PINX:BONZ Bonanza Goldfields Corp Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

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U.S. Securities and Exchange Commission
Washington, D.C. 20549
____________________
 
FORM 10-Q
____________________
 
(Mark One)
 
   o   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended March 31, 2012
 
   þ   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
 
For the transition period from N/A through N/A 
____________________

Commission File No. 000-53612
____________________
 
Bonanza Goldfields Corp.
(Name of registrant as specified in its charter)
 
Nevada   26-2723015
State of Incorporation    IRS Employer Identification No.
 
2415 East Camelback Road, Phoenix, AZ  85016
(Address of principal executive offices)

 (928) 251-4044
(Issuer’s telephone number)
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.0001 par value per share
(Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:  Yes ¨      No þ
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o     No þ
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non–accelerated filer. See definition of “accelerated filer large accelerated filer” and “Smaller reporting company” in Rule 12b–2 of the Exchange Act. (Check one):

Large accelerated filer   ¨       Accelerated filer   ¨       Non–Accelerated filer   ¨      Smaller reporting company   þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).  Yes o    No  þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class
 
Outstanding  April 30, 2012
Common stock, $0.0001 par value
 
330,862,680



 
 

 
 
BONANZA GOLDFIELDS CORP.
INDEX TO FORM 10-Q FILING
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2012 AND 2011

TABLE OF CONTENTS

     
Page
 
PART I - FINANCIAL INFORMATION
     
       
Item 1.
Financial Statements (unaudited)
     
 
Balance Sheets
    4  
 
Statements of Operations
    5  
 
Statement of Cash Flows
    6  
 
Notes to Financial Statements
    7  
Item 2.
Management Discussion & Analysis of Financial Condition and Results of Operations
    21  
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
    25  
Item 4.
Controls and Procedures
    25  
         
PART II - OTHER INFORMATION
       
           
Item 1.
Legal Proceedings
    28  
Item 1A.
Risk Factors
    29  
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
    30  
Item 3.
Defaults Upon Senior Securities
    30  
Item 4.
Mine Safety Disclosures
    31  
Item 5.
Other information
    31  
Item 6.
Exhibits
    31  

 
2

 
 
PART I – FINANCIAL INFORMATION
 
ITEM 1.   INTERIM FINANCIAL STATEMENTS AND NOTES TO INTERIM FINANCIAL STATEMENTS

General

The accompanying interim financial statements have been prepared in accordance with the instructions to Form 10-Q.  Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles.  Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report on Form 10-K for the year ended June 30, 2011.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.  Operating results for the nine months ended March 31, 2012 are not necessarily indicative of the results that can be expected for the year ending June 30, 2012.


 
3

 
 
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
BALANCE SHEETS
(Unaudited)
 
   
March 31,
   
June 30,
 
   
2012
   
2011
 
ASSETS:
           
CURRENT ASSETS
           
   Cash
  $ 69,587     $ 23,306  
   Prepaid expenses
    5,000       -  
      Total current assets
    74,587       23,306  
                 
Property and equipment, net
    9,911       7,250  
                 
Mining claims
    250,000       250,000  
    TOTAL ASSETS
  $ 334,498     $ 280,556  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT:
               
                 
CURRENT LIABILITIES:
               
   Accounts payable and accrued liabilities
  $ 46,326     $ 93,342  
   Accrued interest
    27,948       27,098  
   Accounts payable and accrued liabilities - related party
    18,500       76,316  
   Deferred liabilities
    50,000       50,000  
   Convertible note payable
    -       53,000  
   Notes payable, net of discount $71,748 and $29,430
    597,951       520,269  
   Stock payable
    29,500       -  
      TOTAL LIABILITIES
    770,225       820,025  
                 
STOCKHOLDERS' DEFICIT:
               
   Series A Preferred stock, $0.0001 par value, 20,000,000 shares authorized;
               
   0 and 3,000,000 issued and outstanding as of
               
   March 31, 2012 and June 30, 2011, respectively
    -       300  
   Common stock, $0.0001 par value, 500,000,000 shares authorized;
               
   311,529,345 and 278,507,916 issued and outstanding as of
               
   March 31, 2012 and June 30, 2011, respectively
    31,153       27,851  
   Additional paid-in capital
    5,585,442       4,947,879  
   Deficit accumulated during exploration stage
    (6,052,322 )     (5,515,499 )
      TOTAL STOCKHOLDERS' DEFICIT
    (435,727 )     (539,469 )
                 
    TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ 334,498     $ 280,556  

The accompanying notes are an integral part of these financial statements.

 
4

 
 
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
 
   
For the Three Months Ended
   
For the Nine Months Ended
   
For the Period
 
   
March 31,
   
March 31,
   
from March 6, 2008
 
                           
(inception) through
 
   
2012
   
2011
   
2012
   
2011
   
March 31, 2012
 
         
(Restated)
         
(Restated)
       
                               
REVENUE
  $ -     $ -     $ -     $ -     $ -  
                                         
OPERATING EXPENSES:
                                       
    General and administrative
    89,836       548,435       318,871       843,972       2,060,994  
    Exploration expense
    10,852       11,440       67,832       11,440       250,870  
    Depreciation expense
    120       -       362       -       362  
    Impairment of mining claims
    -       -       -       565,700       714,700  
    Impairment of other assets
    -       -       -       -       32,122  
                                         
         Total operating expenses
    100,808       559,875       387,065       1,421,112       3,059,048  
                                         
OTHER EXPENSES:
                                       
    Interest expense
    34,950       9,908       90,758       17,619       2,784,990  
    Loss on conversion of accounts payable
    -       -       -       -       27,514  
    Loss on debt conversion
    -       23,500       -       96,500       121,770  
    Loss on settlement of litigation
    -       -       59,000       -       59,000  
        Total other expenses
    34,950       33,408       149,758       114,119       2,993,274  
                                         
NET LOSS
  $ (135,758 )   $ (593,283 )   $ (536,823 )   $ (1,535,231 )   $ (6,052,322 )
                                         
NET LOSS PER SHARE:
                                       
Basic and diluted
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.01 )        
Weighted average common shares
                                       
outstanding, basic and diluted
    304,578,551       165,745,355       294,365,241       130,867,229          
 
The accompanying notes are an integral part of these financial statements.

 
5

 
 
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
For the Nine Months Ended
   
For the Period
 
   
March 31,
   
from March 6, 2008
 
               
(inception) through
 
   
2012
   
2011
   
March 31, 2012
 
         
(Restated)
       
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
  Net loss
  $ (536,823 )   $ (1,535,231 )   $ (6,052,322 )
  Adjustments to reconcile net loss to net cash
                       
    used in operating activities:
                       
   Depreciation and amortization
    362       -       362  
   Impairment of mining claims
    -       565,700       714,700  
   Impairment of other assets
    -       -       32,122  
   Options issued
    -       -       2,500  
   Common stock issued for compensation
    62,800       687,700       1,207,119  
   Beneficial conversion feature
    -       -       2,074,827  
   Option issued for services
    72,414       -       174,412  
   Loss on debt conversion
    -       96,500       121,770  
   Loss on accounts payable conversion
    -       -       27,514  
   Amortization of debt discount
    48,182       6,895       117,139  
   Stock issued for interest expense
    4,000       -       500,760  
   Loss on settlement of litigation
    59,000       -       59,000  
   Changes in assets and liabilities:
                       
     Prepaid expenses
    (5,000 )     -       (5,000 )
     Accounts payable and accrued expenses
    (46,166 )     82,825       82,104  
     Accrued expenses - related party
    (38,488 )     22,050       42,772  
     Other payables
    -       -       (9,944 )
          Net cash used in operating activities
    (379,719 )     (73,561 )     (910,165 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
    Investment in mining property
    -       -       (50,000 )
    Purchase of intangible asset
    -       -       (99,000 )
          Net cash used in investing activities
    -       -       (149,000 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
 Proceeds from investment
    -       50,000       50,000  
 Repayment of notes payable
    (58,000 )     -       (115,500 )
 Proceeds from notes payable
    125,000       23,300       483,800  
 Conversion of notes payable
    -       -       60,452  
 Proceeds from convertible note payable
    -       -       31,000  
 Proceeds from the issuance of common stock
    359,000       -       619,000  
          Net cash provided by financing activities
    426,000       73,300       1,128,752  
                         
INCREASE (DECREASE) IN CASH
    46,281       (261 )     69,587  
CASH, BEGINNING OF PERIOD
    23,306       261       -  
CASH, END OF PERIOD
  $ 69,587     $ -     $ 69,587  
                         
SUPPLEMENTAL CASH FLOW INFORMATION:
                       
                         
Interest paid
  $ 32,725     $ 9,908     $ 503,900  
Income taxes paid
  $ -     $ -     $ -  
                         
NONCASH INVESTING AND FINANCING TRANSACTIONS
                 
                         
Common stock issued to acquire mining claim
  $ -     $ 250,000     $ 458,700  
Common stock issued for fixed assets
  $ 3,023     $ -     $ 39,395  
Common stock issued for accounts payable and accrued liabilities
  $ 19,328     $ -     $ 33,878  
Common stock issued for conversion of debt
  $ -     $ 83,000     $ 126,267  
Common stock issued for debt modification
  $ 15,500     $ -     $ 63,887  
Common stock to be issued for settlement of litigation
  $ 29,500     $ -     $ 29,500  
Preferred stock issued for accrued compensation
  $ -     $ -     $ 300  

The accompanying notes are an integral part of these financial statements.

 
6

 
 
BONANZA GOLDFIELDS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS

Bonanza Goldfields Corp. (the “Company”) was incorporated under the laws of the State of Nevada on March 6, 2008 (Inception). On August 3, 2009, the Company changed its fiscal year end to June 30th from June 18th.  The Company is in the process of acquiring mineral properties or claims located in Arizona. The recoverability of amounts from the properties or claims will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying properties and/or claims, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under the property and/or claim agreements and to complete the development of the properties and/or claims, and upon future profitable production or proceeds for the sale thereof.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern. However, the Company has a working deficit and has not generated revenues since inception. During the nine months ended March 31, 2012, the Company incurred a net loss of $536,823.  For the period from inception through March 31, 2012, the Company has an accumulated deficit of $6,052,322.  Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the support of certain stockholders.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.  In this regard, Management is planning to raise any necessary additional funds through loans and additional sales of its common stock. There is no assurance that the Company will be successful in raising additional capital.
 
The Company's ability to meet its obligations and continue as a going concern is dependent upon its ability to obtain additional financing, achievement of profitable operations and/or the discovery, exploration, development and sale of mining reserves. The Company cannot reasonably be expected to earn revenue in the exploration stage of operations. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure financing when needed or to obtain such financing on terms satisfactory to the Company, if at all.
 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's latest Annual Report filed with the SEC on Form 10-K for the year ended June 30, 2011.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.  Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.
 
 
7

 

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates.

Management evaluates these estimates and assumptions on a regular basis.  Actual results could differ from those estimates.

Exploration Stage Company

The Company's financial statements are prepared pursuant to SEC guidance and Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 915, Development Stage Entities, as it devotes substantially all of its efforts to acquiring and exploring mining interests that will eventually provide sufficient net profits to sustain the Company’s existence.

Mineral property rights

All direct costs related to the acquisition of mineral property rights are capitalized. Exploration costs are charged to operations in the period incurred until such time as it has been determined that a property has economically recoverable reserves, at which time subsequent exploration costs and the costs incurred to develop a property are capitalized. The Company reviews the carrying values of its mineral property rights whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net recoverable amounts. An impairment loss is recognized when the carrying value of those assets is not recoverable and exceeds its fair value. As of March 31, 2012, management has determined that there was no impairment loss required for the nine months then ended.
 
At such time as commercial production may commence, depletion of each mining property will be provided on a unit-of-production basis using estimated proven and probable recoverable reserves as the depletion base. In cases where there are no proven or probable reserves, depletion will be provided on the straight-line basis over the expected economic life of the mine.
 
Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Management has determined that there is no impairment loss required for the nine months ended March 31, 2012.
 
 
8

 
 
Basic and Diluted Net Loss Per Share

Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period.  The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Diluted net loss per share for the Company is the same as basic net loss per share, as during the period where a net loss is reported the inclusion of common stock equivalents would be antidilutive.  

At March 31, 2012 and 2011, common stock equivalents consisted of warrants to purchase 15 million and 0 shares of common stock, respectively.

Recent Accounting Pronouncements

The Company’s management does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

NOTE 3 – MINING CLAIMS

The following is a detail of mining claims at March 31, 2012 and June 30, 2011:

   
March 31,
2012
   
June 30,
2011
 
             
Tarantula (Hull Lode) Mining Claim
  $ 250,000     $ 250,000  
Midas Placer Mining Claim
    565,700       565,700  
Osiris Gold Joint Venture
    50,000       50,000  
      865,700       865,700  
Impairment of mining claims
    (615,700 )     (615,700 )
Total Mining Claims
  $ 250,000     $ 250,000  

The Company has impaired all claims expect for the Tarantula (Hull Lode) mining claim.
 
 
9

 

NOTE 4 – NOTES PAYABLE

The Company had the following notes payable outstanding as of March 31, 2012 and June 30, 2011:
 
             
   
March 31, 
2012
   
June 30,
2011
 
             
Gold Exploration LLC (a)
           
Dated - June 1, 2008
  $ 52,699     $ 52,699  
                 
Venture Capital International (b)
               
Dated – March 30, 2009
    12,000       12,000  
                 
Venture Capital International (c)
               
Dated - May 7, 2009
    17,000       17,000  
                 
Advantage Systems Enterprises Limited (d)
               
Dated – July 3, 2009
    17,000       17,000  
                 
Advantage Systems Enterprises Limited (e)
               
Dated – August 7, 2009
    10,000       10,000  
                 
Venture Capital International (f)
               
Dated – October 15, 2009
    10,000       10,000  
                 
Venture Capital International (g)
               
Dated – October 27,2009
    7,000       7,000  
                 
Advantage Systems Enterprises Limited (h)
               
Dated – November 9, 2009
    25,000       25,000  
                 
Venture Capital International (i)
               
Dated – November 23, 2009
    5,000       5,000  
                 
Strategic Relations Consulting, Inc. (j)
               
Dated – March 31, 2010
    15,000       15,000  
                 
Gold Exploration LLC (l)
               
Dated July 29, 2010
    97,000       97,000  
                 
Summit Technology Corporation, Inc. (k)
               
Dated November 22, 2010
    2,000       7,000  
                 
Freedom Boat, LLC (before unamortized discount) (m)
               
Dated February 7, 2011
    250,000       250,000  
                 
Asher Enterprises, Inc. Convertible Note (n)
               
Dated – April 6, 2011
    -       53,000  
                 
Dr. Linh B. Nguyen (o)
               
Dated May 23, 2011
    25,000       25,000  
                 
Mr. Charles Chapman (p)
               
Dated December 27, 2011
    50,000       -  
Mr. Leroy Steury
               
Dated March 12, 2012 (q)
    75,000       -  
Total notes and convertible note payable
    669,699       602,699  
Less current portion of long-term debt
    (597,951 )     (573,269 )
Less note discount
    (71,748 )     (29,430 )
Long term debt
  $ -     $ -  
 
(a) The Company entered into a purchase agreement to purchase mining claims with Gold Exploration LLC in the amount of $99,000 on June 1, 2008. The Company paid $15,000 in cash and issued a note for $84,000 with an interest rate of 12% for the remaining balance. Pursuant to the purchase agreement, $7,000 should be paid each 90 days until the full principal balance plus accrued interest is paid off. As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Gold Exploration LLC for this note is $63,770 and $59,022, respectively.  This note is presently in default.

(b) On March 30, 2009, the Company issued a $12,000 demand promissory note to Venture Capital International, Inc. The note is due on demand with an interest rate of 5%.  As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Venture Capital International, Inc. related to this note is $13,782 and $13,332, respectively.
 
 
10

 

(c) On May 7, 2009, the Company issued a $17,000 demand promissory note to Venture Capital International, Inc.   The note is due on demand and has an interest rate of 5%.  As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Venture Capital International, Inc. related to this note is $19,436 and $18,798, respectively.

(d) On July 3, 2009, the Company issued a $17,000 demand promissory note to Advantage Systems Enterprise Limited.  The note is due on demand with an interest rate of 5%.  As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Advantage Systems Enterprise Limited under this note is $19,338 and $18,700 respectively.

(e) On August 7, 2009, the Company issued a $10,000 demand promissory note to Advantage Systems Enterprises Limited.  The note is due on demand with an interest rate of 5%. As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Advantage Systems Enterprise Limited, Inc. related to this is $11,323 and $10,948, respectively.

(f) On October 15, 2009, the Company issued a $10,000 demand promissory note to Venture Capital International.  The note is due on demand with an interest rate of 5%.  As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Venture Capital International related to this note is $11,228 and $10,853, respectively.

(g) On October 27, 2009, the Company issued a $7,000 demand promissory note to Venture Capital.  The note is due on demand with an interest rate of 5%.  As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to with Venture Capital International related to this note is $7,849 and $7,586, respectively.

(h) On November 9, 2009, the Company issued a $25,000 demand promissory note to Advantage Systems Enterprise Limited.  The note is due on demand with an interest rate of 5%.  As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Advantage Systems Enterprise Limited related to this is $28,010 and $27,072, respectively.

(i) On November 23, 2009, the Company issued a $5,000 demand promissory note to Venture Capital International.  The note is due on demand with an interest rate of 5%. As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Venture Capital International related to this note is $5,588 and $5,400, respectively.

(j) On March 31, 2010, the Company issued a $15,000 demand promissory note to Strategic Relations Consulting, Inc.  The note is due on demand with an interest rate of 5%.  As of March 31, 2012 and June 30, 2011 principal and accrued interest payable to Strategic Relations Consulting, Inc. related to this note is $16,502 and $15,939, respectively.

(k) On November 22, 2010, the Company issued a $7,000 demand promissory note to Summit Technologies Corporation, Inc.  The note is due on demand with an interest rate of 5%.  As of March 31, 2012 and June 30, 2011, principal and accrued interest payable to Strategic Relations Consulting, Inc. related to this note is $2,286 and $7,211, respectively.

All of the demand promissory notes issued by the Company were unsecured.

(l) On July 29, 2010, the Company issued 8,300,000 common shares to Gold Exploration LLC, valued at $83,000 (or $0.01 per share) based upon the closing price of the Company’s stock on the date the agreement was executed, to partially repay  $10,000 of principal on the promissory note held by Gold Exploration LLC initially issued to Global Mineral Resources Corporation.  This payment of common stock reduced the outstanding balance of the note held by Gold Exploration LLC to $97,000. The Company recognized a loss on debt conversion of $73,000.  Recently the holder of the note called the balance of the note and demanded payment although the agreement states the note is not due until 2015 and the Company is not in default of the terms of the note.  The Company is in negotiations with the holder to resolve these matters.  The note is classified as a current liability on the balance sheet.
 
 
11

 

(m) On February 7, 2011, the Company issued a $250,000 promissory note with an interest rate of 12% per annum to Freedom Boat LLC (“Freedom Boat”). Payment of $2,500 is due monthly from July 5, 2011 through December 5, 2011 with a final payment of interest and principal of $260,000 due on February 7, 2012. Freedom Boat also has a right to royalties under certain conditions. The note is secured by the Hull Lode claim, the West Acre Hull tract, property held by David Janney and 10,000,000 of the Company’s common shares currently held in escrow.  Proceed from the note was used to purchase Tarantula Mining Claim from Judgetown, LLC.  As of March 31, 2012 and June 30, 2011, the remaining principal owed was $250,000.  This note is presently in default but the Company is negotiating with the holder for an extension of this note.

(n) The Company entered into a convertible promissory note with Asher Enterprises, Inc. on April 6, 2011 in the amount of $53,000. The note was due and payable on January 9, 2012 with an interest rate of 8%.  The note is convertible into 53,127,506 common shares by the holder.  As of June 30, 2011, the Company had a balance due including principal and accrued interest to Asher Enterprises, Inc. related to this promissory note in the amount of $53,883.  In September 2011, the Company paid $63,125 to satisfy all of the outstanding principal and accrued interest. $10,125 was recorded as interest expense.

(o) The Company entered into a demand promissory note with Linh B. Ngnyen on May 23, 2011 in the amount of $25,000.  The note is due on demand with an interest rate of 5%.  As of March 31, 2012 and June 30, 2011, the Company had a balance due including principal and accrued interest to Linh B. Ngnyen related to this promissory note in the amount of $26,065 and $25,127, respectively.

(p) On December 27, 2011, the Company issued a $50,000 promissory note to Mr. Charles Chapman.  The note was due on February 15, 2012 with an interest rate of 12%.  Pursuant to the note agreement, Mr. Chapman has the right to receive 500,000 shares of the Company’s common stock in lieu of interest payment. On December 28, 2011, the Company issued the 500,000 shares valued at $4,000 in lieu of the interest.  On March 19, 2012, the note agreement was amended to extend the due date to May 15, 2012.  Pursuant to the amendment, the Company issued an additional 500,000 common shares valued at $15,500.

(q) On March 12, 2012, the Company issued a $75,000 convertible note to Mr. Leroy Steury. Mr. Leroy Steury has the right to receive 7.5 million shares of common stock in lieu of unpaid principal and interest before June 17, 2012. The Company recorded a beneficial conversion feature of $75,000 on March 12, 2012 and amortized debt discount of $15,489 during the nine months ended March 31, 2012.

NOTE 5 - EQUITY

During the nine months ended March 31, 2012, the Company issued 42,571,429 shares of common stock for $359,000 in cash.  Within the 42,571,429 shares issued, 7,000,000 shares were issued to an investor with a right to sell the shares back to the Company at an interest rate of 12% after April 11, 2012. On April 12, 2012, the holder waived the right to sell 7 million shares back. As  consideration, the Company issued the investor warrants to purchase 2,500,000 shares of the Company’s common stock at $0.02 per share. The warrants expire on October 11, 2012 and have a fair value of $66,985 on the grant date. Proceeds of $56,000 from this issuance originally recorded as refundable subscription has been reclassified to additional paid-in capital.

On September 23, 2011, the Company issued 750,000 shares of common stock valued at $3,023 to purchase equipment.

During the three months ended September 30, 2011, as part of the resignation of David Janney, former Chief Executive Officer and Chief Financial Officer of the Company, Mr. Janney surrendered 20,000,000 common shares and 3,000,000 preferred shares of the Company. These shares were then cancelled and the Company recorded an adjustment to additional paid-in capital of $2,300. Additional paid-in capital was also decreased by $19,327 to write off the accrued compensation payable to Mr. Janney initially recorded in prior periods.
 
 
12

 

During the nine months ended March 31, 2012, the Company issued 6,200,000 shares of common stock to its director, officer and consultants for services valued at $62,800.

On December 28, 2011, the Company issued 500,000 shares of common stock in lieu of interest payment of a note held by Mr. Charles Chapman. The shares were valued at $4,000.

On February 26, 2012, the Company issued 2,500,000 shares to David Janney, former officer, pursuant to a settlement agreement. See Note 9.

On March 19, 2012, the Company issued 500,000 shares to a note holder pursuant to an amendment to a note agreement. See Note 4 (p).

NOTE 6 – STOCK-BASED COMPENSATION
 
Effective June 18, 2008, the Board of Directors of the Company approved the 2008 Stock Option and Restricted Stock Plan (the "2008 Plan").  The Plan reserves 1,000,000 shares of common stock for grants of incentive stock options, nonqualified stock options, warrants and restricted stock awards to employees, non-employee directors and consultants performing services for the Company. Options and warrants granted under the Plan have an exercise price equal to or greater than the fair market value of the underlying common stock at the date of grant and become exercisable based on a vesting schedule determined at the date of grant.  The options expire 2 years from the date of grant whereas warrants generally expire 5 years from the date of grant. Restricted stock awards granted under the Plan are subject to a vesting period determined at the date of grant.

Effective June 6, 2011, the Board of Directors of the Company amended the 2008 Plan to increase the reserved grant shares from 1,000,000 common shares to 25,000,000 common shares.
 
The cost of all employee stock options, as well as other equity-based compensation arrangements, is reflected in the financial statements over the vesting period based on the estimated fair value of the awards.  

A summary of warrant activity for the nine months ended March 31, 2012 is presented below:
 
         
Outstanding Warrants
 
   
Shares
Available for
Grant
   
Number of
Shares Granted
   
Weighted
Average
Exercise Price
   
Weighted Average
Remaining
Contractual Life
(years)
   
Aggregate
Intrinsic Value
 
                                         
June 30, 2011
   
19,000,000
     
6,000,000
    $
0.01
     
3.73
    $
-
 
Grants
   
(9,000,000)
     
9,000,000
    $
0.01
     
4.65
     
-
 
Cancellations
   
-
     
-
     
-
                 
                                         
March 31, 2012
   
10,000,000
     
15,000,000
    $
0.01
     
4.02
     
-
 
 
 
13

 
 
The Company values all warrants using the Black-Scholes option-pricing model.  Critical assumptions for the Black-Scholes option-pricing model include the market value of the stock price at the time of issuance, the risk-free interest rate corresponding to the term of the warrant, the volatility of the Company’s stock price, dividend yield on the common stock, as well as the exercise price and term of the warrant.  The warrants are not subject to any form of vesting schedule and, therefore, are exercisable by the holders anytime at their discretion during the life of the warrant.  No discounts were applied to the valuation determined by the Black Scholes option-pricing model.

On August 23, 2011, the Company granted Mr. Michael Cao, consultant, 6,000,000 warrants to purchase common stock of the Company at a price of $0.01 per share. The warrants are fully vested, have a five year expected life, expire on August 23, 2015, and were valued at $42,600 using the Black-Scholes option-pricing model. The following inputs and assumptions were used in the option-pricing model:

Expected dividend yield
None
 
Volatility
271.67
%
Weighted average risk free interest rate
0.95
%
Weighted average expected life (in years)
5.00
 

On November 4, 2011, the Company granted Mr. Jack Chow, consultant, 3,000,000 warrants to purchase common stock of the Company at a price of $0.01 per share. The warrants are fully vested, have a four year expected life, expire on November 4, 2016, and were valued at $29,814 using the Black-Scholes option-pricing model. The following inputs and assumptions were used in the option-pricing model:

Expected dividend yield
None
 
Volatility
273.09
%
Weighted average risk free interest rate
0.88
%
Weighted average expected life (in years)
4.00
 

NOTE 7 – RELATED PARTY TRANSACTIONS

As of March 31, 2012 and June 30, 2011, the Company has payables to related parties of $18,500 and $76,316 for services provided.

NOTE 8 – COMMITMENT AND CONTINGENCIES

The Company entered into a purchase agreement to purchase mining claims with Gold Exploration LLC in the amount of $99,000 on June 1, 2008. The agreement requires the Company to make royalty payments equal to 2% of the Net Smelter Returns (NSR) per year. The Company had no Smelter Returns for the nine months ended March 31, 2012 and no royalties have been paid.  The agreement does not have any commitment dates of when production is to begin.

On June 17, 2011, the Company signed a joint venture agreement with Osiris Gold, Inc., a Colorado Corporation, and Sial Exploration, Inc., a Colorado Corporation (collectively, the “Partners”). The Partners are actively involved with the exploration, development, and mining of mineral deposits in the regional southwest. The agreement involves a 1,351 acre mining claim in the historic Red Mountain Mining District of Colorado’s San Juan Mountains. The Company and its Partners agreed to form Red Mountain LLC to operate and manage the joint venture through a joint venture company.  The Company will receive an initial 10% ownership interest in the joint venture company with the potential to increase that share to a maximum of 49%.  Pursuant to the agreement, the Company shall make a payment of $50,000 upon the execution of the agreement, a payment of $800,000 on July 1, 2011, and another payment of $700,000 on August 1, 2011.  $50,000 was paid in June 2011 and fully impaired during fiscal year ended June 30, 2011.  The Company is presently in default on this agreement and no additional payments that were scheduled have been paid.  The Company has settled this agreement and paid the outstanding legal fees of $3,170.
 
 
14

 
 
On February 7, 2011, the Company entered into a $250,000 promissory note agreement with Freedom Boat which bears interest rate at 12%.  The agreement includes a royalty payment which includes 5% in royalty of its gross profits from gold extraction from the Tarantula Placer Mine and 5% royalty payment from the Hull Placer Mine.  The Company intends to re-negotiate the terms which would not include any royalty payments.

During the year ended June 30, 2011, prior management converted 80% of two notes from Venture Capital International for $12,000 dated March 30, 2009 and $17,000 dated May 7, 2009.  86,000,000 shares of common stock were issued to convert $23,200 in debt and $2,323 in accrued interest.  The fair value of those shares was $985,100.  The difference of $959,577 was expensed to loss on conversion of debt.  The prior CEO/CFO requested that Venture Capital International assign those notes to Gustavo Cifuentes Palma.  The Company was provided a signed debt purchase agreement purportedly executed by both Venture Capital International and Gustavo Cifuentes Palma dated November 2010.  Gustavo Cifuentues Palma then assigned 10% of these notes each to Tucker Financial Services, Inc., Vanilly Sky, S.A., Stock Loan Solutions, Euroline Clearing Corporation, Enavest Internacional S.A., and Nicolas Sprung.  In October 2011, the Company learned that the signatures on the original debt purchase agreement from Venture Capital International by Gustavo Cifuentes Palma were forgeries.  The agreement was never executed by Venture Capital International and Venture Capital International was never paid for the debt purchase.  Since the assignments have been deemed forgeries, the Company has recorded the stock issued as compensation and recorded compensation expense of $985,100.  The Company is uncertain of the affiliation between the prior CEO/CFO and Gustavo Cifuentes Palma and if he had any knowledge of the forgeries.

On October 25, 2011, David Janney resigned from all positions he held at the Company, including but not limited to, Chief Executive Officer, Chief Financial Officer, Chairman and member of the Board of Directors, and Secretary.  Scott Geisler was appointed Chief Executive Officer, President and Secretary of the Company.  Pen-Mun Foo was appointed Chief Financial Officer of the Company.

In October 2011, new management learned that the prior CEO/CFO failed to have entity level controls, lacked segregation of duties, among many other internal control deficiencies.  The Company believes that the prior CEO/CFO concealed these matters from the professional advisors until those advisors requested David Janney for additional documentation in which Mr. Janney acknowledged the following to new management and independent legal counsel:

1.  
The Company was informed that the prior CEO/CFO, created a series of promissory notes, such form of notes being provided by a lawyer named John Thomas, Esq.  These promissory notes and documentation provided a signed assignment of two promissory notes with Venture Capital, Inc. a group from Switzerland.  Over time, including discussions with the prior CEO/CFO, new management was able to directly contact a representative of Venture Capital who claims that its signatures on the notes and the later conversions to equity were forged. The alleged improper assignment orchestrated the issuance of converted  allegedly improperly transferred debt for the following numbers of shares:

a)  
December 9, 2010: Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
b)  
January 24, 2011; Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
 
 
15

 
 
c)  
February 16, 2011: Stock Loan Solutions received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
d)  
February 22, 2011:  Nicolas Sprung of Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
e)  
April 18, 2011: Euroline Clearing Corporation received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
f)  
April 18, 2011:   Enavest International S.A., received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
g)  
April 18, 2011: Vanilla Sky, S.A. received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
h)  
June 28, 2011: Scott Geisler received 17,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although Mr. Geisler had no knowledge of the documentation provided by John Thomas was false for the conversion of $2,900 of debt.  On February 23, 2012 the Company cancelled the common shares and reissued based upon the original pricing of the shares.

All legal opinions related to these conversions, documentations, and issuances of shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 were prepared by John Thomas, Esq.

2.  
The prior CEO/CFO personally sent $39,000 to a cable company in the Dominican Republic in which current management has been informed that David Janney owns/controls this company.  The Company settled this issue with David Janney in the settlement agreement discussed in Note 12.

3.  
John Thomas signed various documents as a Board member of the Company, a position which he has never lawfully held, including the transaction with Asher Enterprises, Inc., pursuant to which Asher received 53,000,000 shares of Bonanza common stock which represented about thirty-two (32%) percent of the issued and outstanding shares of the Company in exchange for a $53,000 promissory note.  Current management has negotiated the cash payment of this note and has cancelled the 53,000,000 common shares held in escrow.

In September 2011, David Janney created Board of Directors minutes dated June 15, 2011 for shares issued to employees of the company and included 1,000,000 shares issued to Frank Baumgartner.  Mr. Baumgartner was never issued the common shares as new management could not find any documents to support such issuance and the Company does not intend to issue these 1,000,000 common shares to Frank Baumgartner.

On December 14, 2011, the Company entered into a consulting agreement for advisory services which would provide for a monthly advisory fee of $3,000 starting January 25, 2012 and the issuance of 500,000 common shares.  The term of this agreement is one year.
 
 
16

 

On February 13, 2012, the Company entered into a consulting agreement with Benchmark Advisory Partners, LLC.  Benchmark will provide public relations services for nine months.  Benchmark’s compensation for these services is $10,000.  In the September 30, 2011 Form 10-Q, the Company reported that Benchmark compensation would be 10,000,000 common shares, which was reported in error.

NOTE 9– LOSS ON SETTLEMENT OF LITIGATION

On February 26, 2012, the Company entered into a settlement agreement with David Janney (our former CEO/CFO) for his actions outlined in the June 30, 2011 Form 10-K related to wrongfully issued common stock of the Company, among many other things. The settlement agreement includes the following terms:
 
a.  
The Company agreed to issue 5 million shares of restricted Bonanza Goldfields common stock to Mr. Janney as a form of compensation. The shares will be paid in two tranches. The first 2,500,000 shares should be issued upon the execution of the settlement and is issued on March 19, 2012. The second 2,500,000 shares will be issued six months from the execution date of the settlement.

b.  
The funds held in escrow by Christine Wright at the Wright Law Firm, P.A. on behalf of Freedom Boat, LLC for a loan under Mr. Janney’s name will be considered payment in full for Mr. Janney's return of 20,000,000 shares to the treasury on August 29, 2011.

c.  
Mr. Janney agreed not to sell any more than 1,000,000 shares of his personnel holdings of Bonanza Goldfields common stock in the open market in any thirty-day period.

d.  
Mr. Janney agrees to return to the Company all of the Company’s property in his possession or in the possession of his family or agents including without limitation Bonanza's files and all documentation (and all copies thereof) dealing with the finances, operations and activities of the Company, its clients, employees or suppliers.

The Company recorded loss of $59,000 on this settlement in the quarter ended December 31, 2011 as a recognized subsequent event.  During the period from October 1, 2011 through December 31, 2011, the Company was in discussion with Mr. Janney’s attorney related to litigation for causes of action against Mr. Janney during his tenure as Chief Executive Officer and Chief Financial Officer and Mr. Janney was demanded by the Company for the return of 20,000,000 common shares.  The Company did not compensate David Janney for this period.

 
17

 

NOTE 10 – RESTATEMENT
 
The financial statements for the three and nine months ended March 31, 2011 have been restated mainly to correct the misstatements resulting from the fraudulent conversion of two notes issued to Venture Capital International (See Note 8).

   
Three months Ended March 31, 2011
(Originally Reported)
   
Restatement
   
Three months Ended March 31, 2011
(Restated)
 
                   
Statement of Operations
                 
General and administrative
    164,043       403,200 (a)     548,435  
              32,000 (b)        
              (44,500 )(c)        
              (6,308 )(d)        
Exploration expense
    37,440       (32,000 )(b)     11,440  
              6,000 (e)        
Interest expense
    6,463       7,677 (h)     9,908  
              6,894 (c)        
              (10,000 )(i)        
              (1,126 )(d)        
Loss on  debt conversion
    426,000       (8,000 )(j)     23,500  
              (394,500 )(k)        
Net Loss
    (633,946 )     (40,663 )     (593,283 )
Loss per share
    (0.00 )     (0.0 )     (0.00 )
 
   
Nine months Ended March 31, 2011
(Originally Reported)
   
Restatement
   
Nine months Ended March 31, 2011(Restated)
 
Statement of Operations
                 
General and administrative
    216,993       643,200 (a)     843,972  
              32,000 (b)        
              (44,500 )(c)        
              (3,721 )(d)        
Exploration expense
    37,440       (32,000 )(b)     11,440  
              6,000 (e)        
Impairment of mining claims
    207,080       358,620 (f)     565,700  
Interest expense
    257,938       (73,000 )(g)     17,619  
              (163,000 )(h)        
              6,894 (c)        
              (10,000 )(i)        
              (1,213 )(d)        
Loss on  debt conversion
    586,676       73,000 (g)     96,500  
              (8,000 )(j)        
              (394,500 )(k)        
              (160,676 )(i)        
Net Loss
    (1,306,127 )     (229,104 )     (1,535,231 )
Loss per share
    (0.00 )     (0.01 )     (0.01 )
 
 
18

 
 
   
Nine months Ended March 31, 2011
(Originally Reported)
   
Restatement
   
Nine months Ended March 31, 2011 (Restated)
 
Statements of Cash flows
                 
Net loss
  $ (1,306,127 )   $ (229,104 )   $ (1,535,231 )
Adjustments to reconcile net loss to net cash used in operating activities:
                       
Impairment of mining claims
    207,080       358,620 (f)     565,700  
Loss on debt conversion
    586,756       73,000 (g)     96,500  
              (8,000 )(j)        
              (394,500 )(k)        
              (160,676 )( i )        
              (80 )(d)        
    Common stock issued for compensation
    89,000       643,200 (a)     687,700  
              (44,500 )(c)        
    Beneficial conversion feature     243,677       (73,000 )(g)      -  
              (170,677 )( i )        
Amortization of debt discount
    -       6,895 (c)     6,895  
Changes in assets and liabilities:
                       
Accounts payable and accrued expenses
    84,003       (1,178 )(d)     82,825  
Accrued expenses - related party
    22,050               22,050  
Net cash used in operating activities
  $ (73,561 )   $ -     $ (73,561 )

(a)
To record shares issued to Tucker Financial Services Inc. and Stock Loan Solutions LLC as stock compensation.
(b)
To reclassify payment made to Multicom, Inc. and OM Telecom to officer compensation of David Janney.
(c)
To adjust the value of stock issued for the modification of note payable to Freedom Boat and record the amortization. Legal fee was originally recorded at $44,500.
(d)
Other miscellaneous adjustments.
(e)
To adjust unrecorded expenses.
(f)
To correct the value of common stock issued to acquire Midas Placer Mining Claim which was fully impaired.
(g)
To reclassify $73,000 from interest expense related to a note held by Gold Exploration LLC to loss on conversion of debt.
(h)
To adjust interest expense originally reported as the beneficial conversion feature of two notes fraudulently assigned to Gustavo Cifuentes Palma.
(i)
To remove beneficial conversion feature recorded by mistake.
(j)
To correct value of common stock issued to Pop Holdings, Ltd upon note conversion.
(k)
To reverse the fraudulent conversion of note payable to Advantage of $87,000.

NOTE 11– SUBSEQUENT EVENTS

On April 11, 2012, the Company issued 13,333,335 common shares for $200,000 in cash.

On October 12, 2011, the Company issued 7,000,000 shares of common stock to an investor for $56,000 cash. Pursuant to the subscription agreement, the investor has a right to sell the 7 million shares back to the Company at an interest rate of 12% after April 11, 2012. On April 12, 2012, the investor modified the agreement to waive the right to sell 7 million shares back.  As consideration, the Company issued the investor warrants to purchase 2,500,000 shares of the Company’s common stock at $0.02 per share. The warrants expire on October 11, 2012 and have a fair value of $66,985 on the grant date. Proceeds of $56,000 from this issuance were originally recorded as refundable subscription and has been reclassified to additional paid-in capital as of March 31, 2012.
 
 
19

 

On May 11, 2012 Pen Foo resigned as Chief Financial Officer and Scott Geisler accepted the position of Interim Chief Financial Officer, and Principle Accounting Officer.

On April 6, 2012, Peter Cao was appointed as a member of the Board of Directors and the chief operating officer of the Company.  
 
On May 8, 2012, the Company entered into an employment contract with Mr. Cao. Pursuant to the agreement, the Company will pay monthly compensation of $1,000. Mr. Cao is also entitled to 2,000,000 common shares at $0.06 per share for the production or increase in the Company’s market value for every $15 million up to $100 million.  Additionally, Mr. Cao is granted options to purchase a total of 8,000,000 common shares. Options for 4 million common shares exercisable at $0.025 per share vest immediately. After six months of Mr. Cao’s employment with the Company, additional options to purchase 4,000,000 shares at $0.025 per share will vest. The 8,000,000 options are valued at $198,519.

On May 10, 2012, the Company entered into a two-year employment contract with Mr. Scott Geisler,  Chief Executive Officer.  The agreement allows the immediate accrual of unpaid salary from August 29, 2011 at $100,000 per year.  Mr. Geisler will also receive a longevity bonus equal to the sum of $20,000 plus $5,000 for each year of service. The longevity bonus shall be paid in cash on each anniversary of the effective date of this agreement.  The Company will also pay for health insurance benefits with the health insurance policy adopted by the Board of Directors.  The Company also issued stock options to purchase a total of 17,000,000 common shares. Options for 8,500,000 common shares at $0.01 per share vest immediately.  Additional options to purchase 8,500,000 common shares at $0.01 per share will vest in August 2012.  The 17,000,000 options are valued at $507,862.  These options have a term of 5 years and could be exercised cashless.

* * * * * * * * * * *

 
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In this Quarterly Report on Form 10-Q, “Company,” “our company,” “us,” and “our” refer to Bonanza Goldfields Corporation, unless the context requires otherwise.


ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis contains various “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-Q, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company’s business, including but not limited to, reliance on key customers and competition in its markets, market demand, product performance, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. The Company adopted at management’s discretion, the most conservative recognition of revenue based on the most astringent guidelines of the SEC in terms of recognition of revenue. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.

Forward-looking statements involve risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results and achievements and cause them to materially differ from those contained in the forward-looking statements include those identified in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2011, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.
 
In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.

Overview

We are an exploration stage company engaged in the acquisition and exploration of gold mineral properties, directly or with a joint venture partner in North America.  Our exploration target is to find exploitable minerals on our properties. Our success depends on achieving that target. There is the likelihood of our mineral claims containing little or no economic mineralization or reserves of gold and other minerals. There is the possibility that our claims do not contain any reserves and funds that we spend on exploration will be lost. Even if we complete our current exploration program and are successful in identifying a mineral deposit, we will be required to expend substantial funds to bring our claims to production. We are unable to assure you we will be able to raise the additional funds necessary to implement any future exploration or extraction program even if mineralization is found.
 
It is our objective to identify mineral prospect properties of merit, conduct preliminary exploration work, and if results are positive, to “prove up” mineral resources ultimately providing a strategic supply line to mid-tier mining companies in a world where we believe capital is transitioning to the safety of gold.  Our management contends that this business model is timely in a world of financial and currency instability with escalating mineral demand.
 
 
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Our areas of exploration are in geopolitically stable North American areas.  Our three exploration stage projects are located in Arizona and Colorado, of which our management believes have near-surface gold mineralization. Although Bonanza has interest in Red Mountain, Colorado and the Black Rock Basin, Arizona projects, management continues to focus all efforts on the flagship Tarantula Project, Congress, Arizona.
 
Bonanza Goldfields’ flagship Tarantula Project consists of 38 lode claims covering 600 acres of unpatented, private property claims and BLM claims in the Date Creek Mountains, Arizona consisting of both alluvial and mineralized quartz deposits.  A Preliminary Geological Survey of the claims and the immediate region is now completed of the Tarantula Project, prepared by Auric Resources International, Inc. of Wickenburg, Arizona. Shareholders can access the report at Bonanza Goldfields' official website: www.bonanzagoldfields.com (although this website is not incorporated by reference).

Highlights from the report include:
 
The large land package with widespread areas of anomalous gold values; proximity to the Congress Mine; large iron oxide rich quartz veins which exhibit mineralogical and structural similarities to the Congress, Niagara, Queen of the Hills, Golden Wave and other mineralized, economic vein systems in the area; and the presence of placer gold in widespread gravels indicates that the Tarantula Property may host a large, potentially economic gold deposit and, we believe, undoubtedly represents an excellent exploration target with potential for both placer and lode gold production from auriferous placers and veins.

  
Although some preliminary testing has been done on portions of the property, the majority of the land package has virgin placer gravels and large quartz veins that have never been explored or tested. The geologic setting of the property, in our estimation, is favorable for the concentration of placer gold in the local gravels that occur in drainage channels and elevated benches and for lode gold that occurs within the early Proterozoic granitic rocks as auriferous quartz fissure veins with locally abundant sulfides and iron oxides.

  
Auriferous quartz and quartz-sulfide veins occur on the Tarantula Property and many exhibit the same characteristics as those in the Congress Mine and other mines in the area. These veins ranged up to several feet in width and we believe have strike lengths ranging from hundreds to thousands of feet.

Prior to commencing the survey, extensive samplings were analyzed locally at multiple depths demonstrating the potential for high grade gold findings throughout the property.  Modern access for heavy equipment is already in place via our privately constructed roads, and rail is localized.  The claims are directly adjacent to the world famous historic Congress Mine, Arizona. The Congress Mine operated between 1887 and 1959 producing, according to managements understanding, about 400,000 ounces of lode gold.  Unique features appear ubiquitous throughout the immediate area, including greenstone dike extensions, placer gravel deposits, and vestiges of numerous pre-historic waterfalls.  Additionally, lode gold possibilities exist due to the extensions of schist and mineralized quartz veins in the immediate area of the Congress Mine. Our management believes the alluvial deposits originate from two ancient rivers that flowed in opposing directions during separate geological periods.
 
We expanded our flagship Tarantula Project with the acquisition of the Piedmont Mine, gold and silver mine in operation until 1940. The Piedmont Mine has been deemed by our geological team a highly prospective addition to the Tarantula Project. The acquisition expands the Tarantula Project to 38 lode mining claims covering over 600 acres of contiguous property directly adjacent to the historic Congress Mine which produced over 400,000 ounces of lode gold between 1887 and 1959.
 
 
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The Black Rock Basin (BRB) Project claim group is currently comprised of 320 acres on BLM (“Bureau of Land Management”) ground in the southern part of the Vulture Mining District, Maricopa County, Arizona in the northeastern Belmont Mountains. The property is located along a twelve mile northwest mineralized trend where several gold and copper mines previously operated. Bulk sampling during Bonanza's reconnaissance reveals promising higher level gold values over six large target zones. Approximately 400 soil samples were taken on a surveyed grid. These samples were sent to Chemex Labs in Reno, Nevada and analyzed for 32 elements including gold, silver, copper, lead & zinc. The results obtained from this work indicate a minimum of six gold anomalies within the claim boundaries. Over ten bulk samples returned gold values in excess of 3400 ppb (0.10+ oz/ton), including 2% copper, 20% lead, 15% zinc and up to 7 ounces of silver per ton. Property within the BRB Project experienced minor prospecting during the early 1900's through numerous small prospect pits, shallow shafts, adits, and small tunnels. There is no formal record of production on the BRB property. The property is located approximately 80 miles west of Phoenix and 25 miles southwest of Wickenburg, Arizona, and is accessible year round. The BRB Project is situated within the lower hills and flats of the northern Belmont Mountain Range with elevations from 1900 feet to 2500 feet.  Current management is investigating to determine if the claims has lapsed with the Bureau of Land Management in Arizona.
 
RESULTS OF OPERATIONS

Three and Nine months Ended March 31, 2012 Compared to Three and Nine months Ended March 31, 2011

We are an exploration stage company acquiring mineral properties or claims located in the State of Arizona, USA. The recoverability of amounts from the properties or claims will be dependent upon the discovery of economically recoverable reserves, confirmation of our interest in the underlying properties and/or claims, our ability to obtain necessary financing to satisfy the expenditure requirements under the property and/or claim agreements and to complete the development of the properties and/or claims, and upon future profitable production or proceeds for the sale thereof.

For the three and nine months ended March 31, 2012, we generated no revenue. Our future revenue plan is uncertain and is dependent on our ability to effectively mine our products, generate sales, and obtain contract mining opportunities. There are no assurances of our ability to begin to mine our claim. The expenditures for mining are cost intensive so it is critical for us to raise sufficient capital to implement our business plan.  We incurred losses of $135,758 for the three months ended March 31, 2012, compared to $593,283 for the three months ended March 31, 2011. We incurred losses of $536,823 for the nine months ended March 31, 2012, compared to $1,535,231 for the nine months ended March 31, 2011. Our losses since our inception through March 31, 2012 amount to $6,052,322.

Our operating expenses for exploration activities for the three months ended March 31, 2012 and 2011 were $10,852 and $11,440, respectively. The costs associated with exploration activities included trenching, testing, hauling, and labor costs associated with the exploration of our gold mines claims. For the nine months ended March 31, 2012 and 2010, exploration expenses were $67,832 and $11,440, respectively.

Our general and administrative expenses for the three months ended March 31, 2012 and 2010 were $89,836 and $548,435, respectively. For the nine months ended March 31, 2012 and 2011, general and administrative expenses were $318,871 and $843,972, respectively.  The decrease was primarily related to the issuance of shares for notes we believe were fraudulently converted by prior management during the nine months ended March 31, 2011. The value of the shares issued was recorded in consulting expense.
 
 
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During the nine months ended March 31, 2011, we recorded $565,700 of impairment on mining claims.  Impairments were taken for mining claims that their carrying values exceeded their estimated net recoverable amounts.  No such impairment was recorded for the nine months ended March 31, 2012.

Our interest expense for the three months ended March 31, 2012 and 2011 was $34,950 and $9,908, respectively. For the nine months ended March 31, 2012 and 2011, our interest expense was $90,758 and $17,619, respectively.  The increase is primarily attributable to the increase in debt outstanding.

During the nine months ended March 31, 2011, we recorded $96,500 for loss on debt conversion.  On July 29, 2010, we issued 8,300,000 common shares valued at $83,000 to Gold Exploration LLC towards a $10,000 payment on the promissory note and we recognized a loss on debt conversion of $73,000.  On February 17, 2011, we issued 5,000,000 common shares valued at $62,500 to settle a note payable of $39,000 to Pop Holdings, Inc. and recorded a loss of $23,500. No such loss was recorded for the nine months ended March 31, 2012.

On February 26, 2012, the Company entered into a settlement agreement with David Janney, former CEO. Pursuant to the settlement agreement, the Company agreed to issue 5,000,000 common shares to David Janney.
These shares were valued at $59,000 and recorded as loss on settlement of litigation. No such loss was recorded for the nine months ended March 31, 2011.

Liquidity and Capital Resources

Our cash used in operating activities for the nine months ended March 31, 2012 was $379,719 compared to $73,561 for the nine months ended March 31, 2011.   The increase in cash used in operations was primarily attributable to payment made to vendors and related parties during the nine months ended March 31, 2012.

Our cash provided by financing activities for the nine months ended March 31, 2012 was $426,000, compared to $73,300 for the nine months ended March 31, 2011. The increase is mainly due to the issuance of common stock for $359,000 cash and proceeds from notes payable of $125,000 during the nine months ended March 31, 2012 compared to proceeds from notes payable of $23,300 during the nine months ended March 31, 2011.

To date, we have succeeded in securing capital as needed, but there is no guarantee this will continue.

We believe we will have to rely on public and private equity and debt financings to fund our liquidity requirements over the intermediate term. We may be unable to obtain any additional financings on terms favorable to us, or obtain additional funding at all. If adequate funds are not available on acceptable terms, and if cash and cash equivalents together with any income generated from operations fall short of our liquidity requirements, we may be unable to sustain operations. Continued negative cash flows create substantial doubt regarding our ability to fully implement our business plan and could render us unable to expand our operations or take advantage of acquisition opportunities, any of which may have a material adverse effect on our business. If we raise additional funds through the issuance of equity securities, our stockholders may experience dilution of their ownership interest, and the newly issued securities may have rights superior to those of our common stock. If we raise additional funds by issuing debt, we may be subject to limitations on our operations, including limitations on the payments of dividends
 
Off-balance sheet arrangements

We have no off-balance sheet arrangements including arrangements that would affect the liquidity, capital resources, market risk support and credit risk support or other benefits.
 
 
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Additional Information

Bonanza files reports and other materials with the Securities and Exchange Commission.  These documents may be inspected and copied at the Securities and Exchange Commission, Judiciary Plaza, 100 F Street, N.E., Room 1580, Washington, D.C. 20549.  You can obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.  You can also get copies of documents that the Company files with the Commission through the Commission’s Internet site at www.sec.gov.
 
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
We do not hold any derivative instruments and do not engage in any hedging activities. Most of our activity is the development and mining of our mining claim.

ITEM 4.  CONTROLS AND PROCEDURES
 
(a)  
Evaluation of Effectiveness of Disclosure Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As of March 31, 2012, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

In October 2011, on the eve of the completion of the audit and the current filing of our Annual Report on Form 10-K new management learned that the prior CEO/CFO failed to have entity level controls, lacked segregation of duties, among many other internal control deficiencies.  The Company believes that the prior CEO/CFO concealed these matters from the professional advisors until those advisors requested David Janney for additional documentation in which Mr. Janney acknowledged the following to new management and independent legal counsel:

1.  
The Company was informed that the prior CEO/CFO, created a series of promissory notes, such form of notes being provided by a lawyer named John Thomas, Esq.  These promissory notes and documentation provided a signed assignment of two promissory notes with Venture Capital, Inc. a group from Switzerland.  Over time, including discussions with the prior CEO/CFO, new management was able to directly contact a representative of Venture Capital who claims that its signatures on the notes and the later conversions to equity were forged. The alleged improper assignment orchestrated the issuance of converted  allegedly improperly transferred debt for the following numbers of shares:

a)  
December 9, 2010: Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
 
 
25

 
 
b)  
January 24, 2011; Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
c)  
February 16, 2011: Stock Loan Solutions received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
d)  
February 22, 2011:  Nicolas Sprung of Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the  conversion of $2,900.
e)  
April 18, 2011: Euroline Clearing Corporation received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
f)  
April 18, 2011:   Enavest International S.A., received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
g)  
April 18, 2011: Vanilla Sky, S.A. received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
h)  
June 28, 2011: Scott Geisler received 17,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although Mr. Geisler had no knowledge of the documentation provided by John Thomas was false and this was transacted through a Broker, Scottsdale Capital) for the conversion of $2,900 of debt.

All legal opinions related to these conversions, documentations, and issuances of shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 were prepared by John Thomas, Esq.

2.  
The prior CEO/CFO personally sent $39,000 to a cable company in the Dominican Republic in which current management has been informed that David Janney owns/controls this company.  The Company settled this issue with David Janney in February 2011.

3.  
John Thomas signed various documents as a Board member of the Company, a position which he has never lawfully held, including the transaction with Asher Enterprises, Inc., pursuant to which Asher received 53,000,000 shares of Bonanza common stock which represented about thirty-two (32%) percent of the issued and outstanding shares of the Company in exchange for a $53,000 promissory note.  Current management has negotiated the cash payment of this note and has cancelled the 53,000,000 common shares held in escrow.

Changes in Internal Control Over Financial Reporting

During the fiscal year ended June 30, 2011 and the nine months ended March 31, 2012, there were changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Current management has hired independent counsel to investigate these deficiencies, among many other things.  The Company has removed the prior CEO/CFO from all positions in the Company and he has no further affiliation with the company.  The Company is still investigating whether the parties that participate in the forged debt conversions are victims or co-conspirators.
 
 
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New management has implemented many new controls and procedures as follows:

Currently, as a small exploratory stage company, we maintain our internal controls through a segregation of duties between our principal executive officer and principal financial officer.  For example, all incoming suppliers’ invoices are delivered direct to the principal financial officer for recording in the books, checking and processing.  The principal financial officer must submit all payments request to the principal officer for approval, allocation of cash and presentation of a check for mailing to the payee.  The principal financial officer conduct regular reconciliation for the bank account to make sure that all receipts and disbursements have been identified, supported by appropriate documentation and payment approval, and the transaction are matched to posting in the books.  As a small exploratory stage company, we have very limited financial activity during the year.  Thus, the current check and balance of the financial activity by our principal executive officer and principal financial officer provide sufficient control to ensure fairness, accuracy and properly disclose.  Document related to the Company’s assessment is very limited as there are only a limited number of business transactions.  No testing was performed on limited transactions within the Company by our principal executive officer and principal financial officer since 100% of the transactions were actually performed by our principal execute officer and principal financial officer.  Our principal executive officer and principal financial officer concluded that adequate procedures were in place to approve and monitor all disbursement distributed by the Company and confirm all funds received by the Company.  Our principal execute officer and principal financial officer are responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined under the rules promulgate under Securities Exchange act of 1934.  Our principal executive officer and principal accounting officer have conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the frame work in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organization of the Treadway Commission.  Based the above evaluation, and in light of the prior deficiencies noted above, our principal executive officer and principal financial officer concluded that our internal control over financial reporting was not effective as of March 31, 2012.

The Company has also engaged the services of a consulting CPA with prior public company experience, and accounting qualification to supervise and manage the Company’s accounting and record keeping.  In connection with the evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act, there was no substantial changes of internal control over financial reporting during the quarter ended March 31, 2012 except as discussed above, that materially effects our internal controls over financial reporting.
 
 
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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect except the following matters.

In October 2011, on the eve of the completion of the audit and the current filing of our Annual Report on Form 10-K new management learned that the prior CEO/CFO failed to have entity level controls, lacked segregation of duties, among many other internal control deficiencies.  The Company believes that the prior CEO/CFO concealed these matters from the professional advisors until those advisors requested David Janney for additional documentation in which Mr. Janney acknowledged the following to new management and independent legal counsel:

1.  
The Company was informed that the prior CEO/CFO, created a series of promissory notes, such form of notes being provided by a lawyer named John Thomas, Esq.  These promissory notes and documentation provided a signed assignment of two promissory notes with Venture Capital, Inc. a group from Switzerland.  Over time, including discussions with the prior CEO/CFO, new management was able to directly contact a representative of Venture Capital who claims that its signatures on the notes and the later conversions to equity were forged. The alleged improper assignment orchestrated the issuance of converted  allegedly improperly transferred debt for the following numbers of shares:

a)  
December 9, 2010: Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
b)  
January 24, 2011; Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
c)  
February 16, 2011: Stock Loan Solutions received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
d)  
February 22, 2011:  Nicolas Sprung of Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900.
e)  
April 18, 2011: Euroline Clearing Corporation received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
f)  
April 18, 2011:   Enavest International S.A., received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
g)  
April 18, 2011: Vanilla Sky, S.A. received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
h)  
June 28, 2011: Scott Geisler received 17,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although Mr. Geisler had no knowledge of the documentation provided by John Thomas was false and this was transacted through a Broker, Scottsdale Capital) for the conversion of $2,900 of debt.
 
 
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All legal opinions related to these conversions, documentations, and issuances of shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 were prepared by John Thomas, Esq.

2.  
The prior CEO/CFO personally sent $39,000 to a cable company in the Dominican Republic in which current management has been informed that David Janney owns/controls this company.  The Company settled this issue with David Janney in February 2011.

3.  
John Thomas signed various documents as a Board member of the Company, a position which he has never lawfully held, including the transaction with Asher Enterprises, Inc., pursuant to which Asher received 53,000,000 shares of Bonanza common stock which represented about thirty-two (32%) percent of the issued and outstanding shares of the Company in exchange for a $53,000 promissory note.  Current management has negotiated the cash payment of this note and has cancelled the 53,000,000 common shares held in escrow.

The Company entered into a settlement agreement with David Janney (See Note 9 – Loss on Legal Settlement to the financial statements) as the Company believed it was in the best interest of the Company to settle their outstanding issues with David Janney rather than litigate the matter.  During this time the Company did not have the financial means to litigate these issues.

ITEM 1A. RISK FACTORS
 
There have been no material changes to the risk factors previously discussed in Item 1A of the Company’s Form 10-K for the year ended June 30, 2011 except as follows:
 
We will incur increased costs and demands upon management as a result of complying with the laws and regulations that affect public companies, which could materially adversely affect our results of operations, financial condition, business and prospects.
 
As a public company and particularly after we cease to be an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules implemented by the SEC.
 
The increased costs associated with operating as a public company will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business. Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our results of operations, financial condition, business and prospects.
 
However, for as long as we remain an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012, or JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”
 
If the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30, we would cease to be an “emerging growth company” as of the following June 30, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an “emerging growth company” immediately.
 
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.
 
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
 
 
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In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. An “emerging growth company” can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS SECURITIES

During the nine months ended March 31, 2012, the Company issued 42,571,429 shares of common stock for $359,000 in cash.

On September 23, 2011, the Company issued 750,000 shares of common stock, valued at $3,023, to purchase equipment.

During the three months ended September 30, 2011, as part of the resignation of David Janney, former Chief Executive Officer and Chief Financial Officer of the Company, Mr. Janney surrendered 20,000,000 common shares and 3,000,000 preferred shares of the Company. These shares were then cancelled and the Company recorded an adjustment to additional paid-in capital of $2,300. Additional paid-in capital was also decreased by $19,327 to write off the accrued compensation payable to Mr. Janney initially recorded in prior periods.

During the nine months ended March 31, 2012 the Company issued 6,200,000 shares of common stock to its director, officer and consultants for services valued at $62,800.

On December 28, 2011, the Company issued 500,000 shares of common stock in lieu of interest payment of a note held by Mr. Charles Chapman. The shares were valued at $4,000.

On February 26, 2012, the Company issued 2,500,000 shares to David Janney, former officer, pursuant to a settlement agreement. See Note 9.

On March 19, 2012, the Company issued 500,000 shares to a note holder pursuant to an amendment to a note agreement. See Note 4 (p).

The offer and sale of such shares of our common stock were effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933 (the “Securities Act”) and in Section 4(2) of the Securities Act, based on the following: (a) the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

There were no defaults upon senior securities during the period ended March 31, 2012.
 
 
30

 
  
ITEM 4.  MINE SAFETY DISCLOSURE

Not applicable.
              
ITEM 5.  OTHER INFORMATION

There is no information with respect to which information is not otherwise called for by this form.

ITEM 6.  EXHIBITS
 
3.1 Articles of Incorporation(1)
3.2 Bylaws (1)
10.1 Agreement with Gold Explorations, LLC and Bonanza Goldfields, Corp., dated July 1, 2009.(2)
10.2 Peter Cao Chief Operating Officer employment agreement (3)
10.3 Scott Geisler Chief Executive Officer Employment Agreement (3)
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act(3)
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (3)
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act(3)
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act(3)

(1)  
Incorporated by reference to the Company’s filing on Form S1/A, as filed with the Securities and Exchange Commission on September 11, 2008.
(2)  
Incorporated by reference to the Company's filing on Form 10-Q, as filed with the Securities and Exchange Commission on March 31, 2012.
(3)  
Filed herein.
 
 
31

 
 
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  Bonanza Goldfields Corp.  
       
Date: May 15, 2012
By:
/s/ Scott Geisler  
    Scott Geisler  
    Chairman, Chief Executive Officer (Principal Executive Officer)  
       
       
  Bonanza Goldfields Corp.  
       
Date: May 15, 2012
By:  /s/ Scott Geisler  
    Scott Geisler  
    Interim Chief Financial Officer (Principal Accounting Officer,)  
 
 
 
 32

 

PINX:BONZ Bonanza Goldfields Corp Quarterly Report 10-Q Filling

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PINX:BONZ Bonanza Goldfields Corp Quarterly Report 10-Q Filing - 3/31/2012
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