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Item 8. Financial Statements and Supplementary Data

2022-10-31 compared with 2021-10-29 · 77 added, 117 removed, 464 unchanged (29% of the section changed)

8 unchanged sentences

We have audited the accompanying consolidated balance sheets of Rise Gold Corp.

(the “Company”) as of July 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive loss, cash flows, and stockholders’ equity for the years ended July 31, 2021 and 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Rise Gold Corp.

as of July 31, 2021 and 2020, and the results of its operations and its cash flows for the years ended July 31, 2021 and 2020, in conformity with accounting principles generally accepted in the United States of America.

(the "Company") as of July 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows for years then ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2022 and 2021, and the results of its operations and its cash flows for the years ended July 31, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company incurred a loss of $3,464,127 for the year ended July 31, 2022 and as of that date, had an accumulated deficit of $23,008,604.

These events and conditions raise substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

9 unchanged sentences

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of impairment indicators of mineral property

29 unchanged sentences

Loan payable (Note 9)

Warrant derivative (Note 10)

Derivative liability (Note 10)

Total liabilities

21 unchanged sentences

Filing and regulatory

Foreign exchange

Foreign exchange loss (gain)

General and administrative

5 unchanged sentences

Loss before other items

Gain (loss) on fair value adjustment on warrant derivatives (Note 10)

Gain on settlement of equipment loan (Note 6)

Gain on fair value adjustment on derivative liability (Note 10)

Write-off on payable

Net loss and comprehensive loss for the year

11 unchanged sentences

Interest expense

Gain on settlement of equipment loan

Share-based payments

Share-based payment

Accretion expense

Loss (gain) on fair value adjustment on warrant derivatives

Unrealized loss on foreign exchange

Gain on fair value adjustment on warrant derivatives

Non-cash working capital item changes:

4 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Private placement

Loan financing expense

Share issuance costs

Repayment of equipment loan

Private placement, net of issuance cost (Note 11)

Net cash provided by financing activities

11 unchanged sentences

Balance as at July 31, 2020

Effect of change in functional currency

Shares issued for cash

Share-based compensation

Warrants issued for financing expense

Loss for the year

26 unchanged sentences

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, management believes that the Company has sufficient working capital to meet its projected minimum financial obligations for the next fiscal year.

These events and conditions cast significant doubt about the Company's ability to continue as a going concern.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

26 unchanged sentences

Actual results could differ from those estimates and would impact future results of operations and cash flows.

Functional and reporting currency

The Company's functional and reporting currency is the United States dollar.

Transactions in currencies other than the functional currency of the Company are initially translated into the functional currency by applying the exchange rates prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate prevailing at the date of the statement of financial position.

Non-monetary assets and liabilities are translated at historical exchange rates, unless the item is carried at fair value, in which case it will be translated at the exchange rate in effect at the date when the fair value was determined.

Resulting foreign exchange gains and losses are recognized in income or loss.

RISE GOLD CORP.

4 unchanged sentences

SIGNIFICANT ACCOUNTING POLICIES

Functional and reporting currency

The Company's functional and reporting currency is the United States dollar.

Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate prevailing at the date of the statement of financial position.

Non-monetary assets and liabilities are translated at historical exchange rates, unless the item is

carried at fair value, in which case it will be translated at the exchange rate in effect at the date when the fair value was determined.

Resulting foreign exchange gains and losses are recognized in income or loss.

Derivatives are initially recognized at the fair value on the date the derivative contract is entered into and transaction costs are expensed.

18 unchanged sentences

Equipment purchased by the Company is depreciated over 15 years.

Asset retirement obligations

The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets.

The Company also records a corresponding asset which is amortized over the life of the asset.

Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying the obligation (asset retirement cost).

RISE GOLD CORP.

4 unchanged sentences

SIGNIFICANT ACCOUNTING POLICIES (continued)

Asset retirement obligations

The Company also records a corresponding asset which is amortized over the life of the asset.

Loss per share

2 unchanged sentences

As at July 31, 2022, 3,038,500 outstanding options and 12,337,007 outstanding warrants were excluded from the diluted calculation.

In reporting periods when a loss is incurred, potential issuance of shares would be anti-dilutive and, therefore, basic and diluted loss per share are the same.

Financial instruments

The Company's financial instruments consist of cash, receivables, accounts payable and accrued liabilities, loan payable, payable to related parties and equipment loan.

The Company's financial instruments consist of cash, receivables, accounts payable and accrued liabilities, loan payable and payable to related parties.

It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments.

10 unchanged sentences

Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly;

Level 3 - Inputs that are not based on observable market data.

Cash is considered level 1 and classified as cash on hand and held at banks.

Financial instruments, including payable to related parties, accounts payable and accrued liabilities are classified as other financial liabilities and are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments.

RISE GOLD CORP.

4 unchanged sentences

SIGNIFICANT ACCOUNTING POLICIES (continued)

Level 3 - Inputs that are not based on observable market data.

Cash is considered level 1 and classified as cash on hand and held at banks.

Financial instruments, including payable to related parties, loan payable, accounts payable and accrued liabilities and equipment loan are classified as other financial liabilities and are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments.

Concentration of credit risk

8 unchanged sentences

The Black-Scholes option valuation model is used to calculate fair value.

RISE GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JULY 31, 2021

(Expressed in United States Dollars)

SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

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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 would be credited against the purchase price of $2,000,000 upon exercise of the option.

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 would be credited against the purchase price of $ 2,000,000 upon exercise of the option.

On November 30, 2016, the Company negotiated an extension on the closing date of the option agreement to December 26, 2016, in return for a cash payment of $ 25,000 , which would be credited against the purchase price of $ 2,000,000 upon exercise of the option.

23 unchanged sentences

Opening balance

Total expenditures for the year

Total expenditures for the period

Closing balance

4 unchanged sentences

(Expressed in United States Dollars)

EQUIPMENT AND EQUIPMENT LOAN

Drilling equipment

At July 31, 2020

Foreign currency translation adjustment

At July 31, 2021

6 unchanged sentences

Total carrying value, July 31, 2022

During the year ended July 31, 2018, the Company recorded an equipment loan of $495,481 in connection with two diamond core drilling rigs purchased.

As at July 31, 2019, the outstanding balance on this loan was $223,574.

Pursuant to an agreement with the lender, the Company completed the purchase of the drilling equipment by making a lump sum payment which was due on or before December 1, 2019.

Early settlement of the equipment loan resulted in a gain on settlement of equipment loan of $19,924.

During the year ended July 31, 2014, the Company entered into a binding letter of intent ("LOI") with Wundr Software Inc.

4 unchanged sentences

Management has determined that the probability of the Claim resulting in an unfavourable outcome and financial loss to the Company is unlikely.

RISE GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JULY 31, 2021

(Expressed in United States Dollars)

RELATED PARTY TRANSACTIONS

6 unchanged sentences

e) As at July 31, 2022, $ 28,018 (2021 - $ 34,010 ) was owed to related parties.

RISE GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JULY 31, 2022

(Expressed in United States Dollars)

On September 3, 2019, the Company completed a debt financing with Eridanus Capital LLC (the "Lender") for $ 1,000,000 (the "Loan").

8 unchanged sentences

Balance, July 31, 2020

Issuance costs

Interest expense

4 unchanged sentences

Balance, July 31, 2022

WARRANT DERIVATIVE

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 US dollar.

2 unchanged sentences

Share purchase warrants with a compensatory nature are not included in this calculation.

RISE GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JULY 31, 2021

(Expressed in United States Dollars)

The following table shows a continuity of the Company's fair value of warrant derivative:

3 unchanged sentences

derivative liability

Balance, August 1, 2019

Balance, July 31, 2020

Fair value adjustment

2 unchanged sentences

Balance, July 31, 2022

During the year ended July 31, 2021, the Company recorded a gain on fair value adjustment on warrant derivative of $1,776,341 (July 31, 2020 - loss of $2,218,107).

During the year ended July 31, 2022, the Company recorded a gain on fair value adjustment on derivative liability of $ 67,856 (July 31, 2021 - gain of $ 1,776,341 ).

RISE GOLD CORP.

3 unchanged sentences

(Expressed in United States Dollars)

WARRANT DERIVATIVE (continued)

DERIVATIVE LIABILITY (continued)

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants derivative as at July 31, 2022 and July 31, 2021:

3 unchanged sentences

Expected life of warrants

0.08 - 1.14 years

1.93 to 2.05 years

0.08 to 1.14 years

Expected annualized volatility

4 unchanged sentences

Private Placements

On August 19, 2019, the Company completed the second tranche of a non-brokered private placement for a total of $2,412,281 (C$3,207,850) through the sale of 4,582,644 units at a price of $0.53 (C$0.70) per unit where each unit consists of one share of common stock and one-half of one share purchase warrant.

Each whole warrant is exercisable into one share of common stock at a price of $0.80 (C$1.00) until August 19, 2022.

The Company has paid finders' fees and associated legal fees of $8,710 and issued a total of 11,196 finder's warrants valued at $4,990, entitling the holder to acquire one share at a price of $0.80 (C$1.00) until August 19, 2022.

On July 31, 2020, the Company completed a non-brokered private placement for a total of $3,272,875 through the issuance of 4,363,833 units at a price of $0.75 per Unit (C$1.02 per Unit), with each Unit comprising of one share of common stock (a "Share") and one-half of one share purchase warrant.

Each whole warrant entitles the holder to acquire one Share at an exercise price of $1.00 until July 31, 2022.

The Company paid a total of $40,414 in finders' fees and issued a total of 43,435 finder's warrants with a fair value of $15,500, where each finder's warrant entitles the holder to acquire one Share at a price of $1.00 until July 31, 2022.

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of these warrants:

Risk-free interest rate - 1.52%;

expected volatility - 115.42%;

share price of C$0.86 and strike price - C$1.02;

expected life of warrants - 2 years.

To accommodate the lack of authorized capital to facilitate the closing of the private placement, the Company's President and CEO surrendered 1,097,298 stock options priced between C$0.70 and C$2.40 per share.

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 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 has paid associated legal fees of $1,802 in connection with this financing.

The Company paid associated legal fees of $ 1,802 in connection with this financing.

Stock Options

On February 7, 2022, the Company granted a total of 805,000 stock options with a fair value of $ 406,790 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.

On June 14, 2022, the Company extend the expiry dates of 6,308,310 common share purchase warrants by two years and to include an accelerated expiry provision.

Between July 3, 2019 and September 21, 2020 the Corporation issued a total of 6,308,310 warrants to purchase shares of common stock in the Corporation in connection with various private placement financings and debt financings.

3,970,923 of these Warrants were granted with an exercise price of CAD $ 1.00 per share ("CAD Priced Warrants") with expiry dates ranging from July 3, 2022 to September 9, 2022, and 2,348,583 of these warrants were granted with an exercise price of US$ 1.00 per share ("USD Priced Warrants") with expiry dates ranging from July 31, 2022 to September 21, 2022.

All other terms and conditions of the Warrants remain unchanged.

RISE GOLD CORP.

4 unchanged sentences

CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL (continued)

Stock Options

During the year ended July 31, 2020, the Company granted a total of 826,284 stock options with a fair value of $357,271 to employees, officers, directors, and consultants of the Company, exercisable at a weighted average price of C$0.68 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 as at July 31, 2021:

Weighted Average Exercise

The following incentive stock options were outstanding and exercisable as at July 31, 2022:

March 17, 2023

3 unchanged sentences

September 22, 2025

February 7, 2027

Stock option transactions are summarized as follows:

Number of Options

Weighted Average Exercise Price ($C)

Weighted Average

Exercise Price (C$)

Balance outstanding and exercisable, July 31, 2020

1 unchanged sentence

Options expired

Options forfeited

Balance outstanding and exercisable, July 31, 2021

Options granted

Options expired

Balance outstanding and exercisable, July 31, 2022

As at July 31, 2021, the aggregate intrinsic value of the Company's stock options is $1,313 (July 31, 2020 - $11,532).

As at July 31, 2022, the aggregate intrinsic value of the Company's stock options is $ Nil (July 31, 2021 - $ 1,313 ).

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of stock options issued during the year ended July 31:

Risk-free interest rate

Expected life of stock options

Expected annualized volatility

Forfeiture rate

RISE GOLD CORP.

4 unchanged sentences

CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL (continued)

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of stock options issued during the year ended July 31:

Risk-free interest rate

Expected life of stock options

Expected annualized volatility

117.21%-123.27%

Forfeiture rate

The following warrants were outstanding as at July 31, 2022:

August 19, 2024

September 17, 2021

August 19, 2022

2 unchanged sentences

September 21, 2024

January 28, 2024

Subsequent to the year ended July 31, 2022, 11,196 of the Company's warrants expired unexercised.

RISE GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JULY 31, 2021

(Expressed in United States Dollars)

CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL (continued)

Warrant transactions are summarized as follows:

9 unchanged sentences

Balance, July 31, 2022

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of finders' warrants issued during the year ended July 31:

Risk-free interest rate

Expected life of warrants

0.08-1.14 years

2.0 -2.05 years

Expected annualized volatility

115.42%-116.76%

Forfeiture rate

Share-Based Payments

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.

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.

RISE GOLD CORP.

8 unchanged sentences

Permanent differences

Adjustment to prior years provision versus statutory tax return and expiry of non-capital losses

Change in unrecognized deductible temporary difference

32 unchanged sentences

For the year ended July 31, 2021:

b) The Company issued a total of 11,196 finder's warrants entitling the holder to acquire one share at a price of C$1.00 until August 19, 2022 with a fair value of $4,990.

c) The Company issued a total of 43,435 finder's warrants entitling the holder to acquire one share at a price of C$1.02 until August 19, 2022 with a fair value of $15,500 (C$20,777).

b) The Company accrued $ 119,523 of interest expense as part of the outstanding balance of loan payable.

SEGMENTED INFORMATION

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data