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Item 8. Financial Statements and Supplementary Data

2023-10-30 compared with 2022-10-31 · 102 added, 66 removed, 475 unchanged (26% 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, 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.

(the “Company”) as of July 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the years then ended , and the related notes (collectively referred to as the “consolidated 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, 2023 and 2022, and the results of its operations and its cash flows for the years ended July 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

1 unchanged sentence

As discussed in Note 1 to the consolidated financial statements, the Company incurred a loss of $3,660,382 for the year ended July 31, 2023 and as of that date, had an accumulated deficit of $26,668,986.

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

These events and conditions raise substantial doubt about its ability to continue as a going concern.

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

15 unchanged sentences

Critical Audit Matters

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

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.

Assessment of impairment indicators of mineral property interests

As described in Note 5 to the consolidated financial statements, the carrying amount of the Company’s mineral property interests was $4,149,053 as at July 31, 2023.

Management applies judgment to assess the mineral property for impairment indicators that could give rise to the requirement to conduct a formal impairment test.

Internal and external factors such as (i) significant decrease in the market price of the asset, (ii) current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset, (iii) significant changes in expected capital and operating costs, and reclamation costs, (iv) significant adverse changes in the business climate or legal factors including changes in gold prices, and (v) current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life, are evaluated by management in determining whether there are any indicators of impairment.

The principal considerations for our determination that the assessment of impairment indicators of the mineral property is a critical audit matter are that there was judgment by management when assessing whether there were indicators of impairment for the mineral property.

This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of indicators of impairment that could give rise to the requirement to conduct a formal impairment test.

As more fully described in Note 3, management applies judgment to evaluate its mineral property interests for indicators of impairment whenever events or changes in circumstance indicate that the carrying amount of the asset may not be recoverable.

The principal considerations for our determination that the assessment of impairment indicators of the mineral property interests is a critical audit matter are that there was judgment made by management when assessing whether there were indicators of impairment for the mineral property interests.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures include, among others, evaluating management's assessment of indicators of impairment;

and assessing whether there has been a significant decrease in the market price of the asset, significant changes in the expected capital costs, operating costs, reclamation costs, and current period cash flow or operating losses combined with a history of losses or forecasted continued losses associated with the use of the asset, by considering the current and past performance of the mineral property including other third-party information and evidence obtained in other areas of the audit, as applicable.

The procedures performed also included (i) evaluating whether there were significant adverse changes in the business climate or legal factors including changes in gold prices by considering external market data and industry data;

and (ii) assessing the completeness of external and internal factors that could be considered as indicators of impairment of the Company's mineral property, including consideration of evidence obtained in other areas of the audit.

These procedures include, among others:

evaluating management’s assessment of indicators of impairment;

evaluation of future commodity pricing;

assessing good standing of mineral property rights;

evaluating the Company’s current, past, and planned exploration expenditures and ability to carry out future exploration activity.

We have served as the Company's auditor since 2013.

9 unchanged sentences

July 31, 2022

Cash and cash equivalents

Prepaid expenses (Note 4)

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Nature and continuance of operations (Note 1)

Contingency (Note 7)

Subsequent event (Note 15)

Approved and authorized by the Board on October 25, 2023.

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Filing and regulatory

Foreign exchange loss (gain)

Foreign exchange loss

General and administrative

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Private placement, net of issuance cost (Note 11)

Loan repayment

Proceeds from exercise of options

Net cash provided by financing activities

Change in cash for the year

Cash, beginning of year

Cash, end of year

C hange in cash and cash equivalents for the year

C ash and cash equivalents, beginning of year

C ash and cash equivalents, end of year

Supplemental disclosure with respect to cash flows (Note 13)

7 unchanged sentences

Balance as at July 31, 2021

Shares issued for cash

Shares issued for cash, net of issuance cost

Share-based compensation

2 unchanged sentences

Shares issued for cash, net of issuance cost

Options exercise

Warrants issued for loan modification

Share-based compensation

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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.

These events and conditions cast substantial 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 July 31, 2023, the Company had working capital of $ 472,272 (2022 - working capital of $ 636,617 ).

22 unchanged sentences

Functional and reporting currency

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

The Company and its wholly owned subsidiary, Rise Grass Valley Inc.

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.

8 unchanged sentences

SIGNIFICANT ACCOUNTING POLICIES

Derivative liability

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

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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.

The derivative liability is recognized at fair value using level 2 inputs as the fair value of derivatives was determined using a Black-Scholes option pricing formula.

Financial instruments, including payable to related parties, accounts payable, accrued liabilities and loan payable 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.

7 unchanged sentences

The Company maintains cash in bank accounts that, at times, may exceed federally insured limits.

As of July 31, 2022, and 2021, the Company has not exceeded the federally insured limit.

The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

However, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Stock-based compensation

46 unchanged sentences

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.

("Sierra") to purchase a 100 % interest in and to certain surface rights 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.

2 unchanged sentences

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 final payments totalling $ 1,300,000 .

On May 14, 2018, the Company completed the purchase of the surface rights by making final payments totalling $ 1,300,000 .

As at July 31, 2023, the Company has incurred cumulative exploration expenditures of $ 8,730,982 on the Idaho-Maryland Gold Mine property as follows:

3 unchanged sentences

Opening balance

Total expenditures for the period

Total expenditures for the year

Closing balance

14 unchanged sentences

Total carrying value, July 31, 2023

Depreciation of equipment is included in geological, mineral, and prospect costs (Note 5).

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

32 unchanged sentences

Accretion expense

Issuance costs

Balance, July 31, 2023

In February 2023, the Company renegotiated its debt agreement with the Lender whereby the Company agreed to pay $ 250,000 applied against unpaid and accrued interest and issue 575,000 share purchase warrants to the Lender.

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 % compounding monthly for a period of 12 months after which it reverts to 25 % per annum, compounding monthly.

The renegotiation of the debt was accounted for as a non - substantial debt modification.

Accordingly, no gain or loss was recorded and a new effective interest rate of 32.67 % was established based on the carrying value of the debt and the revised cash flow.

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 fair value of these warrants was calculated to be $ 154,218 which was netted against the loan payable balance.

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

February 17, 2023

Risk-free interest rate

Expected life of warrants

Expected annualized volatility

Share price at grant date

Exercise price

Forfeiture rate

RISE GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JULY 31, 2023

(Expressed in United States Dollars)

DERIVATIVE LIABILITY

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During the year ended July 31, 2023, the Company recorded a gain on fair value adjustment on derivative liability of $ 233,895 (July 31, 2022 - gain of $ 67,856 ).

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)

DERIVATIVE LIABILITY (continued)

The following weighted average assumptions were used for the Black-Scholes pricing model valuation of warrants derivative as at July 31, 2023 and July 31, 2022:

9 unchanged sentences

Forfeiture rate

RISE GOLD CORP.

(An Exploration Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED JULY 31, 2023

(Expressed in United States Dollars)

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 .

On February 17, 2023, the Company completed a non-brokered private placement over two tranches for gross proceeds totaling $ 3,000,000 through the issuance of 7,500,000 units in total at a price of $ 0.40 per unit, where each unit consisted of one share of common stock and one-half of one share purchase warrant.

Each whole warrant entitles the holder to acquire one additional share of common stock at an exercise price of $ 0.60 until January 31, 2025 and February 17, 2025 .

Certain directors of the Company purchased an aggregate of 2,394,299 units of the private placement for gross proceeds of $ 957,720 .

The Company paid fees of $ 4,014 and issued 10,440 finder's warrants relating to the first tranche, where each finder's warrant entitles the holder to acquire one share of common stock at a price of $ 0.60 until January 31, 2025 and February 17, 2025 .

The Company paid legal fees of $ 10,563 in connection with this financing.

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 consisted of one share of common stock and one share purchase warrant.

Each warrant entitles the holder to acquire one additional share of common stock 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

On February 21, 2023, the Company granted a total of 1,045,000 stock options with a fair value of $ 466,527 to employees, officers, directors and consultants of the Company, exercisable at a weighted average price of $ 0.53 (C$ 0.72 ) per share until February 21, 2028.

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.

The following incentive stock options were outstanding and exercisable as at July 31, 2023:

November 30, 2023

August 21, 2024

September 22, 2025

February 7, 2027

February 21, 2028

RISE GOLD CORP.

4 unchanged sentences

CAPITAL STOCK AND ADDITIONAL PAID-IN CAPITAL (continued)

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

March 17, 2023

April 19, 2023

November 30, 2023

August 21, 2024

September 22, 2025

February 7, 2027

As at July 31, 2023, the aggregate intrinsic value of the Company's stock options is $ Nil (2022 - $ Nil ).

Stock option transactions are summarized as follows:

Number of Options

Weighted Average

2 unchanged sentences

Options granted

Options expired

Balance outstanding and exercisable, July 31, 2022

Options granted

Options cancelled

Options expired

Options exercised

Balance outstanding and exercisable, July 31, 2023

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:

3 unchanged sentences

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.

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 amended expiry dates ranging from July 3, 2024 to September 9, 2024, and 2,348,583 of these warrants were granted with an exercise price of US$ 1.00 per share ("USD Priced Warrants") with amended expiry dates ranging from July 31, 2024 to September 21, 2024.

All other terms and conditions of the warrants remain unchanged.

RISE GOLD CORP.

6 unchanged sentences

August 19, 2024

August 19, 2022

September 9, 2024

2 unchanged sentences

January 28, 2024

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

January 31, 2025

February 17, 2025

Warrant transactions are summarized as follows:

9 unchanged sentences

Balance, July 31, 2023

Share-Based Payments

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 returns and expiry of non-capital losses

Change in unrecognized deductible temporary difference

2 unchanged sentences

Deferred tax assets (liabilities):

Exploration and evaluation assets

Mineral property interest

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a) The Company accrued $ 328,097 of interest expense as part of the outstanding balance of loan payable.

b) The Company issued a total of 575,000 share purchase warrants for loan modification entitling the holder to acquire one share an exercise price of $ 0.60 until May 17, 2025 with a total fair value of $ 154,218 .

For the year ended July 31, 2022:

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

a) The Company accrued $ 273,036 of interest expense as part of the outstanding balance of loan payable.

During the years ended July 31, 2023, the Company had the following cash financing and investing activities:

The Company paid $ 250,000 and applied it against unpaid and accrued interest on its loan payable.

SEGMENTED INFORMATION

4 unchanged sentences

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.

SUBSEQUENT EVENT

Subsequent to July 31, 2023, the Company granted a total of 397,780 stock options to officers and directors of the Company.

The stock options are exercisable at a price of $ 0.26 per share until September 22, 2028.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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