UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 5, 2019
PUREBASE CORPORATION
(Exact name of registrant as specified in its charter)
| Nevada | 000-55517 | 27-2060863 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
8625 State Hwy, 124
Ione, CA 95640
(Address of principal executive offices)
(888) 791-9474
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Securities registered pursuant to Section 12(b) of the Act: |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01 Entry into a Material Definitive Agreement.
On September 5, 2019, PureBase Corporation, a Nevada corporation (the “Company”), executed a Debt Exchange Agreement (“Debt Exchange Agreement”) with US Mine Corp., an affiliate of the Company (“USMC”), pursuant to which an aggregate of $5,442,362.86 of debt, including accrued and unpaid interest, was converted to an aggregate 60,248,484 shares of the Company’s common stock of the Company. The debt represented loans made by USMC to the Company, all of which were terminated as a result of the conversion to shares. The per share conversion price of $0.09 was negotiated in an arm’s-length transaction with USMC, and the Company’s board of directors determined that, since there is a limited market to its shares, such price represents the fair market value of the stock.
The Company utilizes the services of its affiliate, USMC, for exploration services and other services. As of December 31, 2018,
all Company purchases, including all minerals utilized by the Company, where made from USMC. A. Scott Dockter, the principal executive
officer and a director of the Company, and John Bremer, a director of the Company, are also officers, directors and shareholders
of USMC.
The foregoing description of the Debt Exchange Agreement and the transactions contemplated thereby are qualified in their entirety by reference to the full text of such agreement, a copy of which is attached to this Current Report on Form 8-K (“Report”) as Exhibit 10.1, which is incorporated herein in its entirety by reference.
The information contained below in Item 3.02 is hereby incorporated by reference into this Item 1.01.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained above in Item 1.01 is hereby incorporated by reference into this Item 3.02.
The issuance and sale of the common stock by the Company to USMC under the Debt Exchange Agreement was made without registration under the Securities Act of 1933, as amended (the “Act”), or the securities laws of the applicable state, in reliance on the exemptions provided by Section 4(2) of the Act and Regulation D promulgated thereunder, and in reliance on similar exemptions under applicable state law, based on the offering of such securities to one investor, an affiliate of the Company, the lack of any general solicitation or advertising in connection with such issuance and the representation of such investor to the Company that it was an accredited investor (as that term is defined in Rule 501(a) of Regulation D).
Item 7.01. Regulation FD Disclosure.
On September 10, 2019, the Company issued a press release with respect to the conversion of $5,442,362.86 of debt, including accrued and unpaid interest, into an aggregate 60,248,484 shares of common stock. A copy of the press release is filed as Exhibit 99.1 to this report and incorporated herein by reference. The information in this Item 7.01 of this Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any of the Company’s filings under the Securities Act, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Report in such filing.
Forward Looking Statements
This filing includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect the Company’s operations, financial performance, and other factors as discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”). Among the factors that could cause results to differ materially are those risks discussed in the periodic reports the Company files with the SEC, including the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2018. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” The Company does not undertake any duty to update any forward-looking statement except as required by law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
|
10.10 |
Debt Exchange Agreement between the Company and US Mine Corp., dated September 5, 2019
|
|
| 99.1 | Press Release issued by the Company, dated September 10, 2019 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
|
PUREBASE CORPORATION
|
||
| Dated: September 10, 2019 | By: | /s/ A. Scott Dockter |
| A. Scott Dockter | ||
| Chief Executive Officer | ||
September 5, 2019
PureBase Corporation
8625 State Hwy. 124
Ione, California 95640
Re: Debt Exchange for Shares
Ladies and Gentlemen:
As of the date hereof, the undersigned (the “Creditor”) is owed an aggregate of $5,422,362.86 by PureBase Corporation, a Nevada corporation (the “Company”). This letter sets forth the terms of our agreement to exchange the outstanding principal, and any accrued and unpaid interest thereon, for shares of common stock, $0.001 par value per share (“Common Stock”), of the Company in accordance with the terms below.
1. Exchange. Subject to the terms and conditions of this letter agreement, the Creditor hereby agrees to exchange the amount of $5,422,362.86, which is currently due and payable to the Creditor (the “Debt”) for shares of Common Stock of the Company, at a conversion rate of $0.09 per share, resulting in the issuance of an aggregate of 60,248,484 shares of Common Stock (the “Shares”). Upon such exchange, the outstanding $5,422,362.86 shall be deemed extinguished and the Company shall be discharged from all liabilities thereunder.
2. Deliveries. At the Closing (as defined below), the Company shall deliver to the Creditor a certificate representing the Shares.
3. Closing. The closing of the conversion of the Shares (the “Closing”) shall take place no later than the fifth (5th) business day after the date hereof, whereupon the Company shall instruct its transfer agent to issue the Shares to the Creditor.
4. Representations and Warranties of the Creditor. The Creditor hereby represents and warrants to the Company, on the date hereof and as of the date of the Closing, as follows:
(a) Organization, Authority and Qualification. If applicable, the Creditor is a corporation, limited liability company, limited partnership, trust or other entity duly organized, validly existing and in good standing under the laws of its incorporation or formation and has the requisite power and authority to execute and deliver this letter agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this letter agreement by the Creditor and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Creditor.
(b) Ownership of the Debt. The Creditor has good, valid and marketable title to the Debt, free and clear of all liens, mortgages, charges or other encumbrances and any preemptive or subscription rights and has not assigned or otherwise transferred or granted any interest in the Debt.
(c) No Consents. The Creditor is not required to obtain any order, consent, approval or authorization of any person or entity in connection with the exchange of the Debt for the Shares.
(d) Status. The Creditor is an “accredited investor”, as defined in Rule 501(a) under the Securities Act of 1933, as amended (the “Securities Act”).
(e) Experience of the Creditor. The Creditor, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Creditor is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
5. Representations and Warranties of the Company. In order to induce the Creditor to enter into this letter agreement, the Company hereby represents and warrants to the Creditor as follows:
(a) Organization, Authority and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has the requisite power and authority to execute and deliver this letter agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this letter agreement by the Company and the consummation by the Company of the transactions contemplated hereunder have been duly authorized by all necessary corporate action on the part of the Company.
(b) No Consents. The Company is not required to obtain any order, consent, approval or authorization of any person or entity in connection with the issuance of the Shares or any of the other transactions contemplated hereunder.
(c) Issuance of the Shares. The Shares, when issued, will be duly authorized by all necessary corporate action by the Company, and will be duly and validly issued, fully paid and non-assessable shares of Common Stock.
6. Further Assurances. The parties shall execute and deliver such further instruments of conveyance, transfer and assignment, cooperate and assist in providing information for making and completing regulatory filings, and take such other actions as the Creditor or the Company, as the case may be, may reasonably require of the other party to evidence or effectuate the transactions contemplated hereunder.
7. Amendment. This Agreement may not be amended or otherwise modified, except by an instrument in writing signed by, or on behalf of, each of the parties hereto.
8. Governing Law. This letter agreement (including the documents and instruments referred to herein) shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of New York, as applied to agreements entered into and wholly performed within such State.
9. Counterparts; Severability. This letter agreement may be executed by facsimile or other electronic means and in one or more counterparts which together shall constitute a single agreement. If any provisions of this Agreement shall be held to be illegal, invalid or unenforceable under any applicable law, then such contravention or invalidity shall not invalidate the entire letter agreement. Such provision shall be deemed to be modified to the extent necessary to render it legal, valid and enforceable, and if no such modification shall render it legal, valid and enforceable, then this letter agreement shall be construed as if not containing the provision held to be invalid, and the rights and obligations of the parties shall be construed and enforced accordingly.
10. Entire Agreement. This letter agreement supersedes all prior agreements between the parties hereto with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter.
[SIGNATURES APPEAR ON NEXT PAGE]
| 2 |
If this letter agreement accurately sets forth our agreement, please sign below where indicated.
Dated: September 5, 2019
| Sincerely, | ||
| US MINE CORPORATION | ||
| /s/ John Bremer | ||
| Name: | John Bremer | |
| Title: | President | |
| Address: | 8625 State Hwy. 124 | |
| Ione, California 95640 | ||
| Telephone: | (209) 790-4535 | |
| State Taxpayer Identification No.: | ||
| NV20121556051 | ||
Dollar Amount of Principal and Interest being converted: $5,422,362.86
| AGREED: | ||
| Date: September 5, 2019 | ||
| PUREBASE CORPORATION | ||
| By: | /s/ A. Scott Dockter | |
| Name: | A. Scott Dockter | |
| Title: | Chief Executive Officer | |
| 3 |
Purebase Eliminates Existing Liabilities In Debt-For-Equity Swap
IONE, CA – (September 10, 2019) – Purebase Corporation (OTCQB: PUBC), a natural mineral resource company, headquartered in Ione, California, is pleased to announce that it has eliminated $5,422,362.86 of liabilities through a Debt-For-Equity exchange with existing noteholders into 60,248,484 restricted common stock at the conversion price of $0.09. The party converting their debt is U.S. Mine Corp., a privately held mining company owned by certain Directors of Purebase Corporation.
Purebase CEO, Scott Dockter said, “The demand for high-quality specialized soil amendment, minerals, and bio-stimulants for sustainable agriculture continues to grow, and we wanted to communicate to the market that our largest shareholders are confident in the company’s path ahead. Mr. Dockter added, “We have been funding the company since it was a start-up, and as the company matures into the next phase of growth, we felt like it was the right time to clean up the company’s balance sheet.”
About PureBase Corporation
Purebase Corporation (OTCQB: PUBC) is a diversified company that acquires, develops, and markets natural mineral resources in the form of soil amendment solutions to the international agricultural industry.
Contacts
Michael Cavalli | PureBase Corporation
michael.cavalli@purebase.com | Office: (209) 274-9143
And please visit our corporate website – www.purebase.com
Safe Harbor
This press release contains statements, which may constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of Purebase Corporation and members of its management team as well as the assumptions on which such statements are based. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that may cause actual results to differ from those anticipated are discussed throughout the Company’s reports filed with Securities and Exchange Commission which are available at www.sec.gov as well as the Company’s web site at www.purebase.com. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.