Gold State Resources Inc. announced a non-brokered private placement of 500 unsecured convertible debenture units at a price of CAD 1,000 per unit for gross proceeds of up to CAD 500,000 on April 14, 2022. Each convertible debenture unit will consist of CAD 1,000 in principal of unsecured convertible debentures and 6,666 common share purchase warrants of the company. The convertible debentures will mature 90 days from the issue date and bear interest at a rate of 10% per annum, payable on the maturity date.

The debenture holders will have the right convert at any time prior to the maturity date, all or a portion of the convertible debentures into common shares of the company at a price of CAD 0.05 per share. Each warrant will be exercisable to acquire one share of the company for a period of one year from the date of issue at an exercise price of CAD 0.05 per warrant share, subject to adjustment in certain events. The warrants are subject to an acceleration right exercisable by the company at its option if, the closing trading price of the shares is greater than CAD 0.25 per share for the preceding 10 consecutive trading days.

If the company provides notice that it intends to exercise its acceleration right, the accelerated expiry date of the warrants will be the 30th calendar day following the date of such notice of exercise. In such instance, all warrants not exercised prior to the accelerated expiry date shall expire on the accelerated expiry date. All securities issued will be subject to a statutory hold period expiring four months plus one day from closing.

The transaction is subject to a number of conditions, including, without limitation, approval of the TSX Venture Exchange.