause a change in control.
 
 
 
 
Name of Beneficial Owner
Number of Shares Owned Beneficially
Percent
Of Class
Title
Of Class
A. Scott Dockter, CEO and Director
3090 Boeing Road
Cameron Park, CA 95682
44,064,932
31.2%
Common
John Bremer, Director
10490 Dawson Canyon Road
Corona, CA 92883
40,163,000 (1)
28.4%
Common
 
Calvin Lim, Director
6580 Haven Side Drive
Sacramento, CA 95831
-0-
0%
Common
 
 
John Gingerich, Director
27Wedgewood Drive
Woodstock, Ontario Canada
-0-
0%
Common
Al Calvanico CFO
8625 State Highway 124
P.O. Box 757
Ione, CA 95640
203,000 (2)
1.4%
Common
All Executive Officers and Directors as a group (5 people)
84, 430,932
 
60%
 
Common
Baystreet Capital Corp.
Bayshore Capital
136 Turtle Cove Road
Turks & Caicos Islands
British West Indies
21,338,800 (3)
 
15.1%
Common
Kevin Wright
1 Yonge Street, Suite 1801
Toronto, ON M5E 1W7
12,582,800
8.9%
Common
 
(1)
Amount includes 57,500 shares held by Mr. Bremer's wife for which he disclaims beneficial ownership.
(2)
Amount includes options to purchase 200,000 shares of the Company's common stock which will have vested and be exercisable as of 3/14/18.
(3)
Todd Gauer is the principal owner of both Baystreet Capital and Bayshore Capital.
 
ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTION AND DIRECTOR INDEPENDENCE

Interest of Management and Others in Certain Transactions

The Company acquired the rights to purchase the Snow White Mine property from US Mine Corp., which is a Nevada corporation of which Scott Dockter and John Bremer are owners and executive officers. On November 24, 2014 US Mine Corp purchased the Snow White property for $650,000. On December 1, 2014 US Mine Corp transferred its right to purchase the Snow White property to the Company at which time the Company paid a down payment of $50,000. John Bremer, a Director and major stockholder of Purebase, advanced an additional $25,000 in order 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 acquired the property on or about October 15, 2015 by paying the remaining purchase price balance of $575,000 to the Seller. During the year ended November 30, 2017, US Mine Corp. agreed to offset the $75,000 deposit against money owed to US Mine Corp. Mr. Bremer will transfer title to the Company when the Company pays Mr. Bremer $650,000 plus expenses.
 
 
Purebase entered into a Contract Mining Agreement with US Mine Corp ("USMC) pursuant to which USMC will provide various technical evaluations and mine development services and natural minerals to Purebase. Purebase incurred costs to the Bremer Trust and USMC $155,534 and $110,164 for mining services and mineral resources provided by USMC during the fiscal years ended November 30, 2017 and November 2016, respectively. USMC currently provides approximately 50% of the minerals used by Purebase in its agricultural products. USMC is a company in which the two major stockholders and Directors of Purebase, A. Scott Dockter and John Bremer, own a substantial interest.
 
During the year ended November 30, 2017, USMC paid $736,038 of expenses to the Company's vendors and creditors on behalf of the Company and also made cash advances to the Company of $432,000. During the year ended November 30, 2016, USMC paid $479,898 of expenses to the Company's vendors and creditors on behalf of the Company and also made cash advances to the Company of $386,000 and offset the $75,000 deposit on the Snow White Mine property. The balance due to USMC is $2,497,708 and $1,007,732 at November 30, 2017 and November 30, 2016, respectively.
 
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 years ended November 30, 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 to the Financial Statements).
 
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 November 31, 2017.
 
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 to the Financial Statements).
 
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. As of January 15, 2018 this note had not been repaid and is currently in default.
 
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 which bears no interest.  During FY 2017 Mr. Bremer assigned the outstanding amount of $241,403 to USMC. As of November 30, 2017 and November 30, 2016, the Company owed the Bremer Family Trust a total of $0 and $241,403, respectively.
 
 
On June 23, 2016 the Company entered into Stock Option Agreements with John Wharton and Steve Ridder (officers of subsidiary Purebase Network, Inc. (PNI)) 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.  Subsequent to the fiscal year-end, PNI  commenced negotiating a Settlement Agreement with Mr. Wharton and Mr. Ridder and entered into a Settlement Agreement with Mr. Ridder dated March 27, 2017 to resolve the parties' differences. Pursuant to Mr. Ridder's Settlement Agreement, he agreed to cancel his options to purchase 5,000,000 shares of the Company's common stock and mutual releases by PNI and Mr. Ridder from any further liability to each other. In addition, the Settlement Agreement provided for  the Company to retain a 10% ownership of PNI and for Mr. Scott Dockter and Mr. Wharton to resign from the PNI Board leaving Mr. Ridder as the sole officer and Director of PNI. The Company has also negotiated a Settlement Agreement with two PNI investors in which PNI will refund $425,000 of their prior investments in PNI in exchange for releases from any actions by the investors against PNI, Mr. Wharton or Mr. Ridder. An Amended and Restated Settlement Agreement with Mr. Ridder 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. Purebase has no further interest in or involvement with Teralytics, Inc.
 
Except for the above, during the fiscal years ended November 30, 2017 and November 30, 2016, there have not been, any material agreements or proposed transactions, whether direct or indirect, with any of the following:
 
a Director or Officer of the Company or a company in which such person has a financial interest;
any nominee for election as a director;
any principal security holder identified in the preceding "Security Ownership of Certain Beneficial Owners and Management" section; or
any relative, spouse, or relative of such spouse, of the above referenced persons.

Should a transaction, proposed transaction, or series of transactions involve: (i) one of our officers or directors, (ii) a related entity or an affiliate of a related entity, or (iii) a holder of stock representing 5% or more of the voting power (a "related entity") of our then outstanding voting stock, the transactions must be approved by the unanimous consent of our Board of Directors.  In the event a member of the Board of Directors is a related party, such Director(s) may participate in the discussion of the proposed related party transaction but will abstain from the Board vote relating to such transaction.
 
Director Independence
 
As of November 30, 2017, only two of the four Company Directors John Gingerich and Calvin Lim would be deemed "independent" under the applicable NASDAQ definition. While John Bremer, a shareholder and Director of the Company, is not an officer or employee of the Company, he currently serves as a major stockholder and Director of USMC and is a Member-Manager of U S Mine, LLC.  A. Scott Dockter, is the CEO of Purebase and a Director and officer of USMC and a Member-Manager of   U S Agricultural Minerals, LLC. The Company anticipates appointing one or more directors to its Board during the current fiscal year who would be deemed independent directors.
 
 
ITEM 14.       PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
Audit Committee Report
 
On October 21, 2016, the Company established its Audit Committee. The Company's Audit Committee duties include reviewing and evaluating the efforts of the Company's independent auditors and the review and authorization of all non-audit fees incurred by the Company.
 
The Committee has reviewed and discussed with the Company's management the audited consolidated financial statements as of and for the fiscal years ended November 30, 2017 and 2016.
 
The Committee discussed with Rose, Snyder & Jacobs LLP, the Company's independent auditors ("RSJ"), the matters required to be discussed by PCAOB on Auditing Standards No. 16, Communication with Audit Committees.
 
The Audit Committee has received and reviewed the written disclosures and the letter from RSJ required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as amended, and has discussed with RSJ its independence.
 
Based on the reviews and discussions referred to above the Board has approved the audited financial statements referred to above to be included in the Company's Annual Report on Form 10-K for the periods ended November 30, 2017 and 2016 to be filed with the SEC.
 
The material contained in this Committee's Report is not soliciting material, is not deemed filed with the SEC, and is not incorporated by reference in any filing of the Company under the Securities Act, or the Exchange Act, whether made before or after the date of this annual report and irrespective of any general incorporation language in such filing.
 
Independent Public Accountants
 
The Company's independent public accountants for the last completed fiscal years ended November 30, 2017 and 2016, were Rose, Snyder & Jacobs LLP.
 
Principal Accountant's Fees and Services
 
During the Company's fiscal year ended November 30, 2017 the Company was billed the following aggregate fees by RSJ.
 
Audit Fees
 
This category includes aggregate fees billed by our independent auditors for the audit of our annual financial statements included in this Form 10-K,  review of financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the auditor in connection with statutory and regulatory filings for those fiscal years.
 
The aggregate fees billed by RSJ to the Company for professional services rendered for the audit of the Company's and its subsidiaries' financial statements for the fiscal year, and for services provided by RSJ in connection with statutory or regulatory filings for the fiscal year, were $86,500 and $80,000 billed by RSJ for the fiscal year ended November 30, 2017 and 2016, respectively.
 
 
Audit-Related Fees
 
This category consists of services by our independent auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under Audit Fees.  This category includes accounting consultations on transaction and proposed transaction related matters. During fiscal years 2017 and 2016, RSJ did not bill for Audit-related Fees.
 
Tax fees
 
In fiscal year 2017, $10,000 and fiscal year 2016 $9,500 was paid for professional services rendered for tax, compliance and preparation of our corporate tax returns.
 
All Other Fees
 
There are no other fees to disclose.
 
Auditor Independence
 
As stated elsewhere in this report, all of the services performed by RSJ for fiscal year 2017 were reviewed and approved by the Company's Audit Committee, which concluded that the provision of the non-audit services described above were compatible with maintaining the accountant's independence.
 
Pre-Approved Policies and Procedures
 
Prior to retaining RSJ to provide services in the current fiscal year (beginning December 1, 2016), the Audit Committee first reviewed and approved RSJ's fee proposal and engagement letter.  In the fee proposal, each category of services (Audit, Audit Related, Tax and All Other) is broken down into subcategories that describe the nature of the services to be rendered, and the fees for such services. The Company's pre-approval policy provides that the Audit Committee (or the Board in the absence of an Audit Committee) must specifically pre-approve any engagement of RSJ for services outside the scope of the fee proposal and engagement letter.
 
 
 
 
 
 
 
 
 
 
PART IV
 
ITEM 15.      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
(a)
Financial Statements
 
Audited financial statements for the Company for the fiscal year ended November 30, 2017 for the Company and the fiscal year ended November 30, 2016 for Purebase, Inc. are included with this annual report.
 
(b)
Exhibits
 
Exhibit
No.
 
Description of Exhibit
     
2.1 (3)
 
Plan and Agreement of Reorganization between Port of Call Online, Inc. and Purebase, Inc. and Certain Stockholders of Purebase, Inc. dated December 23, 2014.
3.1.1 (1)
 
Articles of Incorporation
3.1.2 (4)
 
Certificate of Change to Articles of Incorporation (stock split) effective November 7, 2014
3.1.3 (4)
 
Amendment to the Articles of Incorporation (name change) effective January 12, 2015
3.1.4 (5)
 
Certificate of Change to Articles of Incorporation (stock split) effective June 15, 2015
3.2 (1)
 
Bylaws
10.1 (2)
 
Assignment of Purchase Agreement of Snow White Mine dated December 1, 2014
10.2 (3)
 
Placer Claims Assignment Agreement dated July 30, 2014
10.3 (3)
 
Preference Rights Lease Assignment Agreement dated October 6, 2014
10.4 (3)
 
Plan and Agreement of Reorganization Between Purebase, Inc., US Agricultural Minerals, LLC and the Members of US Agricultural Minerals, LLC dated November 24, 2014
10.5 (3)
 
Contract Mining Agreement dated November 1, 2013
10.6 (4)
 
California State-sponsored  Report, 2001, Mineral Land Classification of the Long Valley Pozzolan Deposits, Lassen County, California
10.7 (4)
 
Summary prepared by Matcon Corp. covering the Snow White Mine property
14 *   Code of Business Conduct and Ethics
21 (4)
 
Subsidiaries of Purebase Corporation
 
 
 
_______
   
*  Filed herewith.
(1)  Filed with Registrant's Form S-1 Registration Statement filed on May 13, 2013.
(2)  Filed as an exhibit to Registrant's Form 8-K filed on December 2, 2014.
(3)   Filed as an exhibit to Registrant's Form 8-K filed on December 24, 2014.
(4)  Filed as an exhibit to Registrant's Form 10-K filed on March 16, 2015.
(5)  Filed as an exhibit to Registrant's Form 8-K filed on June 16, 2015.
 

 


SIGNATURES
 
Pursuant to the requirements of Section 13 or 15 (d) of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
  PUREBASE CORP.  
       
       
Date: February 27, 2018
By:
/s/ A. Scott Dockter  
    A. Scott Dockter  
    Chief Executive Officer  
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
 
Signature
 
Title
 
Date
         
         
/s/ A. Scott Dockter
 
Director and
 
February 27, 2018
A.Scott Dockter
 
Chief Executive Officer
   
         
         
/s/ Al Calvanico
 
Secretary and Chief Financial Officer
 
February 27, 2018
Al Calvanico
 
(Principal Financial & Accounting Officer)
   
         
         
/s/ Calvin Lim
 
Director
 
February 27, 2018
Calvin Lim
       
         
         
/s/ John Bremer
 
Director
 
February 27, 2018
John Bremer
       
         
         
/s/ John Gingerich
 
Director
 
February 27, 2018
John Gingerich
       

 
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Exhibit 14
 
 
CODE OF BUSINESS CONDUCT AND ETHICS
 
PUREBASE CORPORATION
 
I. INTRODUCTION.
 
Purebase Corporation together with all of its subsidiaries (the "Company") seeks at all times to conduct its business in accordance with the highest standards of ethical conduct and in compliance with all laws, rules and regulations.
 
This Code of Business Conduct and Ethics (the "Code") governs the business decisions made and actions taken by the Company's directors, officers and employees and is an expression of the Company's fundamental and core values, some of which are: (i) integrity and honesty in the Company's and its employees' dealings with customers, suppliers, co-workers, competitors, shareholders and the community, (ii) respect for individuality and personal experience and background and (iii) support of the communities where the Company and its employees work and reside.
 
These core values and the other standards of conduct in this Code provide general guidance for resolving a variety of legal and ethical questions for employees, officers and directors. However, while the specific provisions of this Code attempt to describe certain foreseeable circumstances and to state the employee's, officer's and director's obligations in such event, it is impossible to anticipate all possibilities. Therefore, in addition to compliance with this Code and applicable laws, rules and regulations, all Company employees, officers and directors are expected to observe the highest standards of business and personal ethics in the discharge of their assigned duties and responsibilities.
 
The integrity, reputation and profitability of the Company ultimately depend upon the individual actions of the Company's employees, officers and directors. As a result, each such individual is personally responsible and accountable for compliance with this Code. ALL REFERENCES IN THIS CODE TO "EMPLOYEES" SHOULD BE UNDERSTOOD TO INCLUDE ALL EMPLOYEES, OFFICERS AND DIRECTORS OF THE COMPANY (INCLUDING ITS SUBSIDIARIES), UNLESS THE CONTEXT REQUIRES OTHERWISE.
 
The Addendum to this Code provides additional standards of conduct applicable to Executive Officers and Directors of the Company. The Addendum is provided separately to designated Executive Officers and Directors.
 
 
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II. STANDARDS OF CONDUCT.
 
A.            Conflicts of Interest
 
(1) The Company recognizes and respects the right of its employees to engage in outside activities which they may deem proper and desirable, provided that employees fulfill their obligations to act in the best interests of the Company and to avoid situations that present a potential or actual conflict between their interests and the Company's interests. A "conflict of interest" occurs when a person's private interest interferes in any way with the interests of the Company as a whole. Conflicts of interest may arise in many situations. They can arise when an employee takes an action or has an interest that may make it difficult for him or her to perform the responsibilities of his or her position objectively and/or effectively in the best interests of the Company. They may also occur when an employee or his or her family members receive some improper personal benefit as a result of his or her position in the Company. Each individual's situation is different and in evaluating his or her own situation, an employee will have to consider many factors. Some of the most common situations that could present a conflict of interest are as follows:
 
(i) ownership of a significant interest in , or a significant indebtedness to or from, any entity that is a competitor of the Company or that does business with the Company;
 
(ii) serving in any capacity for an entity that does business with the Company or is a competitor of the Company;
 
(iii) marketing or selling products or services in competition with the Company's products or services, or otherwise directly or indirectly competing with the Company;
 
(iv) exerting (or attempting or appearing to exert) influence to obtain special treatment for a particular supplier, vendor or contractor, with or without receiving some actual or potential benefit from such supplier, vendor or contractor;
 
(vi) engaging in any business transaction on behalf of the Company with an immediate family member, or with a firm of which an immediate family member is a principal, officer , representative or substantial owner;
 
(vii) hiring friends or relatives , unless such friends or relatives will work in a different department and are hired with the consent of the appropriate members of management or, if involving a member of management, the Board or a committee thereof;
 
(viii) performing non-Company work or soliciting such work on the Company's premises or on Company time; and
 
(ix) using Company assets, property or services for personal gain.
 
Please note that use of the Company's name, facilities or relationships for charitable work or pro bono purposes can be made only with prior approval from senior management and such other notifications and approvals as may be required under other applicable policies then in effect.
 
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(2) For purposes of this Code, an "immediate family member" includes a person's spouse, parents, children (whether natural or adopted), siblings, mothers-and fathers-in-law, sons-and daughters-in-law, brothers-and sisters-in-law , and anyone (other than employees) who shares such person's home.
 
(3) If there are any questions as to whether or not a specific act or situation represents, or appears to represent, a conflict of interest, an employee should consult their manager or supervisor. Any material transaction or relationship that reasonably could be expected to give rise to a conflict of interest should be reported promptly to the Company's legal counsel, who shall notify the Board as he deems appropriate. Conflicts of interest involving the Company's legal counsel must be disclosed directly to the Board.
 
B.            Employment and Outside Employment
 
Employees of the Company are expected to devote their full attention to the business interests of the Company, with the exception only of employees who are in part-time positions. A conflict of interest can be created where you engage in an activity that interferes with your job performance or responsibilities to the Company. Employees may not accept simultaneous employment with a customer, supplier or competitor of the Company. You should not engage in activities that would put you in a competitive position with the Company or that would enhance or support a competitor.
 
C.            Outside Directorships
 
It is a conflict of interest for you to serve as a member of the Board of Directors of any company that competes with the Company. If you wish to serve as a director of a customer, supplier or other business partner of the Company, you must obtain written approval from the CEO as well as the Company's Counsel before accepting any such directorships. The President and CEO must obtain approval from the Board of Directors before accepting any such directorships. These approvals are not required for directorships with a subsidiary of the Company or a religious or social organization or advisory board of a non-profit institution.
 
D.            Financial Interests in Other Businesses
 
A conflict of interest may be created if you (or a family member) hold a financial interest in a customer, supplier, other business partner or competitor of the Company. Examples of potentially inappropriate financial interests with these companies include owning an interest in such an entity, holding stock representing in excess of 1% of the publicly traded stock of a corporation, loaning money or receiving a loan of money, and selling or leasing property. You should consider many factors in determining whether such a financial interest will create a conflict, including the amount of money involved, your ability to influence the Company's decisions and the decisions of the other company, your access to the confidential information of the Company or the other company and the nature of the relationship between the Company and the other company. If you are unsure as to whether a conflict may exist, you should consult with the Company's Counsel. If it is determined that a conflict exists, you must receive the prior written approval of the Company's Counsel before proceeding with the transaction.
 
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E.             Corporate Opportunities
 
A conflict of interest can exist where both you and the Company can take advantage of an opportunity that has been made available to the Company. You may not exploit, for your own personal gain, opportunities that are discovered through your use of Company property, information or position, unless the opportunity is disclosed in writing to the Company's President or CEO, and the President or CEO declines to pursue the opportunity. In such circumstance, you must receive the prior written approval of the President or CEO as well as the Company's Counsel before proceeding with the opportunity.
 
F.             Gifts to and from Business Partners
 
Occasional business gifts to or from, and entertainment of or by, other persons in connection with business discussions or the development of business relationships are generally deemed appropriate in the conduct of Company business. However, a conflict of interest can be created when you (or a family member) give or accept any gift from a customer, supplier, other business partner or competitor of the Company that might indicate intent to improperly influence the normal business relationship between the Company and the other company. For the purpose of this policy, the term "gift" includes any object or service of value, including meals, vacations and tickets to sporting events. A gift of cash or its equivalent is always considered an improper gift, regardless of the value. A non-cash gift with a value over $500 is presumed to be improper. Repeated non-cash gifts of lesser value may also be considered improper. We expect you to use good judgment and seek guidance from the Company's Counsel when needed. If necessary, you can consult with the Company's Counsel regarding how to refuse or return a gift you deem improper in a manner designed as to not to offend the individual offering the gift.
 
This policy does not apply to minor items commonly exchanged in business relationships between the Company and any customer, supplier, other business partner or competitors, or to gifts directed to the Company (for example, business entertainment and meals with one or more employees of the Company's customers, suppliers and other business partners, subject to approval by the President or other members of the Company's executive staff). In addition, the Company and you may distribute promotional items relating to the Company's services to customers if the items are of a limited value, and their distribution does not violate any laws or generally accepted business practices.
 
Under no circumstances can you make or accept gifts in exchange for Company business. Further, you (or a family member) cannot accept any discount from the Company's customers or other business partners unless the same discount is available to all employees of the Company.
 
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G.            Protection of Confidential Information
 
Confidential proprietary information that is generated and/or gathered in the Company's business, or is provided by third parties that do business with the Company, plays a vital role in the Company's business, prospects and ability to compete. Employees are required not to disclose or distribute such confidential proprietary information, except when disclosure is authorized by the Company or required by law or other regulations, and shall use such information solely for legitimate Company purposes. Every employee having access to proprietary, non-public Company information is required to take steps necessary to prevent such information from becoming public knowledge. You may be required to execute the Company's Employee Confidentiality Agreement. This Agreement sets forth with added specificity your obligations related to the Company's confidential information, including, for example, information regarding the Company's customer relationships, property acquisitions and mineral exploration results. Upon leaving the Company, employees must return all Company property, including, but not limited to, proprietary information in their possession.
 
One area that is of concern to the Company relates to investment bankers and research analysts and their relationships or dealings with the Company and its employees, officers and directors. Only designated executive officers of the Company are authorized to discuss Company matters with investment bankers or analyst. Relationships or transactions with investment bankers and research analysts that are prohibited by applicable law or by the rules and regulations of the stock exchange or system on which the Company's securities are listed or quoted, as applicable, should not be permitted to occur.
 
If you have any questions regarding these obligations, you should consult with the Company's Counsel.
 
H.            Using Non-Public Information and Insider Trading
 
In the course of employment with the Company, an employee may become aware of material information about the Company or other companies that has not been made public. Employees are prohibited from using such non-public information (e.g., trading in the Company's or another company's securities) or disclosing such non-public information to any person outside the Company. For purposes of this policy, the term "material information" is any information that a reasonable investor would deem important to consider in determining whether to buy or sell the Company's stock. Specific aspects and limitations of "insider trading" are set forth in Exhibit A. In addition, those employees, officers and directors of the Company bound by any specific Company procedures with respect to transactions in the Company's securities, such as designated transaction "window periods", must familiarize themselves and comply with such procedures, copies of which are available from the Company's legal counsel. If an employee has any questions concerning what he or she can or cannot do in this area, he or she should consult with the Company's management or legal counsel.
 
I.              Compliance with Laws, Rules and Regulations
 
The Company is committed to conducting its business with honesty and integrity and in compliance with all applicable laws, rules and regulations. No employee shall engage in any unlawful or unethical activity, or instruct others to do so, for any reason. As an employee conducts the Company's business, he or she may encounter a variety of legal issues. If employees have questions on specific laws, rules or regulations they should contact the Company's legal counsel. The following is a summary of some of the laws, rules and regulations that affect the Company's business and with respect to which all employee actions should comply:
 
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(1) Antitrust and Competition Laws. It is the Company's policy to comply with all laws governing competition (including antitrust, monopoly, fair trade or cartel laws) applicable to it.
 
(2) Environmental Laws. It is the Company's policy to comply with all applicable federal, state and local environmental protection laws particularly those applicable to mineral exploration and mining. Each employee shall immediately report any violation of an environmental law, or any action that may appear to conceal such a violation, to his or her manager or supervisor.
 
(3) Health and Safety Laws. It is the Company's policy to maintain a safe and healthy work environment. Each employee shall take reasonable steps to comply with all applicable federal, state and local health and safety laws, rules and regulations particularly those applicable to mineral exploration and mining and must report any health or safety problem observed in or arising during the conduct of his or her responsibilities to his or her manager or supervisor.
 
(4) Political Activities. In the conduct of their responsibilities, the Company and its employees will not illegally contribute to or make expenditures on behalf of any candidate for elective office, political party or political committee, including by means of any corporate funds, services or goods, as well as by means of employees' chargeable work time. In the conduct of their responsibilities, the Company and its employees shall ensure that all of their respective political activities are compliant with appropriate laws, rules and regulations.
 
(5) Illegal Payments. No employee is authorized to pay any bribe or make any other illegal payment on behalf of the Company. No employee is authorized to make any payment to consultants, agents or other intermediaries when he or she has reason to believe some part of the payment will be used to influence governmental or private action. This policy does not prohibit expenditures of amounts for meals and entertainment of suppliers and customers that are otherwise permitted under the Company's gift policies described under "Fair Dealing" in Section F below.
 
(6) Acquiring Information. No employee is authorized to use improper means to acquire a competitor's trade secrets or other confidential information. Illegal practices include trespassing, burglary, wiretapping, bribery and stealing. Improper solicitation of confidential data from a competitor's employees or from the Company's customers is also prohibited.
 
(7) Public and   Shareholder Communications. It is the Company's policy to comply with all laws, rules and regulations governing the public disclosure of business information, including, without limitation, the requirements of SEC Regulation FD which address the selective disclosure of material non-public information. Consequently, only designated executive officers or public relations spokespersons are authorized to speak to or communicate with members of the press, the general public or shareholders on behalf of the Company relating to Company business. Additional information regarding public disclosures by the Company is addressed under Sections K and M below.
 
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(8) Import/Export Controls. It is the Company's policy to comply with import/export laws applicable to it and its business and products. Each employee involved with the sale or shipment of products across international borders is expected to understand and comply with the import/export control restrictions of all relevant countries.
 
(9) Government Contracts and Relationships. Company employees are required to comply with all laws, rules and regulations relating to government contracts in all countries where the Company does business, including the Foreign Corrupt Practices Act (which is discussed in more detail under "Fair Dealing" in Section F below) , and to cooperate fully with investigators and auditors who require information in connection with such contracts.
 
J.             Protection and Proper Use of Company Assets
 
Loss, theft and misuse of Company assets have a direct impact on the Company's profitability. Therefore, employees are required to protect the Company's assets entrusted to them and to protect the Company's assets in general. Employees shall also take steps to ensure that Company assets are used only for legitimate business purposes consistent with the Company's guidelines. Any questions concerning the protection and proper use of Company assets should be directed to the appropriate manager or supervisor. The following highlights the responsibilities of employees with respect to certain of the Company's assets:
 
(1) employees are expected to be alert to and report to their manager or supervisor any incidents that could lead to the loss, theft or misuse of Company property;
 
(2) all physical assets, such as equipment, facilities, supplies and inventories, are to be used solely for Company purposes;
 
(3) employees who receive or disburse money shall follow established procedures to ensure the proper use and recording of funds;
 
(4) employees shall not use or allow anyone else to use the Company's name in any outside capacity without proper authorization; and
 
(5) employees shall take reasonable steps to protect the intellectual property of the Company, in accordance with applicable Company policies.
 
K.            Quality of Public Disclosures
 
The Company is committed to providing its shareholders and the public with full and accurate information, in all material respects, about the Company's financial condition and results of operations in accordance with the securities laws of the United States and, if applicable, other foreign jurisdictions. The Company strives to ensure that the reports and documents it files with or submits to the Securities and Exchange Commission include full, fair, accurate, timely and
 
 
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understandable disclosure in accordance with the securities laws of the United States and, if applicable, other foreign jurisdiction. All employees are expected to provide full, fair and accurate information/data/analysis to insure compliance with SEC reporting requirements. The Company's senior management shall be primarily responsible for monitoring such public disclosure.
 
L.             Work Environment
 
(1) Discrimination and Harassment. The Company seeks to maintain a healthy, safe and productive work environment which is free from discrimination or harassment based on race, color, religion, sex, sexual orientation, age, national origin, disability, or other factors that are unrelated to the Company's legitimate business interests. Accordingly, conduct involving discrimination or harassment of others will not be tolerated. Employees are required to comply with the Company's policy on equal opportunity, non-discrimination and fair employment, copies of which are distributed to employees and are available from the Company's management upon request. Any employee observing or otherwise becoming aware of any discriminatory or harassing conduct should report such conduct to his/her supervisor. The Company may also provide periodic training to promote compliance with applicable regulations and Company policy.
 
(2) Substance Abuse. Employees should not be on Company premises or in the Company work environment if they are under the influence of, or affected by, illegal drugs, controlled substances used for non-medical purposes or alcoholic beverages. Consumption of alcoholic beverages on Company premises is only permitted at Company-sponsored events with prior management approval. All employees are required to comply with the Company's policy on drug and alcohol use, copies of which are distributed to employees and are available from the Company's management upon request.
 
(3) Environment, Health and Safety. The Company and all employees shall strive to avoid adverse impact and injury to the environment and communities in which the Company conducts its business. In furtherance of this objective, the Company and all employees shall seek to comply with all applicable environmental and workplace health and safety laws and regulations (as discussed under "Compliance with Laws, Rules and Regulations" in Section I above).
 
(4) Dangerous Items. The Company makes every effort to create a safe work environment. As a result, any employee found to be carrying firearms, ammunition or other dangerous weapons and/or explosives will result in disciplinary action up to and including termination.
 
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M.           Outside Activities
 
(1) General. Employees should generally avoid any outside activity that reduces the employee's productivity, causes frequent absences and/or tardiness or generally interferes with the employee's work performance. If such interference occurs, the employee may be reprimanded or even discharged.
 
(2)  Political Involvement. Employees may spend their own time and funds supporting political candidates and issues, running for public office or serving as an elected official, but they will not be reimbursed by the Company in any way for such time or their funds used for such political activities. Employees are also expected to ensure that their personal political contributions and activities are in compliance with applicable law. Unless properly authorized, employees may not make any political contribution as a representative of the Company. Employees must obtain the prior approval of the Company to lobby or authorize anyone else to lobby on the Company's behalf.
 
(3)  Public Service. The Company encourages employees to be active in the civic life of their communities. However, when such service places an employee in a situation that poses a conflict of interest with the interests of the Company, such employee should consult with their manager or supervisor and should disclose his or her association with the Company to such civic organization or other entity.
 
(4)  Public Speaking and Media Relations. In all of the Company's dealings with the press and other media, the Company's investor relations personnel or senior management shall be the sole contact. Any requests from the media must be referred to those personnel. In speaking on public issues generally, employees shall speak only for themselves and shall not imply or give the appearance that they are speaking on the Company's behalf, unless properly authorized to do so by the Company.
 
N.            Other Situations
 
If a proposed transaction or conduct raises questions or concerns for you, you should consult with the Company's Counsel.
 
II. COMPLIANCE PROCEDURES.
 
A.             Administration of this Code
 
The Board of Directors of the Company (the "Board"), or such committee or person(s) responsible for administering this Code as the Board shall establish, shall implement and oversee the administration of this Code. The Board shall establish such procedures as it shall deem necessary or desirable in order to discharge this responsibility, including delegating authority to officers and other employees and engaging advisors. Administration of this Code shall include periodic review and revisions to this Code as necessary or appropriate.
 
B.            Communication of Policies
 
(1) A copy of this Code and any revisions thereto shall be supplied to all employees, officers and directors.
 
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(2) A copy of this Code is available to all employees, officers and directors by request from any officer or director of the Company. Each new employee, officer or director shall receive a copy of this Code upon their employment.
 
(3) The Company requires all employees (including new employees), directors and officers to complete, sign and return an Acknowledgment Form attached to this Code. That form states that the acknowledging person has received a copy of this Code and has read and understands this Code. Adherence to these requirements is a condition of employment (both beginning and continuing).
 
(4) Periodically, the Company's management may conduct training sessions on the Company's ethical and business guidelines for new and/or continuing employees, officers and/or directors.
 
B.            Monitoring Compliance
 
The Company's management, under the supervision of the Board, shall take reasonable steps to monitor and audit compliance with this Code, including the establishment of monitoring and auditing systems that are reasonably designed to detect conduct in violation of this Code. The Company's management shall periodically report to the Board or a committee thereof on these compliance efforts including, without limitation, regular reporting of alleged violations of this Code and the actions taken with respect to such violation.
 
D.            Reporting Concerns/Receiving Advice
 
(1)            Communication Channels.
 
(i) Every employee is required to act proactively by asking questions, seeking guidance and reporting any suspected violations with respect to compliance with this Code, other policies and procedures of the Company, or any government law, rule or regulation. IF ANY EMPLOYEE BELIEVES THAT ACTIONS HAVE TAKEN PLACE, MAY BE TAKING PLACE, OR MAY BE ABOUT TO TAKE PLACE THAT VIOLATE OR WOULD VIOLATE THIS CODE, THEY ARE OBLIGATED TO BRING THE MATTER TO THE ATTENTION OF THE COMPANY.
 
(ii) The best starting point for an employee seeking advice on ethics-related issues or reporting potential violations is his or her manager or supervisor. However, if the conduct in question involves his or her manager or supervisor, or if the employee has reported it to his or her manager or supervisor and does not believe that he or she has dealt with it properly, or if the employee does not feel that he or she can discuss the matter with his or her manager or supervisor, the employee may raise the matter with the next level of management, the Company's President, any member of the Board and/or the Company's legal counsel.
 
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(iii) In the case of accounting, internal accounting controls or auditing matters, any concerns or questions about violations with respect to such matters that are not resolved to the employee's satisfaction through the channels set forth above should be directed to the Audit Committee of the Board. The Company must notify the Audit Committee of the Board of any complaints it receives that involve accounting , internal accounting controls or auditing matters.
 
(iv) Upon receiving a report from an employee, the person reviewing the report should consider whether the report involves a potential violation of this Code; if so, he or she must report it immediately to the Company's legal counsel, who will have primary responsibility for enforcement of this Code, subject to the supervision of the Board of Directors or a committee thereof, or, in the case of accounting, internal accounting controls or auditing matters, the Audit Committee of the Board.
 
(v) Reporting of potential violations may be done in writing, by e-mail or by telephone.
 
(vi) Employees must not use this compliance program in bad faith or in a frivolous manner or to report personnel grievances not involving this Code or other ethics-related issues.
 
(2)           Confidentiality; Retaliation.

(i) When reporting conduct suspected of violating · this Code, the Company prefers that employees identify themselves in order to facilitate the Company's ability to take appropriate steps to address the report, including conducting any appropriate investigation. If an employee wishes to remain anonymous, he or she may do so, but this could impair the Company's ability to adequately investigate the complaint. When an individual comes forward with a complaint the Company will use reasonable efforts to protect the confidentiality of the reporting person subject to any applicable law , rule or regulation or to any applicable legal proceedings. In the event the report is made anonymously, however, the Company may not have sufficient information to look into or otherwise investigate or evaluate the allegations. Accordingly, persons who make reports anonymously should endeavor to provide as much detail as is reasonably necessary to permit the Company to look into, investigate and evaluate the matter(s) set forth in the anonymous report.

(ii) Any employee involved in any capacity in an investigation of a possible violation of this Code must not discuss or disclose any information to anyone not involved in conducting the investigation unless required by applicable law, rule or regulation or by any applicable legal proceeding or when seeking their own legal advice, if necessary.

(iii) The Company expressly forbids any retaliation against any employee for reporting suspected misconduct under this Code. Any person who participates in any retaliation is subject to disciplinary action , up to and including termination.
 
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E.   Investigating Violations
 
If the Company receives information regarding an alleged violation of this Code, the authorized person(s) investigating the alleged violations shall, as appropriate:
 
(1) evaluate such information as to gravity and credibility;
 
(2) initiate an informal inquiry or a formal investigation with respect thereto;
 
(3) prepare a report of the results of such inquiry or investigation, including recommendations as to the disposition of such matter;
 
(4) make the results of such inquiry or investigation available to the Company's legal counsel for action (including, if appropriate, disciplinary action); and
 
(5) note in the report any changes in this Code that may be necessary or desirable to prevent further similar violations or to appropriately address any areas of ambiguity, confusion or omission in this Code.
 
The Board or a committee thereof shall periodically receive a list of all such alleged violations and the outcome of the inquiry or investigation thereof and shall have access to all reports prepared regarding alleged violations of this Code.
 
F.             Disciplinary Actions
 
Failure to comply with this Code or any related ethical policies of the Company will be subject to appropriate disciplinary action as determined by the Company, subject to the supervision of the Board or a committee thereof or, in the case of accounting, internal accounting controls or auditing matters, the Audit Committee of the Board. Disciplinary measures include, but are not limited to, counseling, oral or written reprimands, warnings, probation or suspension without pay, demotions, reductions in salary, termination of employment or service to the Company and restitution. Persons subject to disciplinary measures shall include, in addition to the violator, others involved in the violation such as (i) persons who fail to use reasonable care to detect a violation, (ii) persons who are aware of a violation but fail to report it, (iii) persons who were asked to provide information regarding a violation, but withheld material information regarding the violation and (iv) managers or supervisors who approve or condone the violations or attempt to retaliate against employees for reporting violations or violators.
 
G.            Waivers and Amendments
 
No waiver of any provision of this Code as applied to officers, members of the Company's finance department or directors of the Company shall be effective unless first approved by the Board, or a committee thereof. Any waivers of this Code for other employees may only be made within the approval of the Company's President and legal counsel. All amendments to this Code must be approved by the Board, or a committee thereof. All waivers and amendments to this Code must be promptly disclosed to the Company's shareholders in accordance with applicable United States securities laws and/or the rules and regulations of the exchange or system on which the Company's shares are traded or quoted, as the case may be.
 
 
 
 
 
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ACKNOWLEDGMENT
 
I acknowledge that I have reviewed and understand the Company's Code of Conduct and Ethics (the "Code") and agree to abide by the provisions of this Code.
 
 
Signature:  _____________________________________________________________________________
 
 
Name:  ________________________________________________________________________________
 
 
Position:  ______________________________________________________________________________
 
 
Date:  _________________________________________________________________________________
 
 
 
 
 
 
 
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Exhibit 31.1
 
 
CERTIFICATION FOR ANNUAL REPORT ON FORM 10-K
 
I, A. Scott Dockter, certify that:
 
1. I have reviewed this annual report on Form 10-K of Purebase Corporation for the fiscal year ended November 30, 2017;
 
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows as of, and for, the periods presented in this annual report;
 
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,  to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
 
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:
 
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date: February 27, 2018
 
 
/s/ A. Scott Dockter  
  A. Scott Dockter, Chief Executive Officer  
 
 
Exhibit 31.2
 
 
CERTIFICATION FOR ANNUAL REPORT ON FORM 10-K
 
I, Al Calvanico, certify that:
 
1. I have reviewed this annual report on Form 10-K of Purebase Corporation for the fiscal year ended November 30, 2017;
 
2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.  Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows as of, and for, the periods presented in this annual report;
 
4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
 
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:
 
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date: February 27, 2018
 
 
/s/ Al Calvanico  
  Al Calvanico, Chief Financial Officer  
 
 
Exhibit 32.1
 
 
CERTIFICATION
 
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)
 
In connection with the annual report on Form 10-K of Purebase Corporation (the "Company"), for the fiscal year ended November 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to our knowledge
 
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
 
  PUREBASE CORPORATION  
     
     
Dated: February 27, 2018
/s/ A. Scott Dockter  
  A. Scott Dockter, Chief Executive Officer  
   
     
Dated: February 27, 2018 /s/ Al Calvanico  
  Al Calvanico, Chief Financial Officer