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, 2022. RISE GOLD CORP. (AN EXPLORATION STAGE COMPANY) CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS PERIOD ENDED JANUARY 31, 2023 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 RISE GOLD CORP. (An Exploration Stage Company) CONDENSED CONSOLIDATED INTERIM BALANCE SHEET (Expressed in United States Dollars) (Unaudited) AS AT January 31, 2023 July 31, 2022 ASSETS Current Cash $ 1,800,079 $ 471,918 Receivables 84,541 85,357 Prepaid expenses (Note 3) 248,618 429,302 Total current assets 2,133,238 986,577 Non-current Mineral property interests (Note 4) 4,149,053 4,149,053 Prepaid expenses (Note 3) 59,998 - Equipment (Note 5) 540,003 551,436 Total assets $ 6,882,292 $ 5,687,066 LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable and accrued liabilities $ 776,550 $ 321,942 Payable to related parties (Note 7) 96,053 28,018 Total current liabilities 872,603 349,960 Non-current Loan payable (Note 8) 1,632,634 1,364,530 Derivative liability (Note 9) 1,102,435 373,910 Total liabilities 3,607,672 2,088,400 Stockholders' equity Capital stock, $ 0.001 par value, 400,000,000 shares authorized; 37,236,864 shares issued and outstanding (Note 10) 37,237 32,788 Additional paid-in capital (Note 10) 28,446,087 26,678,566 Share subscription received in advance 50,000 - Cumulative translation adjustment ( 104,084 ) ( 104,084 ) Deficit ( 25,154,620 ) ( 23,008,604 ) Total stockholders' equity 3,274,620 3,598,666 Total liabilities and stockholders' equity $ 6,882,292 $ 5,687,066 Nature and continuance of operations (Note 1) Contingency (Note 6) Subsequent events (Note 13) 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 January 31, 2023 Three months ended January 31, 2022 Six months ended January 31, 2023 Six months ended January 31, 2022 EXPENSES Accretion expense (Note 8) $ 28,963 $ 28,963 $ 57,926 $ 57,926 Consulting 172,686 141,233 278,256 270,746 Directors' fees 20,000 20,000 40,000 40,000 Filing and regulatory 24,782 9,626 33,332 16,156 Foreign exchange loss 24,522 25,439 65,480 32,338 General and administrative 37,914 107,901 118,797 214,624 Geological, mineral, and prospect costs (Note 4) 113,618 204,035 237,607 258,559 Interest expense (Note 8) 112,363 91,125 210,178 123,248 Professional fees 70,033 113,124 224,129 236,824 Promotion and shareholder communication 77,371 51,044 85,319 58,407 Salaries 33,750 33,750 67,500 67,500 Loss $ ( 716,002 ) $ ( 826,240 ) $ ( 1,418,524 ) $ ( 1,376,328 ) Gain (loss) on fair value adjustment on derivative liability (Note 9) ( 746,509 ) ( 272,421 ) ( 728,525 ) 64,672 Other income 1,033 14,212 1,033 14,907 Net loss and comprehensive loss for the period $ ( 1,461,478 ) $ ( 1,084,449 ) $ ( 2,146,016 ) $ ( 1,296,749 ) Basic and diluted loss per common share $ ( 0.02 ) $ ( 0.03 ) $ ( 0.04 ) $ ( 0.05 ) Weighted average number of common shares outstanding (basic and diluted) 32,837,257 32,787,798 32,837,257 26,868,410 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 SIX MONTHS ENDED JANUARY 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period $ ( 2,146,016 ) $ ( 1,296,749 ) Items not involving cash Depreciation 11,433 12,297 Interest expense 210,178 123,248 Accretion expense 57,926 57,926 Loss (gain) on fair value adjustment on derivative liability 728,525 ( 64,672 ) Non-cash working capital item changes: Receivables 816 ( 11,728 ) Prepaid expenses 120,686 21,285 Accounts payable and accrued liabilities 422,430 ( 100,187 ) Related party payables 100,213 20,000 Net cash used in operating activities ( 493,809 ) ( 1,238,580 ) CASH FLOWS FROM FINANCING ACTIVITIES Private placement, net of issuance cost 1,771,970 2,392,998 Subscriptions received in advance 50,000 - Net cash provided by financing activities 1,821,970 2,392,998 Change in cash for the period 1,328,161 1,154,418 Cash, beginning of period 471,918 773,279 Cash, end of period $ 1,800,079 $ 1,927,697 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 Share Subscription Received in Advance Cumulative Translation Adjustment Number Amount Deficit Total 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 Balance as at July 31, 2022 32,787,798 $ 32,788 $ 26,678,566 $ - $ ( 104,084 ) $ ( 23,008,604 ) $ 3,598,666 Loss for the period - - - - - ( 684,538 ) ( 684,538 ) Balance as at October 31, 2022 32,787,798 $ 32,788 $ 26,678,566 $ - $ ( 104,084 ) $ ( 23,693,142 ) $ 2,914,128 Shares issued for cash, net of issuance cost 4,449,066 4,449 1,767,521 50,000 - - 1,821,970 Loss for the period - - - - - ( 1,461,478 ) ( 1,461,478 ) Balance as at January 31, 2023 37,236,864 $ 37,237 $ 28,446,087 $ 50,000 $ ( 104,084 ) $ ( 25,154,620 ) $ 3,274,620 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 SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (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 $ 2,146,016 for the six-month period ended January 31, 2023 and has accumulated a deficit of $ 25,154,620 . 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. 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. In March 2020, the novel coronavirus outbreak ("COVID-19") was declared a pandemic by the World Health Organization. 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 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. At January 31, 2023, the Company had working capital of $ 1,260,635 (July 31, 2022 - $ 636,617 ). 2. BASIS OF PREPARATION Generally Accepted Accounting Principles These 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, 2022. 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. These financial statements follow the same accounting policies in the annual financial statements. The operating results for the six months ended January 31, 2023 are not necessarily indicative of the results that may be expected for the year ended July 31, 2023. 5 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (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 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 January 31, 2023 July 31, 2022 Current Insurance $ 29,341 $ 71,424 Deposits 195,878 342,987 Other 23,399 14,891 248,618 429,302 Non-current Deposits 59,998 - Total $ 308,616 $ 429,302 6 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (Expressed in United States Dollars) (Unaudited) 4. MINERAL PROPERTY INTERESTS The Company's mineral properties balance consists of: Idaho-Maryland, California July 31, 2022 and January 31, 2023 $ 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. As at January 31, 2023, the Company holds title to the Idaho-Maryland Gold Mine Property. As of January 31, 2023, 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 consists 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 SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (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 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 by making the final payment of $ 1,300,000 . As at January 31, 2023, the Company has incurred cumulative exploration expenditures of $ 8,195,953 on the Idaho-Maryland Gold Mine property as follows: Six months ended January 31, 2023 Year ended July 31, 2022 Idaho-Maryland Gold Mine expenditures: Opening balance $ 7,958,346 $ 7,169,662 Consulting 164,202 549,468 Depreciation 11,433 24,345 Engineering 13,651 91,635 Exploration - ( 15,856 ) Logistics 16 3,037 Rent 44,508 88,517 Supplies 3,797 23,433 Sampling - 24,105 Total expenditures for the period 237,607 788,684 Closing balance $ 8,195,953 $ 7,958,346 8 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (Expressed in United States Dollars) (Unaudited) 5. EQUIPMENT Cost Drilling equipment At July 31, 2021 $ 644,847 At July 31, 2022 $ 644,847 At January 31, 2023 $ 644,847 Accumulated depreciation At July 31, 2021 $ 69,066 Depreciation 24,345 At July 31, 2022 $ 93,411 Depreciation 11,433 At January 31, 2023 $ 104,844 Total carrying value, July 31, 2022 $ 551,436 Total carrying value, January 31, 2023 $ 540,003 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. 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 assessed 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 $ 67,500 (2022 - $ 67,500 ) to the CEO of the Company. b) Director fees of $ 40,000 (2022 - $ 40,000 ) to directors of the Company. c) During the period ended January 31, 2023, the Company paid $ 67,199 (2022 - $ 71,338 ) in professional and consulting fees to a company controlled by a director of the Company. d) Share-based compensation of $ Nil (2022 - $ Nil ) for options granted during the period ended January 31, 2023. e) As at January 31, 2023 and July 31, 2022, $ 96,053 and $ 28,018 were owed to related parties, respectively. f) As at January 31, 2023, certain directors of the Company purchased an aggregate of 1,476,363 Units of this first tranche of the private placement for gross proceeds of $ 590,545 (2022 - $ Nil ) (see Note 10). 9 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (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" or "Eridanus") 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. Loan Payable Balance, July 31, 2021 $ 976,587 Interest expense 273,036 Accretion expense 114,907 Balance, July 31, 2022 $ 1,364,530 Interest expense 210,178 Accretion expense 57,926 Balance, January 31, 2023 $ 1,632,634 Subsequent to the period ended January 31, 2023, the Company renegotiated its debt agreement with the Lender whereby the Company has agreed to pay $ 250,000 to the Lender as partial prepayment of the outstanding principal balance of the loan and issue 575,000 share purchase warrants to Eridanus Capital LLC (“Eridanus Warrants”). The maturity date of the loan has been extended by one year to September 4, 2024 and the interest rate has been reduced to 15 % for a period of 12 months following the date of issuance of the Eridanus Warrants . Each Warrant entitles the holder to acquire one share at an exercise price of $ 0.60 for a period of two years from the date of issuance. The Eridanus Warrants and any shares acquired upon the exercise of the Eridanus Warrants will be subject to statutory hold periods in accordance with applicable United States and Canadian securities laws. 10 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (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: Number of warrants accounted for as Warrant derivative derivative liability Balance, July 31, 2021 $ 441,766 5,480,083 Expiry - ( 488,438 ) Fair value adjustment ( 67,856 ) - Balance, July 31, 2022 $ 373,910 4,991,645 Expiry - - Fair value adjustment 728,525 - Balance, January 31, 2023 $ 1,102,435 4,991,645 For the six-month period ended January 31, 2023, the Company recorded a total loss on fair value of derivative liability of $ 728,525 during the period (January 31, 2022 - gain of $ 67,856 ). The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants as at January 31, 2023 and July 31, 2022: January 31, 2023 July 31, 2022 Risk-free interest rate 3.76 % 1.52 % Expected life of warrants 1.42 to 1.55 years 1.93 to 2.05 years Expected annualized volatility 105.27 % to 108.28 % 89.49 % to 90.89 % Dividend Nil Nil Forfeiture rate 0 % 0 % 11 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (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 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 January 31, 2023, the Company completed the first tranche of a non-brokered private placement for gross proceeds totalling $ 1,779,626 through the issuance of 4,449,066 units at a price of $ 0.40 per unit, where each unit consists of one share of common stock and one-half of 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 31, 2025 . Certain directors of the Company purchased an aggregate of 1,476,363 units of this first tranche of the private placement for gross proceeds of $ 590,545 . The Company has paid fees of $ 2,767 and issued 6,900 finder's warrants relating to the first tranche, where each finder's warrant entitles the holder to acquire one common share at a price of $ 0.60 until January 31, 2025 . The Company has paid associated legal fees of $ 4,889 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. The following incentive stock options were outstanding and exercisable as at January 31, 2023: 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 12 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (Expressed in United States Dollars) (Unaudited) 10. CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (continued) As at January 31, 2023, the aggregate intrinsic value of the Company's stock options is $ 24,050 (July 31, 2022 - $ Nil ). Stock option transactions are summarized as follows: Number of Options Weighted Average Exercise Price ($C) Balance outstanding and exercisable, July 31, 2021 2,233,500 1.09 Options granted 805,000 0.82 Balance outstanding and exercisable, July 31, 2022 3,038,500 1.02 Balance outstanding and exercisable, January 31, 2023 3,038,500 $ 1.02 The following weighted average assumptions were used for the Black-Scholes pricing model valuation of stock options issued during the period ended January 31, 2023 and July 31, 2022: January 31, 2023 July 31, 2022 Risk-free interest rate Nil 1.38 % Expected life of stock options Nil 5 years Expected annualized volatility Nil 114.02 % Dividend Nil Nil Forfeiture rate Nil 0 % 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. Warrants On June 14, 2022, the Company amended the term of 6,308,310 common share purchase warrants by extending their expiry dates by two years and adding an accelerated expiry provision. Between July 3, 2019 and September 21, 2020 the Company issued a total of 6,308,310 warrants to purchase shares of common stock of the Company in connection with various private placement financings and debt financings. 3,959,727 of these warrants were granted with an exercise price of CAD $ 1.00 per share ("CAD Priced Warrants") or optional currency settlement choice 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. 13 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (Expressed in United States Dollars) (Unaudited) 10. CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (continued) The following warrants were outstanding at January 31, 2023: Number of Warrants Exercise Price (C$) Expiry Date 518,406 1.00 July 3, 2024 2,291,321 1.00 August 19, 2024 1,150,000 1.00 September 9, 2024 2,181,917 1.36 July 31, 2024 166,666 1.36 September 21, 2024 6,017,500 0.76 January 28, 2024 2,231,429 0.80 January 31, 2025 14,557,239 0.93 Warrant transactions are summarized as follows: Number of Warrants Weighted Average Exercise Price (C$) Balance, July 31, 2021 6,851,379 $ 1.14 Warrants issued 6,017,500 0.76 Warrants expired ( 531,873 ) ( 1.21 ) Balance, July 31, 2022 12,337,006 $ 0.95 Warrants issued 2,231,429 0.80 Warrants expired ( 11,196 ) 1.00 Balance, January 31, 2023 14,557,239 0.93 11. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS During the six-month periods ended January 31, 2023 and 2022, the Company had the following non-cash financing and investing activities: For the period ended January 31, 2023: a) The Company accrued $ 210,178 of interest expense as part of the outstanding balance of loan payable. For the period ended January 31, 2022: a) Company accrued $ 123,248 of interest expense as part of the outstanding balance of loan payable. 14 RISE GOLD CORP. (An Exploration Stage Company) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2023 (Expressed in United States Dollars) (Unaudited) 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. 13. SUBSEQUENT EVENTS Subsequent to the period ended January 31, 2023, the Company completed the second and final tranche of a $ 3,000,000 non-brokered private placement. The gross proceeds raised in the second tranche was $ 1,220,374 through the sale of 3,050,934 units at a price of $ 0.40 per unit, where each unit consists of one share of common stock and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share at an exercise price of $ 0.60 until February 17, 2025 . Certain directors of the Company purchased an aggregate of 917,936 units of this second tranche of the private placement for gross proceeds of $ 367,174 . The Company has paid fees of $ 1,420 and issued 3,540 finder's warrants relating to the second tranche, where each finder's warrant entitles the holder to acquire one common share at a price of $ 0.60 until February 17, 2025 . Subsequent to the period ended January 31, 2023, the Company renegotiated its debt agreement with Eridanus Capital LLC whereby the Company has agreed to prepay $ 250,000 to Eridanus to reduce the outstanding loan and issue 575,000 share purchase warrants to Eridanus. The maturity date of the loan has been extended by one year to September 4, 2024 and the interest rate has been reduced to 15 % for a period of 12 months following the date of issuance of the Eridanus Warrants. Each Warrant entitles the holder to acquire one share at an exercise price of $ 0.60 for a period of two years from the date of issuance. The Eridanus Warrants and any shares acquired upon the exercise of the Eridanus Warrants will be subject to statutory hold periods in accordance with applicable United States and Canadian securities laws. On February 21, 2023, the Company granted a total of 1,045,000 stock options to employees, officers, directors, and consultants of the Company, exercisable at a weighted average price of $ 0.53 per share for a period of five years . 15