This Quarterly Report on Form 10-Q includes forward-looking statements that reflect management's current views with respect to future events and financial performance. Forward-looking statements are statements in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of our management team, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended November 30, 2022, as filed with the Securities and Exchange Commission (the "SEC") on February 28, 2023, any of which may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation:





? absence of contracts with customers or suppliers;
? our ability to maintain and develop relationships with customers and suppliers;
? the impact of competitive products and pricing;
? supply constraints or difficulties;
? the retention and availability of key personnel;
? general economic and business conditions;
? substantial doubt about our ability to continue as a going concern;
? our ability to successfully implement our business plan;
? our need to raise additional funds in the future;
? our ability to successfully recruit and retain qualified personnel in order to
  continue our operations;
? our ability to successfully acquire, develop or commercialize new products;
? the commercial success of our products;
? the impact of any industry regulation;
? our ability to develop existing mining projects or establish proven or probable

reserves;

? our dependence on one vendor for our minerals for our products; ? the impact of potentially losing the rights to properties; ? the impact of the increase in the price of natural resources; and ? the continued impact of the COVID-19 pandemic.

We undertake no obligation to update or revise forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report, except as required by law.

As used in this Quarterly Report and unless otherwise indicated, the terms "Company," "we," "us," and "our," refer to PureBase Corporation and its wholly-owned subsidiaries, PureBase Agricultural, Inc., a Nevada corporation ("PureBase AG") and U.S. Agricultural Minerals, LLC, a Nevada limited liability company ("Purebase SCM").





Business Overview

We are an industrial mineral and natural resource company that provides solutions to the agriculture and construction materials markets in the United States, through our two subsidiaries, Purebase AG, and Purebase SCM, respectively. The Company has not yet commenced mining operations and relies on US Mine LLC for its raw materials.





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Agricultural Sector

We develop specialized fertilizers, sun protectants, soil amendments and bio-stimulants for organic and non-organic sustainable agriculture. We have developed and will seek to develop additional products derived from mineralized materials of leonardite, kaolin clay, laterite, and other natural minerals. These mineral and soil amendments are used to protect crops, plants and fruits from the sun and winter damage, to provide nutrients to plants, and to improve dormancy and soil ecology to help farmers increase the yields of their harvests. We are building a brand family under the parent trade name "Purebase," consisting of its Purebase Shade Advantage WP product, a kaolin-clay based sun protectant for crops and Humic Advantage a humic acid product derived from leonardite.





Construction Sector

We are developing and testing a kaolin-based product that it believes will help create a lower CO2-emitting concrete through the use of high-quality supplementary cementitious materials ("SCMs"). We are developing SCMs for the construction material markets, particularly the cement markets that we believe can potentially replace up to 40% of cement, the most polluting part of concrete. As government agencies continue to enact stricter requirements for less-polluting forms of concrete, we believe there are significant opportunities for high-quality SCM products in the construction-materials sector.

We utilize the services of USMC, for the development and contract mining of industrial mineral and metal projects, exploration drilling, preparation of feasibility studies, mine modeling, on-site construction, production, site reclamation and for product fulfillment. Exploration services include securing necessary permits, environmental compliance, and reclamation plans. In addition, a substantial portion of the minerals used by the Company are obtained from properties owned or controlled by USMC.

A. Scott Dockter, the Company's Chief Executive Officer and a director, and John Bremer, a director, are also officers, directors and owners of USMC.





Recent Developments

On February 28, 2023, in connection with the April 7, 2022, securities purchase agreement with USMC, a related party, the Company issued a convertible promissory note in the amount of $308,320 to USMC, with a maturity date of February 28, 2025 ("Tranche #9"). The note bears interest at 5% per annum which is payable on maturity. Amounts due under the note may be converted into shares of the Company's common stock at any time at the option of the noteholder, at a conversion price of $0.39 per share.

On March 20, 2023, the Company entered into a securities purchase agreement with USMC, effective March 7, 2023, pursuant to which USMC may purchase up to $1,000,000 of the Company's 8% unsecured convertible two-year promissory notes in one or more closings. The notes are convertible into the Company's common stock at a conversion price of $0.10 per share. As of the date hereof, USMC has purchased an aggregate principal amount of notes of $160,000 under the securities purchase agreement.





Results of Operations



Comparison of the Three Months Ended February 28, 2023 to the Three Months Ended
February 28, 2022



                                      February 28,      February 28,
                                          2023              2022            Variance
Revenue, net                          $      52,256     $           -     $     52,256

Operating Expenses:
Selling, general and administrative       5,886,870        11,200,401       (5,313,531 )
Product fulfillment                          22,463             3,252           19,211
Loss from operations                     (5,857,077 )     (11,203,653 )     (5,346,576 )
Other income (expense)                       35,401             2,007           33,394
Interest expense                             (9,123 )         (20,898 )        (11,775 )
Net Loss                              $  (5,830,799 )   $ (11,222,544 )   $ (5,391,745 )




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Revenues

Revenue increased by $52,256 for the three months ended February 28, 2023, as compared to the three months ended February 28, 2022. This increase was primarily due to an increase in purchases by the Company's customers during the three months ended February 28, 2023.





Operating Expenses

Total operating expenses decreased by $5,346,576, or 48%, for the three months ended February 28, 2023, as compared to the three months ended February 28, 2022. Selling, general and administrative expenses decreased by $5,313,531, or 47%, for the three months ended February 28, 2023, as compared to the three months ended February 28, 2022. The decrease in selling, general and administrative expenses was primarily due to a decrease in stock-based compensation of $5,490,826 for the three months ended February 28, 2023, as compared to the three months ended February 28, 2022.

The Company continued to expense the option to purchase an aggregate of 116,000,000 shares of common stock granted to USMC on October 6, 2021 through March 2023. Thereafter, the Company no longer expenses such option which is expected to result in a decrease in stock-based operating expense.

Product fulfillment expenses increased by $19,211, or 591%, for the three months ended February 28, 2023, as compared to the three months ended February 28, 2022, primarily due to the increase in revenue during the three months ended February 28, 2023.





Other Income (Expenses)

Total other income (expense) increased by $45,169, or 239%, for the three months ended February 28, 2023, as compared to the three months ended February 28, 2022, primarily due to a gain on forgiveness of debt and accrued interest in the amount of $35,401 and a decrease in interest expense of $11,775 for the three months ended February 28, 2023 compared to the three months ended February 28, 2022.

Liquidity and Capital Resources

As of February 28, 2023, we had cash on hand of $21,423 and a working capital deficiency of $657,834, as compared to cash on hand of $19,055 and a working capital deficiency of $620,290 as of November 30, 2022. The increase in working capital deficiency is primarily a result of an increase in accounts payable and accrued expenses, which are partially offset by an increase in accounts receivable of $53,880 and a decrease in notes payable of $25,000.

The Company's operating activities consume the majority of its cash resources. The Company anticipates that it will continue to incur operating losses as it executes its development plans for 2023, as well as other potential strategic and business development initiatives. In addition, the Company has had and expects to have negative cash flows from operations, at least into the near future. The Company has previously funded, and plans to continue funding, these losses with cash advances from USMC and the sale of equity, and convertible notes. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Although no assurances can be given as to the Company's ability to deliver on its revenue plans or that unforeseen expenses may arise, management currently believes that the revenue to be generated from operations together with equity and debt financing, including funding from USMC in connection with the March 23, 2022 securities purchase agreement and March 7, 2023 securities purchase agreement, will provide the necessary funding for the Company to continue as a going concern for the next twelve months.

On February 28, 2023, in connection with the April 7, 2022 securities purchase agreement with USMC, the Company issued a convertible promissory note in the amount of $308,320 to USMC, with a maturity date of February 28, 2025. The note bears interest at 5% per annum. Amounts due under the note may be converted into shares of the Company's common stock at any time at the option of the noteholder, at a conversion price of $0.39 per share.





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On March 20, 2023, the Company entered into a securities purchase agreement with USMC, effective March 7, 2023, pursuant to which USMC may purchase up to $1,000,000 of the Company's 8% unsecured convertible two-year promissory notes in one or more closings. The notes are convertible into the Company's common stock at a conversion price of $0.10 per share.





Going Concern

The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q have been prepared assuming that the Company will continue as a going concern. The Company has accumulated losses from inception through February 28, 2023, of $59,474,448, as well as negative cash flows from operating activities and a working capital deficiency. During the three months ended February 28, 2023, the Company received net cash proceeds of $300,000 from USMC. Additionally, USMC paid $8,320 to vendors on behalf of the Company during the three months ended February 28, 2023. The Company does not have sufficient cash to meet its obligations in the twelve months following the date of this Quarterly Report if it does not generate additional revenue and obtain equity and debt financing from USMC or other third parties. There currently are no other arrangements or agreements for financing, and there can be no assurances that any other potential debt or equity financing will be available, or if available, on favorable terms. As such, these matters raise substantial doubt about the Company's ability to continue as a going concern for a period of twelve months from the issue 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.





The condensed consolidated financial statements do not include any adjustments
that may be necessary should the Company be unable to continue as a going
concern.



Working Capital Deficiency



                              February 28,       November 30,
                                  2023               2022
Current assets               $       78,260     $       23,786
Current liabilities                 736,094            644,076
Working capital deficiency   $     (657,834 )   $     (620,290 )

The increase in current assets is primarily due to the increase of accounts receivable of $53,880. The increase in current liabilities is primarily a result of the increase in accounts payable and accrued expenses of $120,528.





Cash Flows



                                               Three Months Ended
                                                  February 28,
                                               2023           2022

Net cash used in operating activities $ (287,632 ) $ (239,544 ) Net cash provided by investing activities

            -              -
Net cash provided by financing activities      290,000        118,000
Increase (decrease) in cash                 $    2,368     $ (121,544 )




Operating Activities

Net cash used in operating activities was $287,632 for the three months ended February 28, 2023, primarily due to a net loss of $5,830,799, which primarily consisted of a non-cash expense of $5,485,013 related to stock-based compensation cost and an increase of $53,880 in accounts receivable, which was partially offset by an increase of $139,249 in accounts payable.

Net cash used in operating activities was $239,544 for the three months ended February 28, 2022, primarily due to a net loss of $11,222,544, which primarily consisted of a non-cash expense of $10,949,738 related to stock-based compensation cost, wages of $128,217 and professional fees of $88,320, which was partially offset by an increase of $36,455 in accounts payable.





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Investing Activities

There were no investing activities during the three months ended February 28, 2023 and February 28, 2022.





Financing Activities

For the three months ended February 28, 2023, net cash provided by financing activities was $290,000, with $300,000 being an advance to the Company by USMC and subsequently exchanged into a convertible note.

For the three months ended February 28, 2022, net cash provided by financing activities was $118,000, which was advanced to the Company by USMC and recorded as part of due to affiliated entities on the balance sheet.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies and Procedures

Our significant accounting policies are more fully described in Note 1 to our condensed consolidated financial statements included in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended November 30, 2022, as filed with the SEC on February 28, 2023.

Recently Adopted Accounting Pronouncements

Our recently adopted accounting pronouncements are more fully described in Note 3 to our unaudited condensed consolidated financial statements included in this Quarterly Report.

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