PUBC 8-K
Purebase Corp (PUBC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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| 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).
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Item 1.01 Entry into a Material Definitive Agreement.
Purebase Corporation (the “Company”) entered into a settlement agreement (the “Settlement Agreement”) with Agregen International Corporation, Robert Hurtado, James Todd Gauer (“Gauer”) and John Gingerich, effective June 3, 2022 which was entered into the Second Judicial District Court of the State of Nevada and became effective on August 9, 2022. Pursuant to the Settlement Agreement, among other things, Gauer, agreed to surrender to the Company an aggregate of 8,669,400 shares of common stock of the Company owned by Bay Street Capital Corp. and was granted an immediately exercisable five-year option to purchase 8,669,400 shares of common stock at an exercise price of $2.50 per share.
The foregoing description of the Settlement Agreement is qualified in its entirety by reference to the full text of such Settlement Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.
The issuance of the option and the common stock issuable upon the conversion of the option will be exempt from registration under Section 4(a)(2) under of the Securities Act of 1933, as amended, as transactions by an issuer not involving any public offering.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 10.1 | Settlement Agreement, dated June 2, 2022, among the Company, Agregen International Corporation, Robert Hurtado, James Todd Gauer and John Gingerich. | |
| 10.2 | Option Agreement, dated June 3, 2022. | |
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |
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 30, 2022 | By: | /s/ A. Scott Dockter |
| A. Scott Dockter | ||
| Chief Executive Officer | ||
Exhibit 10.1
SETTLEMENT AGREEMENT
This Settlement Agreement (the “Agreement”) effective as of June 3, 2022 is made and entered into by and between PUREBASE CORPORATION, a Nevada corporation (“Purebase”); AGREGEN INTERNATIONAL CORPORATION, a Nevada corporation (“Agregen”); ROBERT HURTADO, an individual (“Hurtado”); JAMES TODD GAUER, an individual (“Gauer”); and JOHN GINGERICH, an individual (“Gingerich”); (all parties individually a “Settling Party” and collectively the “Settling Parties”).
RECITALS:
| A. | There is one lawsuit currently pending between the Settling Parties: Purebase Corporation v. Agregen International Corporation et al, Case No. CV19-00097 in the Second Judicial District Court of the State of Nevada in and for the County of Washoe (the “Lawsuit”). | |
| B. | The Lawsuit arises out of a dispute between the Settling Parties related to the business and operations of Purebase Corporation as generally described in the First Amended Complaint filed in the Lawsuit (the “Dispute”). | |
| C. | The Settling Parties desire to resolve all issues and disagreements by and between them related to the Dispute and the Lawsuit. |
TERMS OF SETTLEMENT:
In consideration of the mutual covenants and promises contained in this Agreement and to avoid the expense of litigation, the Settling Parties agree as follows:
| 1. | The forgoing recitals are true and incorporated herein, as though set forth in full. | |
| 2. | Consideration: the consideration given under this Agreement shall be the following: |
| a. | Gauer owns 17,338,800 shares in Purebase Corporation through two entities: |
| i. | Bayshore Capital Management Corp., which owns 168,000 shares; and | |
| ii. | Bay St. Capital Corp., which owned 21,170,800 shares but recently sold 4,000,000 shares to bring its current holdings to 17,170,800 shares. |
| 1 |
Gauer will immediately surrender half of the shares owned by those two entities, totaling 8,669,400 (“Surrendered Shares”) to Purebase Corporation upon execution of this Agreement;
| b. | Gauer shall have the option to repurchase the Surrendered Shares for Two Dollars and Fifty Cents United States Dollars (US$2.50) per share on or before June 3, 2027; | |
| c. | Upon Gauer’s surrender of the Surrendered Shares, the Lawsuit shall be dismissed with prejudice as to all parties, all parties to bear their own attorneys’ fees and costs; and | |
| d. | Each Settling Party to this Agreement shall bear its own fees and costs, including attorneys’ fees, resulting from or related to the negotiation and execution of this Agreement. Each Settling Party waives and releases any claim for fees and expenses, including but not limited to attorneys’ fees, with respect to the negotiation and execution of this Agreement. |
| 3. | Agreement Not Admission of Liability. This Agreement is a resolution of disputed claims and defenses and is intended by the Settling Parties to avoid the expenses and risks of litigation. By executing this Agreement, no Settling Party, nor any of their affiliates, employees or representatives admits to any wrongdoing, liability or responsibility. |
| 4. | Mutual Releases. |
| a. | Purebase and its officers, directors, employees, control persons, agents, successors, and assigns agree to completely and forever release and discharge Agregen, Hurtado, Gauer, Gingerich, and their officers, directors, employees, control persons, agents, successors, and assigns of and from all known and unknown past, present, and future actions, causes of action, agreements, controversies, claims, damages, demands, debts, liabilities, obligations, expenses, compensation, suits, and variances whatsoever in law or at equity, based on a tort, contract, or other theory of recovery, and whether for compensatory or punitive damages, which Purebase ever had or now has against those persons and entities including those in any way connected with, arising out of, concerning, or related to the Lawsuit, the Dispute, and/or the negotiation and execution of this Agreement. This release specifically excludes any claims that may arise out of this Agreement after the date of full execution. |
| 2 |
| b. | Agregen, Hurtado, Gauer, Gingerich, and their officers, directors, employees, control persons, agents, successors, and assigns to completely and forever release and discharge Purebase and its officers, directors, employees, control persons, agents, successors, and assigns of and from all known and unknown past, present, and future actions, causes of action, agreements, controversies, claims, damages, demands, debts, liabilities, obligations, expenses, compensation, suits, and variances whatsoever in law or at equity, based on a tort, contract, or other theory of recovery, and whether for compensatory or punitive damages, which Agregen, Hurtado, Gauer, and/or Gingerich ever had or now have against those persons and entities including those in any way connected with, arising out of, concerning, or related to the Lawsuit, the Dispute, and/or the negotiation and execution of this Agreement. This release specifically excludes any claims that may arise out of this Agreement after the date of full execution. |
| 5. | Attorneys’ Fees. If any action or proceeding is commenced to enforce the terms of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs incurred therein from the non-prevailing party. |
| 6. | General Provisions. |
| a. | Notice. All notices concerning this Agreement shall be mailed and emailed to the Settling Parties at the following addresses: |
| To Purebase: | Courtney G. Sweet, Esq. | ||
| Gunderson Law Firm | |||
| 3895 Warren Way | |||
| Reno, Nevada 89509 | |||
| [email protected] | |||
| To Agregen: | Agregen International Corporation | ||
| c/o Robert Hurtado | |||
| 1245 E. Echo Lane | |||
| Phoenix, Arizona 85020 | |||
| To Hurtado: | Robert Hurtado | ||
| 1245 E. Echo Lane | |||
| Phoenix, Arizona 85020 | |||
| To Gauer: | Todd Gauer | ||
| 401 Bat Street, Suite 2410 | |||
| Toronto, ON M5H 2Y4 | |||
| Canada |
| 3 |
| To Gingerich: | John Gingerich | |||
| 306-59 Perry St. | ||||
| Woodstock, ON N4S 3C4 | ||||
| Canada | ||||
| With copy to: | ||||
| Ken Creighton | ||||
| Guild, Gallagher & Fuller | ||||
| 100 W. Liberty Street, Suite 800 | ||||
| Reno, NV 89501 | ||||
—Any Settling Party may change their address for notices by a notice in writing mailed and emailed to the addresses shown above.
| b. | Integration and Amendments. This Agreement, and the documents to be concurrently executed herewith, contain the entire Agreement of the Settling Parties relating to the subject matter of this Agreement and may be modified or amended only by a written instrument executed by all of the Settling Parties. This Agreement shall supersede all other written documents executed by the Settling Parties relating to the subject matter of this Agreement. |
| c. | Severability. If any portion of this Agreement shall for any reason be unenforceable in any respect, such unenforceability shall not affect any other provision of this Agreement, unless enforcement of the remainder would constitute a material failure of consideration. |
| d. | Authority and No Prior Assignment. Each person executing this Agreement represents and warrants to each other Settling Party that (i) he/she has the authority to execute this Agreement and (ii) that he/she has not voluntarily or involuntarily assigned or otherwise hypothecated his/her interest in the claims or demands hereby compromised and released. |
| e. | No Construction Against Drafter. Each Settling Party has had the opportunity to review this Agreement independently with their respective attorney and has participated in the drafting hereof. Any ambiguity shall not be construed against any one Settling Party merely because that Settling Party was allegedly the drafter thereof. |
| f. | Parties Represented by Counsel: The Settling Parties acknowledge and agree that they have entered into this Agreement voluntarily, without duress or coercion, and have done so with the full advice of their respective legal counsel. |
| 4 |
| g. | Course of Dealing. No course of dealing and no delay on the part of the Settling Parties in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof or otherwise prejudice the Settling Parties’ rights, powers, and remedies conferred under this Agreement. No right, power, or remedy conferred by this Agreement shall be exclusive of any other right, power, or remedy now or hereafter available at law, in equity, by statute, or otherwise. |
| h. | Counterparts. This Agreement may be executed in any number of counterparts, and all such counterparts executed by all of the Settling Parties hereto, each as an original, shall constitute one and the same instrument. The parties may each sign by “DocuSign” and a copy, scan, or fax thereof shall be deemed an original. Facsimile, “DocuSign,” or electronic mail signatures shall be sufficient to make this Agreement binding, with original signatures to be delivered promptly after the date of full execution. |
| i. | Headings. The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. |
| PUREBASE CORPORATION | AGREGEN INTERNATIONAL CORPORATION | |||
| /s/ A. Scott Dockter | /s/ James Gauer | |||
| By: | A. Scott Dockter | By: | James Todd Gauer | |
| Its: | Director | Its: | President | |
| /s/ Robert Hurtado | ||||
| By: | Robert Hurtado, individually | |||
| /s/ James Gauer | ||||
| By: | James Todd Gauer, individually | |||
| /s/ John Gingerich | ||||
| By: | John Gingerich, individually | |||
Agreed to as to Paragraph 2(a) of this Agreement:
| BAYSHORE CAPITAL MANAGEMENT GROUP | BAY ST. CAPITAL CORP | |||
| /s/ James Gauer | /s/ James Gauer | |||
| By: | James Todd Gauer | By: | James Todd Gauer | |
| Its: | President | Its: | President | |
| 5 |
Exhibit 10.2
STOCK OPTION AGREEMENT
PUREBASE CORPORATION
THIS STOCK OPTION AGREEMENT (this “Agreement”) is entered into as of the 3rd day of June, 2022 (the “Date of Grant”)
BETWEEN:
PUREBASE CORPORATION, a company incorporated pursuant to the laws of the State of Nevada (the “Company”),
AND:
JAMES TODD GAUER, of Toronto, Ontario, Canada (the “Optionee”).
WHEREAS:
A. The Board of Directors of the Company (the “Board”) has authorized the grant to Optionee of options (the “Options”) to purchase a total of 8,669,400 shares (the “Option Shares”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”), which Options are intended to be Nonstatutory Stock Options.
NOW THEREFORE, the Company agrees to offer to the Optionee the Options to purchase, upon the terms and conditions set forth herein, the 8,669,400 Option Shares.
1. Exercise Price. The exercise price of the options shall be US$2.50 per share.
2. Vesting Schedule. The Options shall vest as to 100% of the Option Shares immediately upon grant.
3. Options not Transferable. The Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner (whether by operation of law or otherwise) other than by will or by the laws of descent or distribution or, pursuant to a qualified domestic relations order, and shall not be subject to execution, attachment or similar process; provided, however, that such Options are transferable without payment of consideration to immediate family members of the Optionee or to trusts or partnerships established exclusively for the benefit of the Optionee and Optionee’s immediate family members. Upon any attempt to transfer, pledge, hypothecate or otherwise dispose of any Options, or upon the sale, levy or attachment or similar process upon the rights and privileges the Options, such Options shall thereupon terminate and become null and void.
4. Investment Intent. By accepting the Options, the Optionee represents and agrees that none of the shares of Option Shares purchased upon exercise of the Options will be distributed in violation of applicable federal and state laws and regulations. In addition, the Company may require, as a condition of exercising the Options, that the Optionee execute an undertaking, in such a form as the Company shall reasonably specify, that the Option Shares are being purchased only for investment and without any then-present intention to sell or distribute such shares.
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5. Termination of Options. The Options shall terminate, to the extent not previously exercised, on June 3, 2027.
6. Common Stock; Adjustments. In the case of any change in the Company’s corporate capitalization, such as a stock split or stock dividend, or a corporate transaction such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, or any reorganization or any partial or complete liquidation of the Company, the Company, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under this Agreement, will proportionately adjust the number, class, and price of the Option Shares covered by this Agreement.
7. Exercise of Option. Options shall be exercisable, in full or in part, at any time after vesting, until termination. Each exercise of the Options shall be by means of delivery of a notice of election to exercise (which may be in the form attached hereto as Exhibit A) to the Chief Executive Officer of the Company at its principal executive office, specifying the number of Option Shares to be purchased and accompanied by payment in cash by certified check or cashier’s check in the amount of the full exercise price for the Option Shares to be purchased. In addition to payment in cash by certified check or cashier’s check, the Optionee, or transferee of the Options, may pay for all or any portion of the aggregate exercise price by complying with any other payment mechanism approved by the Company at the time of exercise.
It is a condition precedent to the issuance of the Option Shares that the Optionee execute and/or deliver to the Company all documents and withholding taxes that may be required.
8. Resale restrictions may apply. Any resale of the Option Shares received upon exercising any Options will be subject to resale restrictions contained in the securities legislation applicable to the Optionee. The Optionee acknowledges and agrees that the Optionee is solely responsible (and the Company is not in any way responsible) for compliance with applicable resale restrictions.
9. Professional Advice. The acceptance of the Options and the sale of Option Shares issued pursuant to the exercise of Options may have consequences under federal and state tax and securities laws which may vary depending upon the individual circumstances of the Optionee. Accordingly, the Optionee acknowledges that he or she has been advised to consult his or her personal legal and tax advisor in connection with this Agreement and his or her dealings with respect to Options. Without limiting other matters to be considered with the assistance of the Optionee’s professional advisors, the Optionee should consider: (a) whether upon the exercise of Options, the Optionee will file an election with the Internal Revenue Service pursuant to Section 83(b) of the Code and the implications of alternative minimum tax pursuant to the Code; (b) the merits and risks of an investment in the underlying shares of Common Stock; and (c) any resale restrictions that might apply under applicable securities laws.
10. No Employment Commitment. The grant of the Options shall in no way constitute any form of agreement or understanding binding on the Company, express or implied, that the Company will employ or contract with the Optionee, for any length of time.
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11. Entire Agreement. This Agreement is the only agreement between the Optionee and the Company with respect to the Options and this Agreement supersedes all prior and contemporaneous oral and written statements and representations and contain the entire agreement between the parties with respect to the Options.
12. Notices. Any notice required or permitted to be made or given hereunder shall be mailed or delivered personally to the addresses set forth below, or as changed from time to time by written notice to the other:
| The Company: | Purebase Corporation | |
| 8631 State Highway 124 | ||
| Ione, CA 95640 | ||
| Attention: A. Scott Dockter | ||
| Email: [email protected] | ||
| With a copy to: | The Crone Law Group | |
| 500 Fifth Ave, Suite 938 | ||
| New York NY 10110 | ||
| Attention: Eric C. Mendelson | ||
| Email: [email protected] | ||
| The Optionee: | James Todd Gauer | |
| [Address] | ||
| [Email] |
| PUREBASE CORPORATION | ||
| Per: | /s/ A. Scott Dockter | |
| A. Scott Dockter | ||
| Chief Executive Officer | ||
| James Todd Gauer | ||
| (Name of Optionee – Please type or print) | ||
| /s/ James Gauer | ||
| (Signature) | ||
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EXHIBIT A
| To: | Purebase Corporation | |
| 8631 State Highway 124 | ||
| Ione, CA 95640 | ||
| Attention: A. Scott Dockter |
Notice of Election to Exercise
This Notice of Election to Exercise shall constitute proper notice pursuant to Section 7 of that certain Stock Option Agreement (the “Agreement”) dated as of the _____ day of June, 2022, between Purebase Corporation (the “Company”) and the undersigned (the “Optionee”).
The undersigned hereby elects to exercise Optionee’s option to purchase shares of the common stock of the Company at a price of US$_____ per share, for aggregate consideration of US$, on the terms and conditions set forth in the Agreement. Such aggregate consideration, in the form specified in Section 7 of the Agreement, accompanies this notice.
The Optionee hereby directs the Company to issue, register and deliver the certificates representing the shares as follows:
| Optionee Information: | Delivery Instructions: | |
| Name to appear on certificates | Name | |
| Address | Address | |
| Telephone Number |
DATED at ____________________________________, the day of ________________________, 20___.
| (Name of Optionee – Please type or print) | ||
| (Signature and, if applicable, Office) | ||
| (Address of Optionee) | ||
| (City, State, and Zip Code of Optionee) |