10-Q: PureBase Corp. Q1 2026 Financials Show Continued Losses

PureBase Corporation reports a net loss of $347,047 for the first quarter of 2026, with ongoing concerns about its ability to continue as a going concern despite securing new financing.

Summary

• PureBase Corporation reported a net loss of $347,047 for the three months ended February 28, 2026, compared to a net loss of $452,688 for the same period in the prior year.
• Total operating expenses decreased by 45% to $231,102 from $418,216, primarily due to reductions in general and administrative expenses, professional services, and stock-based compensation.
• The company had no revenue in either the current or prior year's first quarter, with agricultural product sales typically beginning in the second quarter.
• As of February 28, 2026, the company had a working capital deficiency of $1,439,631 and cash on hand of $111,629.
• A new $1,000,000 convertible line of credit was secured from CoreTer LLC on February 27, 2026, with $771,302 drawn to date.
• Management expresses substantial doubt about the company's ability to continue as a going concern for the next twelve months, citing accumulated losses and negative cash flows from operations.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the continued net loss, lack of revenue, and substantial doubt about the company's going concern status, despite the new line of credit.

Positives

• Operating expenses decreased by 45% to $231,102 for the three months ended February 28, 2026, compared to $418,216 in the prior year period, driven by workforce reduction and decreased professional services.
• Secured a $1,000,000 convertible line of credit from CoreTer LLC on February 27, 2026, providing potential funding for operations.
• The company has $111,629 in cash and cash equivalents as of February 28, 2026, an increase from $5,304 as of November 30, 2025.

Negatives

• Reported a net loss of $347,047 for the three months ended February 28, 2026.
• No revenue was generated in the first quarter of 2026 or 2025.
• A significant accumulated deficit of $66,835,274 as of February 28, 2026.
• A working capital deficiency of $1,439,631 as of February 28, 2026.
• Management has identified material weaknesses in internal control over financial reporting, including inadequate segregation of duties and lack of risk assessment procedures.

Risks

• Substantial doubt exists regarding the company's ability to continue as a going concern for the next twelve months due to accumulated losses and negative cash flows.
• Potential conflicts of interest may arise due to the CEO's ownership and management of CoreTer LLC, which is in a similar industry.
• The company's ability to generate sufficient revenue and secure additional bridge loans or equity/debt financing is critical for its continued operations.
• If adequate funds are not available on acceptable terms, the company may need to curtail or cease operations.
• The company is dependent on one vendor for its minerals for its products.
• There is a risk of losing rights to properties.

Future Outlook

The company anticipates continuing to incur operating losses at least into its second quarter of 2026 as it executes its development plans. Management believes that projected revenue, combined with bridge loans and equity/debt financing, will provide sufficient funding for the next twelve months, but acknowledges that no assurances can be given regarding the availability or terms of such financing. If adequate funds are not secured, operations may need to be curtailed or ceased.

Management Comments

• Management believes that the revenue to be generated from operations together with bridge loans and equity and debt financing, will provide the necessary funding for the Company to continue as a going concern for the next twelve months.
• Management cannot guarantee any other potential debt of equity financing will be available, or if available, on favorable terms.
• As such, these matters raise substantial doubt about the Companys ability to continue as a going concern for a period of twelve months from the issuance date of this report.
• If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations or cease operations completely.

Industry Context

StockSavvy.ai notes that PureBase Corporation's focus on specialized sun protectants derived from kaolin clay in the agriculture sector, while abandoning the construction materials (SCM) market, reflects a strategic shift towards potentially higher-margin opportunities. The company's reliance on related-party financing, particularly from CoreTer LLC, highlights a common challenge for early-stage resource companies seeking capital.

Comparison to Industry Standards

• The company's lack of revenue and continued operating losses are not uncommon for companies in the exploration and development stage of the mining and minerals sector, but its ability to secure ongoing financing remains a critical factor.
• The significant accumulated deficit and working capital deficiency are concerning when compared to established players in the industrial minerals market, which typically have more stable revenue streams and stronger balance sheets.
• The reliance on convertible debt and lines of credit from related parties, such as CoreTer LLC and USMC, is a financing strategy often employed by smaller companies when traditional debt or equity markets are less accessible, but it carries inherent risks related to potential conflicts of interest and unfavorable terms.

Corporate Governance

Legal Proceedings

• The company currently has no legal matters beyond those in the normal course of business.

Related Party Transactions

• A $1,000,000 convertible line of credit was secured from CoreTer LLC, owned by CEO A. Scott Dockter, with $771,302 drawn as of the filing date.
• A promissory note was issued to CoreTer LLC for up to $1,000,000, with an 8% interest rate and conversion rights.
• USMC (a significant shareholder) provided advances for convertible notes and lines of credit in the prior year, with some amounts converted to equity.
• A $31,000 promissory note was issued to a related party on November 1, 2024, which is currently in default.
• A $15,000 promissory note was issued to a related party on February 2, 2026.
• Director compensation for Jeffrey Guzy and Dr. Kimberly Kurtis accrues as debt and is convertible into common stock.
• Brady Barto, a former director, had accrued board compensation converted into common stock.
• The company leases office space from its CEO for $1,500 per month.

Stakeholder Impact

• Shareholders: Continued losses and going concern issues may negatively impact share value. Potential dilution from convertible notes and future equity issuances.
• Creditors: The company's financial condition and going concern status raise concerns about its ability to meet debt obligations.
• Employees: Management's plan to potentially curtail operations if funding is not secured poses a risk to employment.
• Suppliers: The company's financial instability could impact its ability to pay suppliers on time.

Next Steps

• Continue to develop products in the agricultural sector.
• Explore bridge loans and issuances of equity securities or equity-linked securities to third parties to meet short-term cash requirements.
• Management plans to continue promotion of products to existing and potential customers to generate sufficient revenues.
• The company plans to extend the office lease upon expiration of the initial term in April 2026.

Key Dates

Recommendation

The company is in a precarious financial position with significant accumulated losses and substantial doubt about its ability to continue as a going concern. While the new line of credit provides some short-term relief, the lack of revenue and ongoing operational challenges suggest a high level of risk. However, the potential for future development in the agriculture sector and the possibility of a turnaround with successful financing warrant a hold recommendation rather than a sell, pending further developments.

Keywords

PureBase Corporation, 10-Q Filing, Quarterly Report, Financial Statements, Net Loss, Going Concern, Line of Credit, CoreTer LLC, Agriculture, Mining, Nevada, SEC Filing