[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
[ ] Check box if any part of the fee if offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
Item 6. Voting Securities and Principal Holders Thereof.
The following table sets forth certain information regarding the Corporations common stock beneficially owned as of June 1, 2020 for (1) each stockholder known to be the beneficial owner of 5% or more of the Corporations outstanding shares of common stock, (2) the Corporations Named Executive Officers (as defined herein) and directors, and all current executive officers and directors as a group. A person is considered to beneficially own any shares over which such person, directly or indirectly, exercises sole or shared voting or investment power, or over which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants or otherwise. Unless otherwise indicated, voting and investment power relating to the shares shown in the table is exercised solely by the beneficial owner thereof. Except as otherwise disclosed in the table below, the address of persons listed below is c/o Rise Gold Corp., Suite 650 669 Howe Street, Vancouver, British Columbia V6C 0B4. Unless otherwise indicated in the footnotes, each of the beneficial owners listed has, to the Corporations knowledge, sole voting and investment power with respect to the indicated securities.
For the purposes of computing the percentage of outstanding shares of the Corporations common stock held by the person named below, any shares that such person has the right to acquire within 60 days of June 1, 2020 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.
|
|
|
|
Title of Class
|
Name and Address of
Beneficial Owner
|
Amount and
Nature of
Beneficial
Ownership
|
Percent of Class (1)
|
5% or Greater Stockholders
|
Common Stock
|
Southern Arc Minerals Inc.
Suite 650 669 Howe Street
Vancouver, BC V6C 0B4
|
5,212,500 (2)
|
21.24%
|
Common Stock
|
Yamana Gold Inc. (3)
Royal Bank Plaza, North Tower
200 Bay Street, Suite 2200
Toronto, ON M5J 2J3
|
4,132,459 (3)
|
17.62%
|
Common Stock
|
EMA GARP FUND, LLP (4)
211 Grove Street
Wellesley, Massachusetts 02482
|
1,360,000 (4)
|
6.04%
|
Named Executive Officers, Directors and Nominees for Director; Executive Officers and Directors as a Group
|
Common Stock
|
Benjamin W. Mossman (CEO, President and Director)
|
1,305,841 (5)
|
5.62%
|
Common Stock
|
Vince Boon (CFO and Treasurer)
|
40,000 (6)
|
*
|
Common Stock
|
Thomas I. Vehrs (Director)
|
85,000 (7)
|
*
|
Common Stock
|
John G. Proust (Director)
|
5,557,500 (8)(9)
|
22.34%
|
Common Stock
|
Murray Flanigan (Director)
|
40,000 (10)
|
*
|
Common Stock
|
Lawrence Lepard (Director)
|
2,468,750 (11) (12)
|
10.79%
|
Common Stock
|
Executive officers and directors as a group (6 persons)
|
9,497,091
|
39.49%
|
* Less than 1%
(1)
Beneficial ownership is presented on a partially diluted basis, based on 22,073,132 shares of common stock issued and outstanding as of the date of this proxy statement. Pursuant to applicable SEC rules, options, warrants or other convertible securities currently exercisable or convertible, or exercisable or convertible within 60 days, are counted as outstanding for computing the percentage of the person holding such options, warrants or other convertible securities, but are not counted as outstanding for computing the percentage of any other person.
(2)
Includes 2,750,000 shares of common stock, warrants to purchase 2,000,000 shares of Common Stock at a price of $1.50 per share until April 18, 2021, warrants to purchase an additional 87,500 shares of common stock at a price of $1.30 per share until October 16, 2020 and warrants to purchase 375,000 shares of Common Stock at a price of $1.30 per share until November 5, 2020. John G. Proust, a director of the Corporation, is also the Chairman and CEO and a director of Southern Arc Minerals Inc.
(3)
Beneficially owned through by Meridian Jerritt Canyon Corp., a wholly owned subsidiary of Yamana Gold Inc. (Jerritt). Includes 2,754,973 shares of common stock, warrants to purchase 875,000 shares of Common Stock at a price of $1.30 per share until October 16, 2020 and warrants to purchase 502,486 shares of Common Stock at a price of $1.00 per share until March 1, 2021. In connection with Jerritts original investment in the Corporation, the Corporation and Jerritt agreed that for so long as Jerritt holds a 5% or greater interest in the Issuer, Jerritt will have: (a) a right to nominate one person to the Corporations Board of Directors, and (b) a pre-emptive right to participate in any future proposed equity offering of the Corporation in order to maintain its pro rata equity ownership interest and to increase its equity ownership interest up to 19.9% of the Corporations issued and outstanding shares of common stock. In addition, Jerritt was granted a right to nominate two individuals to an advisory committee established by the Corporation. Jerritt has not nominated a representative to serve on the Board of Directors.
(4)
Includes 930,000 shares of common stock, warrants to purchase 130,000 shares of Common Stock at a price of $1.50 per share until April 18, 2021, warrants to purchase 50,000 shares of Common Stock at a price of $1.00 per share until July 3, 2022 and warrants to purchase 250,000 shares of Common Stock at a price of $1.00 per share until August 19, 2022. EMA GARP GP, LLC is the general partner of the EMA GARP FUND, LLP. Lawrence Lepard, one of Corporations directors, is the sole member and manager of EMA GARP GP, LLC. See note (11).
(5)
Includes 162,829 shares of Common Stock, warrants to purchase 10,000 shares of Common Stock at a price of $1.30 per share until March 1, 2021, warrants to purchase 35,714 shares of Common Stock at a price of $1.00 per share until July 3, 2022 and 1,097,298 stock options, 58,660 of which are exercisable into shares of Common Stock at a price of $2.00 per share until August 8, 2021, 214,254 of which are exercisable into shares of Common Stock at a price of $2.40 per share until December 27, 2021, 263,100 of which are exercisable into shares of Common Stock at a price of $1.20 per share until April 18, 2023, 100,000 of which are exercisable into shares of Common Stock at a price of $1.00 per share until November 29, 2023 and 461,284 of which are exercisable into shares of Common Stock at a price of $0.70 per share until August 21, 2024.
(6)
Represents 40,000 stock options, 30,000 of which are exercisable into shares of Common Stock at a price of $1.20 per share until April 18, 2023 and 10,000 of which are exercisable into shares of Common Stock at a price of $0.70 per share until August 21, 2024.
(7)
Represents 85,000 stock options, 25,000 of which are exercisable into shares of Common Stock at a price of $1.20 per share until April 18, 2023, 20,000 of which are exercisable into shares of Common Stock at a price of $1.00 per share until November 29, 2023 and 40,000 of which are exercisable into shares of Common Stock at a price of $0.70 per share until August 21, 2024.
(8)
Includes 345,000 stock options held by John G. Proust, 120,000 of which are exercisable into shares of Common Stock at a price of $1.20 per share until April 18, 2023, 150,000 of which are exercisable into Common Stock at a price of $1.00 per share until November 29, 2023 and 75,000 of which are exercisable into shares of Common Stock at a price of $0.70 per share until August 21, 2024.
(9)
Includes 5,212,500 securities owned by Southern Arc Minerals Inc. John G. Proust, a director of the Corporation, is also the Chairman and CEO and a director of Southern Arc Minerals Inc. See note (2).
(10)
Represents 40,000 stock options which are exercisable into shares of Common Stock at a price of $0.70 per share until August 21, 2024.
(11)
Includes 591,875 shares of Common Stock held directly by Mr. Lepard, 135,000 shares of Common Stock held indirectly through his children, warrants to purchase 81,875 shares of Common Stock at a price of $1.20 per share until September 17, 2021, warrants to purchase 200,000 shares of Common Stock at a price
of $1.00 per share until August 19, 2022 and 100,000 stock options which are exercisable into shares of Common Stock at a price of $0.70 per share until August 21, 2024.
(12)
Includes 1,360,000 securities owned by EMA GARP FUND, LP. Mr. Lepard is the sole member and manager of EMA GARP GP, LLC, which is the general partner of EMA GARP FUND, LP. See note (4).
Changes in Control
The Corporation is not aware of any arrangements, including any pledge by any person of its securities, the operation of which may at a subsequent date result in a change in the Corporations control.
Item 7. Directors and Executive Officers.
See the Election of Directors and Corporate Governance sections of the Information Circular.
In addition, other than as disclosed in footnote (3) to the beneficial ownership table in Item 6 above with regard to Meridian Jerritt Canyon Corp., a wholly owned subsidiary of Yamana Gold Inc., there are no arrangements, agreements or understandings between non-management security holders and management under which non-management security holders may directly or indirectly participate in or influence the management of the Corporations affairs.
Benjamin W. Mossman, Chief Executive Officer, President and Director
Benjamin W. Mossman, PEng, age 42, was appointed as the Chief Executive Officer and a director of the Corporation on August 1, 2016. He was appointed the President of the Corporation on April 20, 2017.
Mr. Mossman is a mining engineer with over 16 years of experience in the mining industry including experience in capital markets, project evaluation, acquisitions, mine operations and development. He was formerly the President, Chief Executive Officer and a director of Banks Island Gold Ltd., a dormant mining company, formerly listed on the TSX Venture Exchange and currently in receivership. See Legal Proceedings below.
Vince Boon, Chief Financial Officer and Treasurer
Vince Boon, age 39, was appointed as the Corporations Chief Financial Officer and Treasurer on May 1, 2018. Mr. Boon is a chartered accountant with over ten years of professional accounting experience with private and public companies focusing on financial reporting, regulatory compliance, internal control and corporate finance activities. Mr. Boons experience includes financial reporting for both Canadian and U.S. listed companies with international subsidiaries, strategic planning, tax planning, corporate governance, equity financings and due diligence for acquisitions. Mr. Boon is currently the CFO/Corporate Secretary of Japan Gold Corp., and the CFO of Southern Arc Minerals Inc., and the CFO and a director of Lincoln Ventures Ltd. Mr. Boon holds a Bachelor of Science degree from the University of British Columbia and is a Chartered Professional Accountant, CPA, CA.
Dr. Thomas I. Vehrs, Director
Dr. Thomas I. Vehrs, age 73, was appointed to the Corporations Board of Directors on April 20, 2017. Dr. Vehrs is a highly regarded and experienced exploration geologist with over 40 years of experience in the Americas. During his career, Dr. Vehrs has conducted and managed numerous exploration programs resulting in the discovery and delineation of major copper, gold and silver deposits, including the Los Pelambres porphyry copper deposit in Chile, the Northumberland sediment-hosted gold deposit in central Nevada, the Rio Blanco porphyry copper deposit in northern Peru and orogenic gold deposits in Central Guatemala. For the past ten years, Dr. Vehrs held the position of Vice President of Exploration for Fortuna Silver Mines and was responsible for the development and execution of exploration programs at the Caylloma Mine in Peru and the San Jose Mine in southern Mexico. During this period, Fortuna Silver Mines was successful in expanding the resources, reserves and production rate at the San Jose Mine resulting in a market capitalization in excess of $1 billion. Dr. Vehrs holds a Ph.D. in geology from Syracuse University and served as an officer in the U.S. Army Corps of Engineers.
John G. Proust, Director
John G. Proust, age 61, was appointed a director on April 18, 2018. Mr. Proust has founded and managed a number of resource companies over the past 30 years. Mr. Proust has served on several boards and held senior operating positions and has directed and advised public and private companies regarding debt and equity financing, mergers and acquisitions and corporate restructuring since 1986. Mr. Proust is currently Chairman and CEO of Southern Arc Minerals Inc., which is one of the Corporations major stockholders; Chairman and CEO of Japan Gold Corp.; and President and a director of Lincoln Ventures Ltd. Mr. Proust has extensive experience in corporate governance, is a graduate of The Directors College, Michael G. De Groote School of Business at McMaster University and holds the designation of Chartered Director.
Murray Flanigan, Director
Murray Flanigan, age 53, was elected to the Corporations Board of Directors on June 27, 2019. Mr. Flanigan is a management consultant providing financial advisory services to a number of public and private oil and gas, mining and technology companies in North America and abroad. Mr. Flanigan is a Chartered Professional Accountant and a Chartered Financial Analyst with expertise in corporate finance, mergers and acquisitions, international taxation, risk management, banking, treasury, corporate restructuring and accounting, and has served as Chief Financial Officer for various public and private companies. Mr. Flanigan is currently a Managing Principal and the CFO of Kepis & Pobe Financial Group Inc., where he is responsible for all aspects of the companys accounting, financing, treasury, tax, and legal affairs including overseeing the companys corporate development activities. Mr. Flanigan is also a director and Chairman of the audit committee for Japan Gold Corp. Prior to founding his own consulting company, Mr. Flanigan served as Senior Vice President, Corporate Development and CFO of Qwest Investment Management Corp., where he was responsible for regulatory reporting and corporate filings for over 15 private and publicly listed companies and limited partnerships in Qwests portfolio, as well as arranging and closing numerous equity and debt financings. Mr. Flanigan also served as VP Corporate Development for Adelphia Communications Corporation, overseeing the companys financial restructuring and ultimate sale to Time Warner Inc. and Comcast Corporation for approximately US$18 billion.
Lawrence Lepard, Director
Lawrence Lepard, age 63, was appointed to the Corporations Board of Directors on August 22, 2019. Mr. Lepard runs Equity Management Associates, LLC, an investment partnership which has focused on investing in precious metals since 2008. Prior to EMA, Mr. Lepard spent 25 years as a professional investor and venture capitalist. From 1991 to 2004 he was one of two Managing Partners at Geocapital Partners in New Jersey which managed six venture capital partnerships, the last of which was $250 million. Geocapital was very active in technology, software and computer investing and invested heavily in the internet starting in 1993. Geocapital was the lead investor in Netcom, Inc., the first internet service provider to complete an initial public offering in 1996. Prior to Geocapital Mr. Lepard spent seven years as a General Partner at Summit Partners in Boston, MA. Summit is a large venture capital and private equity firm. He was employee number 4, joining one year after Summit was launched. Mr. Lepard holds an MBA with Academic Distinction from Harvard Business School and a BA in Economics from Colgate University.
None of the Corporations directors has been a director of any other company with a class of securities registered pursuant to section 12 of the Securities Exchange Act of 1934 (the Exchange Act), or subject to the requirements of section 15(d) of the Exchange Act, or any company registered as an investment company under the Investment Company Act of 1940, during the past five years.
Significant Employees
Other than its executive officers, the Corporation does not expect any other individuals to make a significant contribution to its business.
Family Relationships
There are no family relationships among the Corporations directors, executive officers or persons nominated or chosen to become directors or executive officers.
Legal Proceedings
Except as disclosed below, none of the Corporations directors, executive officers, promoters or control persons has been involved in any of the following events during the past 10 years:
·
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
·
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·
being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
·
being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated;
·
being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any law or regulation prohibiting mail or wire fraud or fraud in connection with any business activity;
·
being the subject of, or a party to, any judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated relating to an alleged violation of any federal or state securities or commodities law or regulation or any law or regulation respecting financial institutions or insurance companies; or
·
being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any stock, commodities or derivatives exchange or other self-regulatory organization.
Benjamin W. Mossman was a director and officer of Banks Island Gold Ltd. (Banks), a company formerly listed on the TSX Venture Exchange that traded under the symbol BOZ, during the time it assigned itself into bankruptcy on January 7, 2016. Banks appointed D. Manning & Associates as trustee in the bankruptcy proceedings. Subsequent to the bankruptcy, FTI Consulting of Vancouver, BC, was appointed as receiver by a major secured creditor. The trustee subsequently applied to be discharged from its role as trustee, which was granted on April 4, 2018. To the best of Mr. Mossmans knowledge, the secured creditor has taken possession of the property as of this date. To date, Banks remains undischarged from the bankruptcy proceedings.
Benjamin W. Mossman, Banks, and two other former employees of Banks, were subject to summary conviction proceedings commenced in August 2016 for alleged violations of the British Columbia provincial Environmental Management Act (the EMA), the Provincial Water Act, and the federal Fisheries Act. The charges are related to the active mining operations conducted by Banks at and on Banks Island, BC during the period from 2014 to 2016. The court found Mr. Mossman not guilty and acquitted of all charges specifically related to alleged pollution under the Fisheries and Water Act. He was acquitted of all but two minor offences under the EMA, for which the court imposed a $15,000 global fine against Mr. Mossman. All charges were dropped against one former employee and against Banks, and the court dismissed all charges against the other former employee.
Subsequent to the decision, the Crown and Defense Counsel for Mr. Mossman both filed appeals regarding certain of the original determinations as they relate to Mr. Mossman. The summary conviction appeal was heard by the BC
Supreme Court in May 2019. In February 2020, the court issued its decision and ordered a new trial in the matter. Counsel for Mr. Mossman are currently seeking leave to appeal the BC Supreme Court decision to the BC Court of Appeal.
In a second trial, the Crown charged Mr. Mossman with obstruction of justice related to the investigation of the underlying charges laid under the EMA and the other provincial and federal environmental regulations. The court acquitted him of that charge on March 6, 2019. No appeal of the acquittal was filed by the Crown.
None of the Corporations directors or executive officers has been involved in any transactions with the Corporation or any of its directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Management Agreements
On July 7, 2016, the Corporation entered into an executive employment agreement with Benjamin W. Mossman, the Corporations Chief Executive Officer, pursuant to which the Corporation engaged Mr. Mossmans services on an ongoing basis beginning on August 1, 2016. Pursuant to the agreement, the Corporation issued 400,000 shares of Common Stock to Mr. Mossman as a signing bonus on August 1, 2016, granted options to purchase 586,600 shares of Common Stock at a price of $0.20 per share (58,660 shares of Common Stock at a price of $2.00 per share on a post reverse split basis) for a period of five years and the Corporation agreed to pay Mr. Mossman an annual salary of $120,000. On April 19, 2017, the Corporation entered into a new executive employment agreement with Mr. Mossman (the Executive Employment Agreement) to replace the prior agreement. The Executive Employment Agreement commenced on May 1, 2017. The Executive Employment Agreement also provides for an annual salary of $180,000 per year. Effective March 1, 2019, Mr. Mossmans annual salary was changed to US$135,000 per year, the equivalent of $180,000 based on the prevailing exchange rate on the date of change. The Executive Employment Agreement provides that Mr. Mossman will, subject to the terms of the stock option plan and stock exchange policies, be granted options from time to time to maintain his right to purchase 5% of the Corporations issued and outstanding Common Stock. To date, Mr. Mossman has been granted options to acquire 1,097,298 shares of Common Stock (post reverse split) pursuant to the terms of the Executive Employment Agreement.
The Executive Employment Agreement, as amended April 16, 2018 includes compensation provisions for Mr. Mossman if there is a change of control, he is terminated without just cause, he resigns under circumstances contemplated in the Employment Agreement or he dies while in the Corporations employment. If there is a change of control and Mr. Mossman is terminated within one (1) year of the date of a change of control, he is entitled to a lump sum amount equal to three (3) years of Mr. Mossmans then applicable annual salary. If Mr. Mossman terminates his employment with us upon the occurrence of certain events, including a material adverse and fundamental change in his overall authority and responsibilities, Mr. Mossman will be entitled to a lump sum amount equal to three (3) months of Mr. Mossmans then applicable annual salary. If Mr. Mossman is otherwise terminated without just cause, Mr. Mossman will be entitled to an amount equal to three (3) months of Mr. Mossmans then applicable annual salary and will also be entitled to maintain in effect, until the earliest of the expiration of 18 months from the date of termination and the death of Mr. Mossman, participation in certain of the Corporations benefit plans and stock option plans. If Mr. Mossman dies while employed by the Corporation, Mr. Mossmans estate, subject to compliance with stock exchange requirements, the stock option plan, and the terms of the Executive Employment Agreement, will be entitled to continue Mr. Mossmans participation in the Corporations stock option plan.
On April 17, 2018, the Corporation entered into a consulting services agreement (the JPA Agreement) with J. Proust & Associates (the Consultant) pursuant to which the Consultant agreed to provide business advisory, finance, accounting, corporate administrative services and an office to the Corporation to maintain continuous disclosure obligations and comply with public listing requirements on the CSE in Canada (collectively, the JPA Services). The Consultant has provided the Corporation with personnel for the positions of Chief Financial Officer, treasurer, controller and corporate secretary. The term of the JPA Agreement was from April 17, 2018 to April 17, 2019. In consideration for provision of the JPA Services, the Consultant is paid $7,100 per month plus GST. On December 13, 2018 the JPA Agreement was amended to provide that the term of the JPA Agreement would be for a period of twelve months commencing and continue thereafter on a month to month basis, unless earlier terminated
in accordance with the terms of the JPA Agreement. The monthly fee was also increased to $15,000 effective January 1, 2019.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires a companys directors and officers, and persons who own more than 10% of any class of a companys equity securities which are registered under Section 12 of the Exchange Act, to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5, respectively. Such officers, directors and 10% stockholders are also required to furnish the company with copies of all Section 16(a) reports they file. Based solely on the Corporations review of the copies of such forms received by it, or written representations from the reporting persons as of the date of this proxy statement, the Corporation believes that all Section 16(a) filing requirements applicable to its directors, officers and 10% stockholders with respect to the fiscal year ended July 31, 2019 have been fulfilled with the following exceptions:
During the fiscal year ended July 31, 2019, the number of late filings and number of transactions not reported on a timely basis for each named person or entity was as follows: Benjamin Mossman, 1 report and 2 transactions; John Anderson, 4 reports and 3 transactions; and Southern Arc Minerals Inc., 1 report and 1 transaction.
Audit Committee Financial Expert
Murray Flanigan is an audit committee financial expert within the meaning of Item 401(h)(1) of Regulation S-K. In general, an audit committee financial expert is an individual member of the audit committee who (a) understands generally accepted accounting principles and financial statements, (b) is able to assess the general application of such principles in connection with the accounting for estimates, reserves and accruals, (c) has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity of issues that can reasonably be expected to be raised by a companys financial statements, (d) understands internal controls over financial reporting, and (e) understands audit committee functions. The Corporation has determined that Mr. Flanigan is an independent director as defined in Nasdaq Listing Rule 5605(a)(2).
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Board has furnished the following report relating to its oversight of the accounting and financial reporting of Rise and the audit of Rises financial statements for the fiscal year ended July 31, 2019. The report is not deemed to be soliciting material or filed with the SEC or subject to the SECs proxy rules or to the liabilities of Section 18 of the Exchange Act, and the report shall not be deemed to be incorporated by reference into any prior or subsequent filing under the Securities Act, or the Exchange Act, except to the extent that the Corporation specifically incorporates it by reference into any such filing.
The Audit Committee oversees the financial reporting process on behalf of the Board. Management has the primary responsibility for the financial reporting process, principles and internal controls as well as preparation of the Corporations financial statements. From September 6, 2018 to June 27, 2019, the members of the Audit Committee were John G. Proust, Thomas I. Vehrs and John Anderson. Thomas I. Vehrs and John Anderson were independent directors. John G. Proust is not an independent director as defined by the applicable Nasdaq and SEC rules. On June 27, 2019 Murray Flanigan replaced Mr. Anderson as a member of the Audit Committee. Mr. Flanigan is an independent director as defined by the applicable Nasdaq and SEC rules.
In fulfilling its responsibilities, the Audit Committee appointed independent auditors Davidson & Company LLP, for the fiscal year ended July 31, 2019. The Audit Committee reviewed and discussed with the independent auditors the overall scope and specific plans for their audit. The Audit Committee also reviewed and discussed with the independent auditors and with management the Corporations audited financial statements and the adequacy of its internal controls. The Audit Committee met with the independent auditors, without management present, to discuss the results of the Corporations independent auditors audits, their evaluations of the Corporations internal controls and the overall quality of the Corporations financial reporting.
The Audit Committee monitored the independence and performance of the independent auditors. The Audit Committee discussed with the independent auditors the matters required to be discussed by Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 16Communications with Audit Committees. The Corporations independent auditors have provided the Audit Committee with the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent auditors communications with the Audit Committee concerning independence, and the Audit Committee has discussed with the independent auditors the independent auditors independence. Based upon the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Corporations Annual Report on Form 10-K for the fiscal year ended July 31, 2019, for filing with the SEC.
Murray Flanigan, Chairman
Thomas I. Vehrs
John G. Proust
Compensation Committee
At present, the Corporations board of directors (the Board) as a whole determines the compensation of the Corporations Chief Executive Officer and Chief Financial Officer and does so with reference to industry standards and the financial situation of the Corporation. The Board has the sole responsibility for determining the compensation of the directors of the Corporation.
Given the Corporations size, limited operating history and lack of revenues, the Board does not plan to form a compensation committee to monitor and review the salary and benefits of the executive officers of the Corporation at the present time. The Board will carry out these functions until such time as it deems the formation of a compensation committee is warranted.
Code of Ethics
During the Corporations financial year ended July 31, 2008, the Board adopted a written Code of Ethics within the meaning of Item 406(b) of Regulation S-K under the Securities Act, a copy of which has been filed on EDGAR as an exhibit to the Corporations annual reports on Form 10-K. The Code of Ethics obligates the Corporations directors, officers and employees to disclose potential conflicts of interest and prohibits those persons from engaging in such transactions without the Corporations consent.
The Board is also required to comply with the conflict of interest provisions of relevant corporate and securities regulation in order to ensure that directors exercise independent judgment in considering transactions and agreements in respect of which a director or officer has a material interest.
Board Leadership Structure and Role in Risk Oversight
The Board of Directors as a whole is responsible for risk oversight. Executive officers address and discuss with the Board the Corporations risks and the manner in which the Corporation manages or mitigates such risks. While the Board has the ultimate responsibility for risk oversight, the Board works in conjunction with the Audit Committee on certain aspects of its risk oversight responsibilities. In particular, the Audit Committee focuses on financial reporting risks and related controls and procedures. The Corporation does not currently have a compensation committee or a nominating committee, so the full Board evaluates the risks associated with compensation philosophy and programs and strives to create compensation practices that do not encourage excessive levels of risk taking that would be inconsistent with the Corporations strategies and objectives, and it oversees risks associated with the Corporations Code of Ethics.
Director Independence
Because the Corporations common stock is not currently listed on a national securities exchange, it currently uses the definition in Nasdaq Listing Rule 5605(a)(2) for determining director independence, which provides that an independent director is a person other than an executive officer or employee of the company or any other
individual having a relationship which, in the opinion of the companys Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nasdaq listing rules provide that a director cannot be considered independent if:
·
the director is, or at any time during the past three years was, an employee of the company;
·
the director or a family member of the director accepted any compensation from the company in excess of US$120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);
·
a family member of the director is, or at any time during the past three years was, an executive officer of the company;
·
the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipients consolidated gross revenue for that year or US$200,000, whichever is greater (subject to certain exclusions);
·
the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
·
the director or a family member of the director is a current partner of the companys outside auditor, or at any time during the past three years was a partner or employee of the companys outside auditor, and who worked on the companys audit.
The Corporation has determined that Thomas I. Vehrs, Murray Flanigan and Lawrence Lepard meet this definition of independence.
Attendance of Directors at Meetings
Five (5) meetings of the Board were held during the year ended July 31, 2019, and all directors attended all such meetings either in person or by electronic means.
The Corporation does not have a policy regarding attendance of directors at stockholder meetings. Of those who were directors at the time attended the Corporations last annual general meeting held on June 27, 2019, two directors attended such meeting in person.
Shareholder Communications with the Board
The Corporations stockholders may communicate with the Board, including non-executive directors or officers, by sending written communications addressed to such person or persons in care of Rise Gold Corp., Attention: Secretary, Suite 650 669 Howe Street, Vancouver, British Columbia V6C 0B4. All communications will be compiled by the Secretary and submitted to the addressee. If the Board modifies this process, the revised process will be posted on the Corporations website.