Rise Gold Corp. 10-Q

ITEM 1. FINANCIAL STATEMENTS. The condensed consolidated interim financial statements of Rise Gold Corp. ("we", "us", "our", the "Company", or the "registrant"), a Nevada corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission. Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, the condensed consolidated interim financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company in the Company's Form 10-K for the fiscal year ended July 31, 2021. 1 RISE GOLD CORP. (AN EXPLORATION STAGE COMPANY) CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PERIOD ENDED APRIL 30, 2022 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS: Page Consolidated Interim Balance Sheet 1 Consolidated Interim Statement of Loss and Comprehensive Loss 2 Consolidated Interim Statement of Cash Flows 3 Consolidated Interim Statement of Stockholders' Equity 4 Notes to Unaudited Consolidated Interim Financial Statements 5 2 RISE GOLD CORP. (An Exploration Stage Company) CONDENSED CONSOLIDATED INTERIM BALANCE SHEET (Expressed in United States Dollars) (Unaudited) AS AT April 30, 2022 July 31, 2021 ASSETS Current Cash $ 1,382,403 $ 773,279 Receivables 60,751 44,113 Prepaid expenses (Note 3) 290,337 339,034 Total current assets 1,733,491 1,156,426 Non-current Mineral property interests (Note 4) 4,149,053 4,149,053 Equipment (Note 5) 557,453 575,781 Total assets $ 6,439,997 $ 5,881,260 LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable and accrued liabilities $ 155,970 $ 165,892 Payable to related parties (Note 7) 30,500 34,010 Total current liabilities 186,470 199,902 Non-current Loan payable (Note 8) 1,257,482 976,587 Derivative liability (Note 9) 189,442 441,766 Total liabilities 1,633,394 1,618,255 Stockholders' equity Capital stock, $ 0.001 par value, 400,000,000 shares authorized (July 31, 2021 - 400,000,000 ) ; 32,787,798 (July 31, 2021 - 26,770,298 shares issued and outstanding (Note 10) 32,788 26,770 Additional paid-in capital (Note 10) 26,678,566 23,884,796 Cumulative translation adjustment ( 104,084 ) ( 104,084 ) Deficit ( 21,800,667 ) ( 19,544,477 ) Total stockholders' equity 4,806,603 4,263,005 Total liabilities and stockholders' equity $ 6,439,997 $ 5,881,260 Nature and continuance of operations (Note 1) Contingency (Note 6) The accompanying notes are an integral part of these condensed consolidated interim financial statements. 1 RISE GOLD CORP. (An Exploration Stage Company) CONDENSED CONSOLIDATED INTERIM STATEMENT OF LOSS AND COMPREHENSIVE LOSS (Expressed in United States Dollars) (Unaudited) Three months ended April 30, 2022 Three months ended April 30, 2021 Nine months ended April 30, 2022 Nine months ended April 30, 2021 EXPENSES Accretion expense (Note 8) $ 28,017 $ 28,018 $ 85,943 $ 85,944 Consulting 128,605 131,488 399,351 323,788 Directors' fees 20,000 20,000 60,000 60,000 Filing and regulatory 10,629 7,166 26,785 34,859 Foreign exchange (gain) loss 7,331 ( 15,896 ) 39,669 ( 25,782 ) General and administrative 48,198 46,698 262,822 290,577 Geological, mineral, and prospect costs (Note 4) 79,132 215,787 337,691 596,121 Interest expense (Note 8) 71,704 29,524 194,952 88,226 Professional fees 221,727 83,472 458,551 384,414 Promotion and shareholder communication 91,190 22,416 149,597 91,276 Share-based compensation (Note 10) 406,790 - 406,790 560,792 Salaries 33,750 30,465 101,250 103,422 $ ( 1,147,073 ) $ ( 599,138 ) $ ( 2,523,401 ) $ ( 2,593,637 ) Gain on fair value adjustment on derivative liability (Note 9) 187,652 277,805 252,324 1,560,945 Other income ( 20 ) 473 14,887 4,280 Net loss and comprehensive loss for the period $ ( 959,441 ) $ ( 320,860 ) $ ( 2,256,190 ) $ ( 1,028,412 ) Basic and diluted loss per common share $ ( 0.03 ) $ ( 0.01 ) $ ( 0.08 ) $ ( 0.04 ) Weighted average number of common shares outstanding (basic and diluted) 32,787,798 26,770,298 28,798,174 26,578,269 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 2 RISE GOLD CORP. (An Exploration Stage Company) CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS (Expressed in United States Dollars) (Unaudited) FOR THE NINE MONTHS ENDED APRIL 30, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period $ ( 2,256,190 ) $ ( 1,028,412 ) Items not involving cash Depreciation 18,328 19,010 Interest expense 194,952 88,226 Share-based payment 406,790 560,792 Accretion expense 85,943 85,944 Loss on fair value adjustment on derivative liability ( 252,324 ) ( 1,560,945 ) Non-cash working capital item changes: Receivables ( 16,638 ) ( 18,303 ) Prepaid expenses 48,697 76,484 Accounts payable and accrued liabilities ( 43,932 ) ( 255,407 ) Related party payables 30,500 ( 59,479 ) Net cash used in operating activities ( 1,783,874 ) ( 2,092,090 ) CASH FLOWS FROM FINANCING ACTIVITIES Private placement, net of issuance cost (Note 10) 2,392,998 248,198 Net cash provided by financing activities 2,392,998 248,198 Change in cash for the period 609,124 ( 1,843,892 ) Cash, beginning of period 773,279 3,378,826 Cash, end of period $ 1,382,403 $ 1,534,934 Supplemental disclosure with respect to cash flows (Note 11) The accompanying notes are an integral part of these condensed consolidated interim financial statements. 3 RISE GOLD CORP. (An Exploration Stage Company) CONDENSED CONSOLIDATED INTERIM STATEMENT OF STOCKHOLDERS' EQUITY (Expressed in United States Dollars) (Unaudited) Capital Stock Additional Paid-in Capital Cumulative Translation Adjustment Number Amount Deficit Total Balance as at July 31, 2020 26,436,965 $ 26,437 $ 23,076,139 $ ( 104,084 ) $ ( 17,940,599 ) $ 5,057,893 Shares issued for cash, net of issuance costs 333,333 333 247,865 - - 248,198 Share-based compensation - - 560,792 - - 560,792 Loss for the period - - - - ( 1,025,358 ) ( 1,025,358 ) Balance as at October 31, 2020 26,770,298 $ 26,770 $ 23,884,796 $ ( 104,084 ) $ ( 18,965,957 ) $ 4,841,525 Income for the period - - - - 367,806 367,806 Balance as at January 31, 2021 26,770,298 $ 26,770 $ 23,884,796 $ ( 104,084 ) $ ( 18,598,151 ) $ 5,209,331 Loss for the period - - - - ( 370,860 ) ( 370,860 ) Balance as at April 30, 2021 26,770,298 $ 26,770 $ 23,884,796 $ ( 104,084 ) $ ( 18,969,011 ) $ 4,838,471 Balance as at July 31, 2021 26,770,298 $ 26,770 $ 23,884,796 $ ( 104,084 ) $ ( 19,544,477 ) $ 4,263,005 Loss for the period - - - - ( 212,300 ) ( 212,300 ) Balance as at October 31, 2021 26,770,298 $ 26,770 $ 23,884,796 $ ( 104,084 ) $ ( 19,756,777 ) $ 4,050,705 Shares issued for cash, net of issuance cost 6,017,500 6,018 2,386,980 - - 2,392,998 Loss for the period - - - - ( 1,084,449 ) ( 1,084,449 ) Balance as at January 31, 2022 32,787,798 $ 32,788 $ 26,271,776 $ ( 104,084 ) $ ( 20,841,226 ) $ 5,359,254 Share-based compensation - - 406,790 - - 406,790 Loss for the period - - - - ( 959,441 ) ( 959,441 ) Balance as at April 30, 2022 32,787,798 $ 32,788 $ 26,678,566 $ ( 104,084 ) $ ( 21,800,667 ) $ 4,806,603 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 4 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 1. NATURE AND CONTINUANCE OF OPERATIONS Rise Gold Corp. (the "Company") was originally incorporated as Atlantic Resources Inc. in the State of Nevada on February 9, 2007 and is in the exploration stage. On April 11, 2012, the Company merged its wholly-owned subsidiary, Patriot Minefinders Inc., a Nevada corporation, in and to the Company to effect a name change to Patriot Minefinders Inc. On January 14, 2015, the Company completed a name change to Rise Resources Inc. in the same manner. On April 7, 2017, the Company changed its name to Rise Gold Corp. These mergers were carried out solely for the purpose of effecting these changes of names. On January 29, 2016, the Company completed an initial public offering in Canada and began trading on the Canadian Securities Exchange ("CSE") under trading symbol "RISE.CN" on February 1, 2016. On September 18, 2020, the Company increased its authorized capital from 40,000,000 shares to 400,000,000 shares. The Company is in the early stages of exploration and, as is common with any exploration company, it raises financing for its acquisition activities. The accompanying condensed consolidated interim financial statements have been prepared on the going concern basis, which presumes that the Company will continue operations for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of business. The Company has incurred a loss of $ 2,256,190 for the nine-month period ended April 30, 2022 and has accumulated a deficit of $ 21,800,667 . The ability of the Company to continue as a going concern is dependent on the Company's ability to maintain continued support from its shareholders and creditors and to raise additional capital and implement its business plan. There is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. However, the Company has been able to obtain such financings in the past and recently closed a financing for net proceeds of $ 2,392,998 on January 31, 2022. As such, management believes there are sufficient funds to fund operations for the next twelve months. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. As at April 30, 2022, the Company had working capital of $ 1,547,021 (July 31, 2021 - $ 956,524 ). Furthermore, the novel coronavirus outbreak ("COVID-19") was declared a pandemic by the World Health Organization in 2020. The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the Company's business are not known at this time. These impacts could include an impact on the Company's ability to obtain debt and equity financing to fund ongoing exploration activities as well as its ability to explore and conduct business. These condensed consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. 2. BASIS OF PREPARATION Generally Accepted Accounting Principles The accompanying unaudited condensed consolidated interim financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America ("US GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") for financial information with the instructions to Form 10-Q and Regulation S-K. Results are not necessarily indicative of results which may be achieved in the future. The unaudited condensed consolidated interim financial statements should be read in conjunction with the Company's Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with Management's Discussion and Analysis, for the year ended July 31, 2021. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such SEC rules and regulations. The operating results for the nine months ended April 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ended July 31, 2022. 5 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 2. BASIS OF PREPARATION (continued) Basis of Consolidation These condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiary, Rise Grass Valley Inc. All significant intercompany accounts and transactions have been eliminated on consolidation. Subsidiaries Subsidiaries are all entities over which the Company has exposure to variable returns from its involvement and has the ability to use power over the investee to affect its returns. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company until the date on which control ceases. The accounts of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Intercompany transactions, balances and unrealized gains or losses on transactions are eliminated upon consolidation. Use of Estimates The preparation of these financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant areas requiring the use of estimates include the carrying value and recoverability of mineral properties, fair value estimates for derivatives, assumptions supporting share-based compensation, fair value of share purchase warrants and the recognition of deferred tax assets based on the change in unrecognized deductible temporary tax differences. Actual results could differ from those estimates and would impact future results of operations and cash flows. 3. PREPAID EXPENSES April 30, 2022 July 31, 2021 Insurance $ 10,232 $ 74,862 Deposits 256,974 263,779 Other 23,131 393 $ 290,337 $ 339,034 6 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 4. MINERAL PROPERTY INTERESTS The Company's mineral properties balance consists of: Idaho-Maryland, California July 31, 2021 and April 30, 2022 $ 4,149,053 Title to mineral properties Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain mineral titles. Additionally, the potential for problems arising from the frequently ambiguous conveying history characteristic of many mineral properties also exist. The Company received a title opinion on the mineral rights of the Idaho-Maryland Mine property which concludes that ownership belongs to Rise Grass Valley Inc. As at April 30, 2022, the Company holds title to the Idaho-Maryland Gold Mine Property. As of April 30, 2022, based on management's review of the carrying value of mineral rights, management determined that there is no evidence that the cost of these acquired mineral rights will not be fully recovered and accordingly, the Company determined that no adjustment to the carrying value of mineral rights was required. As of the date of these consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and has incurred only acquisition and exploration costs. Idaho-Maryland Gold Mine Property, California On August 30, 2016, the Company entered into an option agreement with three parties to purchase a 100 % interest in and to the Idaho-Maryland Gold Mine property located near Grass Valley, California, United States; pursuant to the option agreement, in order to exercise the option, the Company was required to pay $ 2,000,000 by November 30, 2016. Upon execution of the option agreement, the Company paid the vendors a non-refundable cash deposit in the amount of $ 25,000 , which was credited against the purchase price of $ 2,000,000 upon exercise of the option. On November 30, 2016, the Company negotiated an extension of the closing date of the option agreement to December 26, 2016, in return for a cash payment of $ 25,000 , which was also credited against the purchase price of $ 2,000,000 upon exercise of the option. On December 28, 2016, the Company negotiated a further no-cost extension of the closing date of the option agreement to April 30, 2017. On January 25, 2017, the Company exercised the option by paying the net amount owing of $ 1,950,000 and acquired a 100 % interest in the Idaho-Maryland Gold Mine property. In connection with the option agreement, the Company agreed to pay a cash commission of $ 140,000 equal to 7 per cent of the purchase price of $ 2,000,000 ; the commission was settled on January 25, 2017 through the issuance of 92,000 units valued at C$ 2.00 per unit. Each unit consisted of one share of common stock and one transferable share purchase warrant exercisable into one share of common stock at a price of C$ 4.00 for a period of two years from the date of issuance. On January 24, 2019, these warrants expired unexercised. The Company also incurred additional transaction costs of $ 109,053 , which have been included in the carrying value of the Idaho-Maryland Gold Mine. 7 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 4. MINERAL PROPERTY INTERESTS (continued) Idaho-Maryland Gold Mine Property, California (continued) On January 6, 2017, the Company entered into an option agreement with Sierra Pacific Industries Inc. ("Sierra") to purchase a 100 % interest in and to certain surface rights totalling approximately 82 acres located near Grass Valley, California, United States, contiguous to the Idaho-Maryland Gold Mine property acquired by the Company on January 25, 2017. Pursuant to the option agreement, in order to exercise the option, the Company was required to pay $ 1,900,000 by March 31, 2017. Upon execution of the option agreement, the Company paid the vendors a non-refundable cash deposit in the amount of $ 100,000 , which was credited against the purchase price of $ 1,900,000 upon exercise of the option. On April 3, 2017, the Company negotiated an extension of the closing date of the option agreement to June 30, 2017, in return for a cash payment of $ 200,000 , at which time a payment of $ 1,600,000 was due in order to exercise the option. On June 7, 2017, the Company negotiated an extension of the closing date of the option agreement to September 30, 2017, in return for a cash payment of $ 300,000 , at which time a payment of $ 1,300,000 was due in order to exercise the option. On May 14, 2018, the Company completed the purchase of the surface rights totalling approximately 82 acres by making the final payment of $ 1,300,000 . As at April 30, 2022, the Company has incurred cumulative exploration expenditures of $ 7,507,353 on the Idaho-Maryland Gold Mine property as follows: Nine months ended April 30, 2022 Year ended July 31, 2021 Idaho-Maryland Gold Mine expenditures: Opening balance $ 7,169,662 $ 6,387,402 Consulting 205,976 520,690 Depreciation 18,328 25,579 Engineering 17,892 12,770 Exploration ( 18,579 ) 124,987 Logistics 3,052 4,366 Rent 66,446 91,208 Supplies 20,357 2,474 Sampling 24,219 187 Total expenditures for the period 337,691 782,261 Closing balance $ 7,507,353 $ 7,169,662 8 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 5. EQUIPMENT Cost Drilling equipment At July 31, 2020 $ 644,847 At July 31, 2021 $ 644,847 At April 30, 2022 $ 644,847 Accumulated depreciation At July 31, 2020 $ 43,487 Depreciation 25,579 At July 31, 2021 $ 69,066 Depreciation 18,328 At April 30, 2022 $ 87,394 Total carrying value, July 31, 2021 $ 575,781 Total carrying value, April 30, 2022 $ 557,453 6. CONTINGENCY During the year ended July 31, 2014, the Company entered into a binding letter of intent ("LOI") with Wundr Software Inc. ("Wundr"). Under the terms of the LOI, the Company would acquire 100% of the issued and outstanding common shares of Wundr. Due to unforeseen circumstances, the Company did not complete the transactions contemplated in the LOI, which the Company announced had expired on January 10, 2014. On September 17, 2014, the Company learned that it was the subject, along with a number of additional defendants, of a notice of civil claim (the "Claim") filed in the Supreme Court of British Columbia by Wundr, under which Wundr is seeking general damages from the Company as well as damages for conspiracy to cause economic harm. None of the allegations contained in the Claim have been proven in court. Management has determined that the probability of the Claim resulting in an unfavourable outcome and financial loss to the Company is unlikely. 7. RELATED PARTY TRANSACTIONS Key management personnel consist of the Chief Executive Officer, Chief Financial Officer, and the directors of the Company. The remuneration of the key management personnel is as follows: a) Salaries of $ 101,250 (2021 - $ 101,250 ) to the CEO of the Company. b) Director fees of $ 60,000 (2021 - $ 60,000 ) to directors of the Company. c) During the period ended April 30, 2022, the Company paid $ 105,535 (2021 - $ 104,740 ) in professional and consulting fees to a company controlled by a director of the Company. d) Share-based compensation of $ 406,790 (2021 - $ 560,792 ) for options granted during the period ended April 30, 2022. e) As at April 30, 2022 and July 31, 2021, $ 20,262 and $ 34,010 were owed to related parties, respectively. 9 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 8. LOAN PAYABLE On September 3, 2019, the Company completed a debt financing with Eridanus Capital LLC (the "Lender") for $ 1,000,000 (the "Loan"). The Loan has a term of 4 years and an annual interest rate of 10 % for the first two years increasing to 20 % in year 3 and to 25 % in year 4. Interest will accrue and be paid along with the principal upon the maturity date . The Lender received 1,150,000 bonus share purchase warrants as additional consideration for advancing the Loan. The fair value of these warrants was calculated to be $ 444,942 which was netted against the loan payable balance along with $ 15,000 paid to the lender for a total of $ 459,942 in issuance costs. Each warrant entitles the holder to acquire one share of common stock at an exercise price of $ 0.80 (C$ 1.00 ) for a period of three years from the date of issuance. The Loan may be repaid prior to the maturity date, in whole or in part, provided that all accrued interest is paid. In addition, if total interest payments are less than $200,000, the difference will be paid to the Lender as prepayment compensation. The Loan is secured against the assets of the Company and its subsidiary and will be used for permitting, engineering and working capital at the Company's Idaho Maryland Gold Project. Loan Payable Balance, July 31, 2020 $ 742,157 Interest expense 119,523 Accretion expense 114,907 Balance, July 31, 2021 $ 976,587 Interest expense 194,952 Accretion expense 85,943 Balance, April 30, 2022 $ 1,257,482 10 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 9. DERIVATIVE LIABILITY The exercise price of the Company's share purchase warrants is fixed in Canadian dollars and the functional currency of the Company is the USD. These warrants are considered to be a derivative as a variable amount of cash in the Company's functional currency will be received on exercise of the warrants. Accordingly, the share purchase warrants issued as part of past financings, are classified and accounted for as a derivative liability. The following table shows a continuity of the Company's derivative liability: Warrant derivative Number of warrants accounted for as derivative liability Balance, July 31, 2020 $ 2,218,107 11,159,919 Expiry - ( 5,679,836 ) Fair value adjustment ( 1,776,341 ) - Balance, July 31, 2021 $ 441,766 5,480,083 Expiry - ( 488,438 ) Fair value adjustment ( 252,324 ) - Balance, April 30, 2022 $ 189,442 4,991,645 For the nine-month period ended April 30, 2022, the Company recorded a total gain on fair value of derivative liability of $ 252,324 during the period (April 30, 2021 -$ 1,560,945 ). The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants as at April 30, 2022 and July 31, 2021: April 30, 2022 July 31, 2021 Risk-free interest rate 1.52 % 1.52 % Expected life of warrants 0.18 to 0.30 years 0.08 to 1.14 years Expected annualized volatility 74.54 % to 103.60 % 83.6 % to 118.2 % Dividend Nil Nil Forfeiture rate 0 % 0 % 11 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 10. CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL Private Placements On January 31, 2022, the Company completed a non-brokered private placement for gross proceeds totalling $ 2,407,000 through the issuance of 6,017,500 units at a price of $ 0.40 per Unit, where each Unit consists of one share of common stock and one share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share at an exercise price of $ 0.60 until January 28, 2024 . Certain directors of the Company purchased an aggregate of 2,075,000 Units of this private placement for gross proceeds of $ 830,000 . The Company has paid associated legal fees of $ 14,002 in connection with this financing. On September 23, 2020, the Company completed a non-brokered private placement for a total of $ 250,000 through the issuance of 333,333 units at a price of $ 0.75 per Unit (C$ 1.02 per Unit), with each Unit comprising one share of common stock and one-half of one common share purchase warrant. Each whole warrant entitles the holder to acquire one share at an exercise price of $ 1 .00 (C$ 1.36 ) until September 21, 2022 . The Company paid associated legal fees of $ 1,802 in connection with this financing. Stock Options The Company has a stock option plan under which it is authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 10 % of the issued and outstanding common stock of the Company. Under the plan the exercise price of each option equals the market price of the Company's stock, less any applicable discount, as calculated on the date of grant. The options can be granted for a maximum term of 5 years with vesting determined by the board of directors. During the period ended April 30, 2022, the Company granted a total of 805,000 stock options with a fair value of $ 406,790 (2021: $ 560,792 ) to employees, officers, directors, and consultants of the Company, exercisable at a weighted average price of $ 0.65 (C$ 0.82 ) per share for a period of five years . On September 22, 2020, the Company granted a total of 1,338,500 stock options to the Company's President and CEO, Benjamin Mossman. The stock options are exercisable at a price of $ 0.90 (C$ 1.20 ) per share until September 22, 2025. The Company recorded share-based compensation of $ 560,792 in connection with this grant. The following incentive stock options were outstanding and exercisable as at April 30, 2022: Number of Options Weighted Average Exercise Price (C$) Expiry Date 75,000 0.50 March 17, 2023 350,000 1.20 April 19, 2023 180,000 1.00 November 30, 2023 290,000 0.70 August 21, 2024 1,338,500 1.20 September 22, 2025 805,000 0.82 February 7, 2027 3,038,500 1.02 As at April 30, 2022, the aggregate intrinsic value of the Company's stock options is $ 6,000 (July 31, 2021 - $ 1,313 ). 12 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 10. CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (continued) Stock Options (continued) Stock option transactions are summarized as follows: Number of Options Weighted Average Exercise Price (C$) Balance outstanding and exercisable, July 31, 2020 1,005,000 1.00 Options granted 1,338,500 1.20 Options expired ( 110,000 ) 1.50 Balance outstanding and exercisable, July 31, 2021 2,233,500 1.09 Options granted 805,000 0.82 Balance outstanding and exercisable, April 30, 2022 3,038,500 1.02 Warrants The following warrants were outstanding at April 30, 2022: Number of Warrants Exercise Price (C$) Expiry Date 518,407 1.00 July 3, 2022 2,302,517 1.00 August 19, 2022 1,150,000 1.00 September 3, 2022 2,225,352 1.36 July 31, 2022 166,666 1.36 September 21, 2022 6,017,500 0.76 January 28, 2024 12,380,442 0.95 During the period ended April 30, 2022, a total of 488,438 warrants with an exercise price of C$ 1.20 expired unexercised. 13 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED APRIL 30, 2022 (Expressed in United States Dollars) (Unaudited) 10. CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (continued) Warrants (continued) Warrant transactions are summarized as follows: Number of Warrants Weighted Average Exercise Price (C$) Balance, July 31, 2019 8,196,524 $ 1.57 Warrants issued 5,677,869 1.00 Warrants expired ( 1,402,393 ) ( 2.50 ) Balance, July 31, 2020 12,472,000 1.27 Warrants issued 166,666 1.36 Warrants expired ( 5,787,286 ) ( 1.30 ) Balance, July 31, 2021 6,851,380 1.14 Warrants issued 6,017,500 0.76 Warrants expired ( 488,438 ) ( 1.20 ) Balance, April 30, 2022 12,380,442 $ 0.95 11. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS During the nine-month periods ended April 30, 2022 and 2021, the Company had the following non-cash financing and investing activities: For the period ended April 30, 2022: a) The Company recorded $ 85,943 of accretion and $ 194,952 of interest expense as part of the outstanding balance of loan payable. For the period ended April 30, 2021: b) Company recorded $ 85,944 of accretion and $ 88,226 of interest expense as part of the outstanding balance of loan payable. 12. SEGMENTED INFORMATION A reporting segment is defined as a component of the Company that: - Engages in business activities from which it may earn revenues and incur expenses; - Operating results are reviewed regularly by the entity's chief operating decision maker; and - Discrete financial information is available. The Company has determined that it operates its business in one geographical segment located in California, United States, where all of its equipment and mineral property interests are located. 14