Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jan. 31, 2017 | Mar. 17, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Rise Resources Inc. | |
Entity Central Index Key | 1,424,864 | |
Document Type | 10-Q | |
Document Period End Date | Jan. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 57,297,841 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
BALANCE SHEETS (Unaudited)
BALANCE SHEETS (Unaudited) - CAD | Jan. 31, 2017 | Jul. 31, 2016 |
Current | ||
Cash | CAD 597,246 | CAD 139,021 |
Receivables | 22,771 | 20,021 |
Prepaid expenses | 517,311 | 9,566 |
Total Current Assets | 1,137,328 | 168,608 |
Mineral property | 3,533,903 | 563,031 |
Assets | 4,671,231 | 731,639 |
Current | ||
Accounts payable and accrued liabilities | 318,386 | 183,996 |
Loan from related parties | 39,687 | 43,214 |
Total Current Liabilities | 358,073 | 227,210 |
Stockholders' deficit | ||
Capital stock, $0.001 par value, 400,000,000 shares authorized; 56,842,841 (July 31, 2016 - 32,866,261) shares issued and outstanding | 56,844 | 32,867 |
Additional paid-in-capital | 7,531,727 | 2,475,194 |
Subscriptions received in advance | 43,750 | |
Cumulative translation adjustment | (166,663) | (166,663) |
Deficit | (3,152,500) | (1,836,969) |
Total stockholders' deficit | 4,313,158 | 504,429 |
Total liabilities and stockholders' deficit | CAD 4,671,231 | CAD 731,639 |
BALANCE SHEETS (Unaudited) (Par
BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jan. 31, 2017 | Jul. 31, 2016 |
Balance Sheets | ||
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares Issued | 56,842,841 | 32,866,261 |
Common Stock, Shares Outstanding | 56,842,841 | 32,866,261 |
STATEMENT OF OPERATIONS AND COM
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - CAD | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
EXPENSES | ||||
Consulting | CAD 8,029 | CAD 18,579 | CAD 195,171 | CAD 35,270 |
Filing and regulatory | 9,073 | 14,771 | 19,204 | 19,953 |
Foreign exchange | (548) | 8,062 | 1,407 | 8,853 |
Gain on settlement of payables | (11,415) | (6,244) | (11,415) | (36,934) |
General and administrative | 57,648 | 6,460 | 60,006 | 12,974 |
Professional fees | 63,958 | 17,912 | 93,752 | 17,912 |
Promotion and shareholder communication | 250,228 | 2,470 | 267,673 | 2,470 |
Property investigation costs | 55,253 | 55,253 | ||
Salaries | 31,994 | 64,225 | ||
Share-based payments | 464,159 | 570,255 | ||
Net loss and comprehensive loss | CAD (1,018,379) | CAD (62,010) | CAD (1,315,531) | CAD (60,318) |
Basic and diluted loss per common share | CAD (0.02) | CAD 0 | CAD (0.04) | CAD 0 |
Weighted average number of common shares outstanding | 41,459,255 | 25,428,533 | 37,360,584 | 31,650,905 |
STATEMENT OF CASH FLOWS (Unaudi
STATEMENT OF CASH FLOWS (Unaudited) - CAD | 6 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Loss for the year | CAD (1,315,531) | CAD (60,318) |
Items not involving cash | ||
Gain on settlement of payables | (11,415) | (36,934) |
Shares issued for compensation | 60,000 | |
Share-based payments | 570,255 | |
Unrealized foreign exchange | (3,721) | 6,945 |
Non-cash working capital item changes: | ||
Receivables | (2,750) | (5,961) |
Prepaid expenses | (507,745) | |
Accounts payables and accrued liabilities and due to related parties | 28,096 | 15,347 |
Net cash used in operating activities | (1,182,811) | (80,921) |
CASH FLOWS FROM INVESTING ACTIVITY | ||
Mineral property | (2,786,872) | |
Net cash provided by investing activities | (2,786,872) | |
CASH FLOWS FROM FINANCING ACTIVITY | ||
Shares issued for cash | 4,466,400 | 605,000 |
Warrants exercised | 27,208 | |
Subscriptions received in advance | 43,750 | |
Share issuance costs | (119,950) | (74,643) |
Net cash provided by financing activity | 4,427,908 | 530,357 |
Change in cash for the period | 458,225 | 449,436 |
Cash, beginning of period | 139,021 | 18,000 |
Cash, end of period | 597,246 | 467,436 |
Interest | ||
Income taxes |
STATEMENT OF STOCKHOLDERS' EQUI
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY) (Unaudited) - CAD | Common Stock | Additional Paid-In Capital | Subscriptions Received in Advance | Cumulative Translation Adjustment | Deficit | Total |
Beginning Balance at Jul. 31, 2015 | CAD 38,298 | CAD 1,157,868 | CAD (166,663) | CAD (1,203,503) | CAD (174,000) | |
Beginning Balance, in shares at Jul. 31, 2015 | 38,297,197 | |||||
Shares issued for cash | CAD 6,050 | 598,950 | 605,000 | |||
Shares issued for cash, in shares | 6,050,000 | |||||
Shares surrender and cancellation | CAD (13,000) | 13,000 | ||||
Shares surrender and cancellation, in shares | (13,000,186) | |||||
Shares issued for compensation | ||||||
Warrants exercised | ||||||
Subscriptions received in advance | ||||||
Share issuance costs | (122,599) | (122,599) | ||||
Loss for the period | (60,318) | (60,318) | ||||
Ending Balance at Jan. 31, 2016 | CAD 31,348 | 1,647,219 | (166,663) | (1,263,821) | 248,083 | |
Ending Balance, in shares at Jan. 31, 2016 | 31,347,011 | |||||
Shares issued for cash | CAD 19 | 1,906 | 1,925 | |||
Shares issued for cash, in shares | 19,250 | |||||
Shares issued for mineral property | CAD 1,500 | 238,500 | 240,000 | |||
Shares issued for mineral property, in shares | 1,500,000 | |||||
Warrants issued for mineral property | 223,031 | 223,031 | ||||
Share issuance costs | (4,468) | (4,468) | ||||
Share-based payments | 369,006 | 369,006 | ||||
Loss for the period | (573,148) | (573,148) | ||||
Ending Balance at Jul. 31, 2016 | CAD 32,867 | 2,475,194 | (166,663) | (1,836,969) | 504,429 | |
Ending Balance, in shares at Jul. 31, 2016 | 32,866,261 | |||||
Shares issued for cash | CAD 22,385 | 4,454,515 | 4,466,400 | |||
Shares issued for cash, in shares | 22,384,500 | |||||
Shares issued for mineral property | CAD 920 | 183,080 | 184,000 | |||
Shares issued for mineral property, in shares | 920,000 | |||||
Shares issued for compensation | CAD 400 | 59,600 | 60,000 | |||
Shares issued for compensation, in shares | 400,000 | |||||
Warrants exercised | CAD 272 | 26,936 | 27,208 | |||
Warrants exercised, in shares | 272,080 | |||||
Subscriptions received in advance | 43,750 | 43,750 | ||||
Share issuance costs | (237,853) | (237,853) | ||||
Share-based payments | 570,255 | 570,255 | ||||
Loss for the period | (1,315,531) | (1,315,531) | ||||
Ending Balance at Jan. 31, 2017 | CAD 56,844 | CAD 7,531,727 | CAD 43,750 | CAD (166,663) | CAD (3,152,500) | CAD 4,313,158 |
Ending Balance, in shares at Jan. 31, 2017 | 56,842,841 |
NATURE AND CONTINUANCE OF OPERA
NATURE AND CONTINUANCE OF OPERATIONS | 6 Months Ended |
Jan. 31, 2017 | |
Nature And Continuance Of Operations | |
NATURE AND CONTINUANCE OF OPERATIONS | 1. NATURE AND CONTINUANCE OF OPERATIONS Atlantic Resources Inc. (the “Company”) was incorporated in the State of Nevada on February 9, 2007 and is in the exploration stage. On January 14, 2015, the Company merged its wholly-owned subsidiary, Rise Resources Inc., a Nevada corporation, in and to the Company to effect a name change from Patriot Minefinders Inc. to Rise Resources Inc. Rise Resources Inc. was formed solely for the purpose of effecting the change of name. On February 16, 2015, the Company increased its authorized capital from 21,000,000 shares to 400,000,000 shares. On January 29, 2016, the Company completed an initial public offering in Canada and began trading on the Canadian Securities Exchange (“CSE”) on February 1, 2016. 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 $1,315,531 for the period ended January 31, 2017 and has accumulated a deficit of $3,152,500. This raises substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan, which is typical for a start-up company. The condensed consolidated interim financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management of the Company (“management”) is of the opinion that sufficient financing will be obtained from external financing and further share issuances to meet the Company’s obligations. At January 31, 2017, the Company had working capital of $779,255. |
BASIS OF PREPARATION
BASIS OF PREPARATION | 6 Months Ended |
Jan. 31, 2017 | |
Basis Of Preparation | |
BASIS OF PREPARATION | 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, 2016. 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. Basis of Consolidation The condensed consolidated interim financial statements comprise the accounts of Rise Resources Inc., the parent company, and its wholly-owned subsidiary, Rise Grass Valley, Inc., a Nevada corporation, after the elimination of all material intercompany balances and transactions. 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. Inter-company transactions, balances and unrealized gains or losses on transactions are eliminated upon consolidation. Recently Adopted and Recently Issued Accounting Standards In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. This ASU eliminates the current requirement to present deferred tax assets and liabilities as current and noncurrent amounts in a classified balance sheet and replaces it with a noncurrent classification of deferred tax assets and liabilities. The ASU applies to all entities and is effective for annual periods beginning after December 15, 2017, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adoption of this standard. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities”. This ASU amendment addresses aspects of recognition, measurement, presentation and disclosure of financial instruments. It affects investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value, and simplifies the impairment assessment of equity investments without a readily determinable fair value by requiring a qualitative assessment. The ASU applies to all entities and is effective for annual periods beginning after December 15, 2017, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adoption of this standard. Other than the above, the Company has determined that other significant newly issued accounting pronouncements are either not applicable to the Company’s business or that no material effect is expected on the financial statements as a result of future adoption. Use of Estimates The preparation of condensed consolidated interim 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. Actual results could differ from those estimates. Significant areas requiring the use of estimates include the valuation allowance applied to deferred income taxes and valuation of stock options and agent warrants. Actual results could differ from those estimates, and would impact future results of operations and cash flows. |
MINERAL PROPERTY OPTION
MINERAL PROPERTY OPTION | 6 Months Ended |
Jan. 31, 2017 | |
Extractive Industries [Abstract] | |
MINERAL PROPERTY OPTION | 3. MINERAL PROPERTIES The Company’s mineral properties balance consists of: January 31, 2017 July 31, 2016 Klondike, British Columbia $ 513,031 $ 513,031 Indata, British Columbia 50,000 $ 50,000 Idaho-Maryland, California 2,970,872 — Total $ 3,533,903 $ 563,031 Title to Mineral Properties Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain mineral titles as well as the potential for problems arising from the frequently ambiguous conveying history characteristic of many mineral properties. As at January 31, 2017, the Company does not hold titles to any mineral properties. Indata, British Columbia On May 18, 2015, the Company entered into an option agreement with Eastfield Resources Ltd., (“Eastfield”), pursuant to which Eastfield granted the Company the exclusive and irrevocable right to acquire up to a 75% interest in and to certain claims in the Indata property located in the Omineca Mining Division in British Columbia, Canada. In order to earn the initial 60% interest, the Company is required to pay Eastfield an aggregate of $350,000 ($50,000 paid to date) in cash and incur a minimum of $2,000,000 in aggregate exploration expenditures on the property by April 3, 2019. In order to earn the additional 15% interest, the Company is required to pay Eastfield $100,000 cash within 90 days of earning the 60% interest and incur a further $500,000 in aggregate annual exploration expenditures on the property until such time as the Company is able to complete a feasibility study on the property. As at January 31, 2017, the Company has incurred cumulative exploration expenditures of $4,035 on the Indata property. Klondike, British Columbia On May 26, 2016, the Company entered into an agreement with Klondike Gold Corp. (“Klondike”) regarding the purchase of a portfolio of seven gold and base metal properties in southeast British Columbia. Under the agreement, within 60 days of signing, the Company paid Klondike $50,000 in cash, issued 1,500,000 shares of the Company’s common stock valued at $240,000, and issued 1,500,000 warrants valued at $223,031 (discount rate – 0.49%, volatility – 200.64%, expected life – 2 years, dividend yield – 0%), exercisable at $0.227 per share until July 13, 2018. On the one year anniversary of the first closing, the Company will pay Klondike $150,000 in cash, issue 2,000,000 shares of the Company’s common stock, and issue 1,000,000 warrants. Klondike will retain a 2% net smelter return royalty (“NSR”) and the Company will have the right to purchase 50% of the NSR for $1,000,000 at any time after the first closing. Each of the warrants is exercisable for a period of two years into one share of the Company’s common stock at a price that is a 20% premium to the 10-day volume-weighted average price of the stock on the CSE immediately prior to the date of issuance. As at January 31, 2017, the Company has incurred cumulative exploration expenditures of $10,408 on the Klondike properties. 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 must pay US$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 $32,758 (US$25,000), which will be credited against the purchase price of US$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 $32,758 (US$25,000), which will be credited against the purchase price of US$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 January 31, 2017. On January 25, 2017, the Company exercised the option by paying $2,588,625 (US$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 $184,000 (US$140,000) equal to 7 per cent of the purchase price of US$2,000,000; the commission was settled on January 25, 2017 through the issuance of 920,000 units valued at $0.20 per unit (Note 7). On January 6, 2017, the Company entered into an option agreement with Sierra Pacific Industries Inc. 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 must pay US$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 $132,732 (US$100,000), which will be credited against the purchase price of US$1,900,000 upon exercise of the option. |
CONTINGENCY
CONTINGENCY | 6 Months Ended |
Jan. 31, 2017 | |
Debt Disclosure [Abstract] | |
CONTINGENCY | 4. 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. |
BAD DEBT EXPENSE
BAD DEBT EXPENSE | 6 Months Ended |
Jan. 31, 2017 | |
Notes to Financial Statements | |
BAD DEBT EXPENSE | 5. BAD DEBT EXPENSE During the year ended July 31, 2016, the Company advanced to Skanderbeg Capital Partners Inc. a total of $7,126, which had been recorded in prepaid expenses to be applied to future rent expense. As the Company moved its premises during the year ended July 31, 2016, management has assessed the recoverability of the amount and recorded an allowance for doubtful accounts of $7,126 for the year ended July 31, 2016. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jan. 31, 2017 | |
Related Party Transactions | |
RELATED PARTY TRANSACTIONS | 6. RELATED PARTY TRANSACTIONS Key management personnel consist of the Chief Executive Officer, Chief Financial Officer, the President, and the directors of the Company. The remuneration of the key management personnel is as follows: a) Salaries of $60,000 (2016 - $Nil) and 400,000 shares of common stock valued at $60,000, recognized as consulting expense, to the CEO of the Company; b) Consulting fees of $5,262 (2016 - $Nil) to a company controlled by a director of the Company; and c) Consulting fees of $18,000 (2016 - $Nil) to the CFO of the Company d) Consulting fees of $33,617 (2016 - $15,000) to the President and former CEO of the Company; and e) Share-based payments of $570,255 (2016 - $Nil) to the CEO of the Company. As at January 31, 2017, the Company has recorded loans from related parties of $39,687 (US$30,500) (July 31, 2016 - $43,214 or US$33,099) representing advances made by a director and a former director and officer. The advances are due on demand without interest. As at January 31, 2017, included in due to related parties is $19,774 (July 31, 2016 - $25,494) in accounts and advances payable and accrued liabilities to current and former officers and companies controlled by directors and officers of the Company. Included in general and administration expenses for the period ended January 31, 2017 is rent of $Nil (2016 - $1,725) paid to Skanderbeg Capital Partners Inc., a company that previously advised the Company’s management and performed promotional work for the Company. |
CAPITAL STOCK AND ADDITIONAL PA
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL | 6 Months Ended |
Jan. 31, 2017 | |
Capital Stock And Additional Paid-in-capital | |
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL | 7. CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL Issued Capital Stock On October 28, 2015, pursuant to a share surrender and cancellation agreement, the Company cancelled 13,000,186 shares of common stock surrendered to the Company, originally issued through debt conversion agreements on February 11, 2015 and March 31, 2015. On January 29, 2016, the Company completed an initial public offering in Canada, issuing an aggregate of 6,050,000 shares of common stock at a price of $0.10 per share for gross proceeds of $605,000. In connection with the offering, the Company paid a cash commission of $48,400 and issued 484,000 agent warrants valued at $42,248 (discount rate – 0.43%, volatility – 215.3%, expected life – 2 years, dividend yield – 0%), exercisable at $0.10 per share for period of 24 months. The Company also paid the agent a corporate finance fee of $25,000 and incurred other share issuance costs of $53,667. On June 3, 2016, the Company issued 19,250 shares of common stock upon the exercise of agent warrants at a price of $0.10 per share. On July 18, 2016, the Company issued 1,500,000 shares of common stock at a price of $0.16 per share to Klondike pursuant to the Klondike properties purchase agreement (Note 3). On August 1, 2016, the Company issued 400,000 shares of common stock at a price of $0.15 per share to the Company’s CEO as compensation. The shares were valued at $60,000 on issuance and were recognized as consulting expense. On November 1, 2016 and November 7, 2016, the Company issued a total of On January 25, 2017, the Company issued 920,000 units valued at $0.20 per unit to an individual pursuant to a debt conversion by the individual in the amount of $184,000 (US$140,000), representing a cash commission equal to 7 per cent of the US$2,000,000 purchase price of the Idaho-Maryland property (Note 3). Private Placement On December 28, 2016, the Company completed a non-brokered private placement, issuing an aggregate of 21,044,500 units at a price of $0.20 per unit for gross proceeds of $4,208,900. 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 $0.40 for a period of two years from the date of issuance. In connection with the private placement, the Company paid finders fees of $218,410 and issued a total of 1,104,300 agent warrants exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance. On January 25, 2017, the Company completed a non-brokered private placement, issuing an aggregate of 1,340,000 units at a price of $0.20 per unit for gross proceeds of $268,000. 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 $0.40 for a period of two years from the date of issuance. In connection with the private placement, the Company paid finders fees of $5,220 and issued a total of 26,100 agent warrants exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance. During the period ended January 31, 2017, the Company received $43,750 in proceeds pertaining to the private placement of 455,000 units at $0.25 per unit, which closed subsequent to January 31, 2017 (Note 10); this amount has been recorded as subscriptions received in advance as at January 31, 2017. Stock Options During the period ended January 31, 2017, the Company granted a total of 2,729,142 stock options, exercisable at a weighted average price of $0.23 per share for a period of five years, to the Company’s CEO. The following incentive stock options were outstanding at January 31, 2017: Number Exercise Expiry Date 2,000,000 $ 0.15 January 31, 2021 586,600 0.20 August 8, 2021 2,142,542 0.24 December 27, 2021 4,729,142 0.20 Stock option transactions are summarized as follows: Number of Options Weighted Average Exercise Price Balance, July 31, 2015 — $ — Options granted 2,700,000 0.15 Balance, July 31, 2016 2,700,000 $ 0.15 Options granted 2,729,142 0.23 Options expired/forfeited (700,000 ) (0.15 ) Balance outstanding and exercisable, January 31, 2017 4,729,142 $ 0.20 Warrants The following warrants were outstanding at January 31, 2017: Number Exercise Expiry Date 192,670 $ 0.10 January 29, 2018 1,500,000 0.227 July 13, 2018 22,148,800 0.40 December 23, 2018 2,286,100 0.40 January 24, 2019 26,127,570 $ 0.39 Warrant transactions are summarized as follows: Number of Options Weighted Average Exercise Price Balance, July 31, 2015 — $ — Warrants issued 1,984,000 0.20 Warrants exercised (19,250 ) (0.10 ) Balance, July 31, 2016 1,964,750 $ 0.20 Warrants issued 24,434,900 0.40 Warrants exercised (272,080 ) (0.10 ) Balance outstanding, January 31, 2017 26,127,570 $ 0.39 During the period ended January 31, 2017, the Company issued 1,130,400 (2016 – 484,000) agent warrants with a weighted average fair value of $0.17 (2016 - $0.09). The following weighted average assumptions were used for the Black-Scholes option-pricing model valuation of agent warrants issued during the period: 2017 2016 Risk-free interest rate 0.76 % 0.43 % Expected life of warrants 2.0 years 2.0 years Expected annualized volatility 179.45 % 215.30 % Dividend Nil Nil Forfeiture rate 0 % 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. During the period ended January 31, 2017, the Company granted 2,729,142 (2016 - Nil) stock options with a weighted average fair value of $0.21 (2016 - $Nil). The Company recognized share-based payments expense of $570,255 (2016 - $Nil). The following weighted average assumptions were used for the Black-Scholes option-pricing model valuation of stock options granted during the period: 2017 2016 Risk-free interest rate 0.98 % N/A Expected life of options 5.00 years N/A Expected annualized volatility 147.36 % N/A Dividend — N/A Forfeiture rate — N/A |
SUPPLEMENTAL DISCLOSURE WITH RE
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | 6 Months Ended |
Jan. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS | 8. SUPPLEMENTAL CASH FLOW INFORMATION During the period ended January 31, 2017, the Company issued 1,130,400 agent warrants valued at $197,643, accrued $117,903 in share issuance costs through accounts payable and accrued liabilities, and issued 920,000 units, each unit comprising one common share and one share purchase warrant, valued at $184,000 for a debt conversion in relation to mineral property acquisition. During the period ended January 31, 2016, the Company issued 484,000 agent warrants valued at $42,248, accrued $6,658 in share issuance costs through accounts payable and accrued liabilities, and reallocated $51,948 in deferred financing costs to share issuance costs. |
SEGMENTED INFORMATION
SEGMENTED INFORMATION | 6 Months Ended |
Jan. 31, 2017 | |
Segmented Information | |
SEGMENTED INFORMATION | 9. SEGMENTED INFORMATION The Company has two reportable segments, being the acquisition of exploration and evaluation assets located in British Columbia, Canada, and California, United States. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jan. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 10. SUBSEQUENT EVENTS Subsequent to January 31, 2017, the Company: Issued 500,000 incentive stock options to an investor relations consultant, each option exercisable into one share of common stock at a price of $0.33 for a period of three years. Completed a non-brokered private placement, issuing an aggregate of 455,000 units at a price of $0.25 per unit for gross proceeds of $113,750. 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 $0.40 for a period of two years from the date of issuance. In connection with the private placement, the Company paid finders fees of $2,625 and issued a total of 10,500 agent warrants exercisable into one share of common stock at a price of $0.40 for a period of two years from the date of issuance. |
BASIS OF PREPARATION (Policies)
BASIS OF PREPARATION (Policies) | 6 Months Ended |
Jan. 31, 2017 | |
Basis Of Preparation Policies | |
Generally accepted accounting principles | 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, 2016. 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. |
Basis of Consolidation | Basis of Consolidation The condensed consolidated interim financial statements comprise the accounts of Rise Resources Inc., the parent company, and its wholly-owned subsidiary, Rise Grass Valley, Inc., a Nevada corporation, after the elimination of all material intercompany balances and transactions. 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. Inter-company transactions, balances and unrealized gains or losses on transactions are eliminated upon consolidation. |
Recently Adopted and Recently Issued Accounting Standards | Recently Adopted and Recently Issued Accounting Standards In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. This ASU eliminates the current requirement to present deferred tax assets and liabilities as current and noncurrent amounts in a classified balance sheet and replaces it with a noncurrent classification of deferred tax assets and liabilities. The ASU applies to all entities and is effective for annual periods beginning after December 15, 2017, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adoption of this standard. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Liabilities”. This ASU amendment addresses aspects of recognition, measurement, presentation and disclosure of financial instruments. It affects investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value, and simplifies the impairment assessment of equity investments without a readily determinable fair value by requiring a qualitative assessment. The ASU applies to all entities and is effective for annual periods beginning after December 15, 2017, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of adoption of this standard. Other than the above, the Company has determined that other significant newly issued accounting pronouncements are either not applicable to the Company’s business or that no material effect is expected on the financial statements as a result of future adoption. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated interim 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. Actual results could differ from those estimates. Significant areas requiring the use of estimates include the valuation allowance applied to deferred income taxes and valuation of stock options and agent warrants. Actual results could differ from those estimates, and would impact future results of operations and cash flows. |
MINERAL PROPERTIES (Tables)
MINERAL PROPERTIES (Tables) | 6 Months Ended |
Jan. 31, 2017 | |
Mineral Properties Tables | |
Schedule of Mineral Properties | January 31, 2017 July 31, 2016 Klondike, British Columbia $ 513,031 $ 513,031 Indata, British Columbia 50,000 $ 50,000 Idaho-Maryland, California 2,970,872 — Total $ 3,533,903 $ 563,031 |
CAPITAL STOCK AND ADDITIONAL 19
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (Tables) | 6 Months Ended |
Jan. 31, 2017 | |
Capital Stock And Additional Paid-in-capital Tables | |
Schedule of Stock Option Outstanding | Number Exercise Expiry Date 2,000,000 $ 0.15 January 31, 2021 586,600 0.20 August 8, 2021 2,142,542 0.24 December 27, 2021 4,729,142 0.20 Number of Options Weighted Average Exercise Price Balance, July 31, 2015 — $ — Options granted 2,700,000 0.15 Balance, July 31, 2016 2,700,000 $ 0.15 Options granted 2,729,142 0.23 Options expired/forfeited (700,000 ) (0.15 ) Balance outstanding and exercisable, January 31, 2017 4,729,142 $ 0.20 |
Schedule of Stock Warrants Outstanding | Number Exercise Expiry Date 192,670 $ 0.10 January 29, 2018 1,500,000 0.227 July 13, 2018 22,148,800 0.40 December 23, 2018 2,286,100 0.40 January 24, 2019 26,127,570 $ 0.39 Number of Options Weighted Average Exercise Price Balance, July 31, 2015 — $ — Warrants issued 1,984,000 0.20 Warrants exercised (19,250 ) (0.10 ) Balance, July 31, 2016 1,964,750 $ 0.20 Warrants issued 24,434,900 0.40 Warrants exercised (272,080 ) (0.10 ) Balance outstanding, January 31, 2017 26,127,570 $ 0.39 |
Schedule of stock option granted during the year | 2017 2016 Risk-free interest rate 0.76 % 0.43 % Expected life of warrants 2.0 years 2.0 years Expected annualized volatility 179.45 % 215.30 % Dividend Nil Nil Forfeiture rate 0 % 0 % 2017 2016 Risk-free interest rate 0.98 % N/A Expected life of options 5.00 years N/A Expected annualized volatility 147.36 % N/A Dividend — N/A Forfeiture rate — N/A |
NATURE AND CONTINUANCE OF OPE20
NATURE AND CONTINUANCE OF OPERATIONS (Details Narrative) - CAD | 3 Months Ended | 6 Months Ended | ||||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jul. 31, 2016 | Jan. 31, 2016 | Feb. 16, 2015 | |
Nature And Continuance Of Operations Details Narrative | ||||||
Loss for the period | CAD 1,018,379 | CAD 62,010 | CAD 1,315,531 | CAD 573,148 | CAD 60,318 | |
Accumulated Deficit | 3,152,500 | 3,152,500 | CAD 1,836,969 | |||
Working capital deficiency | CAD 779,255 | CAD 779,255 | ||||
Authorized Capital of Company | 400,000,000 | 400,000,000 | 400,000,000 | 400,000,000 |
MINERAL PROPERTIES (Details)
MINERAL PROPERTIES (Details) - CAD | Jan. 31, 2017 | Jul. 31, 2016 |
Mineral Property | CAD 3,533,903 | CAD 563,031 |
Klondike, British Columbia | ||
Mineral Property | 513,031 | 513,031 |
Indata, British Columbia | ||
Mineral Property | 50,000 | 50,000 |
Idaho-Maryland, California | ||
Mineral Property | CAD 2,970,872 |
BAD DEBT EXPENSE (Details Narra
BAD DEBT EXPENSE (Details Narrative) | 12 Months Ended |
Jul. 31, 2016CAD | |
Debt Disclosure [Abstract] | |
Bad debt expense | CAD 7,126 |
CAPITAL STOCK AND ADDITIONAL 23
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (Details) | 6 Months Ended |
Jan. 31, 2017CAD / sharesshares | |
Stock Option One [Member] | |
Number of Shares | shares | 2,000,000 |
Exercise Price | CAD / shares | CAD 0.15 |
Expiry Date | Jan. 31, 2021 |
Stock Option Two [Member] | |
Number of Shares | shares | 586,600 |
Exercise Price | CAD / shares | CAD 0.20 |
Expiry Date | Aug. 8, 2021 |
Stock Option Three [Member] | |
Number of Shares | shares | 2,142,542 |
Exercise Price | CAD / shares | CAD 0.24 |
Expiry Date | Dec. 27, 2021 |
Stock Option [Member] | |
Number of Shares | shares | 4,729,142 |
Exercise Price | CAD / shares | CAD 0.20 |
Warrant One [Member] | |
Number of Shares | shares | 192,670 |
Exercise Price | CAD / shares | CAD 0.10 |
Expiry Date | Jan. 29, 2018 |
Warrant Two [Member] | |
Number of Shares | shares | 1,500,000 |
Exercise Price | CAD / shares | CAD 0.227 |
Expiry Date | Jul. 13, 2018 |
Warrant Three [Member] | |
Number of Shares | shares | 22,148,800 |
Exercise Price | CAD / shares | CAD 0.40 |
Expiry Date | Dec. 23, 2018 |
Warrant Four [Member] | |
Number of Shares | shares | 2,286,100 |
Exercise Price | CAD / shares | CAD 0.40 |
Expiry Date | Jan. 24, 2019 |
Warrant [Member] | |
Number of Shares | shares | 26,127,570 |
Exercise Price | CAD / shares | CAD 0.39 |
CAPITAL STOCK AND ADDITIONAL 24
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (Details 2) - CAD / shares | 6 Months Ended | 12 Months Ended |
Jan. 31, 2017 | Jul. 31, 2016 | |
Stock Option [Member] | ||
Number of Options | ||
Beginning Balance | 2,700,000 | |
Granted | 2,729,142 | 2,700,000 |
Expired/Forfeited | (700,000) | |
Ending Balance | 4,729,142 | 2,700,000 |
Weighted Average Exercise Price | ||
Beginning Balance | CAD 0.15 | |
Granted | .23 | .15 |
Expired/Forfeited | (0.15) | |
Ending Balance | CAD .20 | CAD 0.15 |
Warrant [Member] | ||
Number of Options | ||
Beginning Balance | 1,964,750 | |
Granted | 24,434,900 | 1,984,000 |
Exercised | (272,080) | (19,250) |
Ending Balance | 26,127,570 | 1,964,750 |
Weighted Average Exercise Price | ||
Beginning Balance | CAD .20 | |
Granted | .40 | .20 |
Exercised | CAD (0.10) | (0.10) |
Ending Balance | CAD .20 |
CAPITAL STOCK AND ADDITIONAL 25
CAPITAL STOCK AND ADDITIONAL PAID-IN-CAPITAL (Details 3) | 6 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Warrant [Member] | ||
Risk-free interest rate | 0.76% | 0.43% |
Expected life of options | 2 years | 2 years |
Expected annualized volatility | 179.45% | 215.30% |
Stock Option [Member] | ||
Risk-free interest rate | 0.98% | |
Expected life of options | 5 years | |
Expected annualized volatility | 147.36% |