Filing Analysis
Purebase Corp entered into a securities purchase agreement with Vanquish Funding Group Inc. to issue a $123,050 promissory note. The deal includes high-interest rates and significant conversion discounts for the lender.
🚩 Red Flags
- High-interest rate (12%) that escalates significantly to 22% upon default.
- Significant conversion discount (35%) which is highly dilutive to existing shareholders.
- The use of a promissory note for relatively small amounts ($100k net) often indicates urgent need for working capital/liquidity issues.
- Staggered repayment schedule starting in March 2026 suggests potential cash flow pressure.
📋 Key Facts
- Entered into a securities purchase agreement with Vanquish Funding Group Inc. on September 24, 2025.
- Issued a promissory note with a principal amount of $123,050 (includes $16,050 original issue discount).
- Net funds received by the company: $100,000 after legal and due diligence fees ($7,000 total).
- Note carries a 12% interest rate, increasing to 22% upon late payment.
- Conversion feature allows conversion into common stock at a 35% discount to the share price.
- Maturity date is July 30, 2026, with staggered payments starting March 30, 2026.
Purebase Corporation has entered into an Assignment of Lease Agreement to acquire mining rights for approximately 2,500 acres in Esmeralda County, Nevada. The transfer is contingent upon obtaining necessary consents from the BLM and Rulco LLC.
🚩 Red Flags
- The transfer of the asset is contingent upon external approvals (BLM and Rulco LLC), creating execution risk.
- Potential for delay in finalizing the acquisition of mining rights.
📋 Key Facts
- Agreement dated June 18, 2025; reported via 8-K on October 9, 2025.
- Subject matter: Assignment of Lease Serial No. N-62445-01 (BLM Preference Right Lease).
- Asset description: Mining rights for ~2,500 acres in the Weepah Hills area, Esmeralda County, Nevada.
- Counterparty: U.S. Mine Corporation (USMC).
- Status: Transfer is not yet complete and remains subject to third-party consents from BLM and Rulco LLC.
Purebase Corp entered into a $500,000 loan agreement with J.J. Astor & Co. that includes significant equity sweeteners and high-interest default terms. The deal is secured by a senior first lien on all company assets and involves an Affidavit of Confession of Judgment signed by the CEO.
🚩 Red Flags
- High-cost financing: $150,000 OID on a $500,000 loan represents a massive effective interest rate.
- Death Spiral/Dilution Risk: The 'Bonus Shares' provision triggers additional 750,000 shares if the stock price falls below $0.50, creating significant downward pressure and dilution.
- Severe Default Terms: A default multiplier of 120% plus 19% compounded daily interest is predatory/highly punitive.
- Asset Encumbrance: The loan is secured by a senior first lien on all company assets and equity interests in Dockter Farms.
- Confession of Judgment: CEO Scott Dockter executed an Affidavit of Confession of Judgment, allowing the lender to bypass standard litigation processes for debt collection.
📋 Key Facts
- Loan principal amount: $500,000; Effective Date: July 31, 2025.
- The note features an original issue discount (OID) of $150,000, resulting in a total principal of $650,000.
- Lender to receive 750,000 bonus shares; if stock price is <$0.50 after 90 days, an additional 750,000 shares will be issued.
- Repayment via 40 weekly installments starting August 5, 2025.
- Maturity date: May 5, 2026.
- Default penalty includes a 120% multiplier of the outstanding principal plus 19% daily compounded interest.
Purebase Corp entered into a complex Master Agreement involving the termination of significant mining rights and stock options, alongside a massive share purchase agreement by the CEO. The filing also details the conversion of substantial debt held by US Mine Corp into equity.
🚩 Red Flags
- Significant related-party transactions: The CEO is personally purchasing over 122 million shares from an entity (USMC) that also holds debt convertible into Purebase stock.
- Potential dilution: Massive issuance of conversion shares (over 27 million) and the CEO's planned purchase of 122 million shares represents extreme potential dilution for existing shareholders.
- Complex restructuring: The simultaneous termination of mining rights, rescission of land deals with a board member's trust, and debt-to-equity conversions suggest significant corporate instability or reorganization.
- Conflict of interest: CEO is acting as both an officer of the company and a primary buyer in a massive equity transaction involving USMC.
📋 Key Facts
- Effective Date: June 18, 2025.
- Purebase terminated mining rights for up to 100,000,000 tons of metakaolin and stock options for 116,000,000 shares held by US Mine LLC.
- CEO Arthur Scott Dockter and spouse Teresa Dockter entered a Master Agreement to purchase 122,945,823 shares from USMC for $14,555,665.84 plus 10% interest.
- USMC converted approximately $2,034,476 in principal and interest into 27,220,772 Conversion Shares.
- Rescission of a purchase agreement involving the 'Snow White Mine' with a trust held by board member John Bremer.
PureBase Corporation announced the resignation of Brady Barto from the Board of Directors on February 5, 2025. Mr. Barto also stepped down from his positions on the Audit and Compensation Committees.
🚩 Red Flags
- Departure from key committees (Audit and Compensation) can sometimes precede governance shifts, though no disagreement was cited.
📋 Key Facts
- Brady Barto resigned as a member of the Board of Directors effective February 5, 2025.
- Resignation includes relinquishment of roles on the Audit Committee and Compensation Committee.
- The company stated that the resignation was not due to any disagreement regarding operations, policies, or practices.
PureBase Corp disclosed that a previously reported assignment of mineral rights from its significant stockholder, U.S. Mine Corporation (USMC), was never actually effectuated. Consequently, the Company's subsidiary does not hold the mining rights to the Esmeralda Project as previously stated in 10-K filings.
🚩 Red Flags
- Related-party transaction issue: The error involves a deal with a significant stockholder (USMC).
- Potential restatement trigger: Previous 10-K filings contained inaccurate information regarding asset ownership/rights.
- Asset integrity risk: A core project (Esmeralda Project) may not be owned by the company as previously disclosed.
📋 Key Facts
- The company previously reported an assignment of lease for mineral rights from U.S. Mine Corporation (USMC) to its subsidiary, PureBase Ag.
- The Lease involves approximately 2,500 acres in the Weepah Hills, Esmeralda County, Nevada (the 'Esmeralda Project').
- The Company has discovered that the assignment was not effectuated and rights/obligations remain with USMC.
- USMC is identified as a significant stockholder of PureBase Corp.